Case Name: LITTLE, Respondent, v. HOOKER STEAM PUMP COMPANY et al., Defendants, FARRAR, Appellant
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1907-02-05
Citations: 122 Mo. App. 620
Docket Number: 
Parties: LITTLE, Respondent, v. HOOKER STEAM PUMP COMPANY et al., Defendants, FARRAR, Appellant.
Judges: All concur; Nortoni, Jin a separate opinion.
Reporter: Missouri Appeal Reports
Volume: 122
Pages: 620–631

Head Matter:
LITTLE, Respondent, v. HOOKER STEAM PUMP COMPANY et al., Defendants, FARRAR, Appellant.
St. Louis Court of Appeals,
February 5, 1907.
(Opinion by Bland, P. J.)
1. PRACTICE: Opinion of Trial Judge: Verdict. An opinion filed by the trial judge cannot be treated as a special finding of facts on appeal; a general verdict 'with, substantial evidence to support it will not be disturbed by the appellate court, regardless of an opinion by the trial court.
2. USURY: Commissions: Agent. Under section 3709, Revised Statutes of 1899, a commission exacted for loaning money in excess of the legal interest is usurious and should be deducted from the amount recovered in an action for the money loaned; «this is true although the commission is charged by the agent of the lender and without the knowledge of his principal.
(Concurring Opinion by Nortoni, J.)
3. -: Penal Statute: Strict Construction. Section 3709, Revised Statutes of 1899, is in its nature penal, works a forfeiture of contract rights, and should be strictly construed; it ought not to be construed so as to affect with the .taint of usury a loan in which the agent of the lender charged a commission in excess of the legal rate of interest without the knowledge of his principal.
4. -: -:-.' While it is the duty of this court to follow the last utterance of the Supreme Court in construing section 3709, Revised Statutes of 1899, in case of Western Storage Co. v. Glasner, 169 Mo. 38, the decision in this case by following it is contrary to a previous decision of the Supreme Court in the case of Landis v. Saxon, 89 Mo. 375, and the case is therefore certified to the Supreme Court.
Appeal from St. Louis City Circuit Court. — Hon. O. Orrick Bishop, Judge.
Reversed and remanded with directions, and transferred to Supreme Court.
Christy M. Farrar and Robert L. MeLaran for appellant.
(1) The test of usury in a contract is whether it would, if performed, result in securing a greater rate of profit on the subject-matter than is allowed by law. Webb on Usury, par. 29. Usury may be pleaded in defensa of civil actions in this State, and same in excess of eight per cent per annum shall be deemed payment and credited upon the principal debt, whether paid as commission or brokerage, or as payment upon the principal, or as interest on said indebtedness, and all the costs of the action shall be taxed against the party guilty of exacting usurious interest. R. S. 1899, sec. 3709; Western Storage Co. v. G-lasner, 169 Mo. 38, 68 S. W. 617. (2) Authority to make a usurious loan will be presumed where the agency is a general, not a special, one, without actual knowledge of the principal of the usury received. Webb on Usury, par. 89; Rogers v. Buckingham, 33 Conn. 81; Stein v. Swensen, 46 M'inn. 360; Austin v. Harmington, 28 Yt. 130; Brown v. Archer, 62 Mo. App. 277; Siegelman v. Jones, 103 Mo-. 172.
Joseph Barton for respondent.
(1) The fact that the agent of the lender or creditor, without the knowledge of his principal, exacts a commission from the borrower or debtor as a condition of the loan or extension of credit, the lender or creditor receiving no part of such commission, either directly or indirectly, will not render the transaction usurious. 29 Am. and Eng. Ency. Law (.2 Ed.), 502; Condit v. Baldwin, 21 Barbour (N. Y.) 181; Stillman v. Northrupp, 109 N. Y. 473; Call v. Palmer, 116 U. S. 98. (2) An agent for loaning money may take a reasonable commission from the borrower, even with the knowledge of the lender, and still the transaction will not be usurious, though the amount of interest reserved to the lender be the full lawful interest. Landis v. Saxton, 89 Mo. 380.

Opinion:
BLAND, P. J.
Suit on two promissory notes, commenced before a justice of the peace and in due course appealed to the St. Louis Circuit Court by Sallie C. Farrar, the other defendants not joining in the appeal. The cause was tried de novo in the circuit court without the aid of a jury. Judgment was rendered for plaintiff on both notes. The defense was usury. The prinicpal of one of the notes was four hundred and fifty dollars and the other three hundred and sixty dollars, and both were given for borrowed money. The loans were negotiated by W. C. Farrar, a son of Sallie C. Farrar, through John Mackler, a loan agent or'broker, and the general agent of plaintiff for the loaning of her money. On the note for four hundred and fifty dollars, Mackler testified he charged a commission of twenty-five dollars. Defendant's evidence tends to show he charged a commission of fifty dollars, and the preponderance of the evidence on this charge is with the defendant. In regard to the three-hundred-and-sixty-dollar note, Mackler testified Farrar proposed to pay him a commission of thirty dollars; that he made the loan and took out thirty dollars for his commission. The money loaned in each instance was the plaintiff's and the notes were indorsed and turned over to her. She received no part of the commissions paid to Mackler and had no knowledge or information that they were paid until after the suit was brought and the defense of usury was interposed, though she testified she paid Mackler nothing for his services as her agent. She had a private drawer in Madder's safe, to which drawer both she and Mackler had a key. She testified that Mackler had made a good many loans for her, and the notes securing such loans were kept in her private drawer in Madder's safe and the credits of payments were entered upon these notes by herself or Mackler as they were made, and when partial payments were made to Mackler he would notify her and she would go to his office and get the check for the money; that when she had money to loan, Mackler loaned it for her and she entrusted the loaning of her money entirely to him.
