Foley v. Flaherty
| Decision Date | 25 January 1932 |
| Citation | 278 Mass. 134 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | CHARLES FOLEY v. HARRY E. FLAHERTY & others. |
November 9, 1931.
Present: RUGG, C.
J., WAIT SANDERSON, & FIELD, JJ.
Interest. Bonus.
Where one, having an opportunity to make a large profit by a certain transaction, borrowed the sum of $2,000 to effect such transaction and promised to repay it with a "bonus" of an additional $2,000, the "bonus" constituted interest upon the sum borrowed within the meaning of G.L.c.
107, Section 3; and, the promise to pay the "bonus" having been oral and the borrower having repaid the sum borrowed plus a portion of the "bonus" greater than six per cent per annum on the sum borrowed, the lender could not maintain proceedings to recover the remainder of the "bonus."
BILL IN EQUITY filed in the Superior Court on January 5, 1931, and afterwards amended.
The suit was referred to a master. By order of Gray, J., an interlocutory decree was entered confirming the master's report. The judge then heard the suit further upon the report and certain additional evidence. Material facts are stated in the opinion. A final decree was entered dismissing the bill. The plaintiff appealed.
E.J. Campbell, for the plaintiff. J.A. Boyer, (P. Nichols with him,) for the defendants.
The plaintiff brought this bill in equity to compel the payment of what he calls a bonus promised by the defendant for a loan of $2,000. No demurrer was filed; and we need not consider whether a bill in equity was a proper remedy.
After exceptions to a master's report had been overruled, and an amendment to the bill had been allowed, the case was heard upon the report and additional evidence. The plaintiff testified that he delivered $2,000 to the defendant upon his oral promise to pay him for the use of this money the sum of $2,000 or $3,000 and perhaps more. There was evidence that the defendant having an opportunity to purchase for $2,000 a controlling interest in a corporation by which the plaintiff was employed, which afforded an opportunity for very large profit, and not being himself in possession of the money spoke with the plaintiff, obtained the loan and made the promise stated. He made the purchase, and, later, realized substantial profit. On the receipt of the money, he gave the plaintiff a paper reading: This paper the plaintiff lost. He told this to the defendant and received another paper reading: "June 27, 1930. 90 days after date I promise to pay to the order of Charles Foley $2,000.00 Two thousand 00/100 Dollars signed H.E. Flaherty Duplicate for one lost by Mr. Foley dated April 28, 1930." In July the original paper came again to the hands of the plaintiff, and he so informed the defendant. He testified "that he understood that the $2,000 was to be repaid to him by Flaherty in any event but that any additional sums over and above the $2,000 depended on the working out of the business." In May or June the defendant began liquidation of the corporation business. From time to time he made payments to the plaintiff, and on July 15 completed payment of $2,000. He requested of the plaintiff and received from him the original memorandum, with the following written upon the bottom: At that time he told the plaintiff that he would get more, and in October of
1930 he paid him a further $100. He testified that he did not promise $2,000 or $3,000 or more; but that he intended "to give Foley a good bonus, the amount of which depended on `how he came out,'" and that he told the plaintiff so several times. He felt that $300 or $400 would be a good bonus; and the $100 was paid as part of it. The master found a promise to repay "the $2000 with a bonus of an additional $2,000 and that under certain circumstances not explained in evidence he would pay $3,000 and perhaps more"; that repayment of $2,000 with a payment of $100 in addition had been made; and that there was a present indebtedness of $1,900. The judge found that the "note" of June 27 1930...
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