Briant v. Carl-Lee Brothers

• Citation: 249 S.W. 577,158 Ark. 62
• Decision Date: 02 April 1923
• Docket Number: 268
• Parties: BRIANT v. CARL-LEE BROTHERS
• Court: Supreme Court of Arkansas

249 S.W. 577

158 Ark. 62

BRIANT v. CARL-LEE BROTHERS

No. 268

Supreme Court of Arkansas

April 2, 1923

Appeal from Pulaski Circuit Court, Third Division; A. F. House Judge; affirmed.

Judgment affirmed.

U A. Gentry and J. H. Carmichael, for appellant.

Carl-Lee Bros. could not maintain suit in their own name. Suit must be brought in name of real party in interest. Johnson v. Ankrum, 131 Ark. 557. All the money belonged to Mrs. Vaughan, and the suit against her was simulated, not bona fide, and the court erred in allowing suit to proceed, over objection made, in name of appellees. Bringing suit in name of appellees was part of the scheme to cover up usury. R. C. L. 211, sec. 12. Contract or note was usurious. Sec. 7354, Crawford & Moses' Dig., § 7353, 7363 Id. Garvin v. Linton, 62 Ark. 370. All the testimony shows that Taylor offered to pay $ 300 in addition to the 8 per cent. interest for the use of $ 1,500 for 90 days, and that Carl-Lee Bros. and Mrs. Vaughan agreed, and furnished the money on that agreement. This brings case within rule of German Bank v. Deshon, 41 Ark. 331. We have one case very much like the explanations offered by appellees. Humphrey v. McCauley, 55 Ark. 143.

Will G. Akers and G. Denison Cherry, for appellees.

Carl-Lee Bros. were the parties in interest, and action properly maintained in their name. Secs. 7817, 7761, Crawford & Moses' Digest. Holder may sue in his own name. Craig v. Palo Alto Stock Farm, 16 Idaho 701, 102 P. 393; Utah Implement Co. v. Kenyon, 30 Idaho 407, 164 P. 1176; Harrison v. Pearcy, 174 Ky. 485, 192 S.W. 513. At common law holder of legal title to note can sue in his own name. Chaffee v. Shortie, 46 Okla. 199, 148 148 P. 686; Fay v. Hunt, 190 Mass. 378, 77 N.E. 502; Harris v. Johnson, 75 Wash. 291, 134 P. 1048. Johnson v. Ankrum, cited, not in point in appellant's contention. Mrs. Vaughan had no interest in the money. Contract not usurious. 91 Ark. 458; 25 Ark. 258; 144 Ark. 573. Burden of proof on party pleading usury. 105 Ark. 653 and cases cited. No declarations of law were given or refused, and court is presumed to have applied correct legal principles. Greenspon v. Miller, 111 Ark. 190; Blass v. Lee, 55 Ark. 329 The findings of circuit court sitting as a jury of same effect as verdict of jury. Rice v. Metropolitan Life Ins. Co., 152 Ark. 498. Valid contract not rendered usurious by later contract. Walter v. Adams, 138 Ark. 411; Haynes v. Stevens, 62 Ark. 491. The payment of the bonus was contingent on a profit in the transaction, and did not render transaction usurious. 56 Ark. 335; 81 N.W. 1098; 52 N.E. 690. Material difference between interest and what is termed "profit." 130 Ark. 116; 133 F. 462; 19 A. 685. Also had right to pay brokerage. 27 R. C. L. 236; 51 Ark. 534; 11 S.W. 878, 14 A. S. R. 73; 4 L. R. A. 426; 57 Ark. 251; 68 Ark. 162; 105 Ark. 653.

OPINION

WOOD, J.

The appellees, Reuben B. Carl-Lee, Edward A. Carl-Lee and Frank M. Carl-Lee, are partners doing business under the firm name of Carl-Lee Brothers. They instituted this action against Mrs. R. T. Briant, the appellant, C. J. Blount, Mrs. Frank Vaughan, Joe Johnson, Charles E. Taylor and Charles E. Becker. They alleged that the defendants executed and delivered to plaintiffs a promissory note in the sum of $ 1,500, due in ninety days, with interest at the rate of eight per cent. per annum from maturity until paid; that the note was past due and unpaid. They pray for judgment on the note.

Mrs. Briant answered and admitted that she, with the others, executed the note set up in the complaint. She alleged that she signed the note on the representations of Charles E. Taylor that the note was secured by a trust agreement held by J. W. Mehaffy of Little Rock, Arkansas, and that the plaintiffs were put on notice of such agreement; that, but for such representations and understanding, she would not have signed the note; that the representations made to her were false and fraudulent, and that she was relieved from any responsibility on said note; that she was informed and believed that no mortgage or lien or other security was ever given; that plaintiffs knew of the representations that were made to her by Taylor to induce her to sign the note. She also set up that the sum of only $ 1,500 was advanced to her, whereas it was agreed by the plaintiffs through the defendant, Mrs. Vaughan, that, as part of the interest and for the use of the money, the sum of $ 300 should be paid, which rendered the note usurious and void. Mrs. Briant's answer was filed January 9, 1922, and on February 13 judgment by default was taken against the other defendants.

