Summary
In Jefferson Standard Life Insurance Co. v. Ham, 178 Miss. 838, 173 So. 672 (1937), the Court answered a challenge to the validity of a three-judge division by holding that a three-judge division had full power to hear and determine cases brought before it. The adoption of section 149A left it to the Court to decide whether it would sit en banc or in divisions of three.
Summary of this case from Russell v. StateOpinion
No. 32499.
April 5, 1937.
1. COURTS.
Decision rendered by equally divided court is binding on Supreme Court under rule of stare decisis.
2. COURTS.
Under constitutional provision authorizing Supreme Court to sit in two divisions under such rules and regulations as court might adopt, decision of division of Supreme Court becomes authoritative and binding as to cases thus determined and decided by division of court (Const. 1890, sec. 287, added in 1916; Rules of Supreme Court, rule 34).
3. USURY.
Statute providing that rate of interest specified in contract shall not be construed as increased by stipulation for payment of interest at periods of less than one year held not construable as curative statute with retrospective effect (Code 1930, sec. 1951).
APPEAL from the chancery court of Coahoma county. HON. R.E. JACKSON, Chancellor.
Maynard, Fitzgerald Venable, of Clarksdale, for appellant.
The court below felt compelled, no doubt, to enter the decision which it did due to the cases of Roger v. Rivers, 135 Miss. 756; Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854; Jefferson Standard Life Ins. Co. v. Todd, 51 So. 723. Our thesis is, for purposes of this argument, that Rogers v. Rivers correctly decided the law as existing at that time; that the Todd and Davis cases followed Rogers v. Rivers and were correctly decided insofar as the points raised on appeal were concerned which were urged and argued before the court, but that since the decision of Rogers v. Rivers, section 1951, Code of 1930, was passed, which had the effect of validating the contracts which were involved in the suits at bar.
It is not and has never been against the statutes, or policy, of Mississippi to charge interest on interest as such. The only proposition decided by Rogers v. Rivers was that rests of less than were prohibited by the Mississippi interest statute.
Section 1951, Code of 1930, authorizing less than annual rests provided specifically inter alia for semi-annual rests such as in the cases at bar and, therefore, took away the bases for the decision in the Rogers v. Rivers, conceding its correctness at the time it was decided.
It has never been objectionable to the laws of Mississippi that interest be charged upon earned interest as such. Our state has never followed the rule of some jurisdictions that interest could not be charged upon interest.
Palm v. Fancher, 93 Miss. 785; Planters Bank v. Caston, 97 Miss. 309.
Some jurisdictions under statutes against usury have permitted the charging of interest upon interest whether the rests were annual, or for lesser periods.
State of Conn. v. Jackson, 1 John Ch. (N.Y.) 13, 7 A.D. 471; Kellog v. Hickock, 1 Wend. (N.Y.) 521; Hale v. Hale, 1 Cald. (Tenn.), 233, 78 A.D. 490; 66 C.J., sec. 141.
Section 1951, Code of 1930 of Mississippi, authorized less than annual rests, providing specifically inter alia for semi-annual rests and changing the law of the state as announced in Rogers v. Rivers.
This section provides that when any particular rate of interest per annum is specified in any contract, or evidence of indebtedness, it shall not be construed as any increase of said rate, merely that the interest at the specified rate is stipulated to be paid quarterly, semi-annually, or at any other period less than a year, nor should the fact that the principal and interest is paid at a date earlier than that stipulated in the contract be taken as any increase of rate percentage although paid for the whole period stipulated.
The language in the statute declaring how courts should treat contracts held to be usurious under former rules indicates that the statute is intended to effect previous transactions and have retroactive effect.
Woodruff v. Scruggs, 27 Ark. 26, 11 A.R. 778; Danville v. Pace, 25 Grat. 66 Va. 1, 18 A.R. 197.
That the Legislature has the power to validate preexisting usurious contracts is beyond question.
Welsh v. Wadsworth, 30 Conn. 149, 79 A.D. 239; Savings Bank Assn. v. Allen, 28 Conn. 97.
