Case ID: wis_14/html/0648-01.html
Source: Caselaw Access Project
Author: {"author": "Dixon, O. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Patterson vs. Storm and wife.
    In this case, which turned upon the question whether a contract for a loan of money was made on the day when the bond and mortgage bore date, or some three weeks afterwards when they were in fact drawn up and executed, the court held upon the evidence, that the contract was not concluded between the parties on the day the papers bore date, and that they were antedated for the purpose of avoiding an intervening statute against usury.
    APPEAL from the County Court of Milwaukee County.
    This was an action brought in June, 1860, to foreclose a mortgage made by the defendants to one Brydges, and by him assigned to the plaintiff. The mortgage and the bond secured by it bore date April 1, 1859, and were given to secure the payment of $1,300 in two years after that date, with interest to be paid annually at the rate of twelve per cent, per annum. The mortgage contained a stipulation that in case of the non-payment of interest at any time when it should fall due, the whole amount of the principal should, at the option of the mortgagee or his assigns, be deemed to have become due, and be collectable by foreclosure as if made'paya'-ble at that time. The interest falling due by the terms of the bond on the 1st of April, 1860, was not paid, and the plaintiff gave notice to the mortgagor of his election to consider the whole amount due. The assignment of the mortgage and bond to the plaintiff also bore date April 1, 1859.
    The defense was usury, the answer alleging, among things, that the agreement for the loan was perfected on the 22d of April, 1859, at Milwaukee; that the bond and mortgage were made and delivered on that day, and dated April 1, 1859, for the purpose of evading the usury act which took effect on the 5th day of that month; and that the only consideration of the bond and mortgage was the sum of $988 lent to the mortgagor, Isaac Storm, on the day they were executed, the sum of $812 being deducted and reserved out of the sum named in the bond as and for interest on said sum for two years, in addition to the twelve per cent, interest expressly reserved on the face of the bond; and the defendants insisted that the bond and mortgage should therefore be declared void, and that the plaintiff should pay the defendants their costs, &c.
    As the only question considered on the appeal in this court was, whether the contract for the loan was really made on the 1st of April, 1859, or on the day the bond and mortgage were executed, it is sufficient to say that the circuit court found that a contract was made between the plaintiff and Isaac Storm on the day first named, for the loan of $1800, to bear interest from that date at 12 per cent, per an-num ; and that the sum of $988, a part only’of the amount agreed to be loaned, was paid over and loaned by the plaintiff to said Storm on the 22d of the same month, and the mortgage was then executed, in pursuance of said previous agreement; and, as conclusions of law, the court held that such agreement was not in violation of the act against usury which went into operation on the 5th of April, 1859, or any other law of the state, and that the plaintiff was entitled to judgment of foreclosure and sale to make the.sum of $988, with interest from the 1st of April, 1859, at 12 per cent, per an num. The defendants excepted to each finding of fact and conclusion of law.
    The evidence as to the time when the loan was made was substantially as follows. Isaac Storm testified: “I made a loan of the plaintiff on the 20th of April, 1859. On that day I asked the plaintiff if I could have a loan; the plaintiff said I could kave a l°ari rá" enough to pay off the incumbrance on my farm, say about $900 or $1000. As I started away from theplain-tiff’s bouse, be said, “ A new law bas been passed prohibit-mg my taking more than 10 or 12 per cent., and I cannot let you have it unless you will give me 24 per cent, and agree not to make a fuss about it.” I agreed to this. He said be could not do tbe business, but Mr. Rodway would,. He introduced me to Rodway, and left. Rodway wanted an abstract of tbe title of my land. I went for it, and returned next day, and on tbe 22d tbe bond and mortgage were drawn and executed. Tbe plaintiff suggested on tbe 20tb that tbe bond and mortgage should run to a third person, and that- be would then purchase them, but didn’t want to know where the money came from. Rodway said that Mr. Brydges should be tbe third person; be did not say what tbe object was in making tbe papers run to Brydges; I did not know Brydges. I bad talked with tbe plaintiff three or four times about loaning money; I called at bis bouse three or four times; it was mere street talk; no agreement was made. Every time that I talked with tbe plaintiff be said be bad no money to loan but would have some soon, until about tbe 10th of April, when be said be bad tbe money for me, and I came in for it as soon after as I could.” Win. H. Rodway testified: “Tbe bond and mortgage were executed and delivered to me as tbe plaintiff’s agent on tbe 22d of April, 1859. I saw plaintiff and defendant in tbe street about six weeks before that time. Plaintiff introduced me to defendant early in March. I saw tbe abstract of defendant’s title before tbe 21st of April, 1859. I am positive that be and I made tbe agreement, about eight or ten days before. I bad no conversation with him about tbe abstract on tbe 20th.— I made tbe agreement to loan tbe defendant $1,800, at my office, about 11 o’clock, on tbe 1st day of April, 1859. He bad been to see me several times. Tbe agreement was not made till that day. I told him be could have tbe money, because I knew it was ready for him. I drew tbe money from tbe bank on tbe 22d of April, I think, and paid it to him. He came in on that day and wanted to know if be could have, tbe money. I told him be could. Tbe terms and conditions were made in March. I told him then he could have the money when he perfected his title. He said, ‘You wont let any one else have the money, will you ?’ I said, ‘No; the money is held for you ; reccollect you are paying interest on the money as it is now in the Juneau Bank.’ This was on the 1st of April, 1859. We did not then know how much it would take to pay off the incum-brances on his farm. I dont know that anything further was said except that he was to complete his abstract of title. I don’t know that the rate of interest was ever mentioned. I did not receive the money from Mr. Patterson; he drew a check in blank for me and left it at his house with his wife, and I knew I could get it at any time. I did nqt see the plaintiff and Mr. Storm together during the month of April, 1859. The terms of the bond and mortgage are the same as talked of,by myself and Mr. Storm previously, and were closed April 1, 1859; and that was the reason they were dated that day. I did not know of the law passed April 5, 1859.” The plaintiff testified: “I did not see Storm in April; I saw him in March; don’t know that I had any conversation with Bodway about making mortgage to a third person; I furnished my money to Bodway to loan as he had a mind to. I signed the check I- gave him on the Juneau Bank, about the last of March. I can’t say whether I had $1,800 on deposit in that bank from the 1st to the 22d of April, 1859 ; but if not, I had it where I could command it any time. Bodway and Storm concluded their negotiation on the 1st of April, 1859, and that is the reason the papers were dated on that day.”
    
