Opinion
No. 33943.
January 8, 1940.
1. USURY.
Where interest of 10 per cent. on trust deed note was charged and agreed to be paid, payments made on note were to be credited on principal without interest.
2. EXECUTORS AND ADMINISTRATORS.
Where payments on trust deed note made during lifetime of payee were not sufficient to discharge principal, and subsequent payments were made to payee's administrator after payee's death, claim for items in excess of principal of note paid to administrator was not required to be probated.
3. BILLS AND NOTES.
Evidence showed that payments made by makers of trust deed note to payee during his lifetime and to payee's administrator after his death liquidated note.
4. APPEAL AND ERROR.
The Supreme Court could not consider an alleged clerical error in record in absence of suggestion of correction or findings by trial court in approving stenographer's notes that there was a clerical error.
APPEAL from the chancery court of Tishomingo county; HON. JAS. A. FINLEY, Chancellor.
Clark Clark, of Iuka, for appellant.
The lower court held that W.T. Edmonson could not testify so far as his claim is concerned, but could testify in behalf of the minor children. The proof shows that there was only one minor child. Now the claim of W.T. Edmondson and his two children were identical claims and I take it from the contention of counsel for appellee and the ruling of the court that if more than one person has a claim against an estate which is a joint claim that they cannot testify to establish their claim against the estate, but they can testify for each other; if this is true that would defeat the very intent of the statute. If they cannot testify for themselves, how can they jointly testify for each other. We therefore say that W.T. Edmonson could not testify for himself but he could not testify for others on a joint claim, unless he would waive his claim against the estate and Section 1529, Code 1930, so provides.
Evidence of the habit or custom of a party to loan money at usurious rates of interest is not admissible, unless it relates to, or is connected with, the transaction in issue.
66 C.J. 307.
As to the position as held by the court that it was necessary to probate the claim against the estate, we say that under the law if this claim was not probated within the time prescribed by law that it was barred.
There is no dispute as to publication to creditors being made and if this was a probatable claim that it is now barred.
24 C.J. 329-330; Harris et al. v. Hutchinson, Admr., etc., 65 Miss. 9, 3 So. 34.
According to the pleadings and the proof in this case at the time of the execution of the deed of trust which was foreclosed, and bearing date of January 26th, 1932, which was foreclosed and under which the appellant claimed title to the land that Edmondson did not owe Luttrell one cent; that appellant had paid him all he owed him by applying usurious interest and had applied the same to the principal which liquidated the debt that this note and trust deed were given in renewal, and if this is true according to the pleadings and the proof then the appellant had a claim against the estate in the amount of the cancellation of the amount of the last trust deed of the sum of something over $600.00; this was before the death of L.M. Luttrell and therefore his standing idly by and not probating this claim within the time it is barred by the statute of limitations, this is true even though there was no settlement until the foreclosure of the deed of trust because it was a claim against the estate, and law says that it is such claim that should be presented and registered which was not done.
It is true that the cause of action does not accrue until there is a settlement, but the settlement was made according to the pleadings and the proof January 26th, 1932, and at that time the statute began to run, and this suit not having been brought within the three years is barred by the three year statute of limitations. W.C. Sweat, of Corinth, for appellees.
When a contract becomes tainted with usury, as in the case at bar, then all the payments made by the debtor to the lender are credited by the law to the principal, and all interest is forfeited.
Hardin v. Grenada Bank, 183 Miss. 689, 180 So. 805; Jones v. Brewer, 146 Miss. 142, 110 So. 115; Commercial Bank v. Auz, 74 Miss. 609, 21 So. 754; Armor v. Bank of Loudon, 86 Miss. 658, 39 So. 17.
The amounts paid by debtor on a usurious contract will be applied as a payment on the principal debt even though the payments would ordinarily have been barred by the statute of limitations.
Hardin v. Grenada Bank, 183 Miss. 689, 180 So. 805; Jones v. Brewer, 146 Miss. 142, 110 So. 115; Union National Bank v. Frazier, 63 Miss. 231; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Feld v. Coleman, 72 Miss. 545, 17 So. 378.
It was unnecessary to probate against the estate the payments made on this usurious note.
Sec. 549, Code of 1930; Cohn v. Carter, 92 Miss. 627, 46 So. 60; Schouler on Wills, Sec. 1842; 23 C.J. 1172, Sec. 390.
The statements by the deceased, Luttrell, that he always charged 10% interest were competent as declarations against his interest.
McClusky Bros. v. Hood Milling Co., 119 Miss. 92, 80 So. 492; Jackson v. Johnson, 126 Miss. 26, 88 So. 410; Saffold v. Horn, 72 Miss. 470, 18 So. 433; Baldridge v. Stribling, 101 Miss. 666, 57 So. 658; Kyle v. Peoples Bank Trust Co., 187 So. 534.
The testimony of Edmondson was competent insofar as his two children were concerned, but the court did not consider Edmondson's testimony in deciding the case.
Saffold v. Horn, 72 Miss. 470, 18 So. 433.
On the cross-appeal cross-complainant was entitled to recover $102.70 with interest thereon at 6% from December 28, 1936.