It is held that taking away the right of a debtor to have payment of interest on usury contracts applied to principal is within the power of the Legislature.
Iowa Savings Assn. v. Heidt, 107 Iowa 297, 43 L.R.A. 689; Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 682.
The object of curative acts is to enable parties to carry into effect that which they have designed and attempted and which has failed in its expected legal consequences because of some statutory disability, or illegality in their action. It follows that the general rule that a statute should not be held to operate retroactively unless the legislative intent is clear, has no application to curative statutes which by their nature are intended to cure previous conditions.
Brandon v. Henry, 57 So. 967, 175 Ala. 454; Max Shirley v. McCrew, 140 Iowa 163, 132 A.S.R. 248.
This court has recognized the validity of such curative acts.
Reed v. Norman-Breaux Lbr. Co., 142 Miss. 756; Borrow v. City of McComb, 163 Miss. 337.
Section 1951, Code of Mississippi of 1930, being a validating statute, section 4 of the Code preserving defenses and causes of action from changes made by the court, is inapplicable, and has no effect upon this statute.
If we be correct that section 1951 was intended to be curative and validating, it must follow that section 4 of the Code could not have been intended to apply to such statute for otherwise the Legislature would be convicted of the folly of passing a statute validating previous usurious contracts, and at the same time a statute nullifying their action and defeating their purpose, both statutes being passed at the same time upon the adoption of the code.
The Mississippi Code of 1930, section 4, saves rights in cases of repeal but it does not appear to deal with curative statutes.
Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 682; Hurtz v. Woodman, 218 U.S. 205; U.S. v. Ricesinger, 128 U.S. 398.
It remains to call the court's attention to the cases of Jefferson Standard Life Ins. Co. v. Todd, 51 So. 723, and Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854. In neither of these cases was the point raised or urged that section 1951 was validative and curative, and that section 4 was not applicable.
Shands, Elmore, Hallam Causey, of Cleveland, for appellants.
The phrase stare decisis, et non quieta movere, — to stand by precedents, and not to disturb settled points — expresses the policy of the courts, and the principle upon which rests the authority of judicial decisions as precedents in subsequent litigation. The rule stare decisis has for its object the salutary effect of uniformity, certainty, and stability in the law.
7 R.C.L. 1000.
If, however, a decision or series of decisions are clearly incorrect, either through a mistaken conception of the law, or through a misapplication of the law to the facts, and no injurious results would follow from their overthrow, and especially if they were injurious or unjust in their operation, it is the duty of the court to overrule such cases. Hasty or crude decisions should be examined without fear and reversed without reluctance.
7 R.C.L. 1008, 1009.
But where the decision goes to the merit of the controversy, where the whole right of the parties is dependent upon and is governed by it, in such case, if the court should, from any cause, have erred, it is not only proper, but it is an obligatory duty upon them, a duty imperiously demanded by litigants whose rights are before them for adjudication, to re-examine the opinion so pronounced, and, if found to be erroneous, to recede from it.
7 R.C.L. 1009, 1010.
The contracts were not usurious.
Rogers v. Rivers, 135 Miss. 756, 100 So. 385; Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854, 163 So. 506.
The question in cases of this kind is not what the creditor made, or whether he got more money by making the interest payable at periods less than a year, but whether the rate allowed by the statute has been exceeded.
Briggs v. Iowa Savings Loan Assn., 86 N.W. 320; Cutler v. Board, 56 Miss. 115; Merchants, etc., Bank v. Caston, 97 Miss. 309, 52 So. 633; Palm v. Fancher, 93 Miss. 785, 48 So. 818, 22 L.R.A. (N.S.) 295.
In other words the test is not what the creditor makes, but what the debtor, without option, is forced to pay.
