Hawthorne v. Walton

• Decision Date: 02 March 1956
• Docket Number: No. 3882,3882
• Citation: 72 Nev. 62,294 P.2d 364,59 A.L.R.2d 519
• Parties: , 59 A.L.R.2d 519 Lawrence HAWTHORNE, Appellant, v. J. M. WALTON and Mabel K. Walton, Respondents.
• Court: Nevada Supreme Court

Page 364

294 P.2d 364

72 Nev. 62, 59 A.L.R.2d 519

Lawrence HAWTHORNE, Appellant, v. J. M. WALTON and Mabel K. Walton, Respondents.

No. 3882.

Supreme Court of Nevada.

March 2, 1956.

Harry E. Claiborne, Las Vegas, for appellant.

Calvin C. Magleby, Las Vegas, for respondents.

EATHER, Justice.

This is an appeal by the plaintiff from an order granting a motion of defendant to dismiss the complaint of plaintiff on the grounds that the complaint failed to state a claim upon which relief could be granted.

The complaint alleges the facts which we will now set forth. The complaint consisted of two causes of action, in the first of which the plaintiff (appellant) alleged that on the 8th day of March, 1954, the defendants (respondents) at the request of plaintiff, loaned and advanced to plaintiff the sum of $45,000, upon a certain promissory note of that date for the sum of $50,000, signed by plaintiff, with interest at the rate of 10% per annum; and further, that as a condition of making said note, the defendants did take and receive upon said note from the plaintiff a bonus of $5,000, thereby exceeding the established and allowable rate of interest under the laws of Nevada. The plaintiff further alleged that on or about the 1st day of September, 1954, he paid the amount of the principal and interest due on said note of $50,000.

In the second cause of action plaintiff alleged that on or about the 15th day of June, 1954, the defendants loaned the plaintiff the sum of $18,000 upon a promissory note of that date, for the sum of $20,000, signed by the plaintiff and providing for interest at the rate of 10% per annum that as a condition of making said note the defendants did take and receive upon said note a bonus of $2,000, thereby exceeding the established and allowable rate of interest permitted under the laws of the State of Nevada. Plaintiff further alleged that on or about the 1st day of September, 1954, he paid the amount of the principal and interest due on said note of $20,000. The plaintiff asks judgment for the sum of $5,000 upon the first cause of action, and for the sum of $2,000 upon the second cause of action, claiming that each was in excess of the legal amount of interest allowable under the laws of Nevada.

The defendants in due course filed their motion to dismiss the complaint on the ground that the complaint failed to state a claim upon which any relief could be granted. The trial court granted the motion to dismiss and entered judgment accordingly. Plaintiff seeks review of the judgment and insists that error was committed by the trial court in granting the motion to dismiss the complaint.

Question to be determined.

Whether under Sec. 4323, N.C.L.1929, usurious interest voluntarily paid is recoverable by the person paying it, upon the ground that, notwithstanding the voluntary nature of the payment, usurious interest is to be regarded in law as paid under compulsion, or whether under such section payment is to be regarded as a waiver of the benefit provided by statute in favor of the borrowers.

In determining the question presented on this appeal and recognizing that there are conflicting decisions from other jurisdictions, we are confronted with the task of examining the statutes of various states and must also remind ourselves that usury was not illegal at common law; therefore, a statute which prohibits the exaction of usury is the source from whence stems the power of the court in dealing with such matters.

Section 4323, N.C.L.1929 provides as follows: 'Parties may agree, for the payment of any rate of interest on money due, or to become due, on any contract, not exceeding, however, the rate of twelve per cent (12%) per annum. Any judgment rendered on any such contract shall conform thereto, and shall bear the interest agreed upon by the parties, and which shall be specified in the judgment; provided, only the amount of the original claim or demand shall draw interest after judgment. Any agreement for a...