Monk v. Goldstein

• Decision Date: 15 November 1916
• Docket Number: (No. 400, E.)
• Citation: 90 S.E. 519
• Parties: MONK. v. GOLDSTEIN.
• Court: North Carolina Supreme Court

(172 N.C. 516)

90 S.E. 519

MONK.

v.GOLDSTEIN.

(No. 400, E.)

Supreme Court of North Carolina.

Nov. 15, 1916.

Appeal from Superior Court, Guilford County; Webb, Judge.

Action by William Monk against J. Goldstein. Judgment for plaintiff, and defendant appeals. Affirmed.

The defendant assigns as error the following portion of the charge:

"But if, on the other hand, you find from this testimony that the machine in question was purchased by Goldstein, that is, he bought it in good faith, without having Monk in mind, or without having in mind he was going to let Monk have it, put up the money for Monk to buy it, if you find from this testimony that Goldstein purchased it, and after he purchased it, find that Goldstein paid for it, and find that after Goldstein paid for it he did not have any understanding with Monk to put up money for the car or to lend him the money or furnish him money in any way, but that he simply sold Monk, the plaintiff, a car for $636, the price agreed upon between them, if it was agreed between them, then the court charges you that would not be a usurious contract, and it would be your duty to answer the issue 'No.' "

Plaintiff sued, under Revisal, § 1951, for $80, double the amount of usurious interest paid by him to defendant. He alleged and testified that he wanted to buy a Ford car for $530, and, not having the money to pay for it, he applied to the defendant for a loan of the amount, and he agreed to lend him the money upon a mortgage of the automobile and a lot. When asked by plaintiff what he would charge for the money, defendant replied that "he could not turn so small a deal for less than 20 per cent., and plaintiff, after stating that it was too much, agreed to take the money, " defendant putting up $530 in order to get plaintiff a machine costing $530, and charging him $616, the difference between the $530 that the Ford car cost and the $616 being for the use of the money. Plaintiff further said that the car was sold to him outright by the Ford Company, though the bill of sale was made to the defendant, this being done, as plaintiff contended, to cover up the real transaction as being a usurious one, as defendant was only to advance the money for the car, and told the Ford agent "that plaintiff wanted a car and to let him have it." Plaintiff drove the car from the garage and kept possession of it.

Defendant alleged and testified that he | bought the car from the Ford agency, and gave his note of $530 for it, and paid it in a short time afterwards; that he sold the car to plaintiff for $636, and there was no loan, but a straight out sale, and he never told Monk that he would have to charge 20 per cent. on so small a deal, but the true agreement was that he should buy the car from the Ford agency and then sell it to Monk. He testified that, as plaintiff gave him a mortgage for only $616, he asked for the balance of $20, and plaintiff paid it to him, making $636, in all, the price of the car, and that the $20 was not a payment on the debt, as plaintiff contends. Plaintiff further testified that the $20 was for the use of the money, and that defendant so stated at the time it was paid to him, and added that he would not give a receipt for it.

It was admitted that defendant received $50 from the Ford agencies, which was a bonus or premium paid to owners of their cars during that year. Plaintiff testified that Goldstein did not tell him about this, but kept the money. Defendant also admitted that $570 had been paid on the debt, that is, $40 more than plaintiff contended was due as principal on the debt.

There was much evidence on both sides as to the usury, plaintiff's tending to show that there was a loan, and that he had paid $40 more than the legal interest, and defendant's that there was simply a sale of the car and no loan.

The jury found that there was a loan, and that plaintiff had paid $40 as usurious interest. Judgment was entered upon the verdict for $80, and cost. Defendant appealed. The only exception was to the charge of the court, which will be noticed hereafter.

Stern & Swift and Wilson & Ferguson, all of Greensboro, for appellant.

R. C. Strudwick and L. Herbin, both of Greensboro, for appellee.

WALKER, J. (after stating the facts as above). [1] The test of usury is that there should be a contract for the forbearance of an existing indebtedness or a loan of money (Struthers v. Drexel, 122 U. S. 487, 7 Sup. Ct. 1293, 30 L. Ed. 1216; 29 Am. & Eng. Enc. p. 464, § 4, and note 5; Smithwick v. Whitley, 152 N. C. 366, 67 S. E. 914, 28 L. R. A. [N. S.] 113, 20 Ann. Cas. 1384); or, as otherwise expressed, a profit greater than the lawful rate of interest, intentionally exacted as a bonus for the loan of money, imposed upon the necessities of the borrower in a transaction where the treaty is for a loan, and the money is to be returned at all events, which is a violation of the usury laws, it matters not what form or disguise it may assume (Doster v. English, 152 N. C. 339, 67 S. E. 754). The following rule was adopted in that case for our guidance:

"In order to constitute a usurious transaction, four requisites must appear: (1) There must be a loan, express or implied; (2) an understanding between the parties that the money lent shall be returned; (3) that for such loan a greater rate of interest than is allowed by law shall be paid or agreed to be paid, as the case may be: and (4) there must exist a corrupt intent to take more than the legal rate for the use of the money loaned. The text-writers declare that these rules are applicable everywhere and under the usury laws of every state, and that unless these four things concur in every transaction it is safe to say that no case of usury can be declared. Tyler on Usury, p. 110; Webb on Usury, § 18, and cases cited: Bennett v. Best, 142 N. C. 168 [55 S. E. 841: U. S. v. Waggener, 34 U. S. (9...