Sundahl v. First State Bank of Edmunds
| Decision Date | 06 January 1916 |
| Docket Number | 1915 |
| Court | North Dakota Supreme Court |
An appeal from a judgment of the District Court of Stutsman County; Coffey, J. Defendant appeals.
Reversed.
Judgment vacated, and a new trial granted. Appellant recovered costs on this appeal.
Knauf & Knauf and Engerud, Holt, & Frame, for appellant.
The statute recognized the rule generally prevailing without the aid of any statute, that it is not usurious to charge and collect interest at the lawful rate in advance. Fleckner v. Bank of United States, 8 Wheat. 338; Moore v Bank of the Metropolis, 13 Pet. 302, 10 L. ed. 172; Maine Bank v. Butts, 9 Mass. 49; Agricultural Bank v. Bissell, 12 Pick. 586; Lloyd v Williams, 2 W. Bl. 792; Manhattan Co. v Osgood, 15 Johns. 162; Bank of Utica v. Phillips, 3 Wend. 408; Marvine v. Hymers, 12 N.Y. 223; Hawks v. Weaver, 46 Barb. 164; Lyon v. State Bank, 1 Stew. (Ala.) 442; Cole v. Lockhart, 2 Ind. 631; English v. Smock, 34 Ind. 115, 7 Am. Rep. 215; Bank of Burlington v. Durkee, 1 Vt. 403; Newell v. National Bank, 12 Bush, 57; Stribbling v. Bank of the Valley, 5 Rand. (Va.) 132; McGill v. Ware, 5 Ill. 29; Mitchell v. Lyman, 77 Ill. 525; Brown v. Scottish-American Mortg. Co. 110 Ill. 235; Willett v. Maxwell, 169 Ill. 540, 48 N.E. 473; Tepoel v. Saunders County Nat. Bank, 24 Neb. 815, 40 N.W. 415; Vahlberg v. Keaton, 51 Ark. 534, 4 L.R.A. 462, 14 Am. St. Rep. 73, 11 S.W. 878; Bank of Newport v. Cook, 60 Ark. 288, 29 L.R.A. 761, 46 Am. St. Rep. 171, 30 S.W. 35; Tholen v. Duffy, 7 Kan. 405; State Bank v. Hunter, 12 N. C. (1 Dev. L.) 100; Mackenzie v. Flannery, 90 Ga. 590, 16 S.E. 710; Ticonic Bank v. Johnson, 31 Me. 414; Goodale v. Wallace, 19 S.D. 405, 117 Am. St. Rep. 962, 103 N.W. 651, 9 Ann. Cas. 545.
The only difference is that in those cases the courts read into the usury statute, by judicial construction, a rule which the North Dakota statute declares in express terms. Moore v. Bank of the Metropolis, 13 Pet. 302, 10 L. ed. 172; Vahlberg v. Keaton, 51 Ark. 534, 4 L.R.A. 462, 14 Am. St. Rep. 73, 11 S.W. 878; Bank of Newport v. Cook, 29 L.R.A. 761 with extended notes (60 Ark. 288, 46 Am. St. Rep. 171, 30 S.W. 35); McGill v. Ware, 5 Ill. 29; Mitchell v. Lyman, 77 Ill. 525; Willett v. Maxwell, 169 Ill. 540, 48 N.E. 473; Marvine v. Hymers, 12 N.Y. 223; Lyon v. State Bank, 1 Stew. (Ala.) 442; Cole v. Lockhart, 2 Ind. 631.
It shall be lawful to receive such interest according to the ordinary usage of banking associations. Comp. Laws 1913, § 5166.
The bank books were sufficiently identified as evidence. Comp. Laws 1913, § 7909.
In a proper case, the court has power to reduce or add to the amount of the verdict, where there is a mere error of computation, and the record furnishes the data showing the error or just what should have been done. Fletcher Bros. v. Nelson, 6 N.D. 94, 69 N.W. 53; Carpenter v. Dickey, 26 N.D. 176, 143 N.W. 964.
But the court cannot speculate as to what the jury intended, and thus amend the verdict. Minot v. Boston, 201 Mass. 10, 25 L.R.A.(N.S.) 311, 86 N.E. 783; Fiore v. Ladd, 29 Ore. 528, 46 P. 144; Crich v. Williamsburg City F. Ins. Co. 45 Minn. 441, 48 N.W. 198; Acton v. Dooley, 16 Mo.App. 449; Watson v. Damon, 54 Cal. 278; Goggan v. Evans, 12 Tex. Civ. App. 256, 33 S.W. 891.
M. C. Freerks, for respondent.
An assignment of error must be made so that the court may ascertain from the brief just what is meant. 2 Enc. Pl. & Pr. 943; Minot Flour Mill Co. v. Swords, 23 N.D. 571, 137 N.W. 828.
The appellate court will not search for errors not clearly and properly assigned. State v. Cleveland, 23 S.D. 335, 121 N.W. 841.
Local commercial usages must be pleaded. 12 Cyc. 1097.
A custom introduced as an affirmative defense should be specifically pleaded. Templeman v. Biddle, 1 Harr. (Del.) 522; Lindley v. First Nat. Bank, 76 Iowa 629, 2 L.R.A. 709, 14 Am. St. Rep. 254, 41 N.W. 381; Turner v. Fish, 28 Miss. 306; Hayden v. Grillo, 42 Mo.App. 1; Anderson v. Rogge, Tex. Civ. App. , 28 S.W. 106; Norwood v. Alamo F. Ins. Co. 13 Tex. Civ. App. 475, 35 S.W. 717.