The appellees introduced in evidence the note of February 15, 1921, signed by the appellant and the other defendants mentioned in the complaint. The note recited as follows: "Ninety days after date, for value received, we promise to pay to the order of Carl-Lee Brothers (England, Arkansas) fifteen hundred dollars ($ 1,500), with interest at the rate of eight per cent. per annum from maturity until paid. The makers and indorsers of this note hereby severally waive presentment for payment, notice of nonpayment and protest, and consent that the time may be extended without notice thereof. This note is given for part of purchase price on the following described lands in Union County, Arkansas. This note is further secured by a certain trust agreement held by J. W. Mehaffy of Little Rock, as trustee. A lien is reserved on said property as security for the payment of this note, which is number -- of a series of [158 Ark. 66] -- notes. If this note is not paid on maturity, all unpaid notes of this series shall become and be due and payable at once."

The testimony of C. E. Taylor, who negotiated for appellant and the others the loan for which the note was executed, was to the effect that, in order to get the loan through, he had to promise that a $ 300 bonus would be paid for the use of the money, and he was to receive one-half of the bonus for himself, and was to contribute $ 50 or more to the $ 300. He was also required to execute a first mortgage on certain property he owned in Little Rock to secure the loan. He exhibited an instrument which he testified was a part of the transaction. By this instrument J. W. Mehaffy was constituted as trustee for the signers of the note, and the instrument recited that they had given to the trustee a check for Carl-Lee Brothers for $ 1,500 drawn on the England Bank of England, Arkansas. The instrument directed J. W. Mehaffy, when the money was received on the check, to pay the sum to one P. A. Griffin as part payment on a certain oil and gas lease described therein as purchased from Griffin by W. H. Martin. The instrument directed Mehaffy, as trustee, to receive from Martin for the signers the sum of $ 6,300 and directed him to pay out of said sum $ 1,800 to Carl-Lee Brothers and the remaining two-thirds to the signers of the note, and to retain out of the moneys the sum of $ 250, to be deducted in equal amounts from the sums due the signers of the note. He further testified that it was made clear, in the conference he had with Mrs. Vaughan and one of the Carl-Lee Brothers, when he was negotiating the loan, that the money belonged to Mrs. Vaughan, but had been loaned by her to Carl-Lee Brothers. He stated that at conference the sum of $ 300 was discussed and agreed upon. He said that all concerned in the borrowing of the money would be very glad to pay it to Mrs. Vaughan or to Carl-Lee Bros., inasmuch as they had offered to pay other people at El Dorado a bonus of $ 300 to procure the loan, but had not succeeded in obtaining same. Taylor stated that he executed his note, secured by mortgage on his property mentioned, for the sum of $ 1,650. He was to make good that sum, and the other $ 150, when paid to the trustee and paid to Taylor, was to be retained by him. Witness exhibited and read a letter which he had received from Mrs. Vaughan in which, among other things, she said: "The Carl-Lee $ 1,800-- as I understand it--$ 150 of it goes to you. Of course my brothers will give you check for it as soon as money reaches them." And another letter in which she stated as follows: "Following up the discussion of your suggestion in 'phone conversation that I should bear my part of the Carl-Lee note (my money)." She then states that the parties signing the note were morally obligated to pay $ 1,800, and further says: "It never occurred to me to want the $ 300 unless it came, as was expected, as a 'cut in' with others on the profit or commission, and so I think it should appeal to the signers that we did regard the $ 300 as a share of the profits. * * * Again, my brother made it plain to you, by many repetitions, that I could not afford to lose not even a dollar, and you recall that you offered the mortgage upon his insistence that he would not consent to lending my money unless I was protected against any loss, however small. * * * I suppose I could go ahead and pay a part of the $ 1,800 and hold your note for the part I pay, based upon this agreement you gave my brother to protect me against any loss whatever," etc. And still other letters, in which she stated, among other things, that she realized that the individual note given by Taylor was given in haste and at a time when it seemed there would be a good profit in it for all concerned. She further says: "It was given on the basis of the Carl-Lee Brothers cutting in on the profits, and I have no intention of holding the note for any more than the $ 1,500." And another letter in which she refers to the fact that the Carl-Lee check was not to be paid out to Griffin until certain conditions had been complied with, which, she reminded Taylor, had not been done. In this letter she further states: "You...