Simpson v. Evans

• Decision Date: 01 November 1890
• Citation: 44 Minn. 419,46 N.W. 908
• Parties: SIMPSON v EVANS ET AL.
• Court: Minnesota Supreme Court

44 Minn. 419

46 N.W. 908

SIMPSONvEVANS ET AL.

Supreme Court of Minnesota.

Nov. 1, 1890.

(Syllabus by the Court.)

1. E. owed S. upon notes bearing 12 per cent. interest. Some years after they became due, these notes were taken up, and new ones given in their stead. The new notes were for an amount made up by taking what was actually due on the prior notes, and adding to it an amount arrived at by computing on the old notes compound interest at the rate of 18 per cent. per annum. Held that, to the extent of the excess of interest thus arrived at, the new notes, if not usurious, were without consideration. Following Daniels v. Wilson, 21 Minn. 530, and distinguishing Martin v. Lennon, 19 Minn. 67, (Gil. 45.)

2. E. owed S. upon notes part due, bearing interest after due at the rate of 12 per cent. per annum. They agreed to extend the time of payment for one year, at 8 per cent. interest. Held, that E.'s agreement to forego his right to pay at any time, and to keep the money for a year, at the rate specified, was a valid consideration for the extension of time, and S.'s promise to accept for its use the rate specified.

Appeal from district court, Olmsted county; START, Judge.

Gale & Brown, for appellant.

Davis, Kellogg & Severance, for respondents.

GILFILLAN, C. J.

Action to foreclose a mortgage against real estate. The facts, as found by the court below, are, substantially, that November 20, 1866, plaintiff loaned defendant $1,000, to secure the payment of which defendant executed to plaintiff his two promissory notes in the aggregate for $1,066, due in one year, with interest at the rate of 12 per cent. per annum till paid, and executed a mortgage upon the real estate. Of the $1,066, $6 was for necessary expenses; $60 was a mere bonus, and as interest in excess of the 12 per cent. To the extent of the $60, the notes and mortgage were usurious. July 1, 1874, said notes and mortgage were taken up, and the defendant executed to the plaintiff four promissory notes for $600 each, due in one, two, three, and four years, respectively, with interest at the rate of 12 per cent. per annum, payable annually, and at the same rate, if not paid when due, after due, till paid; and, to secure them, executed the mortgage to foreclose which the suit is brought. In the amount of these notes was included a bonus to the amount, including the prior bonus of $60, of $751.55. The amount of this bonus appears to have been arrived at by computing on the prior indebtedness, for a part of the time, compound interest at the rate of 18 per cent. per annum. February 16, 1882, it was, as the court finds, duly and mutually agreed between the parties that the rate of interest on the indebtedness should be reduced to 8 per cent. per annum for one year, and the evidence sustained this finding, if there was a valid consideration for it. In computing the amount due plaintiff on the notes and mortgage, the court excluded from the principal the $751.55 bonus, and, on the remainder, allowed as interest only 8 per cent. per annum from February 16, 1882. The exclusion of the $751.55, and the computing the interest at 8 instead of 12 percent. since ...