Court Opinion

ID: 6577844
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:53.714803+00
Date Added: 2024-06-11T15:57:10.079665
License: Public Domain

Kellogg, J.
The contract out of which the alleged usurious interest in this case arose was for the purchase of property and not one of borrowing and lending money. It is not claimed that there was any loan, but it is insisted that there was an agreement for the sale of the property at the price of two hundred and fifty dollars, and that the ten twenty dollar notes — of which one was payable in each .year successively for ten years, — were executed for the forbearance of the agreed price of the property for that period, and as interest on that price at the rate of eight per cent, per annum. The defendant’s wife was a sister of the plaintiff, and the property purchased by the plaintiff was her interest or share in the estate of her father. On the occasion of the purchase, an agreement under seal was executed between the defendant and his wife on the one part and the plaintiff on the other, in which the defendant and his wife agreed, that, on the payment of a note for this sum of two hundred and *452fifty dollars, they will convey to the defendant a farm which was part of the property purchased, and will give up to him all of the ten promissory notes then remaining unpaid; and this agreement also contains a recital that the consideration of the note for two hundred and fifty dollars was “ the sum which the plaintiff was to pay for the said farm.” This agreement does not determine the real character and substance of the transaction, so that the alleged usury can be said to be exposed on the face of the instrument. Bes ipsá, non loquitur. If the twenty dollar notes were in fact executed and received for the yearly interest on the purchase money of the property, and there was an agreement deferring the payment of this purchase money for ten years, or until the time when the note for two hundred and fifty dollars became payable, then they were clearly usurious. But if those notes constituted a part of the purchase money of the property, or if they were in good faith intended by the parties to represent the use or rent of the property while occupied by the plaintiff before he became entitled to a conveyance of it by the payment of the purchase money, then they should be regarded as being free from objection on the score of usury, and as containing no element of illegality. The agreement under seal is consistent with either view of the ease, and the determination of these questions must rest on extrinsic evidence. If these twenty dollar notes were executed for the yearly interest on the purchase money, the transaction must be considered as usurious on its face, even though it was not intended as a cover for the purpose of taking or concealing usury.
By directing a verdict for the defendant, the county court proceeded on the ground that there was no evidence tending to show an existing debt from the plaintiff to the defendant and his wife, and the forbearance of such debt in consideration of an agreement for the payment of usurious interest on it. The payment of the note for two hundred and fifty dollars is the only condition precedent to the execution of the deed from the defendant and his wife to the plaintiff, according to the provisions of the contract under seal, but this is not conclusive in respect to the character or consideration of the twenty dollar notes. The plaintiff testified in chief that the two hundred and fifty dollar note was given for the price of the share of the defendant’s wife in her father’s estate, and that the twenty dollar *453notes were given for yearly interest on the two hundred and fifty dollar note, at the rate of eight per cent, per annum, and that the bargain, on the occasion of the giving of the notes and the execution of the agreement under seal was that the plaintiff should pay on this agreed price interest at that rate until he should pay this price and take a conveyance of the property, and that there was no other consideration for the twenty dollar notes. We have no doubt that, under our statute, usury may exist where a money debt is created and forborne by the agreement of the parties, even .though there may be in such case no loan of money ; and we regard the plaintiff’s testimony as tending to show the creation of a debt, and an agreement for the forbearance of it on a rate of interest which was illegal. This testimony had no tendency to vary the contract contained in the agreement under seal in respect to the consideration of the twenty dollar notes, or to contradict that agreement in any particular, and was clearly admissible. We think that it should have been submitted to the jury; and, on this ground the judgment of the county court is reversed.
It is objected on the part of the defendant, that this action should, have been brought against himself and his wife jointly, and not against himself alone; but we think that this objection cannot be sustained without assuming the existence of facts which do not appear in the case. The defendant appears to have been a party to the original contract for the sale of the property to the plaintiff, and to the agreement under seal, and also to have received the money which was paid by the plaintiff on the notes, and that money may still remain in his possession ; and no fact is stated which has any tendency to connect his wife with the plaintiff’s cause of action except her interest, originally, in the consideration of the notes in question. This is not, of itself, sufficient to justify the conclusion that she had, at the time when this suit was commenced, a present interest in the subject matter of this litigation ; and there is no evidence tending to show that she ever received any part of the money paid by the plaintiff to her husband on these notes.
Judgment of the county court reversed, and a new tidal granted.