Case Name: RICHARDS v. BIPPUS
Court: Court of Appeals of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1901-05-22
Citations: 18 App. D.C. 293
Docket Number: Note 1051
Parties: RICHARDS v. BIPPUS.
Judges: 
Reporter: Reports of Cases Adjudged in the Court of Appeals of the District of Columbia
Volume: 18
Pages: 293–306

Head Matter:
RICHARDS v. BIPPUS.
Husband and Wife; Estoppel; Bills and Notes; Usury.
1. Where, in a suit by a married woman on a note payable to her, her uneontradieted testimony is that the money loaned was not acquired by gift from her husband, but was her separate property acquired from the sale of her real estate in Georgia, it will probably not be presumed, in the absence of proof of the law of Georgia relating to the property rights of married women, that the common-law rule which would make the proceeds of such a sale the property of the husband, prevails in that State; or that the husband’s acquiescence to the wife’s claim to the money after its receipt makes it hers by gift or conveyance from him, within the meaning of R. S. D. C., Sees. 727-729.
?. Where one borrows money from a married woman and gives his promissory note for it, payable to her and not to her husband, and is given credit for payments made upon it, and has no pretense of set-off or counterclaim against the husband, he is estopped to deny her capacity to sue on the note for the sole purpose of avoiding payment of the debt.
3. A promissory note or other obligation is affected with usury if the principal makes the loan knowing that his agent has exacted a bonus or commission, though for his own sole benefit, which, with the interest payable to the principal, 'would amount to more than the rate permitted by law.
4. In a suit on a promissory note, payable six months after date with interest, where the contract is shown to have been usurious, while recovery can be had of the principal only, interest is recovei’able at the rate of 6 per cent, per annum, after maturity of the note; construing Sec. 713, R. S. D. C., imposing the rate of 6 per cent, interest per annum upon the loan or forbearance of money; See. 714, id., making it lawful to eontxaet in writing for 10 per cent, or less; Sec. 715, id., providing that if more than 10 per cent, shall be contracted for, the whole of the interest contracted for shall be forfeited and the principal only recoverable; and See. S29, id., providing that 6 per cent, per annum shall be awarded on all judgments in action upon contracts until satisfied, “ and the amount which is to bear interest and the time for which it is to be paid shall be ascertained by the verdict of the jury sworn in the cause.”
Note 1051.
Submitted April 11,1901.
Decided May 22, 1901.
Hearing on an appeal by the defendant from a judg ment of the Supreme Court of the District of Columbia, entered upon the verdict of a jury directed by the court, in an action upon a promissory note.
Modified and affirmed.
The Court in its opinion stated the case as follows:
This action was begun by Eunice C. Bippus, as plaintiff, in the Supreme Court of the District, to recover upon a note for $350 executed by Charles S. Bichards, September 6, 1894, and payable six months after date to the order of said Eunice C. Bippus, with interest at 10 per cent, per annum. Credits to the amount of $35 were admitted.
In addition to a formal plea of non-assumpsit, defendant pleaded, first: That plaintiff was, at the time of the execution of the note, and is now, the wife of one John Bippus, and the cause of action is not in relation to her separate estate ; and, second: That the transaction was usurious.
Upon these pleas issue was joined. Plaintiff testified on her own behalf by deposition tahen in Colorado. She said that she and her husband, John Bippus, were living in the District of Columbia on and before the date of the execution of the note. She had $300 in money, which was her separate property, derived from the sale of her real estate in the city of Atlanta, Georgia; and that it was not acquired by her, directly or indirectly, by gift or conveyance from her husband.
This money she lent to Bichards on September 6, 1894, who executed his note to her for $350.
In reply to the interrogatory, “ If you only gave $300, why was the note drawn for $350 ? ” she answered: “ The loan was negotiated by my husband, Mr. John Bippus, for Mr. Bichards, the defendant. Mr. Bichards promised to pay Mr. Bippus a commission of $50 for the latter’s services in the transaction. As a matter of convenience, this $50 was included in the note and is to be paid to Mr. Bippus by me when the note is paid.” John Bippus received the note and delivered it to plaintiff, who thereafter held it.
