Case ID: iowa_29/html/0120-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Cole, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Conrad v. Gibbon.
    Usury: interest : penalty. Promissory note in the following form: “One year after date for value received we promise to pay C., or order, the sum of $480 ; and, if not paid when due, we promise to pay, as a penalty for the default, interest on said sum at the rate of 20 per cent per annum from maturity. This note may run at above rate for two years, interest to be paid annually.” Held, in an action thereon, that the note was not usurious upon its face, the 20 per cent being construed as a penalty, and the plaintiff held entitled to recover interest at the legal rate. Following Shuck v. Wight, 1 Greene. 128; and Gower <$■ Holt v. Carter fy Shattuck, 3 Iowa, 244.
    
      Appeal from General term, Eighth District (Tama County.)
    Friday, June 17.
    Action upon a note, and to foreclose a mortgage given to secure the payment of it. Trial to the court who found the facts and rendered judgment for plaintiff. The defendant appealed to the general term, where the , judgment was affirmed, and he now appeals to this court.
    
      Stivers & Safely, for the appellant.
    
      Strvihhle & Bradshaw, for the appellee.
   Cole, Ch. J.

The note sued upon reads as follows : “$480. Iowa City, August 8, 1855. One year after date, for value received, we promise to pay Victor L. Conrad or order, at the banking-house in Iowa City, the sum of four hundred and eighty dollars ; and if not paid when due, we promise to pay, as a penalty for the default, interest on the said sum at the rate of twenty per cent per year from maturity. This note may run at above rate for two years, interest to be paid annually.” This note was duly signed and had indorsements on it of five successive payments of eighty dollars each, in full for each year’s interest up to August 8, 1861. The defense was by answer in denial, usury and statute of limitations. The cause was tried to the court; no testimony is contained in the transcript, but there is the following finding of facts by the court, to wit: 1. That the note sued on and the mortgage were duly executed and delivered as stated in the petition. 2. That the mortgage was duly filed for record, etc., and duly recorded. 3. That there is now due, on the noté and mortgage to the plaintiff, the sum of two hundred and seventy-eight dollars and fifty-three cents, computing interest at six per cent per annum thereon from maturity, after deducting payments indorsed on the note. Judgment was rendered accordingly.

The only question made by counsel on this appeal, is, whether upon this finding of facts there was usury. There is no showing as to what this note was given for, whether it was part consideration for the land mortgaged to secure it, or for sale of other property, or for loan of money; or whether it was given in this form for the purpose or with the intent of evading the usury laws. In the absence of any such showing the authorities are uniform that it is not usurious. Wight v. Shuck, Morris, 425; Shuck v. Wight, 1 G. Greene, 128; Gower & Holt v. Carter & Shattuck, 3 Iowa, 244, and authorities cited on page 252. See also 3 Pars. on Cont. 116, and cases cited in note s; Gilmore & Smith v. Furguson & Cassell, 28 Iowa, 220. In view of these authorities, it is clear that the plaintiff did not recover more than he was entitled to; and the defendant only appeals.

Affirmed.