Telford v. Garrels

• Decision Date: 22 April 1890
• Citation: Telford v. Garrels , 132 Ill. 550, 24 N. E. 573 (Ill. 1890)
• Parties: TELFORD v. GARRELS et al.
• Court: Illinois Supreme Court

132 Ill. 550

24 N.E. 573

TELFORD

v.GARRELS et al.¹

Supreme Court of Illinois.

April 22, 1890.

Appeal from appellate court, fourth district.

Bill of foreclosure. Defendant appeals.

H. C. Goodnow and W. & E. L. Stoker, for appellant.

W. C. Kueffner and Krome & Hadley, for appellees.

MAGRUDER, J.

On April 21, 1880, Telford, the appellant, borrowed $12,000 from F. Ryhemer & Co., and gave twelve notes of that date, of $1,000 each, three payable in two years, three in four years, and six in five years, after date, to F. Ryhemer & Co. or order, drawing 8 per cent. interest per annum. All the notes except one were signed by Telford and his wife, Laura A. Telford, who both executed a trust-deed of the same date to Adolphus F. Bandeline upon 920 acres of land in Marion county to secure the payment of said notes. Ryhemer & Co. retained the three notes due in two years after date, which afterwards passed to their assignees, Suppenger, Herman, Ammoun, and Rugger, under a deed of assignment for benefit of creditors made by Ryhemer & Co. on May 5, 1885. Ryhemer & Co. assigned the nine notes, due in four and five years after date, respectively, by indorsement to Gruner, Haller & Co., of Berne, in Switzerland. Gruner, Haller & Co. assigned them to different parties in Switzerland, who in turn assigned them to Garrels, one of the appellees herein. The original bill in this case was filed on February 2, 1887, in the circuit court of Madison county, by Garrels against Telford and wife, the trustee in the trust-deed, and the assignees of Ryhemer & Co., to foreclose the trust-deed as to the nine notes owned by Garrels. The bill charges that the whole of the principal of the nine notes, together with interest from April 21, 1883, to April 21, 1884, and from April 21, 1885, to time of beginning suit, remained due and unpaid. Answers were filed to the original bill of Garrels by Telford and wife, and by the assignees of Ryhemer & Co. The court rendered a decree on August 29, 1888, finding that there was due to Garrels the principal sum of $9,000, with interest from April 21, 1885, amounting to $11,416, and also allowing him $250 as a reasonable solicitor's fee.

We will first notice the objections made to the decree, so far as it relates to the issues formed upon the original bill:

First. It is objected that the notes are usurious, and that the usurious character of each note appears upon the face of it. The notes are all alike, except as to the time of maturity; and the following is one of them: ‘$1,000. State of Illinois, Madison county. Highland, 21 April, 1880. Four years after date we, the undersigned, Joseph Telford and Laura A. Telford, or either of us, promise to pay to F. Ryhemer & Co. or order the sum of one thousand dollars, for money actually borrowed and received, with eight per cent. annual interest from this date until paid, said interest payable annually, sixty days previous to the lapse of each year, at the office and into the hands of F. Ryhemer & Co., at Highland, Madison county, Illinois, against special receipts therefor signed and delivered by said F. Ryhemer & Co. for each such payment; such receipts to be good and valid towards any subsequent owner or holder of this note; the principal also payable at the office of F. Ryhemer & Co., sixty days before maturity of this note. Given under our hands and seals at the place and on the day and year first above written. ‘No. 1,935. JOSEPH TELFORD. [Seal.] LAURA A. TELFORD. [Seal.]’

It is claimed that, by the requirement of a payment of the principal 60 days before maturity, the makers are obliged to pay interest for a period 60 days longer than the time during which they have the use of the money; or, in other words, that they must pay the principal 46 months after date, and pay interest on the principal for a period of [132 Ill. 554]48 months. We do not think that such is the meaning of the language used in the note. The principal sum is made payable, ‘with eight per cent. annual interest from this date until paid.’ The interest runs only until the payment of the principal. When the principal is paid, the interest stops. Upon payment of the principal 46 months after date, the makers can only be required to pay interest for 10 months of the last year. As to the claim of the appellant that the note is usurious, because the annual interest is payable 60 days previous to the lapse of each year, it has been held by this court that a contract to pay interest in advance is not usurious. Brown v. Mortgage Co., 110 Ill. 235, and cases there cited.

It is also objected by Telford that he paid George W. Cone a commission of 2 per cent. on the $12,000, or $240, and that such payment made the loan usurious. This depends upon the question whether or not Cone was the agent of Telford in procuring the loan from Ryhemer & Co. If appellant employed Cone to get the money, and paid him a commission for so doing, the lenders cannot, for that reason, be charged with usury. The trial court found that Cone was appellant's agent in the premises, and we think that such finding is supported by the evidence. As the appellant alleged usury, the burden was on him to prove it, and it was his duty to establish it by a preponderance of the evidence. He has failed to do so. Boylston v. Bain, 90 Ill. 283;Kihlholz v. Wolf, 103 Ill. 363;Hoyt v. Pawtucket Inst. for Savings, 110 Ill. 390;Cox v. Insurance Co., 113 Ill. 382.

It is further urged that there was usury in the fact that appellant paid interest upon the overdue interest for one year. It seems that appellant went to St. Louis some time in 1886, and there paid Garrels $720 for the interest due on the $9,000 for the year from April 21, 1884, to April 21, 1885; and also at the same time paid some interest on the $720 from April 21, 1885, when it was due, up to the date of its payment, in 1886. Where a debtor has agreed to pay annual interest, and, upon a settlement with his creditor, consents to allow interest on such annual interest not paid when due, the transaction is not illegal. Haworth v. Huling, 87 Ill. 23. The claim made by Garrels for interest on the overdue interest was acquiesced in by appellant, and the amount claimed was paid by him. The transaction was thereby ended, and cannot affect the validity of the notes remaining unpaid.

Second. It is assigned as error that the decree allows the sum of $250 for a solicitor's fee. The trust-deed contains a provision that, in case of foreclosure, reasonable attorney's and solicitor's fees may be paid out of the proceeds of sale, and the evidence shows that the amount allowed is a reasonable fee for the services rendered. Under circumstances, the decree was not erroneous in providing for the payment of such amount. McIntire v. Yates, 104 Ill. 491.

Third. It is further assigned as error that the decree requires Telford alone to pay the amount due, and that such decree is not against Mrs. Telford, although she signed...