Defendant testified that fie received $300 from John Bippns, wfio represented the money as his own, and agreed to pay him a bonus of $50 for making tbe loan; tbat Bippus wanted tbe note payable to bis- wife, “ because be bad some financial troubles in tbe South,” and defendant executed it as written. He also said tbat tbe first payment upon tbe note was by check for $25 payable to John Bippus, whose letter acknowledging tbe same was produced, under date October 1, 1896. Tbe letter expressed tbe hope tbat defendant would remit more during tbe month upon tbe reason, thus expressed, “ as my expenses more than eat up my income.”
Tbe court refused a prayer for a charge to tbe jury to find for tbe defendant if they believed tbe money received was not tbe separate property of tbe plaintiff, and also one tbat tbe plaintiff could recover, if at all, only tbe actual sum lent tbe defendant less tbe credits shown. At request of tbe plaintiff, tbe court instructed tbe jury to find for her the-sum of $300 with 10 per cent, interest from date to tbe maturity of tbe note and 6 per cent, per annum thereafter, less $35 of credits. Defendant excepted to tbe several rulings of tbe court and appealed from tbe judgment rendered upon tbe verdict, returned in accordance with tbe instruction aforesaid.
Mr. W. C. Prentiss for tbe appellant:
1. Tbe appellee fails to trace to Richards’ bands tbe money claimed to have been hers. If her husband was tbe real principal, as tbe testimony of Richards tends to show, tbe note in legal effect was payable to bim and be could sue alone thereon (State v. Krebs, 6 H. & J. 31), and title in a stranger would have to be derived through indorsement by bim. But tbe wife claims, not as purchaser, but as payee, and tbe burden is on her to show that she was tbe real principal, disclosed or undisclosed. See Trimble v. Thorson, 80 Iowa, 246.
2. There is no evidence of separate estate. It is incumbent upon tbe wife to allege and prove tbe facts establishing separate estate and giving her a right to sue. Edwards v. Sheridan, 24 Conn. 165; Ridgeley v. Crandall, 4 Md. 442; Barr v. White, 22 Md. 265; Fiske v. Bigelow, 2 MacA. 427; Offutt v. Dangler, 5 Mackey, 313; Foertsch v. Germuller, 9 App. D. C. 357. The burden is upon the wife to establish separate estate, and the presumption is always that money or property belongs to the husband. Seitz v. Mitchell, 94 U. S. 580; Reeves v. Webster, 71 Ill. 307; Jolmson v. Johnson, 72 Ill. 489; Quigley v. Swank, 11 Pa. Sup. Ct. 602; Hord v. Owens, 20 Tex. Civ. App. 21; Clark v. Clark, 21 Tex. Civ. App. 371; Hydrick v. Burk, 30 Ark. 124; Hewitt v. Burritt, 3 App. D. C. 229; Edwards v. Entwisle, 2 Mackey, 43.
3. In the absence of proof to the contrary, the property rights of married women in the States will be presunied to be the same as in this District. Howard v. C. & O. RR. Co., 12 App. D. C. 300. Or that the common law is still in force. Van Ingen v. Brabrook, 27 Ill. App. 401; King v. O'Brien, 33 N. Y. Sup. Ct. 49; Hydrick v. Burk, 30 Ark. 124. And the burden is still upon her to show how she acquired title, the presumption being that the husband’s money purchased. Quigley v. Swank, supra; Clark v. Clark, supra; Hydrick v. Burk, supra; Storrs v. Storrs, 23 Fla. 274. And this burden is not removed by her answer in the negative to the direct interrogatory — “Was it (the money loaned Nichards) or any part of it, acquired by you, directly or indirectly, by gift or conveyance from your husband ? ” — for her answer is merely a conclusion of law from facts not disclosed. Johnson v. Johnson, 72 Ill. 489.
4. If the plaintiff’s proof does not wholly fail, it is not conclusive. The appellee’s testimony being taken on written interrogatories, the onus is more strongly upon her to disclose the facts. In such case, imperfect and evasive answers go to credibility. Weeks on Depositions, Sec. 504.
5. Had the husband been acting as agent, lending his wife’s money, he would, no doubt, have taken a note payable to himself for his bonus, as is usually done in such cases. Trimble v. Thorson, 80 Iowa, 246.
