Parmelee v. Lawrence

On motion to dismiss a writ of error to the Supreme Court of Illinois, brought here on the assumption that the case was shown to be within the 25th section of the Judiciary Act; the idea of the plaintiff in error having been that a statute of the State of Illinois, on the subject of interest, was brought in question in this suit, and was upheld by the court below, though repugnant to the Constitution of the United States, as impairing the obligation of contracts.

It appeared by the record that Parmelee & Co. filed their bill in chancery, in the Superior Court of Chicago, against one Lawrence, in which they sought to enforce the specific performance of what they alleged to be a contract, by Lawrence, to convey to them certain lots in Chicago for the consideration of $50,000, and interest at 10 per cent., free and clear of incumbrance. The bill set forth that they were ready to pay on receiving such a conveyance, but that Lawrence was unable to make title to the land; that he had demanded the money, and was threatening to eject them.

Lawrence in his answer set up that the transaction was not, as represented in the bill, a naked agreement to convey, but was a mortgage to secure the loan of $50,000, and he tendered a reconveyance on payment of the principal and interest. He also filed his cross-bill for a foreclosure of the mortgage in the usual form.

The complainants, in answer to this cross-bill, asserted as before, that the agreement had been simply an agreement to sell; but further insisted that, if the agreement was a mortgage, then the loan was usurious, and that Lawrence thereby forfeited under the laws of Illinois, threefold the whole interest so received. They also set up, that the rate of interest was 12 per cent., and that they had given Lawrence their bond for the 2 per cent. interest, above the ten as already mentioned.

The cause was finally heard on the cross-bill, answer, replication, and proofs in the case. The Superior Court decreed that the plaintiffs should pay to the defendant the amount of the loan remaining due, with 6 per cent. interest from date of the last payment, but he to retain the 12 per cent. already paid. The defendant appealed to the Supreme Court, which reversed this decree, holding that the usurious interest already paid should be credited on the principal, and that interest should be allowed at the rate of 10 per cent. The cause was remanded to the Superior Court for a new trial, where a decree was rendered in conformity with the above opinion, and this was afterwards affirmed by the Supreme Court.

The record showed that the litigation resulted in a question as to the rate of interest to be allowed to Lawrence, the lender, according to the laws of Illinois, and that neither in the pleadings, nor in the evidence, nor at the hearing in the Superior Court, was any question made as to the validity of any statute of the State on the ground of its repugnancy to the Constitution of the United States. This question was first made before the Supreme Court on the appeal. The certificate of the presiding judge showed that the objection was taken in the argument there and overruled, and this furnished the only evidence that any Federal question was raised in the case.

Messrs. G. Payson and C. A. Gregory, in support of the motion, argued that the certificate alone was not sufficient to show the existence of any Federal question, citing the Railroad Company v. Rock.

Mr. Beckwith, contra.

Mr. Justice NELSON delivered the opinion of the court.