Coast Finance Corp. v. Ira F. Powers Furniture Co.

• Decision Date: 10 October 1922
• Citation: 209 P. 614,105 Or. 339
• Parties: COAST FINANCE CORPORATION v. IRA F. POWERS FURNITURE CO.
• Court: Oregon Supreme Court

209 P. 614

105 Or. 339

COAST FINANCE CORPORATION v. IRA F. POWERS FURNITURE CO.

Supreme Court of Oregon

October 10, 1922

In Banc.

Appeal from Circuit Court, Multnomah County; H. H. Belt, Judge.

Action by the Coast Finance Corporation against the Ira F. Powers Furniture Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Defendant appeals from the judgment of the circuit court in the sum of $20 for money had and received. The defendant in its answer alleges:

"That on the 23d day of April, 1921, defendant received of plaintiff the sum of $100, in consideration whereof defendant assigned to plaintiff the first $109.91 of a certain conditional sales contract, according to a written agreement, a copy of which, marked 'Exhibit A,' is attached to and made a part of the complaint herein; that at the time of such purported assignment there was a balance unpaid on said conditional sales contract of $282.63, said balance being due in ten equal monthly installments of $28.26, beginning May 25, 1921; and that according to the terms of said assignment, defendant was to act as agent for plaintiff in the collection of said monthly installments."

Defendant further alleges that it was the purpose of the assignment to obtain for plaintiff a greater rate of interest than 10 per cent. per annum for the use of $100 "for the period of four months," in which the principal of $100 should remain unpaid, according to the terms and purpose of such agreement; and that it was the purpose of plaintiff thereby to evade the law as to the collection of usurious interest in the amount of more than 10 per cent. per annum.

The cause was tried by the court without a jury, upon a stipulation of facts, the substance of which is as follows:

"That plaintiff and defendant are Oregon corporations engaged in business, the plaintiff having been organized for the purpose of under-writing, financing and discounting contracts and commercial paper, and the borrowing and loaning of money; and the defendant is engaged in the retail furniture business. Parties have complied with the law, providing for payment of license fees due the state of Oregon.

"That the agreement between plaintiff and defendant is as set forth in 'Exhibit A,' attached to the complaint herein; and that the sum of $80 is now in the possession of defendant, collected on the conditional sales contract in question, and referred to in the answer; and that no part thereof has been paid, defendant having refused to comply with the terms of the agreement identified as 'Exhibit A,' unless it shall first be determined that the said agreement is not usurious.

"That from the position of plaintiff the said transaction is a purchase and the setting aside to it of a portion of the contract in question for the sum of $100, to obtain a profit; and that, on the part of the defendant, it was a means of obtaining an advance of funds, without waiting for the maturing of such contract and for which it was willing to sacrifice accordingly."

The trial court found, among other things, that the defendant had received of one W. J. Kappes the sum of $20 for and on account of plaintiff, as its agent according to the terms of a certain agreement in writing dated April 23, 1921, which reads in part as follows:

"For and in consideration of the sum of one hundred dollars ($100.00), the Ira F. Powers Furniture Company hereby sells and assigns to the Coast Finance Corporation all its right title and interest in the first one hundred nine and ninety-one one hundreths dollars ($109.91), collected on the following contract hereinafter listed, which the said Ira F. Powers Furniture Company warrants to be genuine and that the balance represented is unpaid and not subject to offset or counterclaim.

Name. Address. Paid. Balance.

W. J Kappes 994 Gantenbein $357.50 $282.63"

The court also found that it was further stipulated in the agreement the defendant would guarantee that the contract would be paid in ten monthly installments, due on May 25 1921, and monthly thereafter; that the furniture company should act as the collection agent for the plaintiff, and guarantee the safe-keeping of the contract, and permit the plaintiff to examine defendant's books relating to the conditional sales contract.

Homer S. Goehler, of Portland, for appellant.

J Leroy Smith, of Portland, for respondent.

BEAN, J. (after stating the facts as above).

The court found, as a conclusion of law, that the agreement between the plaintiff and defendant provides in effect for a sale and assignment of a portion of the conditional sales contract. Defendant assigns such finding as error, and contends that the transaction was in the nature of a loan, and the rate of interest provided for usurious.

By section 7988, Or. L., the rate of interest in this state is fixed at 6 per cent. per annum, provided that on contracts interest up to the rate of 10 per cent. per annum may be charged by...