Where a transaction is within the statutes against usury, the usage of trade as to such transaction cannot be received in evidence to show that it is not usurious. Jones v. McLean, 18 Ark. 456; 12 Cyc. 1097; Daquin v. Colron, 3 La. 387; Harrod v. Lafarge, 12 Mart. (La.) 21; Bank of Utica v. Smalley, 2 Cow. 770, 14 Am. Dec. 526; Bank of Utica v. Wager, 2 Cow. 712; New York Fireman Ins. Co. v. Ely, 2 Cow. 678; Dunham v. Gould, 16 Johns. 367, 8 Am. Dec. 323; Dunham v. Dey, 13 Johns. 40; Gore v. Lewis, 109 N.C. 539, 13 S.E. 909; Niagara County Bank v. Baker, 15 Ohio St. 68; Greene v. Tyler, 39 Pa. 361; Smetz v. Kennedy, Riley L. 218; Cooper v. Sanford, 4 Yerg. 452, 26 Am. Dec. 239.
Loans on "personal security" do not include loans made on real estate security. There is a distinction in the statute. Cleveland v. Shoeman, 40 Ohio St. 176; Pittsburgh Locomotive & Car Works v. State Nat. Bank, 1 N.Y. Week. Dig. 332, Fed. Cas. No. 11,198; Montgomery Nat. Bank v. McCleaster, 2 Pa. Dist. R. 546; 6 Words & Phrases, 5362; Merrill v. National Bank, 173 U.S. 131, 43 L. ed. 640, 19 S.Ct. 360; Colorado Sav. Bank v. Evans, 12 Colo.App. 334, 56 P. 981.
This appeal is from a judgment finding defendant bank to have taken usurious interest, and penalizing it in double the amount of the interest so taken. Numerous errors are assigned. The principal one underlying the whole case concerns the computation of interest, where the deduction of interest to maturity is made in advance at the time of the taking of the note. Several alleged usurious transactions, consisting of overcomputation of advance interest, are charged. One only will be taken as illustrative of all. Plaintiff procured in cash, or its equivalent, the sum of $ 300, giving therefor his note due in one year with no interest until after maturity, for the aggregate amount as of principal and interest earned at maturity, of $ 340.90. Is this transaction usurious? is the law question presented. Plaintiff contended upon trial, and urges on this appeal, that but 12 per cent on the $ 300, or $ 336, could thus be taken; or he says if it be conceded that if defendant could exact 12 per cent in advance, it could but charge 12 per cent interest upon the interest, $ 36, which, added to the interest and principal, would authorize at the most a note for $ 340.32, and that as this note was taken for $ 340.90, the entire interest charge was usurious, and double that amount, or $ 81.80, should be recovered on that cause of action. The trial court agreed with plaintiff concerning his interpretation of the law governing computation of advance interest, and instructed the jury explicitly "that the interest rate should be figured upon the money or value received by the borrower," and it could not exceed 12 per cent per annum on that amount, and "if you find by calculation that said sum (the amount of interest taken) is a greater rate than is permitted by the statute (12 per cent per annum) and as defined in these instructions, then the same is usurious;" and again: "The lender is allowed to withhold interest for one year at 12 per cent per annum, in advance at the time of the making of the loan, but any greater rate of interest is usurious." "The test of the existence of usury is, Will the contract as performed result in producing to the lender a rate of interest greater than is allowed by law, and was that result intended?" Besides this, during the trial the court examined the cashier of defendant bank, who transacted for it the alleged usurious loan, at some length as to the manner of his computation of the interest, and in such a way that the jury could not well have believed therefrom that the transaction was other than usurious, and showing that the trial court through the trial, as well as in its instructions, adopted respondent counsel's view of the law as to computation of advance interest. So the error, if such, is basic and prejudicial.
The question is but one of calculation of interest. For every dollar of the face of the note the borrower must be paid at least 88 cents (see extended note in 29 L.R.A. 761, citing scores of cases), and the question resolves to simply how much upon this basis the face of the note must be to enable the borrower to obtain $ 300 in cash. He must therefore give a note for $ 340.90, exactly the amount for which this one was taken. There is no usury in the transaction concerning the $ 340.90 loan, nor any of them made, unless it be the loan for $ 701.35, mentioned in the complaint. Tholen v. Duffy, 7 Kan. 405; Agricultural Bank v. Bissell, 12 Pick. 586; Fleckner v. Bank of United States, 8 Wheat. 338, 5 L.Ed. 631; Vahlberg v. Keaton, 51 Ark. 534, 4 L.R.A. 462, 14 Am. St. Rep. 73, 11 S.W. 878; Bank of Newport v. Cook, 60 Ark. 288, 29 L.R.A. 761, 46 Am. St. Rep. 171, 30 S.W. 35; McGill v. Ware, 5 Ill. 21; Willett v. Maxwell, 169 Ill. 540, 48 N.E. 473; Marvine v. Hymers, 12 N.Y. 223. And as to this it cannot be usurious, because of prior loans carried forward and entered into it as a part of the consideration, because none of the prior loans are usurious, all being under identical computations to that of the $ 340.90 loan. The court should have instructed the jury that all the loans pleaded, except the one for $ 701.35, were not usurious. Failure to do so was unquestionably reversible error.
As to the note for $ 701.35, the only basis upon which usury could be found or predicated must be upon the disputed question of fact of whether items to the amount of $ 48.65 were properly included in, and were a part of the consideration for, said note as advancements for interest charges paid by the bank for the...
To continue reading
Request your trial