Cockle Et Al v. Flack Et Al

• Citation: 23 L.Ed. 949,93 U.S. 344
• Parties: COCKLE ET AL. v. FLACK ET AL
• Decision Date: 01 October 1876
• Court: United States Supreme Court

93 U.S. 344

23 L.Ed. 949

COCKLE ET AL. v. FLACK ET AL.

October Term, 1876

ERROR to the Circuit Court of the United States for the Northern District of Illinois.

Mr. Robert G. Ingersoll for the plaintiffs in error.

Mr. S. T. Wallis, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

Plaintiffs in error were engaged in the business of packing pork in Peoria, Ill., and the defendants were commission-merchants at Baltimore, in the fall of 1872, when the contract was made which is the foundation of this suit. There had been transactions between the parties the previous year in the line of their business, and, with reference to the packing business of the approaching season, this agreement was made by letter. The substance of it is, that defendants should advance to plaintiffs, as it was needed, the sum of $100,000, which they were to invest in the hog product, at the rate of eighty per cent of the money so advanced, and twenty per cent of the money put into the purchase by plaintiffs. Defendants were to have interest on the money advanced at the rate of ten per cent per annum. The product was to be shipped to them for sale, and they were to have two and a half per cent commission on the amount, if sold within sixty days, and one per cent commission for every theirty days it was carried thereafter. The contract gave to plaintiffs the right to sell for themselves, without sending to defendants, but the latter were to have their commissions all the same.

When the product had all been sold out and an account rendered, a balance was found to be due defendants, for which they brought this suit, and recovered a judgment of $7,054.48.

It appears by the bill of exceptions that this balance was mainly if not wholly made up of the commissions charged on sales not made by defendants, of products which never came to their possession; and the recovery was resisted on the sole ground that these commissions were a device to cover usurious interest.

The charge of the court to the jury on this point was to the effect that the transaction was not necessarily usurious; that defendants, being engaged in the commission business, which required the use of money, might loan their money at lawful rates of interest to such parties and on such terms that it would bring to them also the business which would grow out of the investment of it; that, if the contract was made only with the honest purpose of securing, in addition to interest, the profits incidental to handling the product as commission-merchants, it was not usurious; that, on the other hand, such a contract might be used as a mere evasive device to cover usurious interest, and it left it to the jury to say from all the circumstances whether this were so.

There can be no question, that, on the general doctrine as to the line which marks the division between an honest transaction and a usurious cover, the charge of the court was correct;...