McNish v. General Credit Corp.

• Decision Date: 03 May 1957
• Docket Number: No. 34125,34125
• Citation: 164 Neb. 526,83 N.W.2d 1
• Parties: J. Hammond McNISH, Administrator of the Estate of Burel Kinney, deceased, Appellant, v. GENERAL CREDIT CORPORATION, a corporation, Appellee.
• Court: Nebraska Supreme Court

Page 1

83 N.W.2d 1

164 Neb. 526

J. Hammond McNISH, Administrator of the Estate of Burel Kinney, deceased, Appellant, v. GENERAL CREDIT CORPORATION, a corporation, Appellee.

No. 34125.

Supreme Court of Nebraska.

May 3, 1957.

Syllabus by the Court

1. An admission made in a pleading on which the trial is had is more than an ordinary admission. It is a judicial admission and constitutes a waiver of all controversy so far as the adverse party desires to take advantage of it, and is therefore a limitation of the issues.

2. The real party in interest is the person entitled to the avails of the suit.

3. A person with whom or in whose name a contract is made for the benefit of another may bring an action thereon without joining with him the person for whose benefit it is prosecuted.

4. A party is entitled to the benefit of the testimony of other witnesses in contradiction of his own, whenever his own is not of the character of a judicial admission and concerns only some evidential or constituent circumstance of his case.

5. Ordinarily courts of equity will refuse to aid in the enforcement of penalties and forfeitures and leave the parties to whatever remedies they may have at law. However, this is not an absolute or inflexible rule and should yield when good reason exists for doing so.

6. A borrower coming under the statutes relating to installment loans is not regarded as being in pari delicto but rather as being in vinculus to the lender, to whom he therefore owes no duty in equity. Insofar as Grand Island Finance Co. v. Fowler, 124 Neb. 514, 247 N.W. 429, is in conflict herewith it is overruled.

7. A truck dealer may in good faith sell a truck on time for a price in excess of the cash price without tainting the transaction with usury, even though the difference in the two prices may exceed lawful interest for a loan.

8. A time sale made in good faith at a price in excess of a cash price, which time price is arrived at by schedules furnished by a finance company which solicits contracts so entered into between a purchaser and a dealer, may not be regarded as being tainted with usury, even though the difference exceeds lawful interest for a loan.

9. In order to have the foregoing principles apply it must appear that the buyer actually was informed of and had the opportunity to choose between a time sale price and a cash sale price. It is not enough to merely show that the instruments signed evidencing the indebtedness refer to a time price or time differential when, in fact, the buyer was never quoted a time sale price as such.

10. The statutes make no requirement that a borrower, in order to come within the provisions thereof, must be a necessitous one. In fact, the statutes relating to installment loans have no requirements of any kind in that respect and, in view of that fact, we would not be justified in so limiting the application thereof.

11. Where a principal has by his voluntary act placed an agent in such a situation that a person of ordinary prudence conversant with business usages and the nature of the particular business is justified in presuming that such agent has authority to perform a particular act, and therefore deals with the agent, the principal is estopped as against such third person from denying the agent's authority.

12. Whether or not an act is within the scope of an agent's apparent authority is to be determined under the foregoing rule as a question of fact from all the circumstances of the transaction and the business.

13. If the principal desires to repudiate the unauthorized act of his agent, he must, as soon as he acquires knowledge of the facts, return, or tender a return of, any benefits by him received as the proceeds of such acts, or be held to have ratified them.

14. A principal who accepts the benefits of a contract executed in his behalf by an agent is chargeable with the instrumentalities employed by the latter in procuring it.

J. Max Harding, Ewald D. Warnsholz, Lincoln, for appellant.

Conway & Irons, Hastings, Martin, Davis & Mattoon, Sidney, Harold A. Prince, Walter P. Lauritsen, Grand Island, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ.

WENKE, Justice.

