LAW.coLAW.co

McGee v. Long et al., executors

Supreme Court of Georgia1889-07-08
83 Ga. 156

Summary

Holding. The court reversed the judgment, holding that the trial court erred in striking the defendant's allegations of payment from the special plea on a general demurrer, as the plea—despite its informal character—adequately conveyed that the notes were contaminated by usury from an earlier loan that had been paid off before the notes were created.

Executors of a deceased man's estate brought suit on several promissory notes made payable to the testator. The defendant raised a special plea alleging that the notes were tainted by usury stemming from an earlier loan made in 1871, and further claimed that he had made multiple payments on that original loan before the notes were executed, thereby satisfying it in full. At trial, the court sustained a general demurrer to the special plea and struck all allegations regarding the payments, leaving only the usury claim to proceed.

The appellate court found this ruling erroneous. Although acknowledging that the defendant's plea was poorly drafted and informal, the court determined that it conveyed a coherent argument: the notes themselves were infected with usury because they were given as a substitute for or continuation of an already-satisfied loan that contained usurious interest. The court concluded that evidence of payments made before the notes were issued was material and should have been allowed to proceed, as those payments would affect whether usury truly contaminated the notes at issue.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether usury in an earlier loan can taint later promissory notes given as a substitute or continuation
  • Whether allegations of full payment of an underlying loan should be considered when evaluating whether notes are infected with usury
  • Proper standards for striking pleadings on general demurrer versus special demurrer

Procedural posture

Executors sued on promissory notes; the defendant pleaded usury and payment; the trial court sustained a general demurrer striking the payment allegations; the defendant appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Bleckley, Chief Justice.

1 The action was by executors, upon several promissory notes payable to their testator or bearer, dated March 1st, 1881, and due one day after date. To the plea of the general issue, the defendant added a special plea by amendment, setting up that the consideration of the note was illegal, because consisting in large part of usury. The special plea then entered into particulars as to how the contract for usury arose out of a loan made to him by the testator in 1871, specifying the fate of interest agreed upon, and the amount of usury that had accrued up to the date of the notes in suit. It also alleged specifically the making of several payments on the loan, giving the amount of each of them, and also specifying with more or less certainty the date of each. It averred that these payments (all of which were made before the notes in suit were executed) paid up the loan in full, together with legal interest thereon. It concluded with a prayer that the plaintiffs make to him a deed reconveying to him certain land which he had conveyed to the testator as security for this loan.. At the trial, this plea was demurred to generally. It appears from an order found in the record, that the demurrer was sustained as to all the payments alleged to have been made upon the loan. The motion for a new trial complains of the striking of the plea upon demurrer, and we take it that the striking referred to was only to the extent shown by the order of the court sustaining the demurrer. We infer therefore that the plea was left to stand as a plea of usury, but not as a plea of payment, total or partial. "We think the court erred in putting the alleged payments out of the case; for although the plea is exceedingly loose and informal, we think its plain import is, that the notes declared upon were infected with usury, at least to the amountof the usury specified in the plea, because given in whole or in part on account of a loan which, save as to the usury, had been fully paid before these notes were executed. Certainly the plea should have been more specific in alleging the connection of the notes with that loan; but its want of directness and explicitness in that regard was amendable, and had it been demurred to specially, for such a defect,, no doubt it would have been amended. What we rule is, that it was error to eviscerate it on a general demurrer. If there was usury in the original loan which was not purged out when these notes were given, and if that usury is in them, they are contaminated just as the original contract was, and all payments made in the interval are to be treated, not as payments of usury, but payments made on the original debt, principal and lawful interest. Archer v. McCray, 59 Ga. 546; Wilkinson v. Wooten, Id. 584. Upon this ground of the motion the court ought to have granted a new trial.

2. With regard to the other special grounds of the motion, which relate to the rejection of evidence, we make no ruling, since from our understanding of the case, the excluded evidence had no materiality as the pleadings stood when it was offered. Its significance rested altogether upon the alleged payments which were stricken from the special plea. Moreover, as to much of this evidence we are referred, by the motion for a new trial, to an exhibit annexed to it to ascertain what the evidence was, and that exhibit consists of a long rigmarole, apparently a stenographic report of questions, answers, remarks by counsel, remarks and rulings of the court, etc., etc., the evidence being scattered up and down divers pages, .with these irrelevant, tedious and distracting matters interspersed. That we are not going to fish up evidence in fragments from such muddy water, we have plainly intimated in Wiggins v. Norton, (ante p.), and perhaps in previous eases. Other courts are beginning to complain of this nuisance. Cahn v. State (Texas), 11 S. W. 727. Judgment reversed.