Mowry v. Shumway, 44 Conn. 493; Jefferson Standard Life Ins. Co. v. Dattel, 83 F.2d 504, 81 L.Ed. 14; 66 C.J. 200, sec. 113; Hollingsworth v. Detroit, 3 McLean 472, 12 Fed. Cas. 352; Goodale v. Wallace, 103 N.W. 651; Brown v. Johnson, 43 Utah 1, 134 P. 590, Ann. Cas. 1916C, 321; Bank of Newport v. Cook, 46 Am. St. Rep. 171; Vela v. Shacklett, 12 S.W.2d 1007; Monnett v. Sturgis, 25 Ohio St. 384; Radford v. Southern Mut. Life Ins. Co., 12 Bush. 434; Morgan v. Mortgage Discount Co., 129 So. 589; Blanchard v. Dominion National Bank, 130 Va. 633, 108 S.E. 649; Rogers v. Rivers, 135 Miss. 756.
Not only does the decision in the Rogers case, in construing the interest statute, omit words which vitally qualify the words actually construed; but it writes into the statute words which the Legislature did not use, and draws from the statute a meaning which the Legislature did not express.
Even considering the statute as if the words "payable annually" were a part of it when enacted, yet the statute cannot mean that interest is to be paid only at annual rest, at the end of a year. If that were true, on a note maturing in from one to six months, or any number of months less than a year, the creditor would collect at the maturity of the note only the principal of his debt, and would have to wait for twelve whole months before he would be authorized to collect interest on his debt which had been earned at the maturity of the principal.
Cook v. Courtright, 40 Ohio St. 248, 48 Am. Rep. 681; Taylor v. Hiestand, 46 Ohio St. 345, 20 N.E. 345; Hibbs v. Union Cent. Life Ins. Co., 40 Ohio St. 543; Hickox v. Rounds, 51 Ohio St. 56; Cutler v. Madison County, 56 Miss. 115; Maddox v. Graham, 2 Met. 56; Mobile Sav. Bank v. Bd. of Sup'rs, Oktibbeha County, 24 Fed. 110; Wilson v. Neal, 23 Fed. 129; Hawley v. Howell, 14 N.W. 199; Borner v. City of Prescott, 136 N.W. 552.
We, with the utmost respect, submit that the court was in manifest error in reading into the statute the words "payable annually," and also in giving those words the meaning attributed to them in Rogers v. Rivers, even conceding that the Legislature intended to, but did not, write them into the statute.
The decision in Rogers v. Rivers, it is respectfully submitted, confuses prepayment of interest — resulting in a loan of less than the named principal, with interest nevertheless, at the highest legal rate on such named principal — with a contract for the payment of earned interest at the highest legal rate per annum at periods less than a year.
If interest be paid before it is earned, as thus defined, it is prepaid. Otherwise it is not. Payment of interest at any time before the principal matures is not prepayment if the principal has been used by the debtor up to the time the interest is paid and the interest paid does not exceed the highest legal rate per annum calculated for the period for which the money has been used, that is, if for one month, one-twelfth of a year's interest; if for six months, one-half of a year's interest, and so on.
Unless the court holds with the appellant that chapter 179, Laws 1926, and Section 1951, Code 1930, are curative statutes and retroactively effective, and that section 4, Code 1930, does not interfere with such effect, so ably pressed by other counsel for the appellant in this cause, in which contention we concur with all earnestness, and so held to be in Jefferson Standard Life Ins. Co. v. Dattel, 83 F.2d 504, in which case the writers of this brief had a modest part, then this appellant will suffer immeasurable damage if the court fails to overrule Rogers v. Rivers, and the Davis and Todd cases which rest upon it. The court will surely not refuse to consider the question whether that decision is unsound, in the event the court shall determine, contrary to what the appellant believes to be true, that the above statutes are not retroactive, because any number of similar contracts were made by this appellant, and others, in the firm belief that prior decisions of the court made them legal, which contracts have not yet found their way to the courts. If the decision in the Rogers case is unsound, it should not be permitted to subvert those contracts, but should be abandoned as a matter of fundamental right and justice; and the only way this can be determined is for the court to reconsider the question.
Interest notes are separate negotiable instruments.