      J. La Due, for appellant:
    The day of the loan, the time when the liability of the debtor is actually incurred, is the time when the corrupt agreement is made. Blydenburgh on Usury, 181-2; Harris vs. Hudson, 4 Esp. N. P. Oases, 152; Carlisle vs. Trears, Cowp., 671. It is necessary that the debt be absolutely incurred and not merely resting on an executory agreement, the execution of which depends on circumstances that may never happen. 4 Brown’s Oh. B., 28; 4 Hay, 318; 19 Johns., 294; 6 Wend-’ 415 ; 8 Oow., 706 ; 6 Wend., 595 ; 8 Mass., 14 Maine, 240; 1 Greenleaf, 167.
    
      James Mitchell, for respondent:
    The contract was complete when the plaintiff agreed to loan the money on the terms agreed, and the defendant agreed to talce it and secure it by his bond and mortgage. The bond and mortgage are only evidence of the contract, which was complete without them. Chitty on Con., 10th Am. Ed., 4; 3 Scott, 238, 250; 5 Taunt., 788 ; 6 East, 307; 1 Parsons on Con., 899; 10 E. L. & Eq., 182. See also Banlcs vs. Van Antwerp, 5 Abb. Pr. R., 411.
    December 30.
   the Gowrt,

Dixon, O. J.

We are satisfied that the antedating of the bond and mortgage was merely colorable, and that it was done for the purpose of avoiding the effect of the act against usury which went into operation on the 5th of April. This conclusion seems so obvious from the whole evidence, that we deem a particular examination of it unnecessary. The circuit judge found that the agreement for the loan was made on the 1st day of April, the day to which the bond and mortgage were dated back. In this we think he is not sustained by the testimony. Nothing was consummated— no binding or valid agreement made, upon which either party could have had a remedy against the other, until the 22d of April, when the bond and mortgage were executed and the money paid over. Giving the utmost weight to the testimony of the plaintiff’s agent, Eodway, there was no such agreement — nothing more than an application on the part of the defendant to borrow, and a general offer by the plaintiff to lend. He testifies expressly that he does not know that the rate of interest was ever mentioned. This was a very important part of the agreement, and, from the general features of the case and the manner in which1 the business was closed, we cannot believe that it would have been overlooked if the parties had come to a final and definite understanding upon the subject. The agreement for interest, therefore, was, upon the plaintiff’s own showing, made on the 22d of April, at which time also, in our judgment upon the facts, the loan itself was made.

The judgment must therefore be reversed, and the cause remanded for judgment to be entered for the defendants according to the prayer of their answer.