Hoyt v. Pawtucket Inst. For Sav.

• Decision Date: 13 June 1884
• Citation: 1884 WL 9895,110 Ill. 390
• Parties: WILLIAM H. HOYT et al.v.PAWTUCKET INSTITUTION FOR SAVINGS et al.
• Court: Illinois Supreme Court

110 Ill. 390

1884 WL 9895 (Ill.)

WILLIAM H. HOYT et al.

v.PAWTUCKET INSTITUTION FOR SAVINGS et al.

Supreme Court of Illinois.

Filed at Ottawa Jun. 13, 1884.

OPINION TEXT STARTS HERE

WRIT OF ERROR to the Superior Court of Cook county; the Hon. JOHN A. JAMESON, Judge, presiding.

Messrs. J. I. & F. I. BENNETT, and Mr. R. H. PATTON, for the plaintiffs in error:

If Taylor was the agent of the bank in making the loan,--and that he was seems clear,--then the payment of $250 to him above the legal rate of interest constitutes usury. Payne v. Newcomb, 100 Ill. 611; Rogers v. Buckingham, 33 Conn. 81; Condit v. Baldwin, 21 N. Y. 219; Bell v. Day, 32 Id. 165; Tyler on Usury, 156; Manning v. Young, 28 N. J. 568; Gray v. Van Blarcum, 29 Id. 454.

The cases of Ballinger v. Bourland, 87 Ill. 513, Phillips v. Roberts, 90 Id. 492, and Boylston v. Bain, Id. 283, cited, would be in point if the institution had no knowledge of Taylor's taking a bonus. The taking of usury under a mistaken notion that one has a right to take it, will make it none the less usurious. Marine Bank v. Butts, 9 Mass. 49; Bank of Salina v. Alvord, 31 N. Y. 473; Childers v. Deane, 4 Rand. 406.

Laches, in order to be imputed to a litigant, must have two elements concurring: First, the party invoking it should be injured; and second, the party against whom it is invoked should be in default or in the wrong as against the party invoking it. Mills v. Lockwood, 42 Ill. 118; Wilson v. Byers, 77 Id. 84; Harper et al. v. Ely et al. 56 Id. 196; Tilton v. Stein, 87 Id. 122; Gibbons et al. v. Hoag, 95 Id. 69; Musham v. Musham, 87 Id. 80; Ryder et al. v. Emrich et al. 104 Id. 470; Thompson v. Scott, 1 Bradw. 641; Yeaton v. Yeaton, 4 Id. 579; Beveridge v. Hewitt, 8 Id. 467; Castner v. Walrod, 83 Ill. 171; Kellogg v. Wilson, 89 Id. 357; Maher v. Farwell, 97 Id. 56; Oakley v. Hurlbut, 100 Id. 204.

The undisturbed possession of Hoyt in the property is a sufficient excuse for his not instituting proceedings to avoid the sale sooner; and the same may be said in respect to the negotiations for an arrangement of the matter in difference.

Mr. HOLDRIDGE O. COLLINS, for the defendants in error:

Interest paid in advance is not usurious. McGill v. Ware, 4 Scam. 21; Goodrich v. Reynolds, 31 Ill. 490.

The $250 commissions was received by Taylor as a broker, and not as the agent of the institution for savings. Brokers negotiating loans of other people's money have a right to charge commissions. Phillips v. Roberts, 90 Ill. 492; Boylston v. Bain, Id. 283; Ballinger v. Bourland, 87 Id. 513.

A statutory requirement that the notice shall state the amount claimed to be due at the time of the first publication, is sufficiently met by a statement of the amount claimed to be due at a certain prior date, etc. Jones on Mortgages, sec. 1855; Judd v. O'Brien, 21 N. Y. 186.

Not void by naming a larger amount than due or can be due. Murray v. Sanborn, 62 Barb. 223.

The amount due must be stated with substantial accuracy. Perry on Trusts, sec. 602 s.

Four years' delay has been frequently held by this court to bar the right of redemption. Hamilton v. Lubukee, 51 Ill. 415; Bush v. Sherman, 80 Id. 160; McHany v. Schenk, 88 Id. 357.

Five and six years' delay while valuable real estate is advancing in value, is laches. Cunningham v. Fithian, 2 Gilm. 650; Walsh v. Brennan, 52 Ill. 123.

