Coad v. Home Cattle Co.

• Decision Date: 15 September 1891
• Parties: MARK M. COAD, APPELLEE, v. HOME CATTLE CO. ET AL., APPELLANTS
• Court: Nebraska Supreme Court

49 N.W. 757

32 Neb. 761

MARK M. COAD, APPELLEE, v. HOME CATTLE CO. ET AL., APPELLANTS

Supreme Court of Nebraska

September 15, 1891

APPEAL from the district court for Cheyenne county. Heard below before MORRIS, J.

AFFIRMED.

John C Cowin, Heist & Raynor, Thomas Kane, and W. C. Reilly, for appellants, cited, as to usury and the inception of the contract: Tyler, Usury, 83; Miller v. Tiffany, 1 Wall [U.S.] 298; Andrews v. Hoxie, 5 Tex. 171; Pratt v. Adams, 7 Paige [N.Y.] 615; Berrien v Wright, 26 Barb. [N.Y.] 208; Roberts v. McNeely, 7 Jones [N. Car.] 506; Parham v. Pulliam, 5 Caldw. [Tenn.] 497; Vail v. Heustis, 14 Ind. 607; Marvin v. McCullum, 20 Johns. [N.Y.] 288; Hall v. Wilson, 16 Barb. [N.Y.] 548; Armstrong v. Toler, 11 Wheat. [U.S.] 258, 271; Curtis v. Leavitt, 15 N.Y. 9, 53, 178; Jewell v. Wright, 30 N.Y. 259; Elston v. Kelly, 34 Minn. 409; Scott v. Lloyd, 9 Peters [U.S.] 418; Evans v. Negley, 13 S. & R. [Pa.] 218; Chamberlain v. McClurg, 8 W. & S. [Pa.] 31; Fitzsimons v. Baum, 44 Pa. 32, 40-2; Sands v. Smith, 1 Neb. 110; Hewitt v. Dement, 57 Ill. 500. As to the option to declare the mortgage due: Edgerton v. Peckham, 11 Paige [N.Y.] 357; Seton v. Slade, 7 Vesey [Eng.] 273-4. As to the chattel mortgage sale: Flanders v. Chamberlain, 24 Mich. 305; Eslow v. Mitchell, 26 Mich. 500; Ashworth v. Dark, 20 Tex. 824; Herm., Chat. Mortg. 474, 499; Wilson v. Little, 2 N.Y. 443; Allen v. Dykers, 3 Hill [N.Y.] 596; Dykers v. Allen, 7 Hill 497; Johnson v. Stear, 15 C. B. [N. S. Eng.] 330; Vincent v. Conklin, 1 E. D. Smith [N.Y.] 203; Jones, Chat. Mtgs., 708, 710, 730, 793, 795; Loeb v. Milner, 21 Neb. 392; 6 Wait, Act. & Def., 196; Simpson v. Carleton, 1 Allen [Mass.] 109; Botsford v. Murphy, 11 N.W. 376 [Mich.]; Denny v. Faulkner, 22 Kan. 89; State v. Roberts, 37 Kan. 437; Kopmeirer v. O'Neil, 3 N.W. [Wis.] 367; Black v. Howell, 56 Iowa 630; Lee v. Mason, 10 Mich. 403; Doyle v. Howard, 16 Mich. 261; 2 Jones, Mtgs., sec. 1827; Shillaber v. Robinson, 97 U.S. 68; Hall v. Towne, 45 Ill. 493; Stoddard v. Denison, 7 Abb. Pr. [N.Y.] N. S., 309; Bird v. Davis, 14 N.J.Eq. 467; Freeman v. Freeman, 2 Green [N. J. Eq.] 44; Sandford v. Flint, 24 Mich. 26; Soule v. Ludlow, 6 T. & C. [N.Y.] 24; Longwith v. Butler, 8 Ill. 32; Stoddard v. Denison, 7 Abb. Pr. [N.Y.] N. S., 309; Dana v. Farrington, 4 Minn. 335; Howard v. Ames, 3 Met. [Mass.] 308; Hungate v. Reynolds, 72 Ill. 427.

F. I. Foss, contra:

The place of delivery has nothing to do with the contract, the lex loci contractus and place of performance being the things which control. (Jones, Mtgs., secs. 102, 113; Sands v. Smith, 1 Neb. 108.) The mortgagee of a chattel always has the right of possession as against the mortgagor. (Jones, Mtgs., 426, 453.) There had been four defaults in interest, showing the mortgagee that his security was likely to be squandered, and it was his duty to take the property and protect his interests. (Jones, Mtgs., 632, 637.) As to the question of usury: 7 Wait, Act. & Def., 623 and cases; Savings Inst. v. Blair, 116 U.S. 205; Lloyd v. Scott, 4 Peters [U.S.] 205; Bank v. Waggener, 34 U.S. 378, 9 Peters 378, 9 L.Ed. 163. As to the continuance: Jameson v. Butler, 1 Neb. 117; Billings v. McCoy, 5 Neb. 190; Johnson v. Dinsmore, 11 Neb. 394; Williams v. State, 6 Neb. 337; Ingalls v. Nobles, 14 Neb. 273; Jones, Chat. Mtgs., 632-634, 635.

