Bullard Inv. Co. v. Ford

• Citation: 18 Ala.App. 167,89 So. 837
• Decision Date: 10 May 1921
• Docket Number: 6 Div. 828
• Parties: BULLARD INV. CO. v. FORD.
• Court: Alabama Court of Appeals

89 So. 837

18 Ala.App. 167

BULLARD INV. CO. v. FORD.

6 Div. 828

Court of Appeals of Alabama

May 10, 1921

Rehearing Denied June 7, 1921

Appeal from Circuit Court, Jefferson County; Walter Brower, Special Judge.

Action by Ed Ford against the Bullard Investment Company. Judgment for plaintiff, and defendant appeals. Affirmed.

A transaction whereby plaintiff signed note for $5, stating on its face that plaintiff was to pay interest at the rate of 8 per cent. per annum, but in fact was required to orally agree to pay $1.80 per month for the use of the money, and did pay such amount, was usurious under Acts 1900-1901, p. 2685, the local usury law for Jefferson, Etowah, and Walker Counties.

Special count A is as follows:

Plaintiff claims of defendant $75 damages for this, namely That on, to wit, November 5, 1917, defendants were engaged in the business of money brokers or money lenders in Jefferson county, Ala., and taking therefor by bills of sale, mortgages on, or conveyances or liens of, any kind of personal property or personal effects or other personal security, and that on said date, namely, on, to wit, November 5, 1917, plaintiff entered into a certain contract in writing with defendants whereby plaintiff borrowed of defendants the sum of $5. Plaintiff avers that he gave to defendants his note, payable to defendants for $5, payable 30 days from the date thereof said note bearing on its face the stipulation that plaintiff was to pay interest thereon at the legal rate of interest in Alabama. Plaintiff further avers that, notwithstanding said stipulation on said note whereby he agreed to pay interest thereon at the legal rate of 8 per centum per annum plaintiff was in fact required by defendants to engage in a verbal contract with reference to said loan and said note to pay the usurious interest rate of $1.80 per month for the use of said $5; and plaintiff avers that he did pay to defendants, their servants, agents, or employees, the sum of $1,80 for the use of said $5 for each and every one of the following months, to wit: November and December, 1917; January, February, March, April, May, June, July, August, September, October, November, and December, 1918; and January, 1919; and up to, to wit, January 11, 1919. That January 11, 1919, plaintiff borrowed of defendants the further sum of $5 and gave his note of hand to defendants on said day and date for the sum of $10, said note bearing on its face the statement that said note was to bear interest at the rate of 8 per cent. per annum; but plaintiff avers that as a matter of fact he was required to enter into a verbal contract with defendants, by and through their servants, agents, or employees, whose names are to the plaintiff unknown, to the effect that, instead of paying the legal rate of interest on said loan of $10, plaintiff was in fact to pay for the use thereof the sum of, to wit, $3 per month; and plaintiff avers that for the use of said $10 he did pay to the defendants the sum of $3 for each and every one of the following months during 1919, to wit: February, March, April, and May. And plaintiff avers, further, that on, to wit, the 9th day of June, 1919, plaintiff borrowed of defendants the further sum of $5, making a total principal indebtedness of plaintiff to defendants of $15, in evidence of which said indebtedness plaintiff gave to defendants his note of hand for $15 on said day and date, which said note bore on its face the statement that said indebtedness was to bear the legal rate of interest, but plaintiff avers that on said day and date, and before he could secure said loan, he was required by the servants, agents, or employees of defendants, whilst acting as such, and within the line and scope of such said service, agency, or employment, to agree verbally to pay for the use of said $15 the usurious sum of, to wit, $4 per month; and plaintiff avers that as a matter of fact he did so pay said sum of $4 for each and every month thereafter during 1919 as follows: June, July, August, and September. And plaintiff avers that defendants are now demanding of him the sum of, to wit, $19 in payment of said principal sum of $15 which plaintiff borrowed from defendants in the way and manner hereinabove set forth and at the times hereinabove set forth, and $4 for the use of said $15 from, to wit, the 9th day of October, 1919, to, to wit, the 9th day of November, 1919, and as a proximate consequence of said usurious contract plaintiff was put to great expense for attorney's fees in prosecuting this his suit for recovery of said moneys usuriously paid to defendants, and he lost much time from his work in and about his efforts to recover said money so paid; hence this suit.

The demurrers insisted on are as follows:

(10) It is not made to appear that the transactions of the plaintiff and defendants come within the purview of the act of the Legislature of Alabama approved March 9, 1901 regulating the business of money brokers, or of persons who lend money for themselves or others on bills of sale, notes, or mortgages on personal property or other personal security in Jefferson, Morgan, Walker, and Etowah counties.

(11) It appears that the money sought to be recovered by plaintiff was voluntarily paid by him to defendants.

(13) It is not shown wherein or how the contract between plaintiff and defendants on the 15th day of November, 1919, or on January 11, 1919, or on June 9, 1919, failed to comply with the act of Legislature of Alabama approved March 9, 1901, regulating the business of lending money in Jefferson, Morgan, Walker, and Etowah counties.

(18) It affirmatively appears that the transaction by which plaintiff borrowed $5 on, to wit, January 11, 1919, and gave his note of hand to defendants for the sum of $10, was not an action regulated by the act of March, 1901.

(21) It fails to appear or show wherein the note made by the plaintiff at the time he borrowed the $5 on, to wit, November 15, 1917, failed to comply with the act of March 9, 1901.

(22) The act of March 9, 1901, regulating the business of money brokers, or persons who lend money for themselves or others on bills of sale, notes, or mortgages on personal property or other personal security, in Jefferson, Morgan, Walker, and

Etowah counties, is unconstitutional, in that it unjustly restricts defendants' exercise of their right of contract.

(23) Said act of March 9, 1901, is unconstitutional in that it only applies to loans which do not exceed $75, and which are not made by persons engaged in the business of banking.

(24) Said act of March 9, 1901, is unconstitutional in that section 3 thereof prohibits a loan of money not exceeding $75, to be made to a person who signs his name by mark in Jefferson county, Ala., by a money broker, unless the lender was in the banking business, or unless the note evidencing the loan is attested by two witnesses who are not of kin to the lender, and who have no interest in said loan, either directly or indirectly, and who are not at the time in the employment of the lendor, although the loan is made at a lawful rate of interest.

(25) Said act of March 9, 1901, regulating the business of money brokers, or persons who lend money for themselves or others on bills of sale, notes, or mortgages on personal property or other personal security, in Jefferson, Morgan, Walker, or Etowah counties, is unconstitutional and void, in that it prohibits a loan of less than $75 being made by one engaged in lending his own money, other than in a banking business, to a person who cannot write his name at a legal rate of interest in cases where no bill of sale or mortgage on personal property or other

...