Brown v. Johnson

• Decision Date: 08 May 1913
• Docket Number: 2461
• Citation: 43 Utah 1,134 P. 590
• Court: Utah Supreme Court
• Parties: BROWN v. JOHNSON

134 P. 590

43 Utah 1

BROWN v. JOHNSON

No. 2461

Supreme Court of Utah

May 8, 1913

APPEAL from District Court, Third District; Hon. F. C. Loofbourow Judge.

Action by Carrie Brown against Sarah M. Johnson.

Judgment for defendant. Plaintiff appeals.

REVERSED AND REMANDED, WITH DIRECTIONS.

Allen T. Sanford, for appellant.

Adam Duncan, for respondent.

FRICK J. McCARTY, C. J., and STRAUP, J., concur.

OPINION

FRICK, J.

This was an action to recover upon a promissory note given for $ 350. The only defense interposed is usury. A trial to the court resulted in findings and judgment for defendant, and the plaintiff appeals.

The interest specified in the note did not exceed the rate permitted by our statute, and hence the defendant undertook to prove usury by parol evidence. We have carefully gone over and examined all of the evidence that was produced at the trial, and which was certified up by the trial court in appellant's bill of exceptions. The material evidence produced by both parties is substantially as follows: Some time in 1910 Mrs. Mansfield, the mother of respondent, applied to one Adolph Lochwitz to obtain a loan of $ 250 or $ 300 which she said she needed immediately to pay certain materialmen for material which they had furnished and were furnishing for a new dwelling house she was then building. In this connection she testified that she went to Mr. Lochwitz and asked him for the money, and after telling him that she could secure its payment by a chattel mortgage upon her daughter's (respondent's) property he said that he would see what he could do for her by way of obtaining the money and that he advised her that she needed at least $ 350; that within a day or two thereafter she saw him again and he told her that he could let her have the money but that she would have to pay fifty dollars for it for ninety days; that pursuant to this arrangement she, at his request went to the office of Mr. Sanford, an attorney at law, to have the necessary papers drawn to evidence the loan and there to obtain the money; that she met Mr. Sanford and Mr. Lochwitz at the office of the former and he prepared the papers and she signed them by signing her daughter's name, by herself, as attorney in fact; that after the papers were signed Mr. Sanford counted out $ 300, placing the same in three separate parcels, and also counted out an additional fifty dollars and placed it in a separate parcel and shoved the whole amount across the office desk toward her; that she was about to take the money when Mr. Lochwitz said that the interest and expenses for drawing the papers should be deducted from the amount. After this the witness' memory is not clear with respect to just how the transaction terminated. Mr. Sanford, however, testified that he obtained the $ 350 from his stenographer, with whom Mr. Lochwitz had left it, and that he counted all of it and shoved it across the desk to Mrs. Mansfield when Mr. Lochwitz spoke up and said that the interest called for in the note, to wit, one per cent. a month, should be taken out of the amount, and further that one-half of the expenses for drawing the papers should also be deducted therefrom. He accordingly asked Mr. Sanford what the expenses were and was informed that they would be five dollars. Mr. Sanford then sought to take the amount of the interest, namely, $ 10.50, and his expenses, five dollars, out of the $ 350, but could not do so because he could not make the change correctly. Mr. Lochwitz then paid Mr. Sanford the portion of the expenses Mrs. Mansfield was to pay and immediately left the office to go with her to the bank where she wanted to deposit the money so that she could check against it, where she said she would repay him her share of the expenses. As to what happened at the bank, the witnesses are greatly at variance, but, in view of the conclusions reached, the precise nature of the transaction there is not material. Mrs. Mansfield, however, asserts that Mr. Lochwitz took the whole fifty dollars for interest, while he insists that all he took was $ 10.50 and one-half of the expenses, and that Mrs. Mansfield gave him thirty-seven dollars as compensation for his efforts in obtaining the money in question and to further assist her to obtain a loan upon her house she was then building. He says that this came about in this way: When Mrs. Mansfield asked him for the money in question he asked her what means she had to repay the loan if made; that she said she wanted to secure $ 1,200 by mortgaging her house, and if she could do so she could repay the loan from him out of that. After considering her wants as detailed by her, he told her that she had better make a loan of $ 1,600, and that in consideration of the fifty dollars she offered to pay him he would assist her to obtain the loan from some real estate men with whom he was acquainted. She disputes the latter statement and insists that the fifty dollars was asked as a compensation for the use of the money in question. The evidence is without contradiction that the money in question belonged to the appellant, who is a niece of Mr. Lochwitz, and at the time the loan was made lived and still lives in San Francisco; that some time prior to the transaction in question she had lived at Price, Utah, and from there came to Salt Lake City for surgical treatment; that after she was operated upon and was about to leave Salt Lake City for San Francisco she had more money than she needed and she gave $ 400 to her uncle, Mr. Lochwitz, telling him to use it or do with it as he thought best, and when she needed it he could upon request return it to her. Mr. Lochwitz states that after he had tried in vain for a number of days to obtain the money for Mrs. Mansfield, and after she had offered him fifty dollars as compensation to obtain it, he finally let her have $ 350 of the $ 400 aforesaid and took a chattel mortgage as security; that his niece had no knowledge whatever that he was about to make or that he had made the loan until afterwards, when he advised her of the fact and asked her to execute a power of attorney to him so that he might do everything that might be required of him in collecting the money; that she did not know anything about the arrangements between him and Mrs. Mansfield respecting the interest, commission, or bonus (whatever it may be called), and never obtained any part or share of the same; that no arrangement or understanding of any kind was ever had or talked of between him and his niece about the making of this or any other loan, or about his services in case he made a loan, and that his niece furnished the entire $ 350. Respondent introduced the aforesaid power of attorney in evidence, which was dated and was executed some time after the note in question was made and delivered. It is not necessary to detail the evidence further.

