Landis v. Saxton

• Citation: 89 Mo. 375
• Court: United States State Supreme Court of Missouri
• Decision Date: 21 June 1886
• Parties: LANDIS v. SAXTON.

89 Mo. 375

LANDIS

v.SAXTON.

Supreme Court of Missouri.

June 21, 1886.

Appeal from Buchanan circuit court.

Woodson, Crosby & Ramey, for appellant, Israel Landis. Strong & Mosman and Doniphan & Reed, for respondent, Albe H. Saxton.

BLACK, J.

This was a suit to enjoin the sale of certain real estate under a deed of trust given to secure a promissory note made by the plaintiff, Israel Landis, and two other persons as his securities, for $16,000, due in two years after the date thereof, with interest at the rate of 10 per cent. per annum, interest payable annually. The note is payable to the defendant, Albe H. Saxton, executor of the estate of John Patee, deceased. The defendant filed answer, in which he set up the note and deed of trust, and prayed for a foreclosure. Various payments were conceded to have been made on the note from time to time, and as the issues over the credit of date January 20, 1874, were ruled for the appellant, they need not be further considered.

The contest in this court grows out of a claim of the plaintiff for a deduction of $1,000 from the face or the note, which was refused by the circuit court, and hence there was a decree of foreclosure, from which the plaintiff appealed. The facts as to the $1,000 are as follows: In 1868, and at the date of the note, Landis was embarrassed, and went to Saxton to borrow $15,000. He offered to pay Saxton a bonus of $1,000 for a loan of that amount of money, or for negotiating a loan. Saxton, who was then the executor of the Patee estate, and president of a bank, agreed to let him have the money from the Patee estate on the proposed terms, and thereupon the note and deed of trust were executed. The funds of the estate were then in gold coin, then at a premium. Saxton converted the same into currency, and on the second April, 1868, made a memorandum on the note to the effect that interest should commence from that date. At the same time Saxton deposited to the credit of Landis $15,000, and took a credit for himself of $1,000, thus reducing, we infer, the Patee estate account $16,000. Plaintiff in his testimony says he did not agree to give defendant a bonus of $1,000, but the other evidence, and the attending circumstances, show conclusively that he did, and that the transaction was as before stated. The plaintiff drew out and used the $15,000 placed to his credit. Nothing more was said of the matter until in 1880 or 1881, when the plaintiff's son discovered from the father's pass-book that only $15,000 had been received on the note, and then for the first time followed the demand for a deduction of $1,000.

An agent for loaning money may take a reasonable commission from the borrower, even with the knowledge of the lender, and still the transaction will not be usurious, though the amount of interest reserved to the lender be the full lawful interest. Smith v. Wolf, 55 Iowa, 555; S. C. 8 N. W. Rep. 429; Acheson v. Chase, 28 Minn. 211; S. C. 9 N. W. Rep. 734; Tyler, Usury, 172. Had the $1,000 been paid to some third person, solely for negotiating the loan, and without any participation therein by the Patee estate, it must follow the transaction could not be declared usurious. Fellows v. Longyor, 91 N. Y. 324, was a suit to foreclose a bond and mortgage. In that case Mrs. Longyor gave the bond and mortgage to Downer, guardian, for $5,000. He, as guardian, assigned the bond and mortgage to Mrs. Fellows, who prosecuted the foreclosure suit. In that case it appears Mrs. Longyor actually got the $5,000. The transaction was connected with another, and for both Downer individually received a bonus. It did not appear what, if any, specific part of the bonus was to be allowed for the loan of the $5,000. It is there said the funds did not in equity belong to Downer, but were the property of the estate of which he was the representative; and the conclusion is reached that he could not be considered the lender of the trust funds within the meaning attached to that term by the statute relating to usury. Here the executor, not as such, but Saxton individually, is the owner of the note, and in point of...