Hughes v. Griswold
| Decision Date | 31 July 1889 |
| Citation | 9 S.E. 1092,82 Ga. 299 |
| Parties | HUGHES v. GRISWOLD. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. In its principal elements and characteristics, this case is ruled by Merck v. Mortgage Co., 79 Ga. 213, 7 S.E 265.
2. Where the money actually lent belonged to none of the middlemen engaged in procuring the loan, that the notes and mortgage were made payable to one of them, who shared in the commissions paid by the borrower, will not infect the loan with usury, the lender knowing nothing touching the payment or agreement to pay commissions, and having acted in person in contracting to make the loan, fixing the terms thereof and accepting the security, and having parted with the full amount of the loan and delivered the money to one of the middlemen engaged in procuring it.
3. In such case, the fact that one of the middlemen used his own money in turning over the net proceeds of the loan to the borrower, the same being done when the lender's money was in the hands of another middlemen at a distant point, will not infect the loan with usury by reason of the commissions retained by or paid to the middlemen in pursuance of the contract of the borrower made with one of them at the time of engaging him to procure the loan. The substitution of his money in place of that of the lender was only a mode and means of exchange.
4. That one of the middlemen had advertised that he would loan money and that he had loaned it in other instances, would not affect this particular loan if it was actually made, not by him, but on his application in behalf of the borrower, and by an outside and independent party.
5. That after the loan was made the middlemen took part in facilitating the payment and transmission of accrued interest thereon, would not infect the loan with usury, these services being voluntary, and beneficial as well to the business of the middlemen as to both the lender and borrower.
6. Objections to evidence, the grounds of which are not stated, are not for adjudication by the supreme court.
Error from superior court, Wilkinson county; JENKINS, Judge.
Action by one Griswold against Hughes to recover $1,000 loaned by him to said Hughes, and the accrued interest thereon. Verdict was rendered for plaintiff, and defendant brings error.
F. Chambers and J. W. Lindsay, for plaintiff in error.
J. H. Hall and Clifford Anderson, for defendant in error.
1. In its principal elements and characteristics this case is ruled by Merck v. Mortgage Co., 79 Ga. 213, 7 S.E. 265. Here, as there, the loan was secured by the joint services of three intermediaries, consisting of what might be termed a central, a rural, and an urban middleman. Here, as there, a part of the loan never in fact reached the borrower's own hands, although every cent of it passed from the lender. The amount retained by the middlemen was 15 per cent., and this was divided among them in the ratio of 7 to the central, and 4 each to the others. Here, as there, the lender had no share in these commissions, nor any knowledge that they were exacted. In that case the contract of lending was made by an agent, the lender being a corporation. In this case it was made by the lender himself, the person or firm with whom he dealt directly being the urban intermediary, to whom was delivered, by the lender, the whole sum of $1,000. The decision in Merck's Case being that there was no usury, it is only necessary now to examine the points of difference in the present case, and to determine whether any or all of them require or justify a different adjudication of the question as to this case.
2. The station of the urban intermediary was at Hartford, Conn. This intermediary was a partnership (Moore & Co.) composed of several persons, of whom Tallman was one. He, alone, may be considered as the urban intermediary, since the effect of his connection with this case would be the same whether his relation to it was as an individual, or as a member of the partnership to which he belonged. The notes and mortgage were made payable to Tallman, and his firm received part of the commissions. In this respect the present case is unlike Merck's Case. We think, however, as there was positive proof that neither Tallman nor his firm was the lender, and also that Griswold, the real lender, knew nothing of any compensation to the intermediaries, or of any participation by Tallman therein, this fact is, legally speaking immaterial; more especially as the jury must have found, under the charge of the court, that what was paid to Tallman's firm was for actual services rendered, and not by way of shift or contrivance to conceal or cover up usury,--that question having been submitted to them in the charge, with instructions that, if the share of Moore & Co. in the commissions was not received in good faith for for services, the loan would be usurious. This element of the charge was probably more favorable to the borrower than he was entitled to. The compensation to Tallman's firm did not proceed directly from the borrower, but came from the central intermediary, and was the fruit of a contract which the latter had made with that firm, covering as well this loan as any others that they might be instrumental in negotiating upon applications forwarded by him. According to the decided weight of authority, had Tallman been a direct and immediate agent of the lender, his receiving for his own use and benefit commissions from the borrower, without authority from or knowledge of the lender, would not infect the loan with usury. 1 Jones, Mortg. § 642; Boardman v. Taylor, 66 Ga. 638; Call v. Palmer, 116 U.S. 98, 6 S.Ct. 301; Stillman v. Northrup, 109 N.Y. 473, 17 N.E. 379; Boylston v. Bain, 90 III. 283; Cox v. Insurance Co., 113 III. 382; Williams v. Bryan, (Tex.) 5 S.W. 401; Vahlberg v. Keaton, (Ark.) 11 S.W. 878. And the same rule applies where the negotiation is through brokers. Brown v. Mortgage Co., 110 Ill. 235; Hoyt v. Institution Co., Id. 390; Haldeman v. Insurance Co., 120 Ill. 390, 11 N.E. 526. The prevailing opinion seems to be that, with knowledge on the part of the lender, the loan is infected...
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