Mcneal v. Truesdell, Case Number: 20890
| Decision Date | 20 March 1934 |
| Docket Number | Case Number: 20890 |
| Citation | 167 Okla. 602,1934 OK 176,32 P.2d 68 |
| Parties | MCNEAL v. TRUESDELL et al. |
| Court | Oklahoma Supreme Court |
¶0 Usury--Action on Usurious Note--Judgment --Penalty as Set-Off--Attorney's Fees.
In an action on a promissory note in which the defendant enters a plea of usurious interest charged but not paid, the plaintiff is entitled to judgment for the full amount contracted by the defendant to be paid to the plaintiff, and, as a set-off thereto, the defendant is entitled to a judgment for twice the amount of the entire interest collected, reserved, charged, or received in the transaction, each party being entitled to an attorney's fee as provided by the statute and contract. (Richardson v. Barnhart et ux., 160 Okla. 246, 16 P.2d 98.)
Appeal from District Court, Tulsa County; John Ladner, Judge.
Action by P. A. McNeal against E. D. Truesdell et ux. Judgment denying a portion of the relief prayed for, and plaintiff appeals. Judgment modified and affirmed.
Morse Garrett, for plaintiff in error.
Carter Smith, for defendants in error.
¶1 In this case plaintiff in error, plaintiff below, filed suit to foreclose a chattel and real estate mortgage executed by defendants in error, defendants in the trial court. For the sake of convenience the parties will be referred to as they appeared in the trial court.
¶2 For answer to plaintiff's petition defendant filed answer and counterclaim alleging that usurious interest was charged and reserved in the contract. The case was tried to the court and resulted in favor of the defendants on their counterclaim for usury, and judgment entered for the plaintiff in the total sum of $ 195.
¶3 The trial court found, and the record substantiates the finding, that the defendants received from the plaintiff $ 2,100 at the time the loan in question was consummated. Defendants executed, however, 24 notes in the sum of $ 100 each, due monthly, and one note for $ 150. The total amount of the mortgage and notes was $ 2,550, due in 25 monthly payments. The notes provided for 8 per cent. per annum interest from date. The trial court found correctly that $ 450 had been charged as a bonus for the loan, and that such sum was in fact an additional interest charge, and that this sum when added to the interest provided in the note made the interest charge in excess of 10 per cent. and rendered the contract usurious. At the time the trial court rendered judgment there was accrued the sum of $ 225 interest on the amount then due, as defendants had paid the first four notes. The trial court found correctly that defendants were entitled to double the amount of the $ 675 usurious interest charged as a counterclaim and set-off. This entitled defendants to a credit of $ 1,350 on the contract. The only question to be determined is whether or not this $ 1,350 should be deducted from the amount of money actually borrowed, to wit, $ 2,100, or from the amount of the contract, $ 2,550. This involves a construction of sections 9519 and 9520, O. S. 1931. This question is settled by this court in the case of Richardson v. Barnhart et ux., 160 Okla. 246, 16 P.2d 98, which case is squarely in point, the rule of law being announced as follows:
"In an action on a promissory note in which the defendant enters a plea of usurious interest charged but not paid, the plaintiff is entitled to judgment for the full amount contracted by the defendant to be paid to the plaintiff, and, as a set-off thereto, the defendant is entitled to a judgment for twice the amount of the entire interest collected, reserved, charged, or received in the transaction, each party being entitled to an attorney's fee as provided by the statute and contract."
¶4 The trial court fixed the attorney's fee which plaintiff was entitled to recover in the sum of $ 95, and the attorney's fee which defendant should recover in the sum of $ 250. Computation of the balances between plaintiff and defendant would be approximately as follows: Total due plaintiff by defendant on the contract, $ 2,150, after crediting the $ 400 paid. From this $ 2,150 there should be deducted $ 1,350 usurious interest charged, plus $ 250 attorney's fee, or a total of $ 1,600. This leaves a balance due plaintiff by defendant in the sum of $ 550, but the plaintiff is entitled also to $ 95 attorney's fee, leaving a net balance due plaintiff in the sum of $ 645, instead of $ 195, as found by the trial court. The trial court erred in deducting the penalty from the amount of money actually received, to wit, $ 2,100, instead of deducting the same from the amount of the contract, to wit, $ 2,550. To adopt the view of the trial court would in effect penalize the lender for approximately three times the amount of the interest charged or reserved instead of double the amount of the interest charged or reserved as provided by the statute. A triple penalty was not the intent of the statute. But this question was discussed, analyzed, and passed on in the case of Richardson v. Barnhart, supra. We see no reason for another extended discussion of the same subject in this opinion, inasmuch as we arrive at the same legal conclusion.
