Rushing v. Worsham
| Decision Date | 05 March 1898 |
| Citation | 30 S.E. 541,102 Ga. 825 |
| Parties | RUSHING v. WORSHAM et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Where on January 18th merchandise was sold, "the cash price of which, agreed upon between the parties," was $18.23,--the sale itself not, however, being for cash, but distinctly on a credit until the 1st day of the following October,--the transaction was not rendered usurious because the seller, in order to make a time price on the goods, added to the cash price the sum of $1.27, and included the amount thus arrived at in a promissory note which the purchaser gave after the latter date, securing the same by a mortgage on realty. The law recognizes the right of a seller to make a difference in his cash price, and his time price for goods sold, and though, in a given instance, this difference may exceed 8 per cent., the law as to usury is not applicable.
Error from superior court, Houston county; W. H. Felton, Jr. Judge.
Action by L. S. Worsham & Co. against J. W. Rushing. From a judgment striking his plea, defendant brings error. Affirmed.
M. G Bayne, for plaintiff in error.
Hardeman & Moore, for defendants in error.
On October 12, 1894, Rushing executed to Worsham & Co. a promissory note for $900, due November 11, 1895, together with a mortgage on certain real estate to secure the payment of the same. To a proceeding instituted by Worsham & Co. to foreclose this mortgage, Rushing filed a plea alleging that usury was included in, and made a part of, the consideration of the mortgage. From this plea it appears that, at intervals during the spring of 1894, Worsham & Co. sold to Rushing merchandise, to be paid for on October 1, 1894. In the plea the cash prices of the various bills of merchandise sold are set out, and the increased price at which they were charged to be paid for in October is shown; the difference between the cash price and the price at which they were charged being, as shown by the plea, 18 per cent. Rushing amended his plea, and alleged, as to one of the various transactions set out in the original plea, that the sum of $18.23 had been agreed upon between the parties as the cash price for the goods sold, whereas this item had been charged to become due October 1, 1894, at an increase of 18 per cent. (being 10 per cent. above the legal rate of interest), wherefore Rushing alleged that the mortgage which was given to secure the note for the merchandise account, and in which this item was included at the increased price, was tainted with usury. The plea did not, however, allege that the goods were actually sold at the cash price; and, moreover, the note was given after the account matured in the fall. Worsham & Co. demurred to this plea, and moved the court to strike the same, on the following grounds: (1) The allegations in the plea are insufficient, and too vague and uncertain. (2) The plea shows upon its face that it was for the purchase of merchandise on time prices,--in other words, for merchandise purchased in the spring of 1894, and to be paid for October 1, 1894,--and therefore a profit or per cent. on the said goods, as between a cash price and a credit price, for indulgence. (3) It does not allege a usurious rate of interest on money loaned, but simply shows a profit on the merchandise, being paid for waiting or indulgence from date of purchase to the time of payment. (4) The plea is insufficient, as appears upon the same, and does not set forth such facts as to charge usury, as required by statute. The court sustained the demurrer and struck the plea, and Rushing excepted.
By section 2877 of the Civil Code, usury is defined to be "the reserving and taking, or contracting to reserve and take, either directly or by indirection, a greater sum for the use of money than the lawful interest." In testing the correctness of the judgment of the court striking the plea, it is only necessary to ascertain whether the facts alleged therein, which, under the demurrer, must be taken as true, are sufficient to bring the transaction within the purview of this provision of the Code. The substance of the plea is that Rushing purchased goods during the spring of 1894, which were not to be paid for until October 1, 1894 but that as to one of the items the cash price was agreed upon between the parties. It is true that, where property is sold at a cash price, it is usury to stipulate for more than legal interest on deferred payments. 27 Am. & Eng. Enc. Law, p. 999, and authorities cited. In the case of Irvin v. Mathews, 75 Ga. 739, it was held that where land was sold at a cash price, and time was given by the vendor to the purchaser upon a portion of the purchase money, and a greater rate of interest than that allowed by law was charged on such deferred payments, the contract was usurious. However, where the parties act in good faith, and without design to evade the statute, they may lawfully agree that the price on credit shall be a certain sum designated as principal, and a further sum designated as interest, though the latter exceeds the legal rate on the former for the period of credit. In other words, they may agree that both sums shall constitute the purchase price payable at the time fixed. 27 Am. & Eng. Enc. ...
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