Harper v. Ely, 70 Ill. 580; Humphreys v. Morton, 100 Ill. 592; Bledsoe v. Nixon, 12 Am. Rep. 642, 69 N.C. 89; Wheaton v. Pike, 11 Am. Rep. 227, 9 R.I. 132; Aurora v. West, 7 Wall. 104, 19 L.Ed. 42; Town of Genoa v. Woodruff, 92 U.S. 502; Gelpcke v. Dubuque, 1 Wall. 175, 17 L.Ed. 520; Jones on Mortgages, sec. 653, 1141; Hollingsworth v. Detroit, 3 McLean 472; Scottish Am. Mtg. Co. v. Ogden, 21 So. 116; Lee v. Melby, 100 N.W. 379; Heyward v. Williams, 41 S.E. 550; Crider v. San Antonio, 35 S.W. 1047; Purvis v. Woodward, 78 Miss. 922, 29 So. 917; Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 682; Petterson v. Berry, 125 Fed. 902, 60 C.C.A. 510; Jefferson Standard Life Ins. Co. v. Dattel, 83 Fed. 2d 504; Grass v. Mtg. Co., 108 U.S. 477, 27 L.Ed. 795; National Surety Co. v. Agricultural Decorating Co., 226 U.S. 276, 57 L.Ed. 221; Commonwealth v. L. N.R.R. Co., 215 S.W. 938; Curtis v. Leavitt, 15 N.Y. 229.
If this court, by decisions rendered prior to 1923, "had sanctioned interest at the rate of eight per centum per annum for periods less than a year although interest was chargeable on the interest if not paid," it is respectfully submitted that Rogers v. Rivers comes within the condemnation of Wisconsin Lbr. Co. v. State, 97 Miss. 571, 54 So. 247.
A stranger cannot set up usury.
Usury is a defense personal to the borrower, and a stranger cannot avail himself of it.
Harper v. Middle States Loan, etc., Co., 46 S.E. 817, 2 Ann. Cas. 42; Lee v. Feamster, 21 W. Va. 108.
Roberson, Cook Luckett, of Clarksdale, for appellee.
The contracts provied for usurious interest. We base our contention that the contracts were usurious on Rogers v. Rivers, 135 Miss. 756, 100 So. 385; Jefferson Standard Life Ins. Co. v. Todd, 151 So. 723, and Jefferson Standard Life Ins. Co. v. Davis, 163 So. 506, 173 Miss. 854.
Appellants' present argument was determined adversely to it in the Todd case, 151 So. 723.
Chapter 179 of the Laws of 1926 did not relieve of usury a note usurious under Rogers v. Rivers; and section 1951 of the Code of 1930 did not prescribe a rule of construction to be placed on contracts executed prior to the adoption of the Code of 1930.
Jefferson Standard Life Ins. Co. v. Todd, 151 So. 723.
Section 4 of the Code of 1930 preserves these causes of action unaffected by said section 1951 of the Code of 1930.
These causes of action were established in the appellees by section 2075 of Hemingway's Code of 1917, which provided that "if a greater rate of interest than eight per centum shall be stipulated for or received in any case, all interest shall be forfeited, and may be recovered back, whether the contract be executed or executory."
These causes of actions were not affected by chapter 179 of the Laws of 1926, for that chapter, by section 1 thereof, merely exempted from taxation six per cent loans with semi-annual rests, and in section 2 thereof, dealt solely with "loans where principal and interest both fall due at the same time in less than one year after the date of the note evidencing the same."
Section 1951 of the Code of 1930 became the law of this state by its insertion therein by the codifiers and the adoption of the Code by the Legislature; it had not been previously adopted by the Legislature and approved by the governor.
Section 1951 is either a legislative construction of our usury laws, in which case it is void, or it is a substantive enactment of a new usury law. In the later case, it is repugnant to the usury statute under which these causes of action arose and to that extent supersedes and repeals it. But as such repeal was effected by the adoption of the Code, the causes of action then existing in favor of the appellees were not disturbed.