1. No declarations of law were asked or given. The learned circuit judge prepared and filed an opinion in the case, which is copied in the abstract of the record, and Ave are asked by defendant to treat this opinion as a special finding of the facts by the judge. In regard to an opinion filed in a case by the trial judge, the Supreme Court, in Mead v. Spaulding, 94 Mo. 1. c. 47, said: "Counsel for the plaintiff in error seems to suppose we will look to the written opinion of the trial court to learn how the disputed facts were found. We find no such opinion in the transcript. Even if incorporated in the bill of exceptions, it Avould be no part of the record. Such opinion cannot be made to take the place of instructions, or a finding of facts given as an instruction. The opinion of the trial court may be cited and used in the consideration of the case presented by the record, and in that respect is often of great value to us; but it is no part of the record upon which the case must be determined in this court."
The verdict is a general one and is not subject to review on appeal (Weilandy et al. v. Lemuel, 47 Mo. 322; Bray v. Kremp, 113 Mo. 552), and it is not enough to authorize the court to interfere Avith a general verdict whether found by the court sitting as a jury or by a jury, that the evidence, in the opinion of the appellate court is insufficient; if there is any substantial evidence to support it, it must stand. [James v. Life Assn., 148 Mo. 1, 49 S. W. 978.]
2. On the trial defendant introduced evidence tending to show the three-hundred-and-sixty-dollar note was delivered to Mackler as security for the payment of certain bank checks delivered to him at the same time. Plaintiff's evidence tends to show the note was given for an out-and-out loan and the court so found, therefore, this issue is not reviewable by us. It is shown by plaintiff's evidence that Mackler was her agent in making the loan. The notes are for the highest legal rate of interest (eight per cent) and it is not controverted that a commission was exacted by Mackler for each loan. The question, therefore, is whether or not the notes were tainted with usury in the hands of plaintiff, who had no knowledge of the exaction of the commissions and received none of the benefits.
In Landis v. Saxon, 89 Mo. 1. c. 380, Judge Black said: "An agent for loaning money may take a reasonable commission from the borrower, even with the knowledge of the lender, and still the transaction will not be usurious, though the amount of interest reserved to the lender be the full lawful interest." This ruling is supported by Stillman v. Northrop et al., 109 N. Y. 473, by Call v. Palmer, 116 U. S. 98, and by the text, paragraph 2, page 502, volume 29 (2 Ed.), American and English Ency. of Law, and by the many cases, cited in a note, from the States of Arkansas, Illinois, Iowa, Minnesota, Mississippi, New Jersey, New York, Oregon, Texas and Vermont. Such was the law in this State prior to 1891, when an act was passed by the Legislature, making a radical change in the law of usury. There are two> sections of the act. The first (now section 3709, R. S. 1899) reads as follows:
"Usury may be pleaded as a defense in civil actions in the courts of this State, and upon proof that usurious interest has been paid, the same, in excess of the legal rate of interest, shall be deemed payment, shall be credited upon the principal debt, and all costs of the action shall he taxed against the party guilty of exacting usurious interest, who shall in no case recover judgment for more than the amount found due upon the principal debt, with legal interest, after deducting therefrom all payments of usurious interest made by the debtor, whether paid as commission or brokerage, or as payment upon the principal, or as interest on said indebtedness."
In Western Storage & Warehouse Co. v. Glasner, 169 Mo. 1. c. 47, Makshall, J., said : "It will thus be observed that under the law, all payments, whether made in the shape of interest, or commissions or brokerage or as principal, may be deducted from the sum actually loaned with legal interest added, and if the sum so paid in any of the said shapes or forms, or by whatever name it might be called, equals the loan and legal interest, the debt is considered paid and discharged."
The commission exacted by Mackler of fifty dollars on the one and thirty dollars on the other of the notes, if legal interest be added, aggregates eighty-seven dollars and sixty cents. This amount the learned trial judge failed to deduct from the total amount of four hundred and ninety-seven dollars and sixty-seven cents he found to be due on the two notes. The statute is imperative that the deduction of the commission and added interest be made. If it had been made by the trial court, the judgment would have been for four hundred and ten dollars and seven cents. It is therefore considered that the judgment be reversed and the cause remanded with directions to the circuit court to enter judgment for plaintiff for four hundred and ten dollars and seven cents, to bear interest at the rate of eight per cent per annum from the date of the entry of the original judgment, to-wit, November 20, 1905, and that all the costs in the lower court be taxed against plaintiff.
All concur; Nortoni, Jin a separate opinion.