Court Opinion

ID: 6510217
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:42.297631+00
Date Added: 2024-06-11T15:54:51.291489
License: Public Domain

STONE, J.
The case of Rogers et al. v. Torbut et al., 58 Ala. 523, presented substantially the same question as that which meets us at the threshold of this. In that case, as in this, the bill was filed by mortgagors, charging that there was usury in the debt secured by the mortgage, and seeking to arrest a sale, threatened to be made under a power contained in the mortgage. In that case a question was made on the averments of the bill. We declared the rule iu such case to be, “that a complainant asking such relief, must either bring the money borrowed and interest into court, or he must, by his offer, submit himself to the authority and jurisdiction of the court, so that without more, the court may compel him to do equity, as a condition upon which the relief prayed will be granted. This is the spirit, this the sense of the rule.” We said also, “without this offer, the complainauts would have had no standing in court, and their bill would have been demurrable.” — Branch Bank of Mobile v. Strother, 15 Ala. 51; Nelson v. Dunn, 15 Ala. 501.
The bill in the present case, as amended, contains the following clause: “And she also says that she is ready and willing to pay whatever sum may be actually and truly due to the parties severally interested in her said mortgage notes, allowing to your oratrix, such abatements as she may be entitled to by law, and she tenders to pay any sum that may be found due by her to said parties in interest, and she submits herself to this court in that behalf.” Under the rule declared in our former decisions, cited above, the Chancery Court was authorized to ascertain the amount due, and to decree a foreclosure of the mortgages, without any cross-bill whatever. So, we need not inquire whether the cross-bill in this case was formal, or had been put at issue. There is nothing in this assignment of error.
*515The answers as amended, or some of them, are prayed to be made cross-bills. Whether these cross-bills were ever put at issue or not, they authorized a motion by complainants in them, for the appointment of a receiver. Much testimony was taken by affidavit on the question of the value of the mortgaged property. Many witnesses testified to a value which would be amply sufficient to secure the debts, while many others fixed the valuation below that sum. Uncontradicted evidence establishes the following facts: That Mrs. Eslava is insolvent, owing many debts in judgment, on which there is return of execution, “ no property found that when she executed the mortgages, she bound herself to keep the property under insurance, and the taxes paid, and she had failed to observe and keep each of these promises, and that the mortgagees had been forced to pay for the insurance, and also to pay the taxes to prevent a sale of the property. It was also shown that the property was allowed to suffer for want of repairs, and that the rent notes were disposed of, before their maturity. In view of these damaging facts, we are disinclined to reverse, or scrutinize narrowly the finding of the chancellor that the mortgage security was insufficient and insecure. He did not err in the appointment of a receiver.
In lending the money and taking the mortgage, Cramp-ton, acting for himself and Mrs. Buck, is not shown to be guilty of the offense of usury. In the sworn answers of defendants, and in the testimony of F. A. Stoutz, it is shown that each of these parties lent to Mrs. Eslava five thousand dollars in cash, and took notes due at twelve months for that sum with eight per cent, added, making fifty-four hundred dollars each. True, this witness says that by pre-arrangement, he, the witness, as a broker, was to be paid four per cent, commissions for negotiating the loan, and relieving the property from taxes and other incumbrances; and it is shown that this fund, in whole or in part, went to the lenders. If this was a device or artifice to secure a greater rate of interest than eight per cent, per annum, then, it would brand the transaction as usurious. Only the testimony of F. A. Stoutz bears directly on this question. He testifies positively that such was the agreement under which he performed the services; that they were worth this sum, and that it was gratuitous on his part that Crampton and Mrs. Buck shared in this fund. There is no other testimony on this question. If this statement is not true, Mrs Eslava, or her agent Jules Eslava, could have controverted it. They have *516not testified. The present record fails to show any usury in the claims of Mrs. Buck, and of Crampton, now held by Primo.
