Sherman v. Myers

• Decision Date: 19 January 1933
• Parties: SHERMAN et al. v. MYERS.
• Court: Florida Supreme Court

146 So. 213

108 Fla. 129

SHERMAN et al. v. MYERS.

Florida Supreme Court

January 19, 1933

En Banc.

Suit by Charles R. Myers against George Sherman and others, to foreclose a mortgage. From the decree, defendants appeal.

Reversed in part, and remanded, with directions. Appeal from Circuit Court, Palm Beach County; C. E. Chillingworth judge.

COUNSEL

O. E Falls, D. H. Dwyer, and Boozer & Boozer, all of West Palm Beach, for appellants.

Metcalf Hiatt & Finch, of West Palm Beach, for appellee.

OPINION

PER CURIAM.

Myers as complainant below, filed suit to foreclose a mortgage for $40,000. Sherman, the mortgagor and principal defendant, pleaded usury. The court found that while the mortgage had been executed for $40,000, the principal sum was in fact only $32,000, which had been lent to the borrower on his agreement to secure it by a mortgage for the fictitious principal of $40,000 payable within three years, with 8 per cent. interest in the interim. The chancellor also found that between the time the loan was made and the institution of the suit, the sum of $4,200 had been paid in money as interest on the mortgage.

Having found that usury in the transaction existed, the chancellor undertook to apply the penalty for such usury as provided by sections 6938, 6939, Comp. Gen. Laws, sections 4851, 4852, Rev. Gen. St. His manner of doing so was to decree that the actual sum of $4,200 paid in money, be doubled and forfeited as against the real principal sum of $32,000, and that the reserved unlawful interesty of $8,000 included in the $40,000 principal for which the mortgage was nominally made, be eliminated therefrom and forfeited. The final decree was accordingly entered for $23,600 as the mortgage debt for which foreclosure was awarded.

We find that the controversy here presented is controlled by what was recently said by us in disposing of the case of Wilson v. Conner, 142 So. 606, where a somewhat similar case was considered. In that case, usurious interest had been included in the fictitious $10,000 principal of a negotiable promissory note secured by a mortgage. In this case usurious interest was included in the fictitious principal of two separate promissory notes, negotiable in character, aggregating $40,000, secured by mortgage. There is also in this case the additional factor that during the time the loan had run, the borrower had paid on the loan in actual money, the sum of $4,200 as interest.

Under our holding in Wilson v. Conner, supra, the lender willfully violating the usury laws, as here, is required to forfeit the entire interest charged or contracted for, and in addition thereto, must forfeit double the amount of interest which has been reserved, taken, or exacted. Here the interest contracted for was 8 per centum per annum on a fictitious principal of $40,000. The amount of interest reserved, taken, or exacted within the Wilson v. Conner rule, supra, was $8,000, which had been included in the principal of negotiable promissory notes.

The appellant contends that the chancellor should have doubled and forfeited this $8,000 interest so included in the principal of negotiable promissory notes, and thereby, in the eyes of the law, reserved, taken, and exacted. That contention is supported by what was held by this court in Wilson v. Conner, supra, and inasmuch as a proper predicate for allowance of the claim was laid in the defendant's answer, the chancellor erred in failing to double and forfeit this $8,000 illegally exacted interest, as prayed.

The appellant also contends that inasmuch as the borrower actually paid on the loan, in the form of interest, the sum of $4,200 in money, as found by the chancellor, that this sum also should have been doubled and forfeited under the statute.

We find this item also covered by what was said...