6. There is no escape from the taint of usury. Viewing the transaction in the light most favorable to the appellee and admitting, for the sake of the argument, that the husband was not principal in the transaction, we have the case of the lender’s agent exacting a commission of 33 1-3 per cent, per annum in addition to interest at 10 per cent, per annum, and including the commission in the principal of the note drawn to the order of the lender, with the knowledge and approval of the lender, who accepts the note and sues upon it, claiming the firll amount in her declaration and affidavit under the 73d Rule. In Sullivan v. Snell, 1 MacA. 587, a note for $500 at 90 days, negotiated for $460 to the first holder, was held usurious.-' A bonus included in the principal of a note is treated as interest, and if, added to the interest expressed, it exceed the legal rate, the transaction is usurious. 27 Encyc. of Law, 1009. Upon the general subject of commissions or bonuses, see Upton v. O’Donahue, 49 N. W. Rep. 267; Bank v. Flint, 54 Ark. 40; Ammondson v. Ryan, 111 Ill. 506; Borcherling v. Trefz, 40 N. J. Eq. 502; Meers v. Stevens, 106 Ill. 549; Sherwood v. Roundtree, 32 Fed. Rep. 113.
Mr. Thomas M. Fields for the appellee:
That the matters recited in evidence do not charge the appellee with usury, see Abb. Tr. Ev. 1010, 1011, and cases cited; Leonhard v. Flood, 56 S. W. Rep. 781; Dellerby v. Goodwyn, 37 S. E. Rep. 376; West v. Equitable Mortgage Co., 37 S. E. Rep. 357. Even a court of equity will not relieve against usury unless the loan with legal interest has been repaid. Stanley v. Gadsby, 10 Pet. 521; Ohapman v. Clark, 3 Mackey, 185. Even actual usury between Richards and John Bippus, of which the ap]Dellee had no knowledge or to which she was n-ot a party, could not affect her. Mon-cure v. Dermott, 13 Pet. 345. So the payment of a sum in addition to legal interest, when dependent upon a contingency, does not render the transaction usurious. Spain v. Brent, 1 Wall. 604. Commissions paid by a borrower to a third person will not render the loan usurious. Grant v. Phœnix Life Ins. Co., 121 U. S. 105.
The appellant has suffered nothing whatever from the alleged usury. He has not paid it. Even the small sum which he has paid was not applied to the $50 commissions, as it could have been, but was credited upon the actual money and interest due from him. His defense in this cause is utterly devoid of moral and legal support, and is only an attempt to avoid what he himself admits to be a just and unpaid loan by supposed legal technicalities. The judgment merged the note, and he can never be called upon by any person to pay the $50, about his mere agreement to pay which — not payment or liability for payment — he makes so much complaint, and by reason of which he seeks to evade his just debt which he owes to the appellee. He shows no case which entitles him to any aid from a court of justice.

Opinion:
Mr. Justice Shepard
delivered the opinion of the Court:
1. There was no error in refusing the defendant's prayer for an. instruction founded on his first plea. Plaintiff's direct evidence that the money lent to defendant was her separate property, underived by gift or conveyance from her husband, is assailed as -insufficient because it appears that it was obtained from the sale of her land in Georgia. The contention is, that in the absence of proof of the law of Georgia relating to the property rights of married women, the presumption is that the rule of the common law prevails there; and that, consequently, the proceeds of the sale of her land became the property of her husband. And it is further contended that, if after receiving the money the husband acquiesced in the wife's claim to it, it then became hers by his gift of conveyance, and was not her separate property under the statute conferring Tipon her the right to sue and be sued concerning the same in her own name as if she were unmarried. R. S. D. C., Secs. 727, 729.
The positive, and wholly uncontradicted, statement of the wife that the money lent to the defendant had not been ac quired by gift from ber husband, but was ber separate property in Georgia, was probably sufficient indirect proof, to prevent tbe raising of tbe mere presumption of tbe existence of tbe common-law rule of property in respect of married women in that State; sucb presumption being one of evidence merely and indulged only in tbe absence of all evidence to tbe contrary.
Tbe defendant, however, was in no situation to make sucb a defense to tbe action, and tbe determination of bis conten tion is not necessary.
