Stewart v. Nangle

• Decision Date: 04 June 1958
• Docket Number: No. 361,361
• Citation: 103 So.2d 649
• Parties: Earl W. STEWART and Evelyn A. Stewart, his wife, Appellants, v. John S. NANGLE et al., Appellees.
• Court: Florida District Court of Appeals

Page 649

103 So.2d 649

Earl W. STEWART and Evelyn A. Stewart, his wife, Appellants, v. John S. NANGLE et al., Appellees.

No. 361.

District Court of Appeal of Florida, Second District.

June 4, 1958.

Rehearing Denied June 25, 1958.

Stephen R. Magyar, Orlando, Neal D. Huebsch, Eustis, for appellants.

Jackson A. Cargill, Orlando, for appellees.

ALLEN, Judge.

This is an appeal from a final decree in a foreclosure suit which held that the involved transaction was usurious. Plaintiffs appeal.

Earl W. Stewart and wife, Evelyn A. Stewart, sued John S. Nangle, Golden Dolomite Company and others to foreclose a certain mortgage which secured two notes in the total amount of $18,750.

Paragraph (g) of the defendant's answer alleged usury as follows:

'The promissory notes and mortgage deed referred to in the complaint were given by the defendants who executed the same, for loans made by plaintiffs upon which said loans the plaintiffs wilfully and knowingly charged, demanded and accepted interest at a rate greater than 10% per annum and also at a rate greater than 25% per annum, and in which said transactions the debtors were required and obligated to pay a sum of sums of money greater than the actual principal sum received plus interest at the rate of 10% per annum and also plus interest at the rate of 25% per annum, contrary to and in violation of Chapter 687 of Florida Statutes of 1955 (F.S.A.).'

The trial judge heard the testimony of the parties personally and made the following findings of fact:

'The Defendant, John S. Nangle, doing business as The Golden Dolomite Company, was engaged in mining and sale of dolomite, a mineral product, and needed capital for his business operation. He negotiated a loan from plaintiffs, Earl W. Stewart and Evelyn A. Stewart, husband and wife, upon the following terms, to-wit: Interest at the rate of six (6%) per cent per annum and an investment bonus of one (1cents) cent per ton for every ton of dolomite shipped per month for each sum of $2,500. loaned. Plaintiffs and defendant, John S. Nangle, through testimony confirmed this agreement without any substantial conflict. Interest and bonus payments were payable monthly. The agreement was never reduced to writing or, if reduced to writing, no such agreement in writing was produced at the trial.

'The plaintiffs, on or about December 1, 1949, loaned defendant $7,500.00. Defendant executed a note in favor of plaintiff, Earl W. Stewart, in that amount bearing six (6%) per cent interest payable ninety days after demand, note dated December 1, 1949. Thereafter, on about February 1, 1950, the loan was increased another $7,500. and, on or about April 1, 1950, the loan was increased to a total of $18,750.00. To evidence these subsequent loans, defendant executed another note in favor of plaintiff Earl W. Stewart and Evelyn A. Stewart, in the amount of $11,250. dated December 31, 1950 bearing six (6%) per cent interest and payable two years after demand.

'The defendant, John S. Nangle, joined by his wife, the defendant, Ruby Lee Nangle, executed a mortgage to secure the payment of the above mentioned notes, said mortgage dated August 14, 1953, and describing the following described lands situate in Citrus County, Florida, to-wit:

' S 1/2 of the NW 1/4 of SE 1/4; the E 1/2 and the SW 1/4 of the SE 1/4; all in Section 25, Township 17 South, Range 16, East, Citrus County, Florida.

'The parties stipulated and agreed that the lands intended to be mortgaged should have been described as follows:

'The South Half (S 1/2) of Northwest Quarter (NW 1/4) of Southeast Quarter (SE 1/4), the East Half (E 1/2) of Southwest Quarter (SW 1/4), and the Southwest Quarter (SW 1/4) of Southeast Quarter (SE 1/4) of Section 25, Township 17 South, Range 16 East.

'In accordance with the loan agreement heretofore stated in these findings the defendant, John S. Nangle, paid with reasonable regularity to the plaintiff, the monthly interest and bonus payments based upon tonnage and amount of investment. After May 1, 1950, and beginning with the month of April, 1950, defendant paid to plaintiff interest at the rate of six (6%) per annum on $18,750.00 or $93.75 monthly, and also mortgage note bonus payments figured at the rate of seven and one half (7 1/2) cents per ton for every ton of dolomite shipped each month. The mortgage note bonus payment for April, 1950, amounted to $250.62 and thereafter varied according to the tonnage shipped.

'These interest and mortgage note bonus payments continued through September of 1953. From the date of the initial loan (December 1, 1949,) through September 30, 1953, defendant paid plaintiffs

"Interest in the amount of $4,171.89

Mortgage note bonus in the

amt. of 8,475.91

----------

Total $12,647.80

'Interest and mortgage note bonus payments were not made after September, 1953. On September 4, 1953, plaintiff gave written demand to the defendant for payment of the notes. Thereafter, on July 18, 1956, this foreclosure proceeding was filed.

'It is the Court's observation that the plaintiffs entered into this loan agreement with the defendant in absolute good faith without any thought of its usurious character. The plaintiff, Earl W. Stewart, worked for the defendant for a period of approximately six years, rendering good service, with the plaintiff and the defendant having a mutual respect and trust for each other. It is also acknowledged that this loan was solely sought and solicited by the defendant. Nevertheless, these circumstances have no real bearing upon the issue.

'The total amount of interest and mortgage note bonus payments exceeded the statutory maximum return of ten (10%) per cent and is clearly in violation of Section 687.03 of the 1955 Laws of Florida (F.S.A.). The mortgage note bonus payment, or by whatever other name these payments might be called which are calculated on the basis of one (1cents) cent per ton of dolomite shipped monthly for every sum of $2,500. loaned can only be considered as a return upon the loan brought about by a contemporaneous collateral agreement. See Cooper v. Rothman, 63 Fla. 394, 57 So. 985.

'Upon the premises, I find that the interest and mortgage note bonus paid by the defendant represents a charge of interest greater than ten (10%) per cent per annum for the term of the loan, the term of which loan expired two years after September 4, 1953, the date of demand. It likewise exceeded ten (10%) per cent per annum at the time this foreclosure proceeding was commenced (July 18, 1956). Accordingly, the sum of $12,647.80 should be doubled and forefeited by the plaintiff; this amount doubled exceeds the principal loan of $18,750 and an appropriate decree will necessarily have to be entered in accordance herewith, the Court's personal feeling in the matter to the contrary notwithstanding.'

It is apparent to this court that the conscientious chancellor, who personally heard the testimony of the parties below and decided the case contrary, as he stated, to his personal feelings in the matter, misconceived the force and effect of the word 'willfully' as used in the usury statute. It will be noticed that the court, in its opinion, said:

'It is the Court's observation that the plaintiffs entered into this loan agreement with the defendant in absolute good faith without any thought of its usurious character. The plaintiff, Earl W. Stewart, worked for the defendant for a period of approximately six years, rendering dood service, the plaintiff and the defendant having a mutual respect and trust for each other. It is also acknowledged that this loan was solely sought and solicited by the defendant. Nevertheless, these circumstances have no real bearing upon the issue.'

In the case of Clark v. Grey, 1931, 101 Fla. 1058, 132 So. 832, 834, the following appears:

"* * * It, moreover, harmonizes with the doctrine, now universally...