Goodman v. Building Loan Assn., 71 Miss. 310, 14 So. 146.
The construction placed by our Supreme Court on section 4 of the Code of 1892 was that that section preserved "unaffected by any changes made by the code, any former cause of action or defense." The same construction must now be placed by this court on section 4 of the Code of 1930, because the two sections are identical, and the Legislature, by re-enacting section 4 of the Code of 1892 in the Codes of 1906, 1917 and 1930, adopted that construction of the statute.
This court is bound by a construction formerly given a statute by the re-enactment of the statute.
Griffin v. Jones, 154 So. 551, 170 Miss. 230; Hughes v. Gulley, 153 So. 528, 170 Miss. 425; Gully v. Jackson International Co., 145 So. 905, 165 Miss. 103; Masonite Corp. v. Lochridge, 141 So. 758, 163 Miss. 264; White v. Miller, 133 So. 146, 160 Miss. 734; Miller v. Y. M.V.R. Co., 132 So. 597, 160 Miss. 603; White v. Williams, 132 Miss. 573, 159 Miss. 732; Burks v. Moody, 107 Miss. 279, 141 Miss. 370; Hoy v. Hoy, 48 So. 903, 93 Miss. 732.
Section 1951, Code of 1930, is not only a "change" effected by the Code of 1930, it is a "repeal," by implication, of the provisions of section 2075 of Hemingway's Code of 1917, insofar as the same prohibited the charging of interest at the highest contract rate, such interest to be payable semi-annually and to bear interest at highest contract rate. That is so because the two statutes are, to that extent, repugnant to each other.
State Highway Dept. v. Haines, 139 So. 168, 162 Miss. 216; Gibbons v. Brittenum, 56 Miss. 232; Peyton v. Cabaniss, 44 Miss. 808; Southern Ry. Co. v. Jackson, 38 Miss. 334; Myers v. Marshall County, 55 Miss. 344.
The rule is certain and clear that if two statutes cannot be harmonized, the last enacted, to the extent it is repugnant to the older statute, repeals the same. The only question here is whether section 1951 of the Code of 1930 is repugnant to section 2075 of Hemingway's Code of 1917. We submit that it is.
Section 1951 should not have a retroactive effect.
Richards v. City Lbr. Co., 101 Miss. 678, 57 So. 977; Power v. Calvert Mortgage Co., 112 Miss. 319, 73 So. 51; Bell v. Union Planters Bank Trust Co., 158 Miss. 486, 130 So. 486.
A statute is not construed so as to give it a retroactive effect, unless its words admit of no other meaning.
Garrett v. Beaumont, 24 Miss. 377.
Statutes will always be given prospective operation, unless the contrary intention is manifested by the clearest and most positive expression.
State v. Union Tank Car Co., 151 Miss. 797, 119 So. 310.
It is a familiar rule of statutory construction that retroactive operation shall not be given to a statute, unless it be the manifest intention of the Legislature that it should have that effect. Before a statute will be given such retroactive effect, there must be a plain declaration therein that it is so to operate.
Petroleum Co. v. Miller, 154 Miss. 565, 122 So. 393.
Statutes will be given prospective operation unless contrary intention is shown.
Miss. Central R. Co. v. City of Hattiesburg, 163 Miss. 311, 141 So. 897.
The rights here asserted by appellees are contractual rights and not claims for penalties. Our statute makes them so, and this court so held in Chandler v. Tharp, 161 Miss. 623, 137 So. 496, 78 A.L.R. 455.
To give retroactive effect to section 1951 will render it unconstitutional, it being beyond the power of the Legislature to impair vested rights.
Richards v. City Lbr. Co., 101 Miss. 678.
Section 1951 does not purge these contracts of their usurious features.
Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854, 163 So. 506.
Section 1951 of the Code of 1930, if intended to affect contracts already made, is violative of section 1, Article 1, Constitution of 1890, being a usurpation by the Legislature of judicial functions.