The only findings of fact made by the court, except the formal ones, are as follows:

"That the said note and mortgage were made and delivered to the plaintiff upon an agreement between the plaintiff and defendant that the defendant should pay to plaintiff, and that the plaintiff should take, receive, reserve, and secure to herself for the loan of the principal sum therein mentioned, a greater sum than at the rate of twelve per centum per annum upon said principal sum, to wit, at the rate of one per cent. per month from date of said note, as provided therein, and in addition thereto the sum of thirty-four dollars; and, in addition to the said interest so reserved by the said note at the rate of 1 per cent. per month from date thereof until paid, the defendant at the time of the execution and delivered thereof paid to the plaintiff, and the plaintiff took and received in pursuance of said agreement, the said further sum of $ 34 as additional interest or compensation for the loan of the said principal sum."

Upon the foregoing findings the court made conclusions of law and entered judgment in favor of respondent in which the note and chattel mortgage were canceled and appellant was adjudged to pay the costs of the action. Appellant complains that the findings aforesaid are not sustained by the evidence and that the court's conclusions of law and judgment are contrary to law.

We think it requires no extended, if any, argument to show that in view of the evidence to which we have referred the so-called findings of fact are merely a blending of conclusions of fact and conclusions of law interspersed with some ultimate facts. The finding that an agreement was entered into "between the plaintiff and defendant" is in view of the evidence a conclusion of law pure and simple, since the evidence is without dispute that Mr. Lochwitz acted as agent for and on behalf of the appellant and that Mrs. Mansfield acted as such for and on behalf of the respondent. In view, therefore, that the transaction was effected through the agents of both parties, and since appellant contended, at the trial and now contends that she did not enter into a corrupt and usurious agreement, knew nothing about it, and neither received any of the fruits thereof nor ratified the transaction, the court should have specifically found the facts with regard to those matters and should have made his conclusions of law from the facts found.

There is not the slightest evidence in this record from which any inference can legitimately be deduced that the appellant authorized her uncle to enter into a usurious contract unless such inference is permissible from the mere fact that she left the money with him under the conditions hereinbefore detailed and from the execution of the power of attorney to him after the loan was made. Nor is there any evidence of ratification, nor that she knowingly received or retained any of the...