Purvis v. Woodward

Whiteieed, C. J., delivered the opinion of the court. The payment of the $110, November 29, 1878, was sworn by one witness to have been a cash payment, and this the chancellor manifestly accepted as true, finding that the note was usurious. The argument that it was not a cash payment, but was intended as a purgation of the usury, is without the slightest support in the evidence. If it had been a purgation, then the amount of the credit would have been only an amount equal to the amount of the usurious interest in excess of ten per centum. But it was much more, and this circumstance — • perfectly manifest from a mere calculation — furnishes the corroborating circumstance to the testimony of said one witness needed to meet the rule that since the answer was sworn to and the bill was only sworn to by counsel, there must be more than the testimony of one witness to overturn the answer, if that rule applied here. But it is clear that the answer was sworn to by one who had no personal knowledge of the facts set forth in the answer, and such an answer is not within the protection of the rule. 1 Am. & Eng. Enc. Pl. & Pr., p. 913, par. 7, and pp. 911-916. Both on the evidence and on the pleading this contention must, therefore, fail. It is plain that the transaction has been usurious from the beginning. The rate of interest was at first eighteen per centum. This is demonstrable by a mere calculation. The bill is not one for an injunction only, but also for an accounting. And it is obvious that whether the decree should be reversed or affirmed on the merits as to the accounting, is not to be determined by whether the bill was properly sworn to as a bill for an injunction. The statute (§557) does not say that a bill for an injunction shall be sworn to in all cases. It requires the conscience of the chancellor to be satisfied ‘ ‘ by oath or other means. ’ ’ There may be cases where an injunction should be “ granted ” on an unsworn bill, if the “other means” are convincing, as, for example, written admissions of the party against whom it is sought, or documentary evidence such as these notes, showing — 929 — for themselves the ‘ ‘ equity and truth of the allegations in the bill.” This is an exact statement of the rule. 10 Am. & Eng. Enc. Pl. & Pr., 965 (5), note 2, and authorities. The New Jersey case cited construes the phrase, ‘ ‘ other means,” precisely as we do, which case (Morris Canal Co. v. Bartlett, 3 N. J. Eq., 9) see specially. The text says: ‘ ‘ What is required as preliminary to the granting of an injunction, other than the sufficiency of the averments of the bill, is that the confidence of the court should be obtained, and it is not in all cases indispensable that the bill should be verified. Although the bill is not verified, an injunction will be allowed where documentary evidence or records are produced which satisfy the conscience of the court. ’ ’ At all events, the chancellor who had the case before him, not on a mere motion to dissolve, but on the merits on full proof, did right not to dissolve the injunction and dismiss the bill seeking, not an injunction only, but an accounting as well. So far as tender is concerned, complainant did offer to pay, and actually tendered in cash, the amount he admits to be due; but this was declined. On the facts of this case, with the uncertainty as to what was legally due, no other tender was necessary, the complainant renewing in his bill the offer to pay whatever was legally due. Courts do not require impossibilities. In cases where it cannot be known with reasonable certainty what is due till an accounting shall have been had to determine that very thing, it is certainly enough if the complainant shall actually tender what he admits in good faith to be due, offering moreover to pay whatever shall be ascertained to be legally due. This is the doctrine of Aust v. Rosenbaum, 74 Miss., 893. So, also, is Toulme v. Clark, 64 Miss., 471. See, also, Bank v. Bank, 63 Miss., 231. It is, also, the now generally accepted doctrine. 10 Am. & Eng. Enc. Pl. & Pr., 935, 936, par. 1 and 3. Up to the execution of the note of 1885 the provisions of the code of 1871 governed as to the penalty. The note of 1885 is — 930 — a new contract. It starts with a new principal, extends the time of payment, and adds, for the first time, the clause as to attorney’s fee — a distinctly new term. The rule is well settled that such a note executed after the repeal of a former law, the repealing statute changing the usury penalty, is a new contract, governed by the law in force at the time the note is executed. The 27 Am. & Eng. Ene. L. (1st eel.), 937, states the rule thus: “A new enactment may properly govern a subsequent agreement for the extension of time upon the original note, that being in effect a new contract. ’ ’ Story v. Kimbrough, 33 Ga., 21, is directly in point on the facts of this case. The court says: “ But for the act of 1856, referred to in the charge of the court the charge would have been correct. By the act of 1856, only the usurious interest on contracts made after the date of that act, March 3, 1856, is void. Under it the principal and legal interest on contracts made after that date may be recovered. This act did not apply to the original contract, because it was made prior to the passage of the act, and the interest, up to the making of the new contract, on February 29, 1857, both of legal and usurious, was void, and could not be recovered; but the last contract of the latter, for another year’s forbearance or extension of the time of payment, was a new contract, made while the law of 1856 was in force, and must be governed by that act. It was said that it could not be a new contract, because the note was not changed — no new note was given. That is true; but it was, nevertheless, a new contract, as much binding on the plaintiff (Story) as the first one, and of the same-benefit to the defendant as the first. Under the first he got the benefit of the use of 16,000 for one year, and under the-second he was allowed to continue its use for the same time, and but for the last, the plaintiff would have