Mayfield v. British & Am. Mortgage Co

• Decision Date: 29 March 1916
• Docket Number: (No. 9358.)
• Citation: 88 S.E. 370
• Court: South Carolina Supreme Court
• Parties: MAYFIELD. v. BRITISH & AMERICAN MORTGAGE CO., Limited.

88 S.E. 370

MAYFIELD.

v.BRITISH & AMERICAN MORTGAGE CO., Limited.

(No. 9358.)

Supreme Court of South Carolina.

March 29, 1916.

Appeal from Common Pleas Circuit Court of Bamberg County; T. J. Mauldin, Judge.

Action by Leda K. Mayfield against the British & American Mortgage Company, Limited. From a judgment for plaintiff, defendant appeals. Reversed, and new trial ordered.

Thomas & Lumpkin and D. W. Robinson, all of Columbia, for appellant.

W. H. Town-send, of Columbia, and Mayfleld & Free, and Carter & Carter, all of Bamberg, for respondent.

FRASER, J. This is an action to recover usurious interest paid. While there is much conflict as to the facts, still there are some things undisputed. The plaintiff and her husband wanted to borrow $20,000 on several tracts of land, a part of it owned by the wife, and a part owned by the husband. It was thought better to make one loan in one name, and the husband conveyed his land to his wife. Application was made to Messrs. Patterson & Son for a loan of $20,-000. The application did not say from whom the loan was expected, but Messrs. Patterson & Son made loans for the appellants in Bamberg and surrounding counties. The plaintiff also signed a contract employing Messrs. Patterson & Son as her agents to secure the loan, and agrees as follows: "I agree to pay said J. O. Patterson & Son for his services and for preparing an abstract." This blank was furnished by the lender. These attorneys were making other loans for the lender. They prepared the abstracts. Their statements as to the contents of the public records were taken, and when the abstract was made up, it was sent to the lender, whose general attorney passed upon the abstract as prepared. The securities were prepared by this other attorney of the lender and forwarded to Messrs. Patterson & Son for execution. There was also sent at the same time blank, or rather unsigned, drafts to be signed by the borrower. These drafts were made payable to prior mortgagees, holders of judgments, liens, etc. These papers were to be signed and delivered under the direction and supervision of Messrs. Patterson & Son. The notes bore interest at 7 per cent. One draft for $1,000 was payable to Messrs. Patterson & Son. This draft is the source of trouble. The plaintiff claims that the $1,000 was paid under a verbal agreement to pay 5 per cent. commissions; that he paid a fee of $50 in full of the written agreement to pay for the abstract of title and a fee for inspection of the premises; that the $1,000 was a bonus, and made the contract usurious, and asked for judgment in the sum of $14,159.46, for usurious interest paid and penalty. Appellant denies the payment of $50, and claims that the $1,000 was paid as the fee for the preparation of the abstract of title, and paid only after the plaintiff had approved it as reasonable by signing the draft. The case was tried on circuit, and resulted in a judgment for the plaintiff. From this judgment the defendant appealed, with 15 exceptions, but states in his argument that they raise six questions.

I. Usury—reasonableness of attorney's fee —calculations.

There is nothing in this case upon which to base calculatipns. There were several witnesses for the appellant who stated that, while the abstract by itself did not furnish sutlicient data upon which to base an opinion, yet if in the preparation of the abstract Mr. Patterson had done the work he claims to have done, the fee was reasonable. Mr. Mayfleld, the witness for the respondent, said that the fee was extortionate. Both sides admitted that the charging of an unreasonable fee would be, under the contract, usurious if it was known, either actually or constructively, by the lender. The appellant claims that the lender must not only know that he is paying a counsel fee, but that it is an unreasonable counsel fee, particularly if the borrower pays the fee without protest.

It was not denied that the borrower could be required to pay a reasonable fee without violation of the statutes against usury. Only the unreasonable portion, then, could be charged as usury. The borrower had agreed in writing to pay the fee. If the unreasonable portion carried the interest over 8 per cent. it was usury. There was evidence that it was unreasonable, but to what extent it was unreasonable there is no evidence. A judgment, therefore, based on this record, cannot stand.

II. Agency—whose agent was Mr. Patterson?

Appellant says he was respondent's agent. Respondent says he was appellant's agent. The facts, from which agency is to be inferred, not being in dispute, agency is a matter of law. Similar facts have...