The appellant, Farris, Administrator of the estate of L.M. Luttrell, deceased, filed this suit in the chancery court to reform a trustee's deed, executed pursuant to a sale under a trust deed given by W.T. Edmondson and his wife, B.A. Edmondson. It appears that in 1922 Edmondson and wife purchased sixty acres of land from D.E. Rast and wife, the deed being made to both Edmondson and his wife jointly, but the sixty acres of land embraced in the deed of trust was an incorrect description of the land intended to be conveyed. The appellee, Edmondson, and his wife, who is now deceased, borrowed the money to pay for the land from L.M. Luttrell, the purchase price being $750. At the time of this purchase Luttrell held a deed of trust on the land against Rast and wife for $450, and W.T. Edmondson and wife gave Luttrell a deed of trust for $300 and assumed the amount that Rast owed Luttrell, and assumed and released his claim to the land, but in doing this gave a note, and at the maturity Edmondson and wife gave a deed of trust in 1923 for $750. This note and deed of trust contain an interest charge of ten per cent carried on the face of the note, and the note bore interest at eight per cent after maturity. The matter proceeded along until at the time of giving the note and deed of trust it was agreed and understood in 1923 that the note would bear interest or that Luttrell would be paid interest at the rate of ten per cent, and it appeared from the evidence on the trial that Luttrell stated to the officer who drew the papers that he always charged ten per cent for his money and he considered it worth that, and there was also evidence that Luttrell invariably charged ten per cent for the use of his money.
Prior to the trial of the case Mrs. Edmondson died and her two daughters were made defendants as being heirs of her one-half of the estate with W.T. Edmondson. Luttrell died prior to the attempted foreclosure of the deed of trust, and Farris was appointed administrator of his estate, and it was understood that Edmondson would borrow money and pay for the land, giving a deed of trust to the institution from which the loan was to be secured on the land to secure the money, but this failed because it appeared when title was examined that the deed of trust did not correctly describe the lands, and said institution refused to make the loan. Thereupon suit was filed to correct the papers, deed of trust, and trustee's deed to conform to the real facts, and the deed of trust having been foreclosed, Farris was to execute a deed to Edmondson to secure the balance of the debt, evidenced by the note and deed of trust, and he paid to the administrator, Farris, $100 on agreement to repurchase the land, but when the suit was filed to correct the description of the land embraced in the deed of trust making Edmondson and his wife parties, they denied the existence of the debt and set up that the note had been paid by reason of the forfeiture of the interest for being in excess of that allowed by law, and by crediting the payments made on the note that it had been overpaid at the time the suit was filed. However, when Luttrell died, the payments were not then sufficient to completely pay the principal of the note, but when the amounts paid subsequent to Luttrell's death were applied to the note, it was more than paid, and Edmondson and wife filed a cross-bill seeking to cancel the note and deed of trust and the trustee's deed and for judgment over for amount of payments in excess of the principal of the note. The chancellor, on hearing, found that the interest charged, or stipulated for, was in excess of that allowed by law, and by applying the payments made to the debt, the original principal, Edmondson had overpaid the note, and rendered a decree so adjudging for $62.82.
Luttrell died in 1933 and subsequent to his death Edmondson paid to the administrator $75 in October, 1933, and $39.60 in October, 1934, and, about the time the land was sold under the deed of trust, paid the administrator $100. The administrator, Farris, answered the cross-bill of Edmondson and among other defenses set up a demand that the money over could not be maintained because the same had not been probated. The chancellor held that as the debt had not been paid by the payments when Luttrell died, then the subsequent payments were paid to the administrator, that there was no requirement that the claim be probated, and also the chancellor seems to have held that as there were mutual dealings between Edmondson and the administrator that the statute of limitations did not run until a settlement of the last payment. It was objected to the introduction of the evidence as to the statements made by Luttrell that he charged ten per cent and that his money was worth that, and that he fixed his papers so that the ten per cent would be carried on the face of the note. W.T. Edmondson testified, and his testimony was excluded, as to his claim, but it was held that he was a competent witness as to the claim of his children, and it is objected that the court erred in so doing. We do not think it material here to decide this question for the reason that we think the proof was sufficient to show without dispute that ten per cent was in fact charged and agreed to be paid. Therefore, the payments made on the note were to be credited on the principal of the note without interest, and as much as the payments made during the life of Luttrell were not sufficient to discharge the principal, and as subsequent payments were made to the administrator, there was no necessity for probating as to the items in excess of the principal of the note paid to the administrator.
We have examined the evidence in regard to the payments and we think that the notation on the back of the note on the twenty-sixth day of September, 1927, $540, was in fact $54 for the reason that a credit of $50 on October 2, 1925, showed a balance then of $675, and the credit on September 26, 1926, also showed a balance of $675, showing that it was not intended to credit the note with payment of $540. Counsel stated in brief for the appellant that this was a clerical error in transcribing the notes and that it should have been transcribed $54. We cannot take statements as to what the record properly showed because there was no suggestion of correction, or findings by the trial court in approving the stenographer's notes that such was a fact. However, we think that the amounts paid liquidated the note. The appellee and cross-appellant claim that the chancellor should have found for $102.70. We think the chancellor's finding on this was correct, and should not be disturbed. Consequently, the decree of the chancery court will be affirmed on both direct and cross-appeal.
Affirmed.