OPINION

NORVAL, J.

This suit was brought by the appellee in the district court of Cheyenne county to foreclose a real estate mortgage executed by the Home Cattle Company. The State Bank of Sidney, being a subsequent mortgagee, was joined as party defendant.

The court found that there was due the plaintiff on his note and mortgage the sum of $ 6,339.07, and that the same was a first lien on the real estate mentioned in the petition. The court also found that there was due the State Bank of Sidney, on its mortgage from the Home Cattle Company, the sum of $ 6,208, and the same was a second lien. A decree of foreclosure and sale was rendered, from which the defendants appeal.

On the 28th day of April, 1883, the Home Cattle Company was incorporated under the laws of the territory of Wyoming, with authority to carry on a general live stock business in the territories of Wyoming, Montana, and Dakota, and in the states of Colorado and Nebraska, with its principal place of doing business at Cheyenne, Wyoming. Subsequently the company acquired property in Cheyenne county, Nebraska, where most of the business of the company was transacted, and where the greater portion of its property was situated.

On the 19th day of August, 1884, the appellee loaned the Home Cattle Company $ 12,000, for which amount it executed a promissory note, due November 1, 1886, payable to M. M. Coad at the banking house of Morton E. Post & Co., Cheyenne, Wyoming, drawing interest at fifteen per cent per annum from date. The interest was made payable semi-annually at said bank. To secure the payment of the note the proper officers of the company executed and delivered the real estate mortgage in suit, and a chattel mortgage upon all of the personal property owned by the company.

One of the defenses presented by the answer of the Home Cattle Company is usury. That the full amount, for which the note was given, was paid by the plaintiff, is not denied. But the appellants insist that the loan was made in this state, and as the note specifies on its face a higher rate of interest than is allowed by the laws of Nebraska, the contract is usurious. The plaintiff contends that this was a Wyoming contract and is not governed by the laws of Nebraska. It is conceded that the note is not usurious under the laws in force in Wyoming at the date of its execution.

At and prior to the making of the loan the plaintiff was a resident of Cheyenne, Wyoming. The board of directors of the Home Cattle Company held a meeting at Cheyenne on the 18th day of August, 1884, at which the following resolution was adopted:

"Resolved, That the company borrow the sum of twelve thousand dollars ($ 12,000), giving its note therefor payable on November 1, 1886, with interest at the rate of fifteen per cent per annum, the interest to be payable at the end of each and every six months, the said note and interest thereon to be secured by a mortgage upon the company's property, both personal and real; and the president and secretary are hereby authorized and empowered to execute and sign, for the company, such note and mortgage, and that said money be used in the payment of the debts of said company, some of which are in judgment against the company, and others are long overdue accounts; surplus, if any, to be applied to the proper purposes for which the company was organized."

In accordance with this resolution the proper officers of the company, on the 19th day of August, in the city of Cheyenne, Wyoming, executed the note and mortgages, the note being dated and payable in Cheyenne. The plaintiff, desiring to look over the property and also to examine the records of Cheyenne county, Nebraska, for the purpose of ascertaining whether there were any liens against the property, the money was not paid out on the loan until six days later. On August 25 Mr. Coad examined the records at Sidney, Nebraska, and finding the property free from incumbrances, he gave Thomas Kane, the president of the company, his check for $ 12,000, on either a Cheyenne or Omaha bank, and the note and mortgages were delivered to the plaintiff at the same time in Sidney.

The facts, so far as we have stated them, are not disputed by the testimony. It is, however, contended by the appellants, that the contract for the loan was made between the plaintiff and Thomas Kane, the president of the company in this state prior to the meeting of the board of directors in Cheyenne, and that it was further agreed the note should be executed and made payable in the city of Cheyenne, so that the contract might draw interest at fifteen per cent per annum, instead of the highest rate allowed by the laws of this state, and that said agreement was made for the sole purpose of evading the usury laws of Nebraska. This was denied by the plaintiff when upon the witness stand. That the note in suit appears on its face to have been executed in Wyoming, and by its terms is payable there; that the maker of the note is a Wyoming corporation, and that the plaintiff, at the time of the making of the loan, and both prior and subsequent thereto, resided in Cheyenne, Wyoming, raise a strong presumption that the contract was made in Wyoming, where the rate of interest specified in the note is lawful, and not that the parties entered into the contract in this state, where the stipulated rate of interest is unlawful. And this presumption will prevail until overcome by clear and satisfactory proof that the contract was made here, and that the note was signed in Wyoming, and was dated and made payable there, as a device for securing usurious interest. Whether the transaction was intended as a means to defeat the usury laws of this state is a question of fact to be determined from the evidence. The trial court found that the contract was made in Wyoming, and upon a careful consideration of the case we are satisfied that the evidence fully sustains the finding, and that the transaction was bona fide. There is evidence in the bill of exceptions tending to show that the agreement for the loan was made in Wyoming, and the fact that the note was delivered and the money paid over in this state would not alone make the note a Nebraska contract. It was competent for the parties to adopt the laws of Wyoming, provided they did so in good faith and not for the purpose of evading the usury laws of this state. (Brown v. Finance Co., 31 F. 516; Kilgore v. Dempsey, 25 Ohio St. 413; ...