Court Opinion

ID: 3384461
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:37:07.640716+00
Date Added: 2024-06-11T14:02:41.035245
License: Public Domain

On December 17, 1926, appellant executed her promissory note to appellee in the sum of $14,000, due three years from date with interest at eight per cent. per annum, payable semi-annually. Appellant secured this note with a mortgage of the same date which provided for the appointment of a receiver or trustee to take charge of the mortgaged property in the event of foreclosure and among other specifications, embraced an acceleration compact as follows:
    "If any of said sums of money herein referred to be not promptly and fully paid within thirty days next after the same severally become due and payable, or if each and every, the stipulations, agreements, conditions, and 'covenants of said promissory note(s) and this deed, or either, are not duly performed, complied with and abided by, the said aggregate sum mentioned in said promissory note(s) shall become due and payable forthwith or thereafter, at the option of the Trustee, as fully and completely as if the said aggregate sum of __________ Dollars or such unpaid balance thereof was originally stipulated to be paid on such day of default or breach, anything in said promissory note(s) or in this deed to the contrary notwithstanding, and the equity of redemption of the Mortgagor(s) may thereupon be immediately foreclosed by said Trustee."
April 6, 1928, one year, three months and twenty days after the mortgage was given, no interest having been paid except the sum of $85.00 on the first interest installment and the mortgaged premises having been permitted to *Page 154 
sell for state, county, and other taxes, Appellee as complainant below, pursuant to the acceleration compact, filed its bill to foreclose the mortgage. The bill to foreclose demanded payment of the principal in full and interest from date of the execution of the mortgage to the date of foreclosure at eight per cent. less the $85.00 paid on the first interest installment.
To the bill to foreclose, appellant as defendant below, entered her answer in which she admitted the execution of the note and mortgage but as a defense to their payment, she alleged that neither the said note or mortgage created a legal or binding obligation against her because they were in violation of the statutes of this state prohibiting usury.
We are therefore confronted with the question of whether or not the note and mortgage brought in question are condemned by our statutes prohibiting usury, the same, in so far as applicable to this case, being Section 4855 Revised General Statutes of 1920 (Section 6942 Compiled General Laws of 1927) and is as follows:
    "Any person, association of persons, firm or corporation, or the agent, officer or other representative of any person, association of persons, firm or corporation lending money in this State who shall wilfully and knowingly charge or accept any sum of money greater than the sum of money loaned, and an additional sum of money equal to twenty-five per cent. per annum upon the principal sum loaned, by any contract, contrivance or device whatever, directly or indirectly, by way of omission, discount, exchange, interest, pretended sale of any article, assignment of salary or wages, inspection fees or other fees or otherwise, or for forbearing to enforce the collection of such moneys or otherwise, shall forfeit the entire sum, both the principal and interest, to the party charged such usurious interest, and shall be deemed guilty of a misdemeanor, and on conviction, be fined not more than one hundred dollars or be imprisoned in the county jail not more than ninety days, or both, in the discretion of the court." *Page 155
The record discloses that the defendant actually received for her note and mortgage, the sum of $11,034.72, that the sum of $2500 was charged her as a bonus, and that the sum of $465.28 was paid a broker to secure the loan. By the exercise of its option to invoke the acceleration compact, the complainant seeks by its suit to foreclose, to require the defendant to pay the accrued interest on $14,000. the face of the note, for one year, three months and twenty days at eight per cent., being $1,462.22 which added to the bonus of $2,500 make a total of $3,962.22, exclusive of brokerage, paid for the use of $11,034.72 for the period as stated. Such a demand was warranted by the terms of the contract.
The Chancellor below decreed that the amount so charged or accepted did not equal (to) twenty-five per cent. per annum on the sum loaned but that it did exceed ten per cent. per annum on such sum and should consequently be forfeited. The Chancellor also decreed that $465.28 was a proper charge against the mortgagor for brokerage. The Chancellor's decision proceeded on the theory that the interest charged and the bonus should be spread over the full term of the note.
The statute, Section 4855 Revised General Statutes of 1920, supra, condemns and outlaws any contract, contrivance, or device whatever, whereby any person, association of persons, firm or corporation may wilfully and knowingly charge or accept by way of discount, commissions, interest, exchange, or otherwise, directly or indirectly, any sum of money greater than the sum loaned and an additional sum equal to twenty-five per cent. per annum on the principal sum loaned. The criterion by which the applicability of the statute is determined is whether or not the contract, contrivance, or device embraces within its terms the illegal charge.
The very purpose of statutes prohibiting usury is to bind *Page 156 
the power of creditors over necessitous debtors and prevent them from extorting harsh and undue terms in the making of loans. Under the law and the decisions, usury is largely a matter of intent. It is not fully determined by the fact of whether the lender actually gets more than the law permits but whether there was a purpose in his mind to get more than legal interest for the use of his money and whether, by the terms of the transaction and the means employed to effect the loan he may, by its enforcement be enabled to get more than the legal rate. 27 Rawle C. L. pages 223 and 224.
