Lindberg v. Burton

• Citation: 41 N.D. 587,171 N.W. 616
• Parties: LINDBERG et al. v. BURTON.
• Decision Date: 27 February 1919
• Court: North Dakota Supreme Court

41 N.D. 587

171 N.W. 616

LINDBERG et al.

v.BURTON.

Supreme Court of North Dakota.

Nov. 23, 1918.

On Petition for Rehearing, Feb. 27, 1919.

Syllabus by the Court.

Under section 6076, Compiled Laws 1913, declaring that the charging of a rate of interest greater than that allowed by the statutory provisions therein specified, when knowingly done, shall be deemed a forfeiture of the entire interest, and providing that, in case the greater rate has been paid, the person paying it may recover back in an action for that purpose twice the amount of interest thus paid from the person who has taken or received it, provided such action is commenced within 2 years from the time the usurious transaction occurred, a cause of action for the penalty arises only when interest has actually been paid.

The statute contemplates an actual payment, and not merely a further promise to pay. Interest is not “paid” within the meaning of the statute by the giving of a renewal note or notes.

The remedy provided by the statute is exclusive.

A party who seeks to recover the penalty prescribed by section 6076, supra, must bring himself within its provisions, and must allege and prove, among other things, that he has actually paid interest upon a usurious contract.

Additional Syllabus by Editorial Staff.

A party who asserts a right to recover from another has the burden of establishing such right by a preponderance of the evidence.

A violation of a law is never presumed, and one who alleges such a violation and predicates a right to recover a penalty thereon has the burden of proving the existence of the facts alleged.

On Petition for Rehearing.

Where parties act upon a particular theory in trial court, they will not be permitted to depart therefrom on appeal, such ruling extending to construction placed upon pleadings and as to relief sought and grounds therefor, and generally as to theories acted upon by parties in court below.

A party cannot be heard to say for the first time on appeal that a certain issue does not in fact exist because of certain admissions in the pleadings.

Appeal from District Court, Burke County; Leighton, Judge.

Action by lsaac Lindberg and another against W. P. Burton. Judgment for defendant dismissing the action, and plaintiffs appeal. Affirmed.E. R. Sinkler and M. O. Eide, both of Minot, for appellants.

Palda, Aaker & Greene, of Minot, for respondent.

CHRISTIANSON, J.

The plaintiffs brought this action to recover the penalty for usury provided by section 6070, Compiled Laws 1913. The complaint sets forth three causes of action. The first cause of action is for interest upon an alleged usurious contract, alleged to have been paid on November 18, 1912. The second cause of action is for interest alleged to have been paid on November 18, 1913. And the third cause of action is for interest alleged to have been paid on November 18, 1914.

The answer denies that the defendant at any time reserved, charged, or received any usurious interest. The answer sets forth at great length the business transactions between the plaintiffs and the defendant. According to the allegations of the answer such transactions commenced in the year 1908, and have continued since that time. Such transactions consisted of loans made to the defendant in 1908, advancements made for various purposes during the subsequent years, and the taking of renewal notes from time to time. The answer also avers that the defendant is a man of very limited education, and unable to compute the amounts due upon the various notes, and that at two different times when such renewals were made, he engaged the services of two different attorneys, and that the computations were made by such attorneys. It is specifically averred that the defendant at no time had any intention of charging, reserving, or receiving any usury, and that any errors made in the computations or any overcharges included in the notes were the result of mistakes of computation, and that such amounts were not included for the purpose of exacting usury. The answer specifically admits that errors were made in such computations, in this, that the plaintiffs were not allowed credit for a $75 payment, and that a note for $325 held by the defendant as collateral to their indebtedness was included in a renewal note by mistake, and defendant offers a remission of these amounts, with interest computed thereonfrom the dates the mistakes were made, and avers that the plaintiffs have been credited with these respective amounts upon the last renewal notes which the defendant now holds against the plaintiffs. The answer also alleges that the first and second causes of action are barred by the statutes of limitations for the reason that the action was not commenced within two years from the time alleged the usurious transactions are alleged to have occurred.