The third of the mortgage claim, held by William E. Stoutz, stands on a different footing. He had been a previous creditor of Mrs. Eslava, for money lent at usurious interest. The theory of his defense to the charge of usury is, that his older demand was liquidated with money raised from Crampton on the mortgages, and that he, William E., subsequently took a third interest in the mortgage loan. We have no doubt the parties understood the rule of law, that the renewal of a usurious contract does not purge it of the taint, and that they attempted to escape that result. The answers, and the general statement of the witness E. A. Stoutz, are to the effect that the usurious debtto Wm. E. was first paid, and that he, William E., subsequently took an interest in the mortgage loan. But when the facts are scrutinized, it is shown that this is an erroneous conclusion. It is shown in the record that Crampton and Mrs. Buck each paid or lent five thousand dollars, and only five thousand. It is no where said that William E. Stoutz paid or lent any money. E. A. Stoutz testifies that the fifteen thousand dollars were paid to him in money and its eqioivalent. He repeats this remark in his cross-examination, and never informs us in what this “equivalent” consisted. Wm. F. Stoutz, in his answer, says: “ In accordance with this understanding, said mortgage debt, [the part, usurious debtto Wm. E.,] was paid and satisfied out of the moneys paid to E. A. Stoutz by Crampton and Buck, and respondent then purchased with said money the note of four thousand five hundred dollars, and deposited with said F. A. Stoutz, eight hundred and thirty-three dollars, to invest in the note for nine hundred dollars, each having twelve months to run. Previous to said purchase and investment, the old note and mortgage of the first of February, 1871, was given up and cancelled, and was put into the possession of E. A. Stoutz for Mr^. Eslava.” In F. A. Stoutz deposition, giving a full, itemized account of his disbursement of the fifteen thousand dollars raised for Eslava on the mortgages, he entered and claimed the following credit: “To Wm. F. Stoutz in settlement of mortgage $4,500.00” The theory of this defense is, that Wm. F. Stoutz, after collecting, through the money raised on the mortgages, his old usurious debt of forty-five hundred dollars, then purchased a third interest in the fifteen thousand dollars, new mortgage loan. How, “with said money,” *517$4,500.00, collected on the old debt, Wm, F. Stoutz paid $5,000.00 one-third of the new mortgage loan of fifteen thousand, is not attempted to be explained. And yet, in W. F. Stoutz’ original answer in this cause, he says “ the original real parties in interest in said mortgages, were said A. L. Crampton, Mrs. Ellen B. Buck, wife of the Hon A. E. Buck, and your respondent.” How ¥m. F. Stoutz could be one of “ the original, real parties in interest in said mortgages,” on which the fifteen .thouand dollars was raised; how part of that $15,000.00 should be used in the payment of the older mortgage debt to him of $4,500.00, and yet with that $4,500.00 so received, he should purchase his original one-third interest in the mortgages on which the money was raised, are questions more easily asked than answered. We feel bound to hold that as to Wm. Stoutz, this is a mere evasion of the statute against usury, by an attempted purgation of the older, tainted contract, while the real transaction was a renewal of the debt, with a change of the security.
The result of the foregoing principles is, that the decree of the chancellor, so far as its affects Primo and Mrs. Buck, must be affirmed. So far as it affects Wm. F. Stoutz, it is reversed, only as to the amount due him on the mortgage debts. The true amount to which he is entitled, is the sum or sums of money lent by him to Mrs. Eslava, with lawful interest thereon, until the making of the sale. If in the making of the loan of $1,500.00, he advanced any money beyond the old debt due him, he is entitled to that with in-, terest. A decree is here rendered according to these principles, and the register is directed to take and report an account to the chancery court, based on these principles. The question of the confirmation of the report, and of the disposition of the surplus purchase-money, should any be found, are left open for the chancellor. We also leave open for the chancellor’s consideration, the question of declaring a lien on the interest of said Stoutz in said lands, so purchased in his decree, for any balance of purchase-money found due from him. The costs of appeal to be paid by Wm. F. Stoutz.