¶5 There are other errors assigned in the briefs, but in view of the decision reached herein we do not feel it necessary to discuss the same. The judgment of the trial court is modified to conform to the views herein expressed, and as so modified is affirmed. All costs to be assessed against the defendant.
¶1 (dissenting). For convenience we adopt in part the statement of the case set out in the majority opinion of the above-entitled action.
¶2 Defendants alleged in their counterclaim that the notes sued on were tainted with usury and sought to recover double the amount of usurious interest received, reserved, or charged on said notes with reasonable attorney's fee.
¶3 The trial court found that the contract was tainted with usury in the amount of $ 675, which sum was composed of $ 450 excess, bonus, or usurious interest, added to the actual amount received by defendant. The trial court rendered judgment in favor of plaintiff and against defendants in the sum of $ 195.
¶4 It should be remembered that the plaintiff appeals to this court and presents three errors:
¶5 (1) "That the judgment is contrary to the law and the evidence.
¶6 (2) "That his demurrer to defendants' evidence on the counterclaim should have been sustained."
¶7 (3) "That if this court should sustain the finding that the contracts were tainted with usury, nevertheless the trial court erred in computing the amount recovered under the counterclaim."
¶8 We deem it unnecessary to discuss the first and second assignments of error.
¶9 The trial court found, and it is admitted and held by the majority opinion:
¶10 (1) That the actual amount of money received by defendant was $ 2,100.
¶11 (2) That the $ 450 added to the amount actually received, as shown by the $ 2,550 note sued on, is usury, illegal interest, or excess, by whatever name it may be called.
¶12 (3) That double the amount of usurious interest taken, reserved, collected, or charged by the lender may be recovered by the borrower, as provided by the law.
¶13 (4) That it is agreed by the attorneys of both plaintiff and defendants that the amount of $ 225 taken, received, reserved, or charged by plaintiff as interest on the 25 promissory notes sued on is usurious interest and that the amount ($ 225) so found by the court to be usurious interest is the correct amount of interest charged by plaintiff on the 25 installment notes sued on.
¶14 (5) That the aggregate amount of usurious interest, charged by the plaintiff and found by the trial court to be $ 675 is the correct amount of usurious interest and that double that amount is $ 1,350.
¶15 The above facts having been admitted by the majority opinion, we are to discuss the third and last contention of plaintiff. Plaintiff in his third assignment of error, supra, says:
"That if this court should sustain the finding that the contracts were tainted with usury, nevertheless the trial court erred in computing the amount recovered under the counterclaim."
¶16 It is agreed there is but one question in the instant case for determination, viz., whether the amount of usurious interest taken, received, reserved, or charged should be deducted from the contract (note) sued on, or from "the exact amount of money received from the lender."
¶17 The majority opinion holds that the trial court erred in deducting the entire amount of usurious interest charged from the actual amount received by the borrower. It is said in the opinion:
"This question is settled by this court in the case of Richardson v. Barnhart et ux., 160 Okla. 246, 16 P.2d 98, which case is squarely in point. "
¶18 The court in the majority opinion feels "that it is unnecessary to discuss the constitutional or statutory provisions of our usury law relating to the charging, collecting, receiving, or reserving usurious interest." A careful reading of the majority opinion will surely convince the reader that the constitutional or statutory provisions were never considered.
¶19 The court having held the Richardson v. Barnhart Case to be squarely in point, and having cited no law (except the Richardson v. Barnhart Case), in support of the only question involved, we are compelled to review the Richardson v. Barnhart Case and determine whether or not it is squarely in point.
¶20 We will not, in reviewing said case, burden this court with a detailed review of everything therein stated. We can only give attention to that which seemingly is suggested by the writer to prove his contention:
"That usurious interest, which has been charged, collected, received, or reserved, should be deducted from the contract."
¶21 We think it can be said without fear of contradiction there is not a...
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