Court Opinion

ID: 3392921
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:55:55.867911+00
Date Added: 2024-06-11T13:58:06.258904
License: Public Domain

It is not disputed that J.A. Richter, who charged and was paid the commission, was the Secretary of, and a stockholder in, the lender corporation, the Richter Jewelry Co., Inc. He alone acted for the corporation in making this loan. The chancellor in his decree expressly found that, "J.A. Richter, the Secretary of the defendant corporation, was acting solely as the agent of the defendant, Richter Jewelry Co., Inc., in negotiating and consummating the loan complained of." Indeed, the evidence shows that Richter was not only a stockholder and officer, but also that he was in active control and management of the business of the lender corporation. (Trans. 71-72; 123-124; 133.)
The language of Section 6942, C.G.L., as I understand it, prohibits an officer of a corporation, when putting a loan for the corporation, from charging the borrower any sum for his personal services, which, added to the interest charged by the corporation, would make the total amount charged the borrower equal or exceed 25 per cent. per annum. The prohibition of the statute extends to "any *Page 206 
* * * corporation, or the agent, officer or other representative of any * * * corporation."
So, under the facts of this case, Richter's commission, if he was entitled to any, was chargeable to the lender and not to the borrower. As a general rule, "no man can serve two masters," and that rule must certainly obtain as to officers of money-lending corporation under the language of this statute. Richter obtained and put through a profitable loan for his corporation. If he assisted it to make the loan by indorsing the corporation's note to the bank, so that it could get the money to make the loan, he should have looked to the corporation for his compensation. It appears to have been amply solvent, with a stock worth $70,000.00 and few debts. The note to the bank was signed in the name of the corporation by J.A. Richter as secretary, which indicates that he had authority to borrow money for the corporation. As an officer and stockholder, personal interest should have impelled him to help his corporation, which was in the habit of making loans on jewelry, to make this loan, which was a jewelry-secured loan. If the officers of lending corporations are to be permitted, on any pretext, to charge commissions for loans made by their corporations in such sums as to make the interest on the loan together with the commissions, exceed 25 per cent., without falling within the penalty of this statute, it would be a very easy matter to practically nullify the statute.
But, as I see it, this cannot be done. The tendency of our own decisions is against it. See Owens v. State, 63 Fla. 26, 3458 So. 125, 128; Tucker v. Fouts, 73 Fla. 1215