Sav. Loan & Trust Co v. Yokley
| Decision Date | 21 November 1917 |
| Docket Number | (No. 418.) |
| Citation | 174 N.C. 573,94 S.E. 102 |
| Court | North Carolina Supreme Court |
| Parties | SAVINGS LOAN & TRUST CO. v. YOKLEY et al. |
Appeal from Superior Court, Union County; Cline, Judge.
Action on note by the Savings Loan & Trust Company against one Yokley and others. Judgment for defendants, and plaintiff appeals. Affirmed.
This is an action on a note executed by the defendants to the plaintiff, Savings Loan & Trust Company. The defendants relied on the plea of usury. The plaintiff filed a reply to the answer of the defendants, in which it in substance alleged that the loan to the defendants was made by the Security Life & Annuity Company, and that the plaintiff negotiated the loan and charged 1 per cent, as commissions therefor. The action came on for trial, when the following verdict was returned by the jury:
(1) Was the loan represented by the note sued on in this action made to the defendants by the Security Life & Annuity Company? Ans.: No.
(2) Are defendants estopped to maintain the defense asserted in this action by reason of the defense pleaded in another action between the same parties? Ans.: No.
The verdict was returned under an instruction from his honor directing them to answer both issues in the negative if they believed the facts testified to by the witnesses, to which the plaintiff excepted. His honor then over the objection of the plaintiff, made an order of compulsory reference to state the account between the plaintiff and the defendants. The referee appointed in the order, after hearing evidence for the plaintiff and the defendants, made his report to a subsequent term of the court, in which he found the facts as contended for by the plaintiff. The defendants filed exceptions to said report. The exceptions were heard and were sustained, the judge finding the facts as contended for by the defendants.
The plaintiff moved for a confirmation of the report of the referee, but stated that if the report was not confirmed it desired to note exceptions and formulate an issue or issues to be submitted to a jury. There was no objection made to the court hearing and passing upon the exceptions of the defendant to the report, nor did the plaintiff tender any issues upon the exceptions, nor ask for any issues to be submitted to a jury until after the judge had heard and passed upon the exceptions. At a subsequent term of the court the defendants moved for judgment upon the record, and the plaintiff requested that certain issues be submitted to the jury. His honor granted the motion of the defendants and entered judgment in their favor, to which the plaintiff excepted and appealed.
Redwine & Slkes, of Monroe, for appellant.
Stack & Parker, of Monroe, for appellees.
ALLEN, J. "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. * * * 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, is a violation of the usury laws, it matters not what form or disguise it may assume." Dos-ter v. English, 152 N. C. 341, 67 S. E. 754, approved in Monk v. Goldstein, 172 N. C. 519, 90 S. E, 519. The corrupt intent consists in knowingly "taking, receiving, reserving or charging a greater rate of interest than six per centum per annum" (Revisal, § 1951; MacRackan v. Bank, 164 N. C. 26, 80 S. E. 185, 49 L. R. A. [N. S.] 1043, Ann. Cas. 1915D, 105); and "where there Is negotiation for a loan of money, and the borrower agrees to return the amount advanced at all events, it is a contract of lending, and, however the transaction may be shaped or disguised, if a profit or return beyond the legal rate of interest is intended to be made out of the necessities or improvidence of the borrower, or otherwise, the contract is usurious." MacRackan v. Bank, supra.
Applying these principles to the evidence, we are of opinion his honor held correctly that in any view of the evidence the plaintiff, the Savings Loan & Trust Company, made the loan to the defendants, and not the Security Life & Annuity Company, and that the transaction is usurious. The evidence shows that the defendants applied to the Annuity Company and were refused the loan; that the Annuity Company then agreed to advance the money to the Trust Company, to be lent to the defendants, upon condition that the Trust Company would issue to the Annuity Company a certificate of deposit for the amount and attach the note of the defendants as collateral; that pursuant to this agreement the money was sent to the Trust Company, and the certificate of deposit and the note executed and delivered; that the note was payable to the Trust Company; that an agreement for extension of time was made with the Trust Company; that renewal notes were executed to the Trust Company; that all payments made by the defendants were made to the Trust Company; that the Trust Company entered the transaction on its books, and, while it at first charged the excess over 6 per cent as commissions, it afterwards charged it as interest; and that the defendants at first paid to the Trust Company 7 per cent, on the loan, and afterwards 8 per cent. Mr. Grimsley, an officer of the Annuity Company, who acted for the company in the transaction, testified, among other things:
On cross-examination he said:
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...v. Bank of Columbus, 164 N.C. 24, 26, 80 S.E. 184, 185 (1913) (emphasis in original). We said in Swamp Loan and Trust Company v. Yokley, 174 N.C. 573, 576, 94 S.E. 102, 103 (1917) that: "The corrupt intent consists in knowingly 'taking, receiving, reserving or charging a greater rate of int......
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Carolina Indus. Bank v. Merrimon, 102
...intent to take more than the legal rate for the use of the money. Preyer v. Parker, 257 N.C. 440, 125 S.E.2d 916; Swamp Loan & Trust Co. v. Yokley, 174 N.C. 573, 94 S.E. 102; Doster v. English, 152 N.C. 339, 67 S.E. 754. If in fact the transaction is a bona fide sale and not a loan of money......
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