Family Loan Co. v. Smetal Corp.

• Decision Date: 14 January 1936
• Parties: FAMILY LOAN CO. v. SMETAL CORPORATION.
• Court: Florida Supreme Court

169 So. 48

123 Fla. 900

FAMILY LOAN CO. v. SMETAL CORPORATION.

Florida Supreme Court, Division A.

January 14, 1936

Suit by the Smetal Corporation against the Family Loan Company and W C. Chadwick, with a counterclaim by the lastnamed defendant. From a decree for complainant, the first-named defendant appeals.

Modified and affirmed. Appeal from Circuit Court, Dade County; Paul D. Barns, Judge.

COUNSEL

A. M Reder and Thomas H. Anderson, both of Miami, for appellant.

Shutts & Bowen and Charles A. Carroll, all of Miami, for appellee.

OPINION

DAVIS Justice.

This was a suit wherein a corporation, organized under the laws of Florida, by bill in chancery, obtained in the court below a final decree setting aside and annulling a loan of money made to it by a corporate licensee doing business under chapter 10177, Acts 1925, Laws of Florida (sections 3999-4017 C.G.L.1927), on the ground that the loan made was in excess of $300 and the interest charged on such loan was calculated and provided to be paid at a rate of more than 10 per cent per annum. The controversy now before us has heretofore been considered by this court on a prior appeal (Smetal Corporation v. Family Loan Co., 119 Fla. 497, 161 So. 438), wherein it was decided that the allegations of appellee's bill of complaint were amply sufficient to show that the appellant, Family Loan Company, was a licensee under the Florida Small Loan Act, above cited, and that the loans complained of in the bill had been made by it in violation of chapter 10177, supra, so as to make the transactions void.

The final decree herein appealed from was, in substance, as follows: (1) That the motion of Smetal Corporation for a final decree in its (complainant's) favor on bill and answer should be granted; (2) that a counterclaim of one W. C. Chadwick, a defendant in the cause, should be stricken; (3) that the defendant Family Loan Company had violated the Small Loan Act in making a loan of $2,051.48 to complainant and that therefore the loan was unenforceable and void; (4) that accordingly the lender should surrender up to the borrower certain collateral securities that had been pledged with the lender to secure the illegal loan; (5) that the injunction that had been granted against defendant Family Loan Company to prevent its negotiation or transfer of such collateral to third parties should be continued in effect until the restoration, as decreed, should be accomplished; (6) that certain sums of money should be paid defendant Chadwick under the management contract he had executed in part for the benefit of the plaintiff's properties as part of the transaction sought to be avoided in the suit.

The opinion of this court on the earlier appeal vindicated and upheld the right of Smetal Corporation, the appellee here, to bring and maintain its suit in equity against appellant, Family Loan Company, to have the alleged unlawful contract entered into between the parties canceled and surrendered, and the collateral securities deposited incident thereto redelivered to the depositor, without tendering payment of the whole or any part of the original indebtedness as a condition precedent to the obtaining of the relief prayed for. This holding was arrived at on the theory that in filing its bill in equity to have the unlawful transaction rescinded and the evidence of it canceled, the complainant below was not seeking equity of an ordinary kind, but was in contemplation of law invoking an equitable remedy as an incident to the enforcement on its behalf of a substantive right given it by the statute of Florida commonly referred to as the 'Small Loan Act,' hereinbefore cited as shapter 10177, Acts of 1925. Stated another way, the rule invoked was that which acknowledges an inherent jurisdiction in courts of equity jurisdiction to give effect to a policy declared by the Legislature by ordering to be delivered up and canceled any instruments or evidences of a transaction that the...