Smith v. Myers

Brent, .J.,

delivered the. opinion of the Court.

The record in this case is so very limited, that we have been somewhat embarrassed in our examination of the questions presented. It contains nothing hut the short docket entries, and the opinion and decree of the Court below. We refer to this, that we may express our disapproval. The record ought certainly to contain such of the original papers as are necessary to present the case with sufficient fulness.

As it is, we are restricted to the opinion of the Court to learn anything of the facts and proceedings in the case. This to say the least, is irregular, but we have concluded to entertain the appeal, although we might well dismiss it upon the ground of an incomplete and imperfect record.

The case has been submitted upon printed arguments, and there are but two errors, assigned on the part of the appellant, in 'the views of the Court. The first is in regard to the affidavit to the mortgage, the present contest arising between creditors and the mortgagee. The appellant contends that the affidavit was not made by the mortgagee in good faith, and that it is untrue in fact. The Court below decided otherwise, and in this the appellant alleges there is error..

. The Code, in Art. 24, sec. 29., provides, ‘'that no mortgage shall be valid, except as between the parties thereto, unless there be endorsed thereon an oath or affidavit of the mortgagee, that the consideration in the mortgage is true and bona fide as therein set forth.” The affidavit in this case is formal and the consideration set forth in the mortgage is a note for five thousand dollars. In fact the true amount loaned is but $4400, the residue of $600 being usurious or withheld as a bonus. It is therefore *433 argued that the affidavit is false and void, and the mortgage is to he treated as one without an affidavit endorsed upon it.

The consideration expressed in the mortgage is the indebtedness of the mortgagor on and by his note for five thousand dollars, and to the trnlh and good faith of that consideration as set out the affidavit has reference. From the facts stated in the Court’s opinion it is apparent, that the note truly represents the contract made between the parties, at the time of its execution, and that it was in good faith intended by them to express the debt which was to he paid. It was not designed as a deceit, and there is nothing to show that any fraud was practised in obtaining it. Nor was there any fraud upon creditors intended or contemplated. On the contrary the amount of money loaned was obtained for the purpose of meeting the demands of pressing debts;’and was actually applied to their payment. This being so, it cannot he said that the mortgagee, Myers, either in law or morals was guilty of false swearing, when he made the affidavit that the consideration, set forth in the mortgage, was true, and that it had been given and received in good faith. As was said by tire Court below, there is nothing immoral in the contract, and it could he enforced to its utmost extent, but for the operation of the laws against usury. These do not render the contract void, or make invalid the mortgage given to secure its performance. They only forfeit the excessive or usurious interest, and cannot be said to affect the fact, that the contract between the parties was real and true, and was entered into by both of them in good faith. The Circuit Court seems to have entertained the same view in regard to this affidavit, and we think the conclusion, reached by them, is the correct one.

The other error assigned is, that if the usurious interest taken in advance at the time of the loan, was applied, as it should he, to the payment of the legal interest accruing *434 upon the sum which was really advanced hy the appellee, there was no default in any of the conditions of the mortgage. This question has not heen discussed in the argument submitted on the part of the appellant, and we are without information of the grounds upon which he rests his objection to this part of the Court’s opinion. Whether the objection is true or not in the fact assumed, we cannot ascertain from this record. But the Court below has treated it upon the assumption that it is so, and we shall so regard it. We cannot better express our views upon this point than in quoting from the language used by the Court. They say in their opinion, “but it is said that by application of the $600, retained as bonus, to the accruing interest on $4400, there would have been no default in payment of interest on the sum actually loaned, and it is contended the Court should make this application. No authority has been cited for this position, and we think none can be found. Excessive interest, when once paid, may be recovered back by an action at law brought in due time, or in equity it may be eliminated from the claim upon the objection of other claimants whose rights its allowance would injuriously affect; but we know of no case in which it has been decided that usury could be taken advantage of in the mode now contended for. In determining whether there has been a default, the Court must be governed by the terms of the mortgage itself, irrespective of the question of usury. After a default thus made, a sale or its ratification can he prevented on this ground only by paying, or at least offering to pay, the sum actually loaned, with legal interest. If this exceptant, or the creditors whom he represents had accompanied their objection with payment into Court, or tender of payment of $4400, with legal interest thereon up to the time of sale, a very different case would have been presented, but as it now stands, we cannot sustain this objection.” This expresses our own views, and we fully concur in the reason *435 ing as well as tlie conclusion reached by tlie Circuit Court upon this point.

Decided 12th February, 1875.)

Upon the other branches of the case, the correctness of tlie Court’s conclusions is manifest. They have not been commented upon, or referred to in the argument on the part of the appellant, and as no error lias been suggested in regard to them, it is unnecessary to do more than to say we concur upon them with the Court below.

Finding no error in the opinion, the decree which has been passed by the Court below will he affirmed.

Decree affirmed.