From the transcript of the evidence, it appears that the defendant is a man 65 years old, and resides near Pelican Rapids, Minn. He has never been engaged in any business except farming. He is not, and never has been, engaged in the business of making loans. The loan involved in this action is the only one which he ever made, with the single exception of one which he made to a near relative. The defendant is a man of very limited education. His correspondence was carried on largely by his wife, and his business transactions, such as preparing notes and computing the amounts due on notes to be renewed, were carried on through his banker or attorneys engaged by him for that purpose.

The transactions out of which this action arose began in January, 1908. From January 2, 1908, to March 18, 1908, the defendant loaned the plaintiffs in all $3,325, for which notes were taken. In September of that year he sold them some horses, and advanced cash. The purchase price of the horses and the cash advanced aggregated in all $825. Hence the total original indebtedness of the plaintiffs to the defendant so incurred and evidenced by notes taken in 1908 aggregated $4,150. It also appears that during the years 1909, 1912, 1913, and 1914 the defendant made further advancements to the plaintiffs, which according to defendant's testimony and documentary evidence aggregated in all $5,068.70. There is some dispute as to some of the items which go to make up this aggregate, but the greater portion of these advancements are undisputed. There is no dispute with respect to what payments have been made by the plaintiffs. The original notes bear indorsements to the effect that the interest thereon up to November 1, 1908, has been paid.

It is significant that these are the only indorsements upon any of the notes indicating that any interest has been paid. The evidence also shows that the defendant received the following payments from the plaintiffs: In January, 1910, $75; in October, 1912, $776.54; November, 1913, $1,685.74; November, 1914 (or January, 1915), $2,907.05. There is, however, no evidence showing the application made of these various payments. The plaintiffs nowhere testify or even intimate that they directed that these payments be applied upon interest. As already indicated, the defendant made advancements from time to time. The different notes were renewed from time to time. The renewal notes were taken as collateral, and the old notes were not surrendered. And upon the trial of this action the original notes taken in 1908, and the different notes subsequently taken, were all introduced in evidence. As already stated, there are no indorsements upon the notes showing payments of interest, except those showing interest paid to November 1, 1908. The only deduction that can reasonably be drawn from the transactions as disclosed by the evidence is that the payments were applied generally upon the indebtedness of the plaintiffs, and that there was neither any direction by the plaintiffs that the sums paid be applied on interest, nor any mutual understanding between the parties that they should be so applied.

At the close of plaintiffs' case the defendant moved for a directed verdict on the ground that there was no evidence from which the jury could find “that any amount of usury has been paid if any at all has been charged and paid, and there is no evidence in the case from which the jury can determine what, if any, sum in excess of 12 per cent. interest has been paid.” And upon the close of all the testimony the defendant renewed the motion for a directed verdict, and moved for such verdict upon the grounds, among others, that under the undisputed evidence the plaintiff had failed to establish any of the causes of action set forth in the complaint, and that the evidence shows clearly that there has been no usurious charge “paid by the plaintiffs for the loan or forbearance of the moneys loaned to them by the defendant.” The motion for a directed verdict was denied, and the cause was submitted to a jury, which returned a verdict in favor of the defendant. The jury also found in answer to interrogatories submitted by the court that the defendant had not knowingly charged any bonus. Judgment was entered pursuant to the verdict for a dismissal of plaintiffs' action, and plaintiffs have appealed from such judgment. Our statute relative to usury provides:

“No person, firm, company or corporation shall directly or indirectly take, or receive, or agree to take or receive in money, goods or things in action or in any other way any greater sum or any greater value for the loan or forbearance of money, goods or things in action than twelve per cent. per annum; and in the computation of interest the same shall not be compounded. Any violation of this section shall be deemed usury; provided, that any contract to pay interest not usurious on interest overdue shall not be deemed usury.” Section 6073, Compiled Laws 1913.

“The interest which would become due at the end of the term for which a loan is made, not exceeding ninety days' interest in all, may be deducted from the loan...