Opinion
No. 36272.
January 13, 1947.
1. USURY.
Where dealings between maker and payee of notes ran over several years and involved many transactions, and of amount claimed by maker to be usurious interest a large part, at least, consisted of errors, inadvertences, miscalculations and bona fide contentions over disputed items, chancellor was justified in concluding that maker had contracted to pay interest at rate greater than 8 but less than 20 percent annually, warranting recovery of principal amount of indebtedness (Code 1942, sec. 36).
2. USURY.
That all interest had been forfeited because more than 8 but less than 20 percent had been charged annually did not relieve maker of notes of obligation to pay attorneys' fees on amount found to be owning from maker to payee (Code 1942, sec. 36).
APPEAL from the chancery court of Humphreys county. HON. J.L. WILLIAMS, Chancellor.
Henry Barbour, of Yazoo City, for appellant.
Usurious interest in excess of 20 percent per annum was contracted for on January 29, 1945, and this contract avoided and cancelled the entire indebtedness between J.W. McClintock, Inc., and T.O. Patterson.
Byrd v. Link-Newcomb Mill Lumber Co., 118 Miss. 179, 79 So. 100; Hebron Bank v. Gambrell, 116 Miss. 343, 77 So. 148; Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854, 163 So. 506; Dickey v. Bank of Clarksdale, 183 Miss. 748, 184 So. 314; Planters' Bank v. Snodgrass, 4 How. (5 Miss.), 573; Smythe v. Allen, 67 Miss. 146, 6 So. 627; Chandler v. Cooke, 163 Miss. 147, 137 So. 496; Crittenden Co. v. Ragan, 89 Miss. 185, 42 So. 281; Hiller v. Ellis, 72 Miss. 701, 18 So. 95, 41 L.R.A. 707; Taylor v. Copeland, 183 Miss. 85, 181 So. 742; McAlister v. Jerman, 32 Miss. 142; Torrey v. Grant, 10 Smedes M. (18 Miss.) 89; Hardin v. Grenada Bank, 182 Miss. 689, 180 So. 805; Parchman v. McKinney, 12 Smedes M. (20 Miss.) 631; McLaurin v. Parker, 24 Miss. 509; Brown v. West, 80 Miss. 764, 32 So. 52; Kennedy v. Porter, 176 Miss. 742, 170 So. 286; Jones v. Lamensdorf, 175 Miss. 565, 167 So. 624; Wood v. Essary, 177 Miss. 134, 170 So. 543; Crabb v. Comer, 190 Miss. 289, 200 So. 133; Brown v. Nevitt, 27 Miss. 801; Jones v. Brewer, 146 Miss. 142, 110 So. 115; Hyde v. Finley, 26 Miss. 468; Burt v. Brashears, 118 Miss. 339, 79 So. 182; Gully v. Gulf Coast Industrial Loan Co., 168 Miss. 768, 151 So. 754; Canal-Commercial Trust Savings Bank v. Brewer, 143 Miss. 146, 108 So. 424, 47 A.L.R. 45; Chandlee v. Tharp, 161 Miss. 623, 137 So. 540, 78 A.L.R. 445; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Rozelle v. Dickerson, 63 Miss. 538; Warmack v. Boyd, 63 Miss. 488; Carter v. Holloway (Miss.), 28 So. 941; Commercial Bank of Manchester v. Nolan, 7 How. (8 Miss.) 508; Hardin v. Grenada Bank, 182 Miss. 689, 180 So. 805; Wrotten v. Jones (Tex.), 286 S.W. 680; Reed v. Coale, 4 Ind. 283; Bowder v. Gabel (Mont.), 76 P.2d 334; Atlas Realty Corp. v. House (Conn.), 192 A. 564; Grove Fultz v. Great Northern Loan Co., 17 N.D. 252, 116 N.W. 345, 138 Am. St. Rep. 707; Person v. Mattson (N.D.), 156 N.W. 78, Ann. Cas. 1918A, 747; 66 C.J. 304, 305, Secs. 298, 299; 27 R.C.L. 250, Sec. 53; 39 Cyc. 390.
The cotton sale was an integral part of the usurious contract of January 29, 1945, and Patterson is entitled to recover the value of the cotton.