Planters' Bank of Tennessee v. Black, 11 S. M. 43; Lawson v. Jeffries, 47 Miss. 686; McCulloch v. Stone, 64 Miss. 378, 8 So. 236; Lindsay v. United States Savings Loan Co., 24 So. 171.
Rogers v. Rivers was correctly decided.
The question settled by the decision of this court in Rogers v. Rivers is no longer open for review or investigation.
Moss Point Lbr. Co. v. Harrison County, 42 So. 290, 89 Miss. 448; State v. Wyoming Mfg. Co., 103 So. 11, 138 Miss. 249; White v. Williams, 132 So. 573, 159 Miss. 732; New York Life Ins. Co. v. Boling, 169 So. 882; Village of Zama v. Ayers Separate School District, 82 So. 313, 120 Miss. 444.
The extension agreement in the Dorsey case provided for usurious interest.
Ruby Ham is entitled to the relief granted her by the lower court.
Boyd v. Warmack, 62 Miss. 536; McAlister v. Jerman, 32 Miss. 142; Chaffe v. Wilson, 59 Miss. 42; Spinks v. Jordan, 108 Miss. 133, 66 So. 405; Chandler v. Cooke, 163 Miss. 147, 137 So. 496.
Argued orally by L.C. Hallam, and W.W. Venable, for appellant, and by Semmes Luckett, for appellee.
In this case the usury statute of our state, section 1946, Code 1930, was enforced by the court below in accordance with the construction put upon it by this court in Rogers v. Rivers, 135 Miss. 756, 100 So. 385, 37 A.L.R. 313, which was decided by this court in banc, there being an equal division, three judges for affirmance and three for reversal.
The pleading and essential facts alleged in the case at bar cannot be differentiated from the case of Jefferson Standard Life Insurance Co. et al. v. Dorsey et al. (Miss.), 173 So. 669, this day decided.
Appellants urge upon us that we now overrule the case of Rogers v. Rivers, supra, as unsound and mischievous, and cite authorities from other appellate courts, and among them, Jefferson Standard Life Ins. Co. v. Dattel (C.C.A.), 83 F.2d 504. The reasoning and philosophy of those cases were considered and disposed of by the controlling opinion in the case of Rogers v. Rivers, supra, and that decision, although rendered by an equally divided court, is binding upon us under the rule of stare decisis. See Robertson v. Mississippi Valley Company, 120 Miss. 159, 81 So. 799. In the latter case the three judges who voted to affirm the case were entitled to write the controlling opinion, they having decided to conform to the judgment of the lower court.
Aside from this, the same question has been presented to Division B of this court again, with a change in the personnel thereof, and after due consideration of the case of Jefferson Standard Life Ins. Co. v. Todd, 151 So. 723 (not officially reported), the court adhered to and reaffirmed the decision in Rogers v. Rivers, supra. Only recently this division considered this same question again and adhered to that decision. See Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854, 163 So. 506.
The Legislature by the adoption of the Code of 1930 and section 1946 thereof reenacted the statute with the construction placed upon it by this court in the case of Rogers v. Rivers, supra.
By the Laws of 1916, chapter 152, the Legislature inserted into our Constitution an amendment (section 287) which vested in the Supreme Court the power to sit in two divisions under such rules and regulation as the court might adopt. By rule 34 thereof this court exercised the constitutional power vested in it, and the court was so divided in two divisions. See 161 Miss., Rules, p. 908. Under the constitutional power and authority vested in this court, the decision of a division thereof becomes authoritative and binding in this state as to cases thus determined and decided by a division of this court; and a decision by an equally divided court is a judicial precedent until overruled. Robertson v. Mississippi Valley Co., supra. By that amendment full power is vested by the Constitution in a division of this court to hear and determine the cases brought before it.
We decline to overrule the case of Rogers v. Rivers, supra, and the other cases following it.
In the case of Jefferson Standard Life Ins. Co. v. Dorsey et al., 173 So. 669, we have decided the effect of section 1951, Code 1930, as applied to this case adversely to the contention that it shall be construed as a curative statute and retrospective in its effect.
Affirmed.