Court Opinion

ID: 3819152
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:54:39.874984+00
Date Added: 2024-06-11T07:39:30.692961
License: Public Domain

I am unable to agree with the majority opinion herein. This is a proceeding in equity wherein defendants in error seek a decree declaring a deficiency judgment, appearing against them in the district court, satisfied of record. I agree that the question presented is one to be considered in the light of the equitable principle as stated in the majority opinion:
"Equity will not permit a mere form to conceal the real position and substantial rights of parties. Equity always attempts to get at the substance of things, and to ascertain, uphold, and enforce rights and duties which spring from the real relations of parties. It will never suffer the mere appearance and external form to conceal the true purposes, objects, and consequences of a transaction."
The record clearly shows that defendants in error were indebted to the State School Land Commission on a promissory note in the principal sum of $6,000 and four interest coupon notes in the amount of $150 each, which together with interest computed on the basis of 5%, rather than the contract rate of 10%, amounted, at the date of the judgment, to at least $8,145.45. The principal note provided for an attorney's fee in the sum of $600.
On or about October 12, 1938, the cause was about to be brought to trial. There appears to have been some contention about whether the interest was to be charged at the contract rate of 10% or at the statutory rate of 5% fixed by the Legislature after the execution of the notes involved. If interest was to be computed at the contract rate, then the amount due for principal and interest was in excess of $10,000. It was apparent that in either event the value of the land mortgaged to secure the indebtedness was far less *Page 632 
than the amount due. Defendants in error, in an effort to reduce the amount of the possible deficiency judgment, were anxious to have the interest computed at 5%.
About twelve days before judgment was entered, the plaintiff and defendants in error herein entered into the stipulation set forth in the majority opinion. The first paragraph recites:
"Whereas, plaintiff herein has been offered the difference in the appraised value of the land involved in this action and the judgment which will be entered herein."
Clearly the parties must have then had in mind a contemplated judgment of not less than $8,145.45, for that was the least that could be due at the lowest possible rate of interest.
The stipulation next recites that the defendants Lutie H. Sanders, H.L., and Ruth Hollingsworth had agreed to pay said consideration in the sum of $1,000 in consideration of plaintiff's bidding within $1,000 of the judgment to be rendered, and the further consideration that a judgment with interest at not to exceed 5% would be taken. Again, the parties must have had in mind a contemplated judgment of not less than $8,145.45 if said sum of $1,000 was not paid.
It was then agreed that plaintiff would bid to within $1,000 of the judgment, at the sheriff's sale of the land under special execution and that plaintiff would not take a judgment at an interest rate to exceed 5%. Defendants then agreed to pay, as a consideration for the above (that is, the promise to bid within $1,000 of the amount of the judgment to be entered with interest at not to exceed 5%), the said sum of $1,000. The $1,000 was paid on October 12, 1938, and it appears that the parties agreed that said sum of $1,000 should be credited upon the principal note of $6,000 instead of upon the accrued interest. Defendants were not agreeing to pay, and did not pay, any new consideration whatever. They were only agreeing to pay, and did pay, a part, and only a part, of the debt they owed to plaintiff. The record clearly shows that the $1,000 so paid was in fact credited upon the principal note. This is shown by the fact that the note called for an attorney's fee of 10%, which, except for the credit of the $1,000, would have been $600. Instead of fixing the attorney's fee at $600, the judgment fixed it at $500. This clearly indicates that the court must have taken into consideration the payment of the $1,000 at the time judgment was entered.
Furthermore, the amount of the judgment entered was only $7,145.45, which was $1,000 less than the smallest amount that could be due unless defendants were given credit for the $1,000 so paid. When the order of sale was issued it recited that plaintiff had secured judgment in the sum of $7,145.45 with interest thereon at 5% from October 20, 1938, less $1,000 paid on principal October 12, 1938, and an attorney's fee of $500. This makes it appear that the $1,000 had been paid and credited on the judgment theretofore entered so as to reduce the amount unpaid from $7,145.45 to $6,145.45, with accrued interest, $500 attorney's fee, and costs. This recital was also reflected in the notice of sheriff's sale and the sheriff's deed.
All the parties apparently assumed that the judgment rendered on October 20, 1938, in the sum of $7,145.45 was subject to a credit for the $1,000 paid by defendants in error herein on October 12, 1938. This assumption was erroneous for the reason that defendants in error must have been given credit for that payment when the judgment was entered eight days after it was paid. Taking into consideration the fact that there was no basis for the entry of a judgment in any sum less than $8,145.45, exclusive of the $1,000 paid, and the further fact that the judgment reduced the attorney's fee from $600 to $500, it is absurd to say that the trial court was not in some manner advised of the payment of the $1,000 and that *Page 633 
it was to be credited on the principal note rather than on the interest.
If the judgment and order of the trial court are to be affirmed, the result must be that by inadvertence or mistake, defendants will have been allowed credit for the $1,000 twice. To permit this to be done violates the very rule of equity quoted in the majority opinion. The judgment as herein affirmed violates the rule of law stated by this court on March 26, 1946, in State v. Schneider, 197 Okla. ___, 168 P.2d 288, holding that an affirmative agreement by Commissioners of the Land Office with a borrower to settle a debt due the state for less than the amount due the state is void. Is a judgment any less voidable on appeal that has the effect of doing that which may not be done within the ordinary contract rights? I think not, and respectfully dissent.
I am authorized to say Mr. Justice ARNOLD concurs.