got his money at that time to which he was entitled. That they allowed the old securities for the debt to remain unchanged, did not make it the less a contract binding on both parties, according to the — 931 — law as it stood at that date. The plaintiff was, therefore, entitled to the legal rate of interest upon the amount then due, from the date of this last contract up to the time of .the payment, with .interest- on the balance until the whole is paid, the defendant being entitled to the benefit of the payments made of usurious interest, and also of legal interest from the first to the second contract, as payments on the amount thus found to be due. ’ ’ The case at bar is a stronger one in this respect than the Georgia case — stronger, that is, to show a new contract. To the same effect, see Webb v. Bishop, 101 N. C., 99, and Watson v. Mims, 56 Texas, 451, cited in note 5 of the above citation from the Am. & Eng. Enc. of Law. Again, at page 938, Am. & Eng. Enc. of Law says: “The statute changing the penalty applies to suits thereafter brought, though based upon contracts made before such enactment.” And again, at page 939: “The law in force at the time of suit governs as to the recoupment of usurious interest paid. ’ ’ This last position is abundantly supported by authorities and is manifestly sound on principle. See Sager v. Schnewind, 83 Ind., 204; Perrin v. Lyman, 32 Ind., 16; Burroughs v. Cook, 17 Iowa, 440. Mr. Webb, in his recent work on usury (1899), says, in section 237: “Where a contract for the payment of money has been renewed, by either implication or express agreement, in such a manner that the renewal has all the esential elements of a contract, the renewal contract is governeds by the law in force at the time it is made, although that law may be different from the statute in force at the time the original contract was made. ’ ’ Again, he says, in section 213: ‘ ‘A penalty, being merely a punishment for the taking of usury, does not affect the validity of the contract, and is subject to legislative control to the extent that it may be imposed or removed at any time by statute.” As to the proposition that a statute changing the penalty governing on suits thereafter brought, though based upon con — 932 — tracts made before such enactment, the citations from Indiana and North Carolina do not entirely support the text, and we are not to be understood as assenting to that proposition in all of its generality. We hold — dealing with our own statutes— that the provisions of the code of 1880 are prospective and have no retroactive efficacy, so that, up to the execution of the note of 1885, the provisions of the code of 1871 governed; but the note executed in 1885 being, under the authorities and on principle, a new contract, that note and all subsequent notes are to be governed by the code of 1880. As to the proposition that it is a new contract, and so to be governed by the law in force when the contract was made, Mississippi decisions are in perfect harmony with those already cited. Rozelle v. Dickerson, 63 Miss., 538; Warmack v. Boyd, 63 Miss., 488; Norcum v. Lum, 33 Miss., 299. It is not necessary to consider whether a statute making a rate of interest usurious which was lawful when a preceding contract was made, impairs the obligation of the contract, for in this case there never was an hour when this contract was not grossly usurious. In fact, the first note made charged the highest usury of any of the notes. As to the rule in this state, where a sale under a trust deed or mortgage is enjoined, under the code of 1880 or the code of 1892, we are satisfied that the true rule is that only the principal can be recovered when the contract is usurious. That has been the unbroken holding of this court. See Parchman v. McKinney, 12 Smed. & M., 631; Norcum v. Lum, 33 Miss., 299; McAllister v. Jerman, 32 Miss., 142; Chaffe v. Wilson, 59 Miss., 42; Long v. McGregor, 65 Miss., 70; Dickinson v. Thomas, 67 Miss., 777; Mortgage Co. v. Jefferson, 69 Miss., 770; Rozelle v. Dickerson, 63 Miss., 538; Warmack v. Boyd, 63 Miss., 488. The case of So. B. & L. As. v. Toney, decided last Monday, announces the correct view, ante p. 916. The case of Mortgage Company v. Jefferson, 69 Miss., 770, — 933 — has been greatly misunderstood. It does not conflict with Parchman v. McKinney, but approves it. The contract there was not made in this state, nor payable in this state. Legal interest was required to be paid there on the sole ground that the contract was not governed by the law of Mississippi. It was ■ directly held that if the contract had been governed by the law of Mississippi all interest would have been forfeited. Citing Norcum v. Lum, Hooker v. Austin, and Long v. McGregor, the court said, page 787: “We cannot perceive any public policy of this state which is to be conserved by applying the rule prescribed by our statute of forfeiting all interest to a contract made, in another state. This is nota suit upon the contract, and its terms and conditions furnish n'o standards by which the court is to be guided. ’ ’ In other words, whatever the language of the opinion, all that was decided in the Mortgage Co. v. Jefferson was that, since the contract was not a Mississippi contract, it was not to be governed by Mississippi law, but by the general equity doctrine, which is that the principal and legal interest can be collected. With us the doctrine is firmly established that the debtor may pay the whole interest and then sue at law and recover back the part forfeited by the statute — now all. To hold under our statute (§ 2348, code of 1892) and system of jurisprudence that the debtor, who may recover the usury at law, cannot in equity, secure relief without paying what he can recover back at law, though voluntarily paid, is utterly illogical and a view wholly unsound. It is manifest from what has been said that the court below erred in applying the provisions of the code of 1871 after the execution of the note of 1885. The decree on the cross appeal is affirmed, on direct appeal is reversed, and cause remanded to he proceeded with in accordance with this opinion.