Rigby v. Stone, 194 Miss. 775, 13 So.2d 230; Chandlee v. Tharp, supra; Wright v. Spencer, 18 Am. Dec. 76; Boorney v. Isley, 42 Idaho, 547, 246 P. 966, 47 A.L.R. 578; McCleod-Nash Motors v. Commercial Credit Co., 187 Minn. 452, 246 N.W. 17, 87 A.L.R. 296.
The Chaney notes were included in and therefore avoided by the usurious contract of January 29, 1945, and should be cancelled, with the loss falling on J.W. McClintock, Inc.
Jones v. First National Bank, 170 Miss. 857, 155 So. 173; First National Bank v. John McGrath Sons Co., 111 Miss. 872, 72 So. 701; Adams v. Power, 48 Miss. 450, 454; Hazlehurst Oil Mill Fertilizer Co. v. Booze, 160 Miss. 136, 133 So. 120; Kennedy v. Porter, supra; Eckert v. Searcy, 114 Miss. 150, 74 So. 818; Baker v. Burkett, 75 Miss. 89, 21 So. 970; Steger v. Bush, Smedes M. Ch. 172; First National Bank v. Yowell (Tenn.), 294 S.W. 1101, 52 A.L.R. 1412; Vogle v. Ripper, 34 Ill. 100, 85 Am. Dec. 298; Elisberg v. Simpson, 173 N. Supp. 128; Fletcher American Co. v. Culbertson, 215 Ky. 695, 286 S.W. 984; First State Bank v. Cooper (Tex.), 179 S.W. 295; Armstrong v. Walker, 200 Ala. 364, 76 So. 280; Bohning v. Caldwell, 10 F.2d 298; Sheppard v. Hamilton, 29 Barb. (N.Y.) 156; Baillie v. Dickson, 2 Can. L.T. 543; Citizens State Bank v. U.S.F. G. (Neb.), 266 N.W. 81, 103 A.L.R. 1401; Code of 1942, Secs. 50, 68, 71, 92, 101, 160, 161; 10 C.J.S. 810, Sec. 318; 8 Am. Jur. 442, 448, 449, 452, 455; 41 Am. Jur. 617, Sec. 45, p. 621, Sec. 52; Annotations, 52 A.L.R. 1420, 1430, 1432; Restatement, Restitution, p. 288, Sec. 70.
V.B. Montgomery and W.D. Womack, both of Belzoni, for appellees.
A reconciliation of the accounts as acted upon by McClintock in taking the note for $7,014.99 on January 29, 1945, and the accounts as sued upon shows that these are all one and the same identical account.
All disputes and conflicts over the items of the accounts have all been decided by the lower court to the satisfaction of all parties and are totally irrevelant and immaterial in connection with the question of usury.
The balance of $559.55 brought forward from the 1943 account into the 1944 Bomer Place account did not contain interest on the 1943 account in excess of 20 percent per annum.
Doyle v. L. Herzog Bros. Dry Goods Co., 115 Miss. 154, 75 So. 760; Smythe v. Allen, 67 Miss. 146, 6 So. 627; Morgan v. King, 128 Miss. 401, 91 So. 30; Jones v. Hernando Bank, 194 Miss. 474, 13 So.2d 31.
The $7,014.99 note dated January 29, 1945, did not contain interest in excess of 20 percent per annum.
The usury law is highly penal and is to be strictly construed.
Morgan v. King, supra; Crabb v. Comer, 190 Miss. 289, 200 So. 133; Jones v. Hernando Bank, supra; Byrd et al. v. Link-Newcomb Mill Lumber Co., 118 Miss. 179, 79 So. 100; Smythe v. Allen, supra.
The Chaney notes and deed of trust are still in full force and effect.
8 Am. Jur. 444, Secs. 790, 791, p. 446, Sec. 792; 52 A.L.R. 1416, 1417, 1422.
A decree based on conflicting evidence is final.
