Spinks v. Jordan

1. Usury. Right of third persons. Judgment creditors. Creditors’ ■ suit. Conditions precedent. Tender. Judgment creditors of insolvent debtors have the right to show usury in an indebtedness, secured by a deed of trust which is a first lien on the debtors’ property, and to have such indebtedness reduced by the deduction therefrom of the interest illegally charged. 2. Creditors’ Suit. Condition precedents. Tender. Where judgment creditors filed a bill, alleging that the holders of a trust deed, which was a first lien on the debtors property, and which the holders were seeking to foreclose, had included in the amount of the debts secured usurious interest and overcharges, and had failed to allow proper credits, and prayed to have the correct amount of the debt ascertained, so that the proceeds from the sale under the deed of trust, in excess of such amount may be applied to other debts, it was not necessary to tender or offer to pay into court the amount of the indebtedness secured by the deed of trust which might be found due.

Appeal from the chancery court of Leak county. Hon. J. F. McCool, Chancellor. Suit by W. M. Jordan and others against J. P. Spinks, and others. From a decree overruling a demurrer to the bill, the defendant, J. P. Spinks, appeals. The facts are fully stated in the opinion of the court. But for the fact that counsel for appellee is so seriously in error as to the true doctrine announced in the case of Amt v. Rosenbaum, 74 Miss. 893, we should not attempt to respond to his brief; but finding one of so vast learning as he, so thoroughly confused as to what was really held in that case, I take it that there will be nothing amiss in again calling the attention of the court to the fact that even in the Anst case, the case on which appellees are relyng, the complainants offered, in their hill to do equity, by paying what was found to be due on an accounting; and, in addition to this, tendered property of his own, and not that of some other person,-worth greatly more than enough to meet and pay off any amount that mig’ht be found due, to be sold to raise the necessary funds with which to pay off the said indebtedness. See from the top of page 897 of that case, concluding with line eight. And by beginning with line six from the bottom of the same page, the fact can’t be overlooked, that in that case the same charges were made in the bill that are in this; that is, usurious interest, extortionate charges for goods, false charges for goods never purchased, and failure to give proper credits for payments made; and the only thing that saved the bill on demurrer in that case, was the fact that complainants offered, in their bill, to pay the amount found to be due on an accounting and, instead of making an actual tender in cash, tendered property of their own (not that of some other person) worth greatly more than enough to meet and pay off any amount that might be found due. It is also expressly held in that ease that the general rule requires, in addition to an offer in the bill to pay the amount found to be due, that an actual tender of the amount admitted to be due, be made in cash. Appellees, in the present case, do not so much as make an offer to pay the amount found to be due, much less an actual tender of money or property to back up such offer; but they attempt to stand behind the absurd plea that they have offered in their bill to let the property of A. II. Tate, one of the defendants be sold to pay this debt. They have successfully evaded personal liabilities at every point in their bill, and seek to litigate with appellant at his sole peril. We submit that in all cases of this character, it is the imperative duty of the complainant to offer in his bill to pay the amount found to be due, and unless it be in a case to redeem and where property of his own, of sufficient value to pay the debt, is tendered, he should make an actual tender of the amount due in cash, when.known, and where the exact amount is not known, even though it may be concealed from him by the defendant, he should make an actual tender of some safe sum sufficient to cover any amount that might honestly be believed to be due. Crittendonv. Reagan, 89 Miss. 185; Purvis v. Woodward, 78 Miss. 929. It is charged that we are mistaken in saying that the expression used in the Aust case, 74 Miss. 893, wherein it is stated'that “the allegation of tender or offer to pay is unnecessary” is a quotation by Woods, C. J., from the case Gassely v. Weathersby et al., 119 N. Y. 522, and that after quoting from that case he immediately says that the current of authority is against that view. Now let’s see if we are. Beginning with the seventh line from the bottom of page 898 of that case, we find him using this language: “In the recent case of Gassely v. Weathersby et al., 119 N. Y. 522, this view is broadly stated. “Immediately following this he begins to quote from the New York case and continues to quote therefrom up to and including the first word of line twenty-two from the bottom of page 899. It is in this quotation alone that the expression is found. Having thus quoted from the New York case, he proceeds immediately to say: “It must be admitted, however, that the current of authority is against this view.” As to the right of appellees to plead usury, we confidently rest on the authorities cited in our original brief. Our courts have held that it is contrary to-public policy for a person to charge usury in any transaction and that being true it may be raised at any time and by whomsoever is affected by it. B. <& D. Association v. Grant, 82 Miss. 424. This usury may be recovered back by the debtor whether the contract is executed or executory. Mississippi Code of 1906, section 2678. The weight of authority sustains our contention that other creditors may set up usury in the note and deed of trust held by Spinks. Brook v. Todd, 79 Ga. 692; Ope v. Solomons, 36 Ga. 541; Coleman v. Cole, 158 Mo. 260; Marx v. Hart, -■ Mo. 503; See v. Sale, 169 Mo. 38; 55 Mo. 656; 63 Mo. App. 656; Carew v. Kelley, 59 Barb. (N. Y.), 239; Dix v. Van Wyck, 2 Hill (N. Y.) 522; Chapins v. Mathet, 91 Hun. (N. Y.) 565. Also, see 27 N. Y. 568; 40 N. Y. 488; Hamilton Brown Shoe Co. v. Mayo (Texas), App. Div. 164; Martin Brown Co. v. Perill, 77 Texas Í991. In the case of Stain v. Swenson, 44 Minn. 218, it was held, under the Minnesota statute that usurious contracts were void and that a sheriff holding mortgaged property under a writ of attachment was entitled to defend against the mortgage on the ground of usury in a court of law. See, also, In re Miller, 118 Fed. Bep. 360. The Miller case above, held that under the’ Georgia statute which is similar to ours in some respects, a mortgage creditor has no right to collect usury from an insolvent debtor to .the prejudice of his other creditors. A few of the states held that subsequent incumbrances including mortgages, deeds of trust and judgments cannot set usury up to defeat or reduce the amount of the usurious contract, but a majority of the Courts have held to the contrary and our court has gone with them them in the holding, that a subsequent beneficiary in a deed of trust may do it, in the case cited heretofore and that courts of England, Mansfield v. Ogal, 3 Eq. R. 907, and those of Indiana, 26 Ind. 94, and Kentucky, Banta v. Louisville Savings Co., 59 S. W. 501, and 22 Ky. L. Rep. 1045, and the courts of New Jersey, Trusdell v. Bowden, 47 N. J. Eq. 396, and the courts of New York, Chamberlain v. Dempsey, N. Y. Supreme Ct. Gen. Term, 14 Abb. Pr. (N. Y.) 241; Mutual L. Ins. Co. v. Bowen Barb. (N. Y.), 618; Maloney v. Hahart, 81 Texas, 281; Jolmson v. Lasher Real-Estate Assn., 2 Texas Civ. App. 494; all hold that judgment lienors are entitled to plead usury in contracts and securities upon which they hold judgments. This state has lined up with them for the same reason, as to judgments.