Nunn v. Bird

• Decision Date: 29 January 1900
• Citation: 36 Or. 515,59 P. 808
• Parties: NUNN v. BIRD et al.
• Court: Oregon Supreme Court

59 P. 808

36 Or. 515

NUNN v. BIRD et al.

Supreme Court of Oregon

January 29, 1900

Appeal from circuit court, Multnomah county; Alfred F. Sears, Judge.

Action by W.H. Nunn, plaintiff, against Mary Bird and others defendants, for the recovery of certain personal property claimed by plaintiff as assignee of a chattel mortgage. From a judgment for defendants, the plaintiff appeals. Affirmed.

This is an action to recover the possession of certain personal property, or the sum of $350, its value, in case possession thereof cannot be had. It is alleged in the complaint, in effect, that on January 19, 1897, the defendants delivered to W.C. Smith their promissory note for $316, payable in six months, with interest at the rate of 10 per cent. per annum and to secure the payment thereof gave him a mortgage upon their household goods and furniture, which provided that, if default should be made in the payment of the note, the holder thereof should be entitled to the possession of the property for the purpose of selling it and applying the proceeds to the payment of the note; that Smith, for a valuable consideration, assigned the note before maturity to plaintiff, who, upon defendants' failure to pay any part thereof, demanded of them the possession of said property which they refused to deliver. The defendants deny the material allegations of the complaint, and aver, in substance, that they borrowed of R.I. Echerson & Co. $150 May 17, 1892, and a like sum August 10th of that year, for which they executed their promissory notes for $160 each, secured by a first and a second mortgage, respectively, on the property described in the complaint, and, in pursuance of an agreement entered into at the time the money was loaned, paid Echerson & Co. interest on the sum so borrowed at the rate of 5 per cent. per month; that in March, 1894, they executed to J.W. Wright, a partner with Echerson & Co., their promissory note, secured by a mortgage on said property, and took up the previous notes; that they continued to pay Echerson & Co. interest on the latter note until November, 1896, at the rate of 5 per cent. per month, and that they have thus paid said company, on account of the original loan, the sum of $696.25; that on January 19, 1897, they executed to Echerson & Co. the promissory note and mortgage described in the complaint, but that Smith's name was inserted as payee and mortgagee without their knowledge or consent, and that said note has been fully paid. At the trial the court, over plaintiff's objection and exception, allowed the answer to be amended by adding the following words: "That all the facts set forth in defendants' answer the plaintiff herein well knew." The allegations of new matter in the answer having been denied in the reply, a trial was had, resulting in a judgment for the defendants, and plaintiff appeals.

J.F. Boothe, for appellant.

W.N. Gatens, for respondents.

MOORE J. (after stating the facts).

It is contended by plaintiff's counsel that the court erred in permitting the answer to be amended at the time and in the manner indicated. The statute authorizes the court at the trial, in furtherance of justice, to allow an amendment to be made to a pleading so that it may conform to the facts proved, provided, however, that the cause of action or defense is not thereby changed. Hill's Ann.Laws Or. § 101. The trial court being invested with such power, its exercise must necessarily be a matter of discretion, and, like all orders of such character, will not be reviewed upon appeal except in cases of manifest abuse. Pittman v. Pittman, 3 Or. 553; Henderson v. Morris, 5 Or. 24; Hexter v. Schneider, 14 Or. 184, 12 P. 668; Mitchell v. Campbell, 14 Or. 454, 13 P. 190; Baldock v. Atwood, 21 Or. 73, 26 P. 1058; Wallace v. Baisley, 22 Or. 572, 30 P. 432; Garrison v. Goodale, 23 Or. 307, 31 P. 709; Clemens v. Hanley, 27 Or. 326, 41 P. 658; Foster v. Henderson, 29 Or. 210, 45 P. 899; Davis v. Hannon, 30 Or. 192, 46 P. 785. The answer is predicated upon the theory that the plaintiff is not a bona fide holder of the note in suit, and, as his knowledge of the facts tending to prove the invalidity of the security was essential to, and did not change, the cause of defense, the court did not abuse its discretion in allowing the amendment. The defendants do not claim to have paid any sum whatever upon the note described in the complaint, but their defense is, in effect, that by reason of the payments made to Echerson & Co. no consideration existed for the execution of this note. Plaintiff's counsel contend that these payments were made as brokerage, for the purpose of securing extensions of the time of payment, and not to reduce the principal, and, having been voluntarily made, the sums so paid are not recoverable; while defendants' counsel insist that plaintiff is not a bona fide holder of the note; and that, the monthly installments having been met as agreed upon, the court should apply the sums so paid in discharge of the original debt. Echerson & Co. were the payees named in the first and second notes, and, having loaned the defendants the sum of $300 only, this constitutes the debt properly chargeable to them. It is alleged that Wright, to whom the third note was executed, was a partner with Echerson & Co., and that the latter collected from the defendants the monthly installments agreed upon, aggregating $696.25; and, if the jury found such to be the facts, it remains to be seen whether the amount so paid shall be credited upon the defendants' debt. The notes having contained a stipulation for the payment of 10 per cent. interest, and being taken in the name of Echerson & Co., the charge of $10 on account of each loan is in excess of the rate of interest prescribed by statute, and hence usurious.

So too, the monthly payment to Echerson & Co. of 5 per cent. of the sum so borrowed, being in excess of the rate of interest allowed by law, is equally usurious, for, if the taking of such sums to secure the creditor's forbearance could be justified upon the assumption that the money so received was in the nature of a commission or brokerage, the statute of usury would be circumvented, and the necessities of the borrower would render him an easy prey to the avarice of the lender. The rule is well settled that, notwithstanding a debtor, in pursuance of an unlawful agreement, may have paid his creditor, as interest, a sum in excess of the legal rate, in an action by the creditor to recover the remainder of the debt the court should, upon proof of the payment of such usurious interest, apply the sums so paid in discharge of the original debt. 27 Am. & Eng.Enc.Law, 963; Musselman v. McElhenny, 85 Am.Dec. 445; Farwell v. Meyer, 35 Ill. 40; Woolley v. Alexander, 99 Ill. 188. If no payments had been made on the loans of $150 each made on May 17 and August 10, 1892, until January 19, 1897, when the last note was executed, the money so...