Bingham v. Myers

• Court: Iowa Supreme Court
• Writing for the Court: ROTHROCK
• Citation: Bingham v. Myers, 51 Iowa 397, 1 N.W. 613 (Iowa 1879)
• Decision Date: 12 June 1879
• Parties: E. W. BINGHAM, APPELLANT, v. JOHN M. MYERS AND ANNA M. MYERS, APPELLEES.

51 Iowa 397

1 N.W. 613

E. W. BINGHAM, APPELLANT,

v.JOHN M. MYERS AND ANNA M. MYERS, APPELLEES.

Supreme Court of Iowa.

Filed June 12, 1879.

Appeal from Story circuit court.

On the twenty-fifth day of April, 1874, the defendant John M. Meyers borrowed of the plaintiff the sum of one thousand dollars. He executed a promissory note for that amount, payable to plaintiff's order with interest at ten per cent per annum. And to secure the payment thereof, he and his codefendant, Anna M. Myers, his wife, executed to the plaintiff a mortgage upon certain real estate. At the same time, and as part of the same transaction, the defendant executed to the plaintiff certain additional interest notes in such an amount as would make the legal rate of interest for the one thousand dollar loan equal to twenty per cent per annum. This action was brought for a judgment on the note for one thousand ollars, and the intrest at ten per cent per annum, and for a foreclosure of the mortgage. The defendants interposed the defense of usury. The cause was tried by the court. It was found that the contract by which the money was loaned was tainted with usury, and a decree was entered for the plaintiff for the unpaid principal of the debt without interest or cost. Plaintiff appeals.Dyer & Fitchpatrick, for appellant.

J. L. Dana, for appellees.

ROTHROCK, C. J.

--I. The trial was had upon written evidence in pursuance of the proper motion and order, and the parties are entitied to a trial anew in this court. The plaintiff is a married woman. That she was the owner of the one thousand dollars loaned, is not put in issue by the pleadings. The money had been loaned to J. C. Mitchell upon a mortgage. Mitchell did not pay his loan directly to plaintiff. The loan to defendant was effected by Mitchell taking up his note and mortgage, and paying to defendant the one thousand dollars for which the defendant executed the note and mortgage in suit. Mitchell drew the mortgage and notes from the defendant to the plaintiff in the plaintiff's dwelling-house, in presence of plaintiff's husband, who was attending to the premises for the plaintiff. Plaintiff was not present when the business was transacted, but was in another room in the same house.

It is claimed by the defendants that the evidence establishes the defence of usury, because the husband was acting as agent of the plaintiff in making the loan, and taking the notes for the interest in excess of the ten per cent provided for in the note for the principal; and that the husband afterward collected the usurious interest notes and applied them, in part at least, to the support of the plaintiff. On the other hand, it is claimed by the plaintiff that she did not know that her money was loaned to defendant at any rate of interest greater than ten per cent per annum; that she did not authorize her husband, nor any other person, to make the loan at more than ten per cent interest; that she received only the note for the principal sum and ten per cent interest, and did not know that her husband had taken the interest notes in excess of the ten per cent per annum, until after the commencement of this suit. The law is well settled, that where an agent for loaning money takes a bonus or commission to himself beyond the legal rate of interest without the knowledge, authority or consent of his principal, it does not effect with usury the loan of the principal. Gakey v. Knapp, 44 Iowa, 32;Nylhis v. Ault, 46 id. 46; Story on Agency, § 170; Tyler on Usury, 156; Condit v. Baldwin, 21 N. Y.; Rogers v. Buckingham, 33 Conn. 81. The appellant filed an abstract and the appellee filed an additional abstract. The correctness of...