Commercial Bank v. Auze

Woods, C. J., delivered the opinion of the court. We find it unnecessary to examine, in detail, the many and complicated and voluminous pleadings of counsel, for the reason that on the issues finally joined the defenses were fairly presented by the pleas adjudged good, and all the evidence desired to be offered in support of these pleas was fully presented. On January 27, 1892, appellees borrowed of appellant $2,174, and to this principal sum was added interest at the rate of twenty per centum per annum, for which appellees executed their note for $2,500, with interest thereon, after maturity, at eight per cent, per annum, which note became due and payable on November 1, 1892. On June 18, 1892, appellees borrowed of appellant the further sum of $1,000, and to this principal sum was added interest at the rate of twenty per cent, per annum, for which appellees executed their second note for $1,090, with interest thereon, after maturity, at the rate of eight per centum per annum, which note became due and payable on December 20, 1892. Both notes, by the terms in their faces, were payable at Brookhaven, Miss., the domicile of the appellant. Deducting some payments which had been made, there appeared to be due on both of said notes, on April 21, 1893, the sum of $3,772.27, but this sum was reached by computing interest, after the maturity of the notes, not at eight per cent., as agreed originally, but at twenty per cent, from maturity to November 1, 1893, and thereupon, on said April 21, 1893, appellees executed their third note for said sum of $3,772.27, due and payable November 1, 1893, with interest at eight per cent, per annum after maturity. This new note, like the two former ones, in lieu of which it was given, on its face was payable, likewise, at Brookhaven, Miss., the appellant’s domicile. The three foregoing notes were dated ‘ ‘Amite City, Louisi [622] ana,” and were secured by mortgages, properly executed, on lands of appellee, Mrs. Auze, in that state, she being thereunto authorized by the proper court in that state under the laws thereof. On May 4, 1894, appellees executed their two promissory notes, payable to appellant at Brookhaven, Miss., one for $111.77, .due June 4, 1894, and the other for .$145.76, due July 4, 1894, and these two notes were given, as it seems, wholly for usurious interest on the original debt. In satisfaction of all these notes, appellees paid to appellant the sum of $4,627.92, and this action was instituted to recover all interest paid, because of usury. The principal contentions on this state of case will readily suggest themselves. Were the contracts of loan Mississippi or Louisiana contracts? Were they made in the one state or the other ? and, if made in Louisiana, were they so made with reference to the laws of that state in good faith, and with no purpose to evade our laws on the subject of usury ? Is the controversy determinable by the leas loci contractus or the lex solutionis ? It will be remembered that the notes and mortgage executed to secure their payment were made in Louisiana, and were payable in Mississippi, as disclosed by the faces of the notes. The law in this state on this subject has been ' briefly but clearly stated in the case of Brown Bros. & Co. v. Freeland & Murdock, 34 Miss., 181. The syllabus to the case, prepared by the then reporter, presents with wonderful perspicuity and precision the views of the court, and we can do no better than quote that syllabus. ££1. A contract, as to its nature, construction and validity, is governed by the law of the place where it is entered into. ,££2. When a contract is made in one country, to be performed in another, the law presumes, in the absence of any other circumstance, that the parties contracted with reference to the place where it is to be performed; and, in that case, the [623] contract, as to its nature, construction and validity, will be governed by the lex loei solutionis. But this is a mere presumption of law, and is not inflexible; and it will not control if the attendant circumstances show that the parties contracted with reference to the law of the place where the contract was entered into. “ 3. When a contract, made in one country, to be performed in another, stipulates for the payment of a rate of interest allowable by the lex loei contractus but prohibited by the lex loci solutionis, it will be governed by the law of the place -where it was entered into. For, as it was competent for the parties to contract with reference to the law of either place, it will be presumed that they contracted with reference to that law which their contract did not violate. A presumption will never be indulged that a contract is in violation of law when it is capable of any other reasonable construction.” But these presumptions of law as to execution and perform.anee, are only, after all, presumptions, and must yield to the facts showing what the real intent and purpose of the parties was. In the present case, the conflict on this point, on the evidence, is sharp and irreconcilable. For'the appellees, the evidence is that the loan was effected at Brookhaven, the money paid at Brookhaven, and was to be paid back by the borrower at Brookhaven, and that no thought of Louisiana law was in the mind of the parties, nor any word spoken about performance under Louisiana laws. In a word, the appellees’ evidence is that it was a Mississippi contract with security for the notes evidencing it on lands in Louisiana. On the other hand, appellant’s evidence shows that the contract was made with direct and express reference to the laws of Louisiana, and that W. C. Auze, one of the appellees, is the very person who suggested the plan adopted, by which the extortionate rate of interest might be made unobjectionable in law. On this conflicting evidence as to the circumstances under which the contract was entered into and as to the. intent and [624] purpose of the parties, the case went to the jury under fair instructions for appellant. The jury was told by the fifteenth charge given at appellant’s request, that if the evidence showed that the contract of loan evidenced by the three notes of January 27, 1892, June 18, 1892, and April 21, 1893, was made in the State of Louisiana, then no recovery could be had for any payments made in settlement of such loan and payment of such notes. Surely, by this instruction, appellant received generous treatment at the hands of the court. The instruction seems to make the legal presumption arising from the execution of the contract in Louisiana conclusive as to their intent to contract with reference to the law of that state, where the contract was legal, and that without considering whether the contract was in good faith, and with no purpose to evade our usury laws, so made in Louisiana. The other two instructions given for appellant gave appellant the benefit of this too generoxis announcement as to the two small notes given solely for interest. The danger was that the jury, under all of the appellant’s charges, might have relied wholly on the presumptions of law arising from the execution of the contract in Louisiana, disregarding the circumstances of the execution of the contract and the good faith and the intent of the parties as to what state’s law should govern in an attempt to enforce performance. But of this danger the appellant cannot complain, and, on the whole law as charged by the court below, we see no reversible error. Several of the refused charges of appellant were plainly erroneous, and if any which were correct were refused, the appellant’s defense was certainly submitted fully on the charges given. The mere verbal changes in § 2348, code of 1892. do not substantially change § 1141 of the code of 1880. The code of 1880 declared a forfeiture of all interest in all cases where a greater rate of interest than ten per cent, was stipulated for; and the code of 1892 declares a forfeiture of all interest in all cases where a greater rate of interest was stipulated for or received. [625] So far, at any rate, as the right of action in appellees is concerned, the mere verbal alteration is without any force or effect, and it is a mistake to suppose that any retroactive effect need be given § 2348 of the code of 1892. The forbidden thing— the stipulating for unlawful interest — is in both codes. It only remains to add that this suit is not for the recovery of a penalty, eo nomine, under § 2741, code of 1892, by which actions for penalties eo nomine are barred in one year. Besides, the defense on this ground was presented by a plea to the whole declaration, and set up only a partial defense, or, to speak more accurately, attempted to set up only a partial defense. The specific payments referred to in the third plea must be applied to the payment first of the money actually borrowed, and, until this money had been paid, no suit would have been maintainable for any specific lesser sums paid by appellees, and the sum of money actually borrowed had not been repaid more than a year before this action was begun. The issues joined presented the controverted questions, and, under these issues, all the evidence desired to support the contentions of appellant was laid before the jury, and under such charges as at least fairly instructed the jury for appellant as to the legal principles applicable in the case. On the violently conflicting evidence, the jury might have found, under the instructions, for appellant; but they have not so found, and we do not feel authorized to disturb their finding. Affirmed.