Holt v. Kirby

• Decision Date: 04 February 1893
• Citation: 21 S.W. 432,57 Ark. 251
• Parties: HOLT v. KIRBY
• Court: Arkansas Supreme Court

21 S.W. 432

57 Ark. 251

HOLT v. KIRBY

Supreme Court of Arkansas

February 4, 1893

Appeal from Faulkner Chancery Court, DAVID W. CARROLL, Chancellor.

Judgment reversed and cause remanded.

J. H Harrod for appellants.

The evidence shows that the Arkansas Loan and Trust Co. was the agent of Kirby, the borrower, and the payment of the $ 20 commission did not make the loan usurious. 51 Ark. 534; ib 548; 54 id. 573.

E. A Bolton, for appellee.

51 Ark. 546 settles this case. The proof shows that the company was the agent of the lender. 46 Mich. 393; 51 Ark. 534.

OPINION

HUGHES, J.

This is an appeal from a decree of the chancery court of Faulkner county cancelling a mortgage, on the finding by the chancellor that it was made to secure a usurious loan of money made by Helen M. Norton to the appellee upon his application, made through the Arkansas Loan and Trust Co., on the 24th day of March, 1883.

The complaint was filed on the 25th of September, 1888, and alleges that appellee applied to said company for a loan of four hundred dollars, and that the said company demanded that he execute his note for that amount bearing ten per cent. per annum interest from date till paid, which he did, and that he was paid by the company only $ 380; that the sum of twenty dollars was kept out and retained as a bonus, with the corrupt intent to take more than ten per cent. per annum for the use of said money; that Helen M. Norton had assigned the note and mortgage given for the said sum of four hundred dollars to Nelson Holt, who was proceeding to foreclose by sale, etc.

The defendants filed an answer denying that the transaction was usurious, and a cross bill praying for foreclosure of the mortgage.

It is contended by the appellees, that in making the loan the Arkansas Loan and Trust Company acted as the agent of Mrs. Norton and not as the agent of R. R. Kirby.

The application for the loan was in writing, and states that the applicant made the company his agent, and agreed to pay it a commission to be agreed upon for negotiating the loan for him. The company was a corporation organized, under the laws of Arkansas, for the purpose of negotiating loans. R. R. Kirby testified in substance, that, on the 21st day of March, 1883, he and his wife executed a note for $ 400 due two years after date, payable at the Merchants National Bank, Little Rock, Arkansas, with interest at ten per cent, payable semi-annually, and executed the mortgage in controversy to secure the payment; that, about a week afterwards, he applied to L. W. Coy, the treasurer of the company, to get the money; that Coy would not give him the money until he procured his brother, S. B. Kirby, to endorse his note; that he expected to get $ 400, but was only paid $ 380; that Coy kept $ 20 of the amount, and said it was customary; that Coy said also that, if he had not procured his brother's endorsement, he would have had to furnish an abstract of the title to the land mortgaged, which would have cost him $ 15 or $ 20; that he said to Coy, when he got the money, that he thought he was getting it from the Arkansas Loan and Trust Company, and asked him who Norton was, and that Coy said, it did not make any difference who Norton was, so he got the money; that Coy said, the $ 20 kept by him was a customary charge for the use of the money in addition to the ten per cent interest.

Coy testified in substance that the company acted as the agent of R. R. Kirby, and procured the loan for him of H. M. Norton that, "in all transactions in connection with the procuring of this loan, the Arkansas Loan and Trust Company was the agent of R. R. Kirby, and was not the agent of either Holt or Norton"; that Kirby alone paid the company its compensation for its services in the matter of the loan, and that neither Norton nor Holt paid any part of it, and never agreed to do so; that the amount H. M. Norton loaned Kirby was $ 400; that when Kirby made the application, the company made examination and found H. M. Norton was willing to make the loan; that the money was not the money of the Arkansas Loan and Trust Company. That, at the time Kirby obtained this loan, H. M. Norton had no money deposited with the Arkansas Loan and Trust Company for the purpose of being loaned; that when Kirby made the application, the company did not know where it would place the loan, but afterwards succeeded in...