Court Opinion

ID: 3393090
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:56:21.87387+00
Date Added: 2024-06-11T13:42:21.562181
License: Public Domain

Our conclusion from the record is that Mrs. Croker negotiated a three year loan of $160,000.00 from The Crown Corporation; that the Crown Corporation retained one years interest at 8%, $12,800.00, plus $5,000.00 bonus paid to one William J. Hamilton who handled the transaction as the agent of the Crown Corporation; plus a $2,000.00 fee paid to J. K. Williamson, an attorney, for services rendered in connection with the loan.
Our view is that the $12,800.00 interest reserved in advance and the $5,000.00 bonus constituted the amount retained by The Crown Corporation and that Mrs. Croker actually received $142,200.00.
If we adhere to the formula adopted in Purvis v. Frink,57 Fla. 519, 46 So. 1023; Wilson, et ux., v. Connor, et al.,106 Fla. 6, 142 So. 606 and in Sherman  Sherman v. Myers,108 Fla. 129, 146 So. 213; Sullivan v. Thumm, 101 Fla. 1412,136 So. 439, we must reach the conclusion that if she was required to pay as interest and bonus more than the aggregate of the amount of three years interest on $142,200.00 at 10% or $42,660.00, the result will be a violation of the statute against usury.
Looking then to see what she was required to pay, we find that she was obligated to pay, and did pay, the difference between $142,200.00 and $160,000.00 or $17,800.00 plus two years interest at 8% on $160,000.00, which is $25,600.00, making a total of $43,400.00, which exceed interest for three years at 10% on $142,200.00 in the sum of $740.00. This, regardless of the $2000.00 paid to Williamson.
Therefore, we would be required to hold the plea of usury good and reverse the decree of the chancellor *Page 430 
(See Rich v. Hunter, 147 Fla. 724, 3 So.2d 393) with directions that double the interest paid, the sum of $38,400.00, being $76,800.00, be adjudged forfeited and deducted from $160,000.00, the face of the obligation, and that decree for the balance, $83,200.00, with costs in the lower court be entered with costs of appeal taxed against appellee. See Sec. 4852 R.G.S., 6939, C.G.L.; Wilson, et al., v. Conner, et al., supra; Sullivan v. Thurman, supra.
Sec. 4851 R.G.S., 6938 C.G.L., provides:
"It shall be usury and unlawful for any person, association of persons, firm or corporation, or for any agent, officer or other representative of any person, association of persons, firm or corporation, to reserve, charge or take for any loan, or for any advance of money, or for forbearance to enforce the collection of any sum of money, a rate of interest greater than ten per cent per annum, either directly or indirectly, by way of commission for advances, discount, exchange, or by any contract, contrivance or device whatever, whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of ten percent, as aforesaid. The provisions of this Section shall not apply to sales of bonds in excess of one hundred dollars and mortgages securing the same, or money loaned on bonds."
This Section appears as Sec. 687.03 Fla. Stat. 1941.
Now it appears to the present writer that the rationale of the opinions in the usury cases, cited supra, is in each case based on an erroneous premise in that each case interest paid (or retained) in advance is deducted from the face amount of the loan, and interest is then computed on the balance which *Page 431 
goes to, or is received by, the borrower. To hold thus, it appears to me, is tantamount to holding that if a lender demands and retains from the principal 10% interest in advance, the lender thereby wilfully violated the provisions of Sec. 4851 R.G.C., 6938 C.G.L. and that if a lender demands 8% interest payable in advance together with a bonus which will make the amount retained as interest and bonus exceed 10% of the balance of the loan which is received by the borrower, then the same result follows: I cannot agree with that conclusion because it is necessarily based on the holding that the lender comes within the ban of the statutes, supra, by adopting thephysical method of retaining the interest and delivering to the owner the balance of the principal. Whereas, if the lender had delivered the principal of its loan to the physical possession
of the borrower and the borrower had received the same and had then paid the lender from the identical money so received the required interest in advance, there would have been no violation of the statute, although the net result as to both parties would have been the same as it would have been had the interest been retained or reversed instead of being passed and re-passed from one to the other.
That the Crown Corporation is to be held liable and answerable for the action of its officer and agent Hamilton in demanding, receiving and retaining the $5000.00 bonus, there appears to be no room for question. See Hopkins v. Otto,118 Fla. 865, 160 So. 203; Ritcher Jewelry Co. v Schweinert,125 Fla. 199, 169 So. 750. It, therefore, follows that in legal effect his $5000.00 was reserved from the loan of $160,000.00, leaving the principal amount of the loan $155,000.00. *Page 432 
This is true because the borrower received the equivalent of $142,200.00 together with credit for $12,800.00 one years interest on the principal sum of $160,000.00.
So it is if the interest demanded or reserved and received by lender from the borrower, together with the $5000.00 bonus, supra, exceeded the sum equal to 10%, on the $155,000.00 for three years, then the transaction was within the ban of the usury statute, supra.
Interest on $155,000.00 for three years is $46,500.00. The amount of interest paid was $38,400.00, which with the $5000.00 bonus makes $43,400.00, being $3,100.00 less than three years interest at 10%, supra.
I think the above cited cases should be over-ruled insofar as they conflict with the views herein expressed and the decree should be affirmed, but as the majority of the Court adheres to the enunciations promulgated in the opinions and judgments referred to supra, I am bound by these enunciations and, therefore, agree with Mr. Chief Justice BROWN that the judgment should be reversed.