Yellow Medicine County Bank v. Cook
| Decision Date | 27 June 1895 |
| Docket Number | 9371--(114) |
| Citation | 63 N.W. 1093,61 Minn. 452 |
| Parties | YELLOW MEDICINE COUNTY BANK v. GEORGE COOK and Another |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from an order of the district court for Yellow Medicine county, Powers, J., denying a motion for a new trial. Reversed.
Order reversed.
E. T Young, L. H. Schellbach, and W. A. Lancaster, for appellant.
D. A McLarty and A. J. Volstead, for respondents.
June 4, 1892, defendants, brothers, carrying on quite a large farm together, executed and delivered their promissory note to plaintiff, an incorporated state bank, due in 6 months, for $ 3,500, with interest payable in advance. To secure its payment, and at the same time, defendants executed and delivered a second mortgage upon real estate, their farm, and a chattel mortgage on all of their personal property including growing crops. This action was brought to recover possession, or value, in case a delivery could not be had, of a portion of the mortgaged personal property, and the defense was usury. The defendants had a verdict, and plaintiff appeals from an order denying a new trial.
We reverse the order squarely on the ground that the verdict, when we apply the proper rule in this class of cases, was manifestly and palpably against the evidence. It therefore becomes important for us to go into the facts and circumstances surrounding this transaction, as they appeared on the trial, quite in detail, for we frankly admit that a reversal of this character is quite an uncommon event in this court. It would not now occur, if we were not abundantly satisfied that a wrong and injustice has been accomplished under the plea and guise of the necessity of a strict enforcement of the laws respecting usury in this state, and that on the evidence an unbiased and impartial jury should have found for the plaintiff. While this court has steadily upheld these laws to their full intent and purpose, and has performed its part in seeing that they were not evaded or defied by any trick or artifice, and while we have no intention to depart from the well-established rule as to a conflict of testimony in ordinary cases, we do not feel inclined to witness and allow what we regard, on the facts, as a clear perversion of a salutary legislative enactment, and the perpetration through it of a fraud upon those who, more fortunate than their neighbors, perhaps, have money to lend. From a number of facts and circumstances we feel confident that this is just what was attempted here.
The defendants had borrowed money of another party, giving a mortgage on this same real property, and their indebtedness on this account amounted to $ 3,138, at the time of the loan here involved. But this debt was not due for six months. George Cook then applied to Mr. Welcome, president of the plaintiff bank, for a loan sufficient to pay off the mortgage debt not yet due, about $ 42 due as taxes on the land, the incidental costs and expenses connected with the making of the loan, and, according to the president's testimony, an additional sum, about $ 130, sufficient to pay one Alke for seed grain already obtained and sown on the farm by the defendants. George Cook denied that anything was said about paying Alke out of the amount so to be loaned.
Two or more interviews were had in the bank, between George Cook and the president, about the money, in which, the latter testified, the former was told that the rate of interest would be 10 per cent., and no more. Cook, upon the other hand, testified that nothing whatsoever was said about the rate of interest until the note and mortgages were prepared and signed by both defendants, June 4, when he was told, in the presence of his brother, Henry Cook, the co-defendant, that the interest would be 10 per cent., payable in advance, and that a bonus of $ 140 would also be exacted. Henry Cook was also positive that he heard the president say June 4, which was Saturday, that a bonus of $ 140 would be required for the use of the money. He could not remember what rate of interest was asked, or anything further of the conversation, but his recollection of the amount of the bonus seemed vivid, for, as he expressed it, "I had it printed down in my head." All of these conversations and negotiations were had behind the counter of the bank, the room itself being very small, in the presence of, and, according to their testimony, in the hearing of, the cashier, the teller, and the clerk of the bank. These three persons denied that anything was said about a bonus, or that any money was retained as a bonus, and stated that it was agreed that the interest should be 10 per cent., payable in advance.
The president testified that when he inquired of George Cook why he wished to borrow money for six months to pay off a note not due until that period of time had expired, he was answered that defendants were tired of paying usurious interest to the party then holding the other note. Cook denied having made this statement, but in no manner did he attempt to explain why, with the money already secured to his use for six months, without any necessity for so doing, he should apply to plaintiff for a loan to cover the same period of time, without an inquiry as to the rate of interest, agree to pay several dollars in the way of expenses in making out and recording papers and in an examination of the title, and finally take the money at the highest legal rate of interest, and in addition submit, without a word of remonstrance, to an extortion amounting to downright robbery.
It was undisputed at the trial that the plaintiff paid to the party holding the other note the sum of $ 3,141, as principal interest, and exchange, that there was paid $ 42.40 for taxes, and that the expenses before mentioned were $ 10. After deducting the interest, as agreed on, there was left $ 131.60 to be accounted for. On the part of plaintiff it was contended that payment for the seed grain was to be made by plaintiff to Alke, and that Cook was to come with him to the bank that the payment might be made; that Alke and Cook did come to the bank together two days later,...
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