This is an appeal from the district court for Cheyenne County. Therein, on March 1, 1955, Burel Kinney brought an action against the General Credit Corporation. The purpose of the action, as set forth in plaintiff's amended petition filed April 2, 1955, on which the action was tried, is to have declared null and void an alleged installment loan in the principal sum of $10,000, made by defendant to plaintiff, because the interest charge of $1,200 made for the use thereof is in violation of the maximum amount authorized by the provisions of section 45-138, R.S.Supp., 1953, which statute deals with 'Installment Loans' of over $1,000. The relief asked is that the promissory note evidencing the indebtedness be held null and void and that defendant be required to refund to plaintiff all payments it has received thereon from plaintiff. The primary defense pleaded is that the indebtedness owing from plaintiff to defendant is not a loan but the balance due on the time purchase price plaintiff agreed to pay for a used truck and therefore not subject to the provisions of the foregoing statute. The trial court found for the defendant and dismissed plaintiff's action. Plaintiff thereupon filed a motion for new trial and this appeal is from the overruling thereof.

Plaintiff was accidently killed on January 16, 1956, and this action was thereafter, on February 28, 1956, revived in the name of J. Hammond McNish as administrator of his estate. We shall hereinafter refer to decedent as Kinney.

Kinney had been engaged in the trucking business with headquarters near Sidney in Cheyenne County, Nebraska, since November 25, 1951. Appellee is a Nebraska corporation with its principal place of business in Hastings, Nebraska, where, at all times herein material, it was licensed to and operating an installment loan business at 615 West Second Street. The Hastings Motor Truck Company, a Nebraska corporation, was, at all times therein material, engaged in the selling and servicing of trucks with its principal place of business located in Hastings. Clinton J. Sahling, hereinafter referred to as Sahling, was a stockholder, the vice-president, and a salesman of this corporation, which we shall hereinafter refer to as H. M. T. Co.

On June 22, 1954, in response to a telephone call from Kinney on June 21, 1954, Sahling went to Sidney, where, on June 23, 1954, he met Kinney and, in the presence of Mrs. Kinney, negotiated the sale to him of two used trucks, the sale of one of which is the basis of this action. We shall more fully set out the facts relating to the sale of this truck in connection with our discussion of the nature of the indebtedness herein involved for the principal question to be determined is whether or not the contract entered into was a sale on time, with deferred payments, or one for cash, with a loan being made to pay the balance of the purchase price.

As a preliminary we shall briefly answer three propositions raised but not discussed. The transaction herein involved was entered into at Kinney's place of business near Sidney in Cheyenne County, Nebraska. Consequently the district court for that county had jurisdiction of the subject matter. See § 25-404, R.R.S.1943. It provides in part: 'Actions for the following causes must be brought in the county where the cause or some part thereof arose: (1) An action for the recovery of a fine, forfeiture, or penalty, imposed by a statute, * * *.'

Article I, section 3, of the Constitution of Nebraska, provides: 'No person shall be deprived of life, liberty, or property, without due process of law.' We think sections 45-124 and 45-125, R.R.S.1943, adequately meet this constitutional requirement. They provide, insofar as here material, as follows:

'No license shall be granted to any person unless and until such applicant therefor shall file with the Department of Banking a designation in writing that appoints the Director of Banking to act as applicant's agent, upon whom all judicial and other process or legal notices directed to such applicant may be served. Service upon the agent, so designated, shall be equivalent to personal service on the applicant or licensee.' Section 45-124, R.R.S.1943.

'Service shall be made in duplicate upon the Director of Banking, or, in his absence, upon the person in charge of his office, and shall be deemed sufficient service upon such licensee. No such service shall be valid or binding against such licensee when licensee is required thereunder to file answer, pleading or defense within less than ten days from the date of mailing the copy of such service to such licensee. When legal process against any such licensee is served upon the director, he shall forthwith, by registered mail, send one of the duplicate copies prepaid and directed to licensee.' Section 45-125, R.R.S.1943.

The requirements of these statutes were followed.

Appellee suggests, in view of Article VII, section 5, of the Constitution of Nebraska, that appellant has no standing in court because any penalty arising thereunder must be paid to the common schools in the place where it accrues. We do not think this constitutional provision has application here. See, Graham v. Kibble, 9 Neb. 182, 2 N.W. 455; Clearwater Bank v. Kurkonski, 45 Neb. 1, 63 N.W. 133; Everson v. State, 66 Neb. 154, 92 N.W. 137; School Dist. of City of Omaha v. Adams, 147 Neb. 1060, 26 N.W.2d 24.

Appellee raises the question, is the appellant the real party in interest? We doubt if the appellee is in a position to raise this question for in its answer it alleged: 'That Hastings Motor Truck Company as agent for this Defendant negotiated with the Plaintiff herein for the sale of said tractor and on June 24, 1954, sold the said tractor...