At tbe time be borrowed tbe money, married women were authorized to contract and to bring suits concerning their separate property as if they were unmarried, and this right of separate property has been widened by the act of June 1, 1896. 29 Stat. 193.
Defendant contracted with plaintiff to borrow tbe money as ber separate property, and bis note promised to pay ber and not ber husband. It does not, therefore, lie in bis mouth to deny her capacity to sue thereon for bis default, for the. sole purpose of defeating an action to which be has no defense whatever. Credits for tbe only payments alleged to have been made have been allowed in full, and be has no pretense of set-off or counterclaim against ber husband.
2. We think that tbe plea of usury was sustained by tbe plaintiff's own evidence.
It appears that she intrusted $300 to ber husband to be lent to tbe defendant, and that tbe rate of interest obtained! was tbe highest that could be lawfully contracted for in tbe District of Columbia. Comp. Stat. D. C., p. 283. In addw tion to this, be contracted for a bonus of $50, to be paid by tbe defendant for obtaining tbe loan. Now, bad be received tbis bonus in cash, or taken a separate obligation therefor payable to himself, and bad received for the plaintiff a note for $300 only and delivered tbe same to her without ber knowledge or approval of tbe exaction for bis own exclusive benefit, her right to recover both the principal and interest of ber note would not be impaired. Call v. Palmer, 116 U. S. 98, 102.
Instead of conducting the affair in the manner aforesaid, he included the bonus in the note with the knowledge and consent of the plaintiff, who promised to pay him the same out of the proceeds of the note when collected. The doctrine established by the weight of authority is this: The note or obligation is affected with usury if the principal makes the loan, knowing that his agent has exacted a bonus or commission, though for his own sole benefit, which, with the interest payable to the principal, would amount to more than the rate permitted by law. 27 A. & E. Encyc. Law, 1006, 1007, and cases cited. See also Fowler v. Eq. Trust Co., 141 U. S. 384, 405.
Under the statute regulating interest and punishing usury, and the rule that prescribes the running of the legal rate after maturity, all that the plaintiff was entitled to recover was the principal sum of $300, with interest at the legal rate after the termination of the contract rate, less the credits which she had admitted. Comp. Stat. D. C., p. 283, Sec. 3.
As the judgment follows the verdict, which separates the findings for principal and interest as aforesaid, there is no occasion for reversing it and remanding the case for a new trial, provided the appellee will remit the interest as contracted for from date to maturity.
The judgment will, therefore, be affirmed with costs, provided the appellee shall within ten days file with the clerk of this court a remittitur of the aforesaid part of said interest. It is so ordered.
On May 29, 1901, Mr. Prentiss for the appellant, filed a motion for a rehearing " upon the question of the effect of usury as to forfeiture of interest and amount recoverable and the question of costs, or for a reconsideration of the condition imposed upon the appellee and the modification of the same so as to require her to enter a remittitur of all the interest, with costs to the appellant." In support of this motion he cited, as to the interest: R. S. D. C., Sec. 715; Stark-weather v. Prince, 1 MacA. 144; Sullivan v. Snell, 1 MacA. 585; R. S. D. C., Secs. 713 and 829; R. S. U. S., Sec. 966; Farmers' Bank v. Dearing, 91 U. S. 29; Brown v. Marion National Bank, 169 U. S. 416; Carter v. Carusi, 112 U. S. 478; Stockham v. Munson, 28 Ill. 51; Bank v. Davis, 108. Ill. 633; Bressler v. Harris, 19 Ill. App. 430; Payne v. Waterson, 16 La. An. 239; Succession of Rhoton, 34 La. An. 893; Chaffee v. Heyner, 31 La. An. 594.
As to the costs, lie contended that " Inasmuch as the-judgment in the court below carried interest at 10 per cent, for six months and 6 per cent, for six years, amounting-to about $125, if the appellee be required to remit the whole interest the appellant will have been substantially successful on appeal and should be allowed his costs as was done inj Bressler v. Harris, supra, for the appellant could not have appealed from part only of the judgment; or the costs should be divided, as was done in Denison v. Lewis, 5 App. D. C. 328, and Ross v. Fickling, 11 App. D. C. 442."