Some courts and text writers approve the doctrine that on default of the principal debtor under an acceleration compact like that involved in this case or where the contract provides for a higher rate of interest than the legal rate in the event of a default, that such contract in either event will not be usurious but that the additional and larger sum so required will become a mere penalty. This doctrine is grounded on the fact that the debtor has the power to forestall the operation of the acceleration compact and prevent the increase of his debt by promptly discharging his installment payments but it overlooks the distressing consequences thus precipitated by inability of the debtor to respond which the statutes prohibiting usury were designed to forestall. The statute invoked is directed to the lender and by its terms, any contract, contrivance, or contingency whereby he directly or indirectly gets more than the legal rate of interest is infected with the vice of usury. It (the statute) in no way imputes evil to a debtor who does not pay under his contract. It presumes that he will comply with his contract and prescribes the bounds within which they may be made. Maxwell vs. Jacksonville Loan and Improvement Co. 45 Fla. 425,34 So. 255; Mitchell vs. Doggett 1 Fla. 356; Tucker vs. Founts,73 Fla. 1215, 76 So. 130; Shropshire vs. Commerce Farm Credit Co., ___ Tex. ___, *Page 157 
30 S.W. (2nd Series) 282; 27 Rawle C. L. 223 and 224. Webb on Usury, Section 28.
Three statutes prohibit and punish usury in this state. Section 4851 Revised General Statutes of 1920 (Section 6838 Compiled General Laws of 1927) prohibits the lender from charging more than ten per cent. per annum on the sum loaned and the following Section (Section 4852 Revised General Statutes of 1920) penalizes him by forfeiting the entire interest. Section 4852, Revised General Statutes of 1920 (Section 6939 Compiled General Laws of 1927) prohibits the lender from charging more than ten per cent. per annum on the sum loaned by taking or reserving said amount when the loan is made and penalizes him by forfeiting double the amount of the interest so taken or reserved. Section 4855 Revised General Statutes of 1920 (Section 6942 Compiled General Laws of 1927) prohibits the lender from charging more than twenty-five per cent. per annum on the sum loaned and penalizes him by forfeiting both the principal and interest to the party charged. Violation of the latter statute also subjects the lender to a fine of not exceeding one hundred dollars or imprisonment in the county jail not exceeding ninety days, or both, in the discretion of the court.
If there had been any provision in the note or mortgage to eliminate any unearned or unlawful interest, such a provision might be in mitigation of forfeiture, but we find no such provision and the conduct of the lender precludes the presumption of one. The parties were sui juris, understood the premises, and every phase of the contract appears to have been deliberately executed. If it had been complied with and the note paid at maturity, the amount of interest and bonus paid would not have equalled twenty-five per cent. per annum on the sum loaned and in consequence violative of Section 4855 Revised General Statute, supra, but it would have exceeded ten per cent. per annum *Page 158 
in violation of Section 4851 Revised General Statutes, supra. In this situation, the interest charged would have been forfeited and the bonus having been taken or reserved when the loan was made, would have been forfeited in twice its amount under Section 4852 Revised General Statutes, supra.
But the lender in this case did not elect to let its note run to maturity thereby thus subjecting itself to the milder penalty, but deliberately exercised its option to foreclose after default in the second interest installment, thereby charging $1,462.22 interest and a bonus of $2,500 or a total of $3,962.22 on the sum of $11,034.72 for one year, three months, and twenty days, which it would have been in position to enforce if its suit had proceeded to final decree. This amount was in excess of twenty-five per cent. per annum of the sum actually loaned and was in violation of the harsher statute. Section 4855, supra.
So, from any point viewed, the contract brought in question, made it possible for the appellee to "charge or accept" from the appellant more than was permitted. To "accept" means to receive, assent to, to understand, in other words, it denotes completed action. "Charge" in its legal acceptation has a very broad meaning but as used generally, it has reference to a price demanded for services rendered or goods furnished, to fix or demand such a price, or any act by which the charging party manifests his purpose to demand the amount fixed or allowed for the thing. State ex. rel. Attorney General vs. Atlantic Coast Line R. Co. 48 Fla. 114, 37 So. 652; Freight Discrimination Cases 95 N.C. 434, 59 Am. Rep. 250; Darling v. Rogers 22 Wend. (N.Y.) 485, text 491; Fulmer vs. Southern Ry. Co. 67 S.C. 262,45 S.E. 196, 198; United States vs. Nord Deutscher Lloyd 186 Fed. 391, text 394.
To work a forfeiture under the statute, the appellee must not only "charge or accept" twenty-five per cent. per annum *Page 159 
on the sum loaned but he must do so wilfully and knowingly." We do not deem it necessary to say more about "charge or accept." The law presumes that appellee was advised as to its rights and being advised, we are forced to the conclusion that the contract, the foreclosure and every element of the charge was wilfully and knowingly made. A thing is wilfully done when it proceeds from a conscious motion of the will, intending the result which actually comes to pass. It must be designed or intention and may be malicious though not necessarily so. "Wilful" is sometimes used in the sense of intentional as distinguished from "accidental" and when used in a statute affixing a punishment to acts done wilfully, it may be restricted to such acts as are done with an unlawful intent. United States vs. Boyd 45 Fed. 851, text 855; State vs. Clark29 N.J.L. 96.
We do not decide the question of whether or not the sum of $465.28 paid the broker was a proper charge against the mortgagor as with or without this the amount sought to be collected by the suit to foreclose is in excess of twenty-five per cent. per annum of the amount actually loaned. It is not out of place to say, however, that the record indicates that the broker was the agent of the mortgagee and the statute condemns any contract charge, covin or device whereby a lender is enabled, directly or indirectly, to extort more than the permissible rate of interest from the borrower.
We think, therefore, that the transaction or contract challenged was usurious and that when appellee filed its bill to foreclose, and sought to enforce the payment of an amount of interest which, added to the bonus, made a sum in excess of twenty-five per cent. per annum of the amount actually loaned, it in effect "charged" the appellant with a sum in clear violation of Section 4855 Revised General Statutes of Florida. It is no defense that appellant brought *Page 160 
this about by failure to pay the interest. While this fact presents an element of equity that appeals to the conscience of a Chancellor, it cannot be permitted to nullify or intercept the clear mandate of a statute, the avowed purpose of which was to prohibit such loans and which was designed to break up the practice of lenders imposing extortionate terms on borrowers. The whole transaction was infected with the vice condemned by the law and for that reason, both principal and interest must be forfeited.
The judgment below should be reversed.