Ewell v. Daggs

On May 27, 1856, James B. Ewell and his wife, having the legal title in fee to the premises, made and delivered to Daggs a promissory note of that date, payable three years after date to his order, for $3,556, and to secure the same executed and delivered to Daggs a deed of mortgage upon a tract of land in Guadulupe county, Texas, containing 1,653 acres, which mortgage was duly proved and recorded on June 5, 1856. James B. Ewell acquired the legal title to this land on April 13, 1854; but, in equity, it belonged to his brother, George W. Ewell, the appellant, for whom and with whose money it had been bought. The legal title was conveyed by James B. Ewell to his brother, George W. Ewell, on September 6, 1856, the latter having no knowledge of the mortgage to Daggs, and Dagge having, as we find from the evidence, no notice, actual or constructive, of the equity of George W. Ewell. On March 9, 1872, Daggs, being a citizen of Virginia, brought his action at law against James B. Ewell and wife, on the note, in the circuit court of the United States for the western district of Texas, and recovered judgment against James B. Ewell, July 14, 1873, for $3,530.93. The defense set up by James B. Ewell in that suit was usury, the actual amount of the loan having been $2,000, the residue of the note being interest on that amount until its maturity, at the rate of 20 per cent. per annum, compounded annually. A statute of Texas in force at that time on the subject of usury was as follows:

'That all contracts or instruments of writing whatsoever,     which may in any way, directly or indirectly, violate the      foregoing provisions of this act by stipulating for,      allowing, or receiving a greater premium or rate of interest      than 12 per cent. per annum for the loan, payment, or     delivery of any money, goods, wares, or merchandise, bonds,      notes of hand, or any commodity, shall be void and of no      effect for the whole premium or rate of interest only; but      the principal sum of money or the value of the goods, wares,      merchandise, bonds, notes of hand, or commodity, may be      received and recovered.' Paschal, Dig. § 3942.

Payments had been made on the note prior to the commencement of the suit to the amount of $1,745, which were allowed; but the usurious interest was not deducted on the ground that the constitution of Texas, which went into effect in 1870, and continued in force till after the recovery of the judgment, repealed all usury laws and prevented any defense on that account. The judgment not being paid, Daggs filed the present bill in equity, January 14, 1875, to foreclose the mortgage and sell the mortgaged premises, to which James B. Ewell and his wife, George W. Ewell, and the heirs of James B. Wilson were made defendants. The heirs of Wilson claimed title to a portion of the land under George W. Ewell, by virtue of a sale and actual possession prior to the date of the mortgage to Daggs. The claim established their title, and from that there is no appeal. As against George W. Ewell, however, it adjudges a foreclosure of the equity of redemption and sale of the remainder of the premises in default of payment by him of the amount found due upon the judgment against James B. Ewell, and interest thereon at the rate of 12 per cent. per annum. From this decree George W. Ewell prosecutes this appeal.

''Wm. Reynolds and Chas. A. West'', for appellant.

J. R. Tucker, for appellee.

MATTHEWS, J.