Ormund v. Hobart

• Decision Date: 29 December 1886
• Citation: 31 N.W. 213,36 Minn. 306
• Parties: ORMUND v HOBART AND ANOTHER.
• Court: Minnesota Supreme Court

36 Minn. 306

31 N.W. 213

ORMUNDvHOBART AND ANOTHER.

Supreme Court of Minnesota.

December 29, 1886.

(Syllabus by the Court.)

Under our statute, (Laws Minn. 1879, c. 66, § 3,) where a contract for an usurious loan of money is evidenced by a note secured by bill of sale, the contract, as well as the note and bill of sale, are void, and there is no valid indebtedness for the money loaned.

Appeal from district court, Hennepin county.

Conversion for the value of certain cattle and farm machinery. On the trial below, before YOUNG, J., and a jury, the evidence showed that on November 9, 1884, plaintiff borrowed from defendants $100, giving them therefor his note. This note was due in 30 days, and provided for the payment of six dollars per month interest. There was evidence offered to show that plaintiff gave a bill of sale of the said property to defendants, as security. The material facts appear in the opinion. In April, 1885, the note being in default, defendants took possession of the cattle and a seeding machine, claiming the same as their property. Verdict and judgment for plaintiff. From the judgment defendant appeals.

Chas. A. Ebert, for respondent, Ormund.

Russell, Emery & Reed, for appellants, Hobart and another.

BERRY, J.

The contract between plaintiff and defendants was evidenced by the note and bill of sale. The contract was usurious, as well as the note by which it was evidenced, and both were therefore void by statute, as well as the bill of sale, which was only security for them. Laws 1879, c. 66, § 3. The statute, therefore, leaves no ground upon which to claim that there was a valid indebtedness for the money actually loaned, notwithstanding the usurious character of the note, and of the whole transaction between the parties. The cases which hold that a pre-existing valid debt is not lost, although the amount of it is included in a usurious and void note, are not in point to the contrary.

It appears that the bill of sale covered certain cattle, and that, the note not having been paid when due, the cattle were put into the hands of one Thompson. The plaintiff insists, and the testimony adduced in his behalf went to show, that he did not consent to this, but that it was done against his objections. But the defendants claim, and their evidence tended to show, that the cattle were put into Thompson's hands with plaintiff's consent and co-operation, and upon an agreement that if, at the end of 10 days, the note or debt was not paid, that they (defendants) might take them, together with other property covered by the...