National Bldg. Ass'n v. Quin

• Citation: 47 S.E. 962,120 Ga. 358
• Parties: NATIONAL BLDG. ASS'N v. QUIN.
• Decision Date: 09 June 1904
• Court: Supreme Court of Georgia

47 S.E. 962

120 Ga. 358

NATIONAL BLDG. ASS'N v. QUIN.

Supreme Court of Georgia

June 9, 1904

Syllabus by the Court.

1. The answer of the defendant was not subject to demurrer upon the ground that it attempted "to set up the plea of usury and [contained] no allegation of fact which, if proved, would take the contract sued on out of that class of contracts of building associations recognized by the law as not being usurious."

2. Declarations of an agent as to business transacted by him, in order to be admissible against his principal, must have been made by him while representing the principal in the transaction in controversy, and must also have been a part of the negotiation, and constituting the res gestae.

3. Evidence that a letter was written to a given person does not authorize a presumption that he received it, unless the evidence also shows that such letter was properly addressed duly stamped, and mailed.

4. It is erroneous to admit in evidence, over proper objection by the party against whom it is offered, an advertisement published in a newspaper by a person while acting as his agent in a matter to which it is claimed such advertisement referred, when it appears that such person made the publication in his individual capacity, and there is no evidence to show that the party against whom it is offered authorized the publication, or by subsequent ratification adopted it as his own.

Error from City Court of Washington; W. H. Toombs, Judge.

Action by the National Building Association against B. L. Quin. Judgment for defendant, and plaintiff brings error. Reversed.

W. A Slaton, for plaintiff in error.

S. H. Hardeman and Colley & Sims, for defendant in error.

FISH P.J.

There was a demurrer to the answer filed by the defendant, which demurrer was overruled by the court, and the first question to be decided is whether the court erred in this ruling. The suit was apparently one by a building and loan association against one of its borrowing members and stockholders for the recovery of the amount due to the association by such member and stockholder upon an advance made by it to her upon her stock, and for the establishment in the judgment of a special lien upon described land, which had been conveyed by the debtor to the creditor as security for the debt. The answer of the defendant set up the defense of usury, under which she sought both to reduce the amount of the plaintiff's claim and to invalidate the security deed. The demurrer was "that said answer is not sufficient in law, for that it attempts to set up the plea of usury, and contains no allegation of fact which, if proved, would take the contract sued on out of that class of contracts of building associations recognized by the law as not being usurious." Taking the allegations of the plaintiff's petition to be true, the case would fall within the well-settled rule in this state that the ordinary contract between a legitimate building and loan association and one of its borrowing members and stockholders is not usurious, although the borrower may therein obligate himself to pay more for the use of the money advanced upon his stock than interest thereon at the highest rate which the law authorizes in other contracts. But these allegations, except as to the giving of the bond sued on and the execution and delivery of the security deed, were expressly denied by the defendant. All that she admitted was "that said bond and written instrument sued on were given by her as alleged in the petition," and she immediately explained and limited this admission by alleging that "they were given as security of said loan of $1,800 and six per cent. interest," and that, "under the contract between her and plaintiff, she was a mere borrower, and not in any wise a stockholder in said plaintiff company"; that the plaintiff "approached her, before said loan was made, with the distinct proposition to loan her the said $1,800, stating that it did not wish any stock subscriptions or to obtain any stockholder, but merely [desired] to loan its money, of which it had an abundance to loan"; "that the money would not bear exceeding six and one-half per cent. per annum, and that their method of doing business was adopted merely as a convenient way of loaning and securing its money"; that she "was assured by the plaintiff that the intention of both parties, which was to act merely in the relation of lender and borrower, would be accomplished by the execution of the papers she signed, and that she was borrowing the money at the rate of six and one-half per cent. as aforesaid." She further alleged "that plaintiff adopted this method of doing business, not bona fide as a legitimate building and loan association, but merely as a device to evade the laws of Georgia in regard to usury, and in fraud of [her] rights," and that the "whole business of plaintiff's company was on the line of this transaction with defendant, and its sole purpose in doing business in this state was to lend money at usurious rates of interest." The answer denied the allegation of the petition that at the time the contract was entered into the defendant was a member of the alleged building and loan association; denied the allegation that, while a member of such association, she applied for and obtained an advance on stock which she owned therein; and, after making these denials, admitted the giving of the bond set out in the plaintiff's petition, but qualified and restricted this admission as above indicated, so that it did not conflict with these denials, but amounted simply to an admission that she did execute and deliver the written instruments to the plaintiff, but did so merely for the purpose of borrowing money from the plaintiff, who had adopted this method of making loans in order to evade the laws of this state against usury.

If the understanding between the parties, prior to and at the time that the contract was entered into, was that the defendant was not to become a stockholder in a building and loan association, but the relation of the parties was to be merely that of lender and borrower, and in this transaction the plaintiff adopted the mere forms of a building and loan association's method of doing business, "not bona fide as a legitimate building and loan association, but merely as a device to evade the laws of Georgia in regard to usury," certainly these facts would take the contract between the parties "out of that class of contracts of building and loan associations recognized by the law as not being usurious." The question raised by the demurrer was not whether the contract alleged in the plaintiff's petition was usurious, but whether the contract alleged in the defendant's answer was usurious. The contract set forth in the petition was one thing, and the contract alleged in the answer was another. The one was apparently a legitimate building and loan association contract. The other was simply a contract for the loan of money at usurious interest, masquerading in the habiliments of a building and loan contract for the purpose of concealing its real usurious character. Whatever else may be said of the defendant's answer, it was not subject to this demurrer. The demurrer was evidently based on the ruling of this court in Goodrich v. Atlanta National Building & Loan Association, 96 Ga 803, 22 S.E. 585, which is cited by counsel for defendant in error in its support. In that case it was held that "the pleas alleging usury, and which were stricken, on motion, by the court, containing no averments of fact which take the present out of that class of cases in which, according...