Shealy v. Cappelmann, Treasurer

The opinion of the Court was delivered by Mr. Justice Cárter. This action by the plaintiff, J. E. Shealy, against the defendant, E. W. Cappelmann, treasurer, etc., was commenced in the Court of Common Pleas for Richland County by *410 service of a summons and complaint April 1, 1926, for the recovery of the usury penalty. The‘plaintiff in his complaint alleged that the defendant demanded and collected compound interest upon the notes described in the complaint and that by so doing violated the usury statute, and, because of this alleged act on the part of the defendant, the plaintiff demanded the penalty provided by the usury statute, a sum double the amount of interest collected. The defendant demurred to the complaint on the ground that the same did not allege facts sufficient to constitute a cause of action for the reason that it appeared on the face of the complaint that the terms of the notes in question provided for the payment and collection of compound interest. The demurrer was heard by his Honor Judge E. C. Dennis, at the November, 1926, term of Court of Common Pleas for Richland County, who, after a full consideration, issued an order sustaining the demurrer and dismissing the complaint. From this order the plaintiff has appealed to this Court, imputing error to his Honor, Judge Dennis, in the particulars set forth under the several exceptions which will be incorporated in the report of the case. In considering the exceptions, we shall not consider them separately, but as a whole, for the reason that the only question raised is “whether or not under the terms of the notes the defendant was entitled to charge and collect compound interest.” The two notes in question, executed by the plaintiff and assigned to the defendant, contain the following language, one of them being $225.00, and the other for $250: “$225.00 Lexington, S. C., March 25, 1913. “One year after date, for value received, I promise to pay to C. M. Efird, Treasurer of the United Synod of the Evangelical Lutheran Church, or order, the sum of two hundred twenty-five dollars, with interest thereon from date until *411 fully paid at the rate of 8 per cent, per annum. Interest to be paid annually, and, if not so paid, to become principal and draw interest at the rate aforesaid. “J. E. Shealy.” “$250.00 Lexington, S. C., Dec. 4, 1913. “One year after date, for value received, I promise to pay to C. M. Efird, Treasurer of the United Synod of the Evangelical Lutheran Church in the South, or order, the sum of two hundred and fifty dollars, with interest thereon from date until fully paid at the rate of 8 per cent, per annum. Interest to be paid annually, and, if not so paid, to become principal and draw interest at the rate aforesaid. “J. E. Shealy.” We agree with Judge Dennis in the conclusion reached and think he issued a proper order in the case. The clause, “Interest to be paid annually, and, if not so paid, to become principal and draw interest at the rate aforesaid,” in our opinion, gave to the defendant, to whom the notes had been assigned, the right to charge the same rate of interest (8 per cent.) on all unpaid interest that was charged on the principal, and by. so doing the defendant was not guilty of usury and his act was not in violation of the usury statute. ■ In the support of this view, reference may be had to the case of Tate v. Lenhardt, 110 S. C., 569; 96 S. E., 720, to which Judge Dennis called attention. The opinion in that case, written by Mr. Justice Hydrick, deceased (honored and highly esteemed member of the Court), contains a clear and full discussion of this question and clearly supports the conclusion reached by Judge Dennis. The exceptions are therefore overruled, and it is the judgment of this Court that the judgment of the Circuit Court be and is hereby affirmed. Mr. Chief Justice Watts, and Messrs. Justices Cothran, BeEase, and Stabler concur.