Mckanna v. Thorne
| Decision Date | 19 September 1922 |
| Docket Number | Case Number: 10605 |
| Citation | 209 P. 1039,87 Okla. 74,1922 OK 274 |
| Parties | MCKANNA et al. v. THORNE. |
| Court | Oklahoma Supreme Court |
¶0 1. Usury--Usurious Transaction.
Where the lender of money requires the borrower to execute notes by their terms obligating the borrower to pay to the lender a greater amount of money than that actually loaned to the borrower, including the highest legal rate of interest which the lender is permitted to charge under the law, such a transaction is tainted with usury.
2. Same -- Action Upon Usurious Note--Remedy of Defendant -- Statutory Construction.
In an action by the lender of money upon promissory notes evidencing a usurious transaction, the defendant in such action may plead as a set-off or counterclaim twice the amount of the entire interest collected, reserved, charged, or received in said transaction under section 1005, Revised Laws 1910, as amended by the act of the Legislature approved March 4, 1916, c. 20, Session Laws 1916, p. 24.
3. Same.
Record examined, and held, that the transaction, as evidenced by the notes upon which the plaintiff instituted this action, was usurious, and that the trial court committed reversible error in refusing to allow defendants credit for twice the amount of the entire interest charged by the plaintiff for the use of the money loaned.
Error from District Court, Oklahoma County; John W. Hayson, Judge.
Action by E. C. Thorne against Belle McKanna and another in foreclosure. Judgment for plaintiff, and defendants appeal. Judgment reversed, and cause remanded, with directions to grant the defendants a new trial.
Wilson, Tomerlin & Threlkeld, W. R. Taylor, and H. F. Tripp, for plaintiffs in error.
G. A. Paul, for defendant in error.
¶1 This appeal is prosecuted by Belle McKanna and J. J. McKanna, plaintiffs in error, to reverse the judgment of the district court of Oklahoma county rendered on November 20, 1918, in favor of E. C. Thorne. The defendant in error, E. C. Thorne, was by the judgment of the district court decreed a recovery of $ 10,251.53, together with interest thereon from the date of said judgment at the rate of 7 per cent. per annum until paid, for $ 600 as an attorney fee, and the foreclosure of a real estate mortgage executed to secure the payment of said money adjudged to be due said E. C. Thorne upon certain promissory notes.
¶2 The only question presented by this appeal for determination is whether or not the transaction involving the loan of $ 6,000 by the defendant in error to the plaintiffs in error is shown to be usurious upon the face of the notes executed evidencing the debt due by the plaintiffs in error to the defendant in error.
¶3 The parties will be referred to as they appeared in the trial of the cause; E. C. Thorne, as plaintiff, and Belle McKanna and J. J. McKanna, as defendants.
¶4 An examination of the evidence found in the record discloses the following facts: That the McKannas, for the use of $ 6,000 loaned to them for a period of five years from October 1, 1912, until October 1, 1917, were charged by the plaintiff, E. C. Thorne, or contracted to pay to him, interest in the sum of $ 3,454.15, as evidenced by the following notes:
¶5 It is clear from the notes executed by the defendants that the defendants contracted to pay to the plaintiff $ 454.15 more than the legal rate of interest which the plaintiff was permitted to charge the defendants under the law. Ten per cent. interest being the maximum amount of interest which the plaintiff was permitted to charge the defendants for the use of the money, it is obvious that when the plaintiff required the defendants to contract to pay him $ 3,454.15 for the use of $ 6,000 for five...
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