Heard v. Cottrell, 100 Miss. 42, 56 So. 277; Lott v. Hull, 104 Miss. 308, 61 So. 421; Lee v. Wilkinson, 105 Miss. 358, 62 So. 275; Bland v. Bland, 105 Miss. 478, 62 So. 641; Grace v. Pierce, 127 Miss. 831, 90 So. 590, 21 A.L.R. 1035; Crump v. Tucker, 149 Miss. 711, 115 So. 397; Stevens v. Magee, 81 Miss. 644, 33 So. 73; Gulf Transport Co. v. Fireman's Fund Ins. Co., 121 Miss. 655, 83 So. 730, 9 A.L.R. 1307; Barry v. Mattocks, 156 Miss. 424, 125 So. 554; Sykes v. Sykes, 162 Miss. 487, 139 So. 853; Cole v. Standard Life Ins. Co., 170 Miss. 330, 154 So. 353; Silver Creek Co. v. Hutchens, 168 Miss. 757, 151 So. 559; Chapman v. Federal Land Bank of New Orleans (Miss.), 185 So. 586; Keaton v. Miller, 38 Miss. 630; Bacot v. Holloway, 140 Miss. 120, 104 So. 696; Crichton v. Halliburton Moore, 154 Miss. 265, 122 So. 200; Langston v. Farmer, 176 Miss. 820, 170 So. 233; Stroud v. Loper, 190 Miss. 168, 198 So. 46; Byrd v. Hendon (Miss.), 120 So. 203; Interstate Cattle Co. v. Lapsley (Miss.), 24 So. 532; Vaughan v. Commercial Bank (Miss.), 18 So. 270; Griffith's Mississippi Chancery Practice, Sec. 674, pp. 783, 784.
Interest forfeiting usury on a promissory note forfeits interest only, but principal and 10 percent attorney's fees on the principal may be recovered.
Eyrich v. Capital State Bank, 67 Miss. 60, 6 So. 615; Brahan v. First National Bank, 72 Miss. 266, 16 So. 203; Duggan v. Champlin, 75 Miss. 441, 23 So. 179; Clifton v. Bank of Aberdeen, 75 Miss. 929, 23 So. 394; Burt v. Brashears, 118 Miss. 339, 79 So. 182; Jones v. Brewer, 146 Miss. 142, 110 So. 115; 66 C.J. 241, Sec. 187.
The court below found that Patterson had contracted to pay McClintock interest at a rate greater than eight, but less than twenty percent, annually, and that Patterson was liable for the principal of, but not the interest on, the debt. Section 36, Code 1942. Patterson now contends on his direct appeal that the chancellor erred in not finding that the rate of interest exceeded twenty percent and in not also forfeiting the principal of the debt.
The question presented to us is whether the evidence justified the chancellor's finding of fact and his conclusion of law. The dealings between these parties ran over a number of years and involved many transactions. The record discloses that of the amount claimed by Patterson to be usurious interest a large part, at least, consisted of errors, inadvertences, miscalculations, and bona fide contentions over disputed items. These do not constitute usury.
"In the very nature of the case, in every usurious contract, there must exist these two elements of knowingly giving or promising, and knowingly taking or reserving, a greater rate of interest than that fixed by statute, and of doing so intentionally. It follows, therefore, that when by mistake in fact, by error in calculation, or by inadvertence in insertion of date, the effect of an engagement to pay money may be to secure a greater rate of interest than the statutory rate, yet such mistake, error, or inadvertence will not stamp the taint of usury on such engagement, nor cause to be visited upon one who did not knowingly and intentionally disregard the law in this behalf the highly penal consequences of an usurious offense." Smythe v. Allen, 67 Miss. 146, 6 So. 627, 628. Again it was said in Jones v. Hernando Bank, 194 Miss. 474, 13 So.2d 31, 32, "To constitute usury, there must be an intent to commit the act which results in the exaction of a usurious charge. When such act is the result of mistake or misapprehension, this necessary element is lacking." The chancellor was amply justified in his finding and conclusion in this regard.
The decree below adjudicated that the principal of the debt due and owing by Patterson to McClintock was $4,921.67. The notes evidencing the liability of Patterson obligated him to pay ten percent ". . . upon the amount due." The chancellor disallowed any claim for attorney's fees. This action is the ground for the cross-appeal. The fact that all interest had been forfeited did not relieve the maker of the notes of the obligation to pay attorney's fees upon the amount found to be owing. Burt v. Brashears, 118 Miss. 339, 79 So. 182; Jones v. Brewer, 146 Miss. 142, 110 So. 115.
Affirmed on direct appeal; reversed on cross-appeal and remanded for further proceedings in accordance with this opinion.
Sydney Smith, C.J., did not participate in this decision.