Mr. JUSTICE SHELDON delivered the opinion of the Court:

This was a bill in chancery, filed in the Superior Court of Cook county on September 5, 1881, to set aside a sale of real property, made August 16, 1877, under a trust deed given by William M. Hoyt and wife to the Pawtucket Institution for Savings, on May 22, 1876. On May 22, 1871, Hoyt borrowed from the Savings Institution $5000, for five years, agreeing to pay ten per cent interest per annum, payable semi-annually, in advance. On May 26, 1876, Hoyt obtained a renewal of the loan, at nine per cent interest, payable semiannually, in advance. By the terms of the trust deed any default in the payment of interest or taxes made the principal sum at once due and payable, at the option of the holder of the note therefor. On August 16, 1877, the trustee in the trust deed made sale of the premises to Charles Moies, president of the Pawtucket Institution for Savings, for $5250, and executed to him a deed therefor. The trustee's deed, as also the notice of sale, recites default in the payment of part of the interest note due on the 22d day of November, 1876, and the whole of the interest note due on the 22d day of May, 1877, as the ground for the sale under the trust deed, the notice stating that the holder of the unpaid notes had exercised its option and declared the whole principal sum due and payable. On June 21, 1881, the Pawtucket Institution for Savings made a contract with A. T. Ewing for a sale to him of the property, and executed to him a warranty deed therefor, dated August 4, 1881, for $12,000. Laches was set up in the answer of the Pawtucket Institution for Savings. On final hearing, upon proofs taken, the court below dismissed the bill. The complainant brings this writ of error.

The bill alleged the following grounds for setting aside the sale: First, that the notes and trust deed were executed for $5000, but that Hoyt received only $4500,--that $250 was kept out for interest in advance, and $250 was retained as commissions by Taylor, the agent of the Pawtucket Institution for Savings, wherein it is claimed there was usury; second, that the interest notes due May 22 and November 22, 1876, were paid, and that the Institution for Savings then agreed to accept interest thereafter not in advance, and therefore no interest was due until November 22, 1877; third, that the notice of sale did not contain the amount due; and fourth, that $5250 bid at the sale was an inadequate price.

By the terms of the notes and trust deeds the interest was payable in advance. Interest paid in advance is not usurious. McGill v. Ware, 4 Scam. 21; Goodrich v. Reynolds, 31 Ill. 490.

The Pawtucket Institution for Savings was an institution in the State of Rhode Island. Taylor was a loan broker in Chicago. Taylor sent on from Chicago to the Institution for Savings the application for the loan, which the institution accepted, and paid the money by a draft for $4750, payable to the order of Hoyt, retaining from the $5000 (the amount loaned) $250, a half year's interest, in advance. Taylor charged Hoyt $250 commissions for securing the loan, so that the net sum which Hoyt got was but $4500. This commission received by Taylor was not from any arrangement with the Institution for Savings, or with its knowledge. It got no part of the commission, and received no more than ten per cent interest on the money loaned. Brokers negotiating loans of other people's money may charge the borrower commissions, without thereby making a loan at the full rate of legal interest usurious. Ballinger v. Bourland, 87 Ill. 513; Phillips v. Roberts, 90 Id. 492; Boylston v. Bain, Id. 283.

Payne v. Newcomb, 100 Ill. 611, was not intended to decide anything to the contrary, as seems to be supposed by counsel for plaintiffs in error. In the latter case there was an express understanding between Stevens, the lender, and Newcomb, his agent, that Newcomb should get his commissions from the borrower. The court there says, in its opinion: “In effect the transaction is the same as had the loan been made at fifteen per cent, and ten had been paid to Stevens and five to Newcomb. This was the result which, by the parties, was intended before the inception of the transaction. It was in pursuance of an arrangement of the lender and his agent.” There is nothing of that kind appearing in the present case. It is the case of a person at a distance receiving, through a broker residing here, an application for a loan at the full legal rate of interest, and accepting the application and sending on the money to be loaned as applied for, nothing whatever being said upon the subject of commissions. It was not, it is true, a solitary instance. Taylor was in the business of receiving, here, applications for loans, and sending them on to persons living abroad, for acceptance or rejection, and when applications were accepted he charged the applicants, here, commissions, but without any understanding with the lenders, and in the course of such business he forwarded, among others, to this Institution for Savings, a large number of applications for loans besides the one in this case, many of which were accepted and others rejected. The Institution for Savings has never received, or agreed to receive, more than the legal rate of interest upon this loan, and whatever in addition thereto Hoyt has paid to Taylor has been in compensation for the services of the latter in procuring the loan for Hoyt, which was something entirely between themselves, independent of the Institution for Savings, with which the latter had no connection. We fail to discover anything of usury in the transaction.

The interest, by the terms of the notes, was payable semiannually, in advance. The proof fails to establish the allegation of the bill that after the payment of the interest note due November 22, 1876, the Institution for Savings agreed with Hoyt that it would accept interest during the remainder of the time semi-annually not in advance. It is this alleged agreement, and the claimed over-payment for usurious interest in commissions on the loan in 1871, that the bill relies upon as showing there was no semi-annual interest payment due on May 22, 1877,--that it had either been extended by said alleged agreement to November 22, 1877, or had been paid by such over-payment of usurious interest, as claimed. We find failure in either of these respects to show that the interest note payable May 22, 1877, was not due at the time the sale was made. Nor does the proof show that the whole of the interest note due November 22, 1876, was paid, as the bill alleges. We think the fair...