Anderson v. Creamery Package Mfg. Co.

• Decision Date: 17 January 1902
• Citation: 67 P. 493,8 Idaho 200
• Parties: ANDERSON v. CREAMERY PACKAGE MANUFACTURING COMPANY
• Court: Idaho Supreme Court

67 P. 493

8 Idaho 200

ANDERSON v. CREAMERY PACKAGE MANUFACTURING COMPANY

Supreme Court of Idaho

January 17, 1902

USURY-CORRUPT INTENT.-Where a note provides for interest at ten per cent per annum, both before and after judgment, and it does not appear that there was a corrupt intent on the part of the lender to receive an unlawful rate of interest, it is not an usurious contract.

CHATTEL MORTGAGE-MORTGAGE LIEN-FIXTURES.-Where machinery is purchased for use in a permanent building under a contract that the machinery shall remain the property of the seller, or where after such machinery is placed in such building a chattel mortgage is given by the purchaser to the seller upon such machinery, a real estate mortgage of prior date to the purchaser of such machinery is not a lien upon such machinery, and the mortgagor has a right of action to foreclose his chattel mortgage.

(Syllabus by the court.)

APPEAL from District Court, Bear Lake County.

Reversed and remanded.

John A Bagley, for Appellant.

The requisites to form a usurious transaction are four: 1. A loan either expressed or implied; 2. An understanding that the money lent shall be returned; 3. A corrupt agreement to pay a greater rate of interest than is allowed by law; 4. A corrupt attempt to take more than a legal rate of interest. (Especially see Washington etc. Investment Assn. v. Stanley, 38 Or. 319, 63 P. 489, 495; Loyd v. Scott, 4 Pet. 205; Balfour v. Davis, 14 Or. 47, 12 P. 89; Webb on Usury, 17, 30, 33-41; Tyler on Usury, 110; United States Bank v. Waggner, 9 Pet. 378, 799; Fay v. Lovejoy, 20 Wis. 407.) It appears there must have been an unlawful agreement to take usury, entered into with a corrupt intent at the time of loaning the money. (Webb on Usury, 30, 33-41; Stevens v. Staples, 64 Minn. 3, 65 N.W. 959; Elliott v. Sugg, 115 N.C. 236, 20 S.E. 450; Gilmore v. Ferguson, 28 Iowa 220; Chopins v. Mathol, 91 Hun, 565; Carolina Savings Bank v. Parrott, 30 S.C. 61, 8 S.E. 199.) Articles annexed by a mortgagor of land, after making the mortgage, become subject thereto, and the same rules apply in determining what articles are a part of the realty in this case as when the annexation is previous to a mortgage or conveyance. (1 Jones on Mortgages, 436. See, also, Allen v. Citizens' etc. Nav. Co., 6 Cal. 402; Conant v. Conant, 10 Cal. 258; Willis v. Wozencraft, 22 Cal. 620; Fratt v. Whittier, 58 Cal. 126, 41 Am. Rep. 251; McKiernan v. Hesse, 51 Cal. 594; Merritt v. Judd, 14 Cal. 59; 13 Am. & Eng. Ency. of Law, 670; Hill v. Farmer, 97 U.S. 450; Wood v. Wheelan, 93 Ill. 153; Bond v. Coke, 71 N.C. 97; Bank v. Stevens, 130 Mass. 547; Winslow v. Merchants' Ins. Co., 4 Met. 306, 38 Am. Dec. 368, and note; McFadden v. Allen, 134 N.Y. 489, 32 N.E. 21.) We think all this machinery is clearly covered by the following clause in the mortgage: "Including all the machinery in the Creamery." (13 Am. & Eng. Ency. of Law, 2d ed., 597-614. As to intention see: Lavenson v. Soap Co., 80 Cal. 245, 22 P. 184, 13 Am. St. Rep. 147, and note; Dutton v. Ensley, 21 Ind.App. 46, 69 Am. St. Rep. 340, 51 N.E. 380; Binkley v. Forkner, 117 Ind. 176, 19 N.E. 753; Improvement Co. v. Reddick, 47 N.E. 848; Winslow v. Ins. Co., 4 Met. (Mass.) 306, 38 Am. Dec. 368, and note. And cases cited in notes on pages 597, 598 and 599 of 13 Am. & Eng. Ency. of Law.) The annexation need not be such that removal of the article will injure the freehold. (13 Am. & Eng. Ency. of Law, 602, and cases cited; Pierce v. George, 108 Mass. 78, 11 Am. Rep. 310; Allen v. Mooney, 130 Mass. 155; Doughty v. Owen (N. J. Eq.), 19 A. 540.)

Alfred Budge, for Respondent.

The notes set out in appellant's complaint provide for the payment of ten per cent per annum interest "both before and after judgment." This clause makes each of said notes usurious. (See Idaho Rev. Stats., secs. 1263, 1264, and as amended in Session Laws 1889, pp. 315, 316; Webb on Usury, 35, 36.) Parol evidence cannot be received to contradict a written instrument, and there is no ambiguity about the notes, and nothing to explain, and we were not informed that any explanation would be offered until tendered at the trial. (18 Am. & Eng. Ency. of Law, 2d ed., 453; Center Creek Water & Irr. Co. v. Lindsay, 21 Utah 192, 60 P. 559.) This proof was evidently offered to contradict the express terms of the note. (Greenleaf on Evidence, 15th ed., secs. 275, 277.) Did not become a part of the realty and that it was the intention of the parties that it should not, which intention largely controls and is a question of fact for the jury to find, and not a question of law for the court. (Handy v. Dinkerhoff, 57 Cal. 5, 40 Am. Rep. 107; Seeger v. Pettit, 77 Pa. 437-441, 18 Am. Rep. 452.) To convert a chattel into a real fixture the person making the annexation must, at the time the same is annexed, intend to make such chattel a permanent addition to the realty. (Treadway v. Sharon, 7 Nev. 37; Tate v. Blackburn, 48 Miss. 1; Wheeler v. Bedell, 40 Mich. 693; Manwaring v. Jenison, 61 Mich. 177, 27 N.W. 899.) The mortgagee, while he may be entitled to any annexation made by the mortgagor of his own property, would not be entitled either in law or in equity, to the property of others. That so long as he is secured in the full amount of property which he took for security for the payment of his debt, he has no ground for complaint. (Manwaring v. Jenison, 61 Mich. 117, 27 N.W. 899; Binkley v. Forkner, 117 Ind. 176, 3 L. R. A. 33; Waterloo First Nat. Bank v. Elmore, 52 Iowa 541, 3 N.W. 547; Tibbetts v. Mon, 23 Cal. 209; Miller v. Walson, 71 Iowa 610, 33 N.W. 128; Henry v. Van Brandenstien, 12 Daly, 480.) One who claims, under real estate mortgages, fixtures which were also covered by a chattel mortgage, has the burden of showing that the fixtures were attached to the realty at the time when the real estate mortgage was given. (Buzzell v. Cummings, 6 Vt. 213; Campbell v. Roddy, 12 Cent. Rep. 821, 44 N. J. Eq. 244, 6 Am. St. Rep. 889, 14 A. 279; Ford v. Cobb, 20 N.Y. 344; Tift v. Horton, 53 N.Y. 378, 13 Am. Rep. 537; Kinsley v. Bailey, 9 Hun, 452; Session v. Hibbord, 10 Hun, 420; Andrews v. Chandler, 27 Ill.App. 103; Caper v. Peckham, 35 Conn. 88; Hill v. Wentworth, 28 Vt. 428, 437.)

STOCKSLAGER, J. Quarles, C. J., and Sullivan, J., concur.

OPINION

STOCKSLAGER, J.

This case comes here for review from three judgments rendered by the district court of Bear Lake county. On the twenty-first day of June, 1899, C. J. Anderson and Margaret Anderson, defendants, executed to plaintiff, John A. Anderson, a promissory note, to wit: "Four years after date, for value received, we, or either of us, promise to pay to John A. Anderson $ 3,100, negotiable and payable at the Manufacturers' National Bank of Racine, Wisconsin, in United States gold coin, with interest at the rate of ten per cent per annum from date until paid, both before and after judgment; and, if suit be instituted for the collection of this note, we agree to pay a reasonable attorney's fee. Interest payable yearly."

On the eleventh day of October, 1898, the same parties executed and delivered their promissory note payable to Mattie Vass, to wit: "Two years after date, for value received, we, or either of us, promise to pay to Mattie Vass, or order, $ 400, negotiable and payable at the Manufacturers' Bank of Racine, Wisconsin, in United States gold coin with interest at the rate of ten per cent per annum from date until paid, both before and after judgment, and, if suit be instituted for the collection of this note, agree to pay a reasonable attorney's fee. Interest payable yearly." Mortgages were executed by C. J. Anderson and his wife, Margaret Anderson, to secure the payment of these notes upon the Anderson Creamery property in Bear Lake county, recorded, and delivered to John A. Anderson and Mattie Vass. The mortgages covered the creamery machinery fixtures and land. Mattie Vass assigned her note and mortgage to John A. Anderson before maturity, and on the twenty-eight day of January, 1901, he brings suit to foreclose both mortgages.

On April 14, 1900, C. J. Anderson and Margaret Anderson executed and delivered their promissory note to the Creamery Package Manufacturing Company, a corporation, to wit: "For value received, we jointly and severally promise to pay to the order of Creamery Package Manufacturing Company, a corporation, the sum of $ 969, together with interest thereon at the rate of eight per cent per annum from date until paid, payable in installments as follows, to wit: Twenty-five dollars one month from date, twenty-five dollars two months from date, fifty dollars three months from date, and the sum of one hundred dollars on the fourteenth day of each and every month thereafter until the full amount of this note, together with the interest thereon, has been fully paid; and, if suit be instituted for the collection of this note, we, or either of us, promise to pay a reasonable attorney's fee."

On the same date a mortgage was executed and delivered by the Anderson to the Creamery Package Manufacturing Company to secure the payment of this note on the Anderson Creamery property in Bear Lake county, and at the same time a chattel mortgage was executed and delivered by the Anderson to the Creamery Package Manufacturing Company with property described, to wit: "One 36x8 15 H. P. boiler, complete with all fittings, including 38, 16 stack and guy wire; one four hundred-gallon cheese vat; one four hundred-gallon milk rec. vat (gal.); one 400-gallon cream vat; one 60-gallon weigh can with three P.; one two-pound butter print, with 12 extra trays; one 14 1/4 Helmer improved cheese press; twenty i4i, 2x6 gang press hoops and followers; two No. 1 Ideal rotary pumps; two No. 15 Gosher tanks; seven doz. 1/2 pint sample...