Cornwell v. Urton

• Decision Date: 01 December 1898
• Citation: 55 P. 294,6 Idaho 269
• Parties: CORNWELL v. URTON
• Court: Idaho Supreme Court

55 P. 294

6 Idaho 269

CORNWELL v. URTON

Supreme Court of Idaho

December 1, 1898

EVIDENCE-USURY.-Evidence examined and found not to support the finding of the court that the notes and mortgage sued on were in violation of the usury laws of Idaho. (See Cornwell v. McCoy, ante, p. 219, 55 P. 240, and Cornwell v. Carter, ante, p. 222, 55 P. 240 decided at this term.)

(Syllabus by the court.)

APPEAL from District Court, Nez Perces County.

Reversed and remanded, with instructions.

James E. Babb, for Appellant.

Usury must be pleaded and must be established by evidence beyond a reasonable doubt. (1 Jones on Mortgages, 5th ed., sec. 643; Jefferson v. Burhans, 85 F. 949.) Payment by the borrower of commission for services in procuring the loan rendered by a third person acting bona fide as the agent or broker for the borrower, and of which commission the lender receives no part, directly or indirectly, can never render the loan usurious, for the plain reason that the lender is no party to the transaction. The fact that the lender is cognizant of the agreement between the borrower and his own agent does not affect the rule so long as the commissions are solely for the latter's benefit. (27 Am. & Eng. Ency. of Law, 1003, and cases cited; Mackey v. Winkler, 35 Minn. 513, 29 N.W. 377; Acheson v. Chase, 28 Minn 211, 9 N.W. 734; Nichols v. Osborn, 41 N. J. Eq. 92 3 A. 155; Marck v. American etc Mtg. Co., 79 Ga. 213, 7 S.E. 266; Thomas v. Miller, 39 Minn. 339, 40 N.W. 358; Secor v. Patterson, 114 Mich. 37, 72 N.W. 9.)

James W. Reid, for Respondents.

In this action it is apparent from reading the complaint and answer that the five notes sued on which are respectively one note for thirty-four dollars and four notes for thirty-six dollars each, were given to Harry Cornwell the plaintiff and appellant, as interest, for a loan of money advanced by James H. Tallmon to the respondents in the sum of $ 1,200. The court having heard the testimony and found this fact, there was no error in entering up the judgment given. We submit that judgment should be affirmed. (Vermont Loan etc. Co. v. Hoffman, 5 Idaho 376, 49 P. 314; Idaho Rev. Stats., sec. 1266.)

HUSTON, J. Sullivan, C. J., and Quarles, J., concur.

OPINION

HUSTON, J.

The facts in this case are almost identical with the facts in the cases of Cornwell v. McCoy, ante, p. 219, 6 Idaho 219, 55 P. 240, and Cornwell v. Carter, ante, p 222, 6 Idaho 222, 55 P. 1100, decided at the present term of this court. The plaintiff was applied to by the defendants, through a firm of attorneys, to procure for them a loan of $ 1,200, for a period of five years, at ten per cent per annum. This application was in writing, and made plaintiff the agent of defendants for the procuration of said loan, and the defendants agreed, by a written instrument signed by the principal defendant, to pay to the plaintiff a certain amount as commissions for procuring said loan, and to secure the payment of such commissions by note and mortgage. The loan was procured by plaintiff, and security given therefor by defendant of one James H. Tallmon, and on the same date defendants executed to plaintiff the notes and mortgage sued on in this action in accordance with defendant Allen Urton's contract theretofore made with plaintiff. Defendants claim, and attempt to prove, that the notes and mortgage given to the plaintiff by them were given to secure interest on the loan made by Tallmon to defendants, but the failure to establish such fact is absolute. As illustrative of the kind of evidence upon which the court based its finding that the mortgage sued on was given for interest on the loan from Tallmon to defendants, we copy from the transcript a portion of the examination of Allen Urton, the principal defendant: "Q. What was the consideration, if you know, of this mortgage [being the mortgage sued on]? A. Is this the Cornwell mortgage? Q. This is the Cornwell mortgage. The Court: The one sued on in this action? A. Well, $ 178, I think. Q. What was the consideration--what was it for? What did you give the note for? A. It was for three per cent of the interest. Q. Interest on what? A. Three per cent. Q. Interest on what? A. I do not mean 'interest': it is the interest on the note--on those notes in that mortgage? Q. What mortgage? A. On the Cornwell mortgage. Q. Well, the Cornwell mortgage, Mr. Urton, is what I am asking about. Listen to me. This mortgage that has been introduced in evidence is for $ 178, payable to Cornwell. You say it was for interest. Interest on what? No answer. Q. Now, answer it. What was this interest on? A. I do not understand it." At this point the court, with the laudable intent, unquestionably, of throwing some light on the matter under investigation, interposed as follows: "The Court: Well, I will explain it to you. It is $ 178, you say? A. Yes, sir. The Court: Now, interest on what? What is the interest for? What is that mortgage for? That is what he wants to know. A. How much interest? The Court: Yes; interest on what? No answer." His honor's interference having simply served to make "confusion worse confounded," counsel for defendant again returns to the conflict with...