Jones v. Phillippe
Decision Date | 14 October 1918 |
Docket Number | 163 |
Parties | JONES v. PHILLIPPE |
Court | Arkansas Supreme Court |
Appeal from Madison Chancery Court; B. F. McMahan, Chancellor affirmed.
Decree affirmed.
Harvey Combs and W. N. Ivie, for appellant.
1. The plea of usury is not sufficient. It fails to allege a corrupt intent or agreement. 4 Ark. 44; Ib. 410. A corrupt agreement and the intention to take or reserve more than the legal rate of interest are essential and must be averred. 26 Id. 356. The burden is on the party who pleads usury. 74 Ark. 241; 83 Id. 31; 105 Id. 653. The written contract is legal on its face and a parol contract to take usury must be shown by clear and convincing evidence. 83 Ark. 31; 105 Id. 653.
2. The evidence does not show usury. 62 Ark. 99. Usury must be proven; it is never implied. 91 Id. 458; 87 Id. 534. There must be an agreement to receive and to give a greater rate than 10 per cent. 54 Ark. 566; 83 Id. 31.
3. A sum paid by the borrower to his own agent to procure the loan is not usury. 51 Ark. 534; 4 L. R. A. 462; 14 Am. St. 73.
E. B Wall, for appellee.
1. The contract is clearly usurious. Kirby's Digest §§ 5389, 5394. Here the interest and the bonus or commission paid the agent of the lender with his knowledge and divided with the lender makes a clear case of usury. Ignorance or mistake is no protection. 2 Cowen, 678; 4 Scam. 29; 1 Porter, 96; 62 Ark. 379; 41 Ark. 331; 62 Id. 379; 51 Id. 534; 51 Id. 546; 123 Id. 612; 126 Id. 155; 68 Id. 164.
2. The death of Mrs. Phillippe was duly suggested and proven. There was no request for revivor but the case went to trial without objection. Kirby's Digest, §§ 6298, 6317; 69 Ark. 215; 31 Id. 319; 93 Id. 307; 16 Id. 168; 39 Id. 235; 51 Id. 82; 69 Id. 215; 81 Id. 462.
See also 31 Ark. 319; 56 Id. 324; 81 Id. 462; 93 Id. 307; 127 Id. 159, 498; 105 Id. 222; 128 Id. 155; 103 Id. 601.
3. As to the usury the decree of the chancellor is correct. 54 Ark. 50; 41 Id. 331; 51 Id. 534.
WOOD, J. Mr. Justice HUMPHREYS not participating. McCULLOCH, C. J., dissenting.
This action was brought by appellant against appellees to recover a balance alleged to be due on a promissory note and to foreclose a mortgage on certain real estate executed to secure the note. The note, on its face, was for the sum of $ 300 with interest at the rate of 10 per cent. per annum. The defense was a plea of usury.
Appellee, M. J. Phillippe, testified concerning the execution of the note as follows:
Alfred Hawn testified: "The note in suit was made to me. The first suit was started and I furnished Mr. Phillippe the money to pay for the original debt. I just loaned Mr. Phillippe $ 300. My recollection is that Mr. Nunnelley came to me and told me that Mr. Phillippe was giving him $ 15 to procure this loan of $ 300 and I don't remember how much of the $ 15 he gave me but it is my best impression that I and Sam Nunnelley divided the $ 15. After I loaned the $ 300 I sold and transferred the note and mortgage to Mrs. Sarah E. Jones. I know that I got some of the $ 15 but don't know how much I got for letting Mr. Phillippe have the $ 300.
The court found that: The court entered a decree dismissing appellant's complaint for want of equity, from which is this appeal.
"The burden of proof is on the party who pleads usury to show clearly that the transaction is usurious." Holt v. Kirby, 57 Ark. 251, 256, 21 S.W. 432; Citizens' Bank v. Murphy, 83 Ark. 31, 36, 102 S.W. 697; Smith v. Mack, 105 Ark. 653, 151 S.W. 431.
In Scruggs v. Scottish Mortgage Co., 54 Ark. 566, 569, 16 S.W. 563, we said: "To constitute usury, there must be an agreement to pay for the use of money more than 10 per cent. interest." And in Citizens' Bank v. Murphy, supra, we said: "To constitute usury, there must be an agreement on the part of the lender to receive, and on the part of the borrower to give, for the use of the money, a greater rate of interest than 10 per cent."
In Garvin v. Linton, 62 Ark. 370, 379, 35 S.W. 430, Judge Battle, speaking for the court, said:
When the language in these cases is taken in connection with the facts under review therein, there is no conflict in the decisions, and the law as announced in Garvin v. Linton, supra, must be taken as the settled law in this State. The reason for the rule there announced is forcefully stated by Mr. Justice Mitchell in Lukens v. Hazlett, 37 Minn. 439, 35 N.W. 265, quoted by Judge BATTLE in Garvin v. Linton, supra, as follows:
Now, it matters not whether Nunnelley be regarded as the agent of the borrower, or as the agent of the lender, or as the agent of both, in conducting the negotiations and in consummating the contract between the appellees and Hawn, because the undisputed evidence clearly justifies the conclusion that Hawn intentionally received, in addition to the 10 per cent. specified in the note, a bonus from Nunnelley for making the loan. The evidence shows that this payment of the bonus was contemporaneous with the contract evidenced by the note, and was part of the consideration for it. It could hardly be contended that if the makers of the note at the time of its execution had paid to Hawn the sum of $ 7.50 as a bonus for making the loan in addition to the 10 per cent. specified in the note, that such transaction would not be usurious. Yet in legal effect this is precisely what was done, because Nunnelley told Hawn that he was receiving from the appellees the sum of $ 15 which he was dividing with him for the purpose of obtaining the loan. The evidence clearly sustains the finding of the trial court "that in the contract for the loan of said money the said Alfred Hawn, in addition to the 10 per cent. interest specified in said note, took and received a further and additional sum of money for the forbearance of said loan." Such is the only reasonable deduction to be drawn from the testimony.
It is undoubtedly true that a borrower may pay a fee or bonus to his agent who procures a loan for him, and where this is done before or after the contract for the loan is executed, it is no concern of the borrower what disposition his agent may make of the bonus thus received. The agent of the borrower may do as he pleases with his own money, and if on his own account, and not as the agent of the borrower, before or after a loan has been consummated by...
To continue reading
Request your trial-
Ryder Truck Rental, Inc. v. Kramer
...must knowingly receive some part of the excessive interest. See Garvin v. Linton, 62 Ark. 370, 35 S.W. 430, 37 S.W. 569; Jones v. Phillippe, 135 Ark. 578, 206 S.W. 40. I had thought that on motion for summary judgment, a very extreme remedy, that all reasonable inferences were to be drawn i......
-
Dupree v. Virgil R. Coss Mortgage Company
...by clear and cogent proof. 24 A. L. R., 856; 14 Ore. 47, 12 P. 89; 44 Ore. 530-533, 1 Ann. Cases, 418; 27 R. C. L. 268; 159 Ark. 141; 135 Ark. 578, and cited; 18 N.J.Eq. 481; 54 Ark. 566-569; 105 Ark. 661; 107 Ark. 21. To constitute usury there must be an agreement to pay for the use of mon......
-
Standard Leasing Corp. v. Schmidt Aviation, Inc.
...v. Thompson, 186 Ark. 497, 54 S.W.2d 303; Hollan v. American Bank of Commerce & Trust Co., 159 Ark. 141, 252 S.W. 359; Jones v. Phillippe, 135 Ark. 578, 206 S.W. 40; Smith v. Mack, 105 Ark. 653, 151 S.W. 431. Usury must be established by Clear and convincing evidence, particularly where wri......
-
McHenry v. Vaught
... ... rule has been steadily adhered to by the court ever since ... Habach v. Johnson, 132 Ark. 374, 201 S.W ... In ... Jones v. Phillippe, 135 Ark. 578, 206 S.W ... 40, the court held that, where a loan of money was made at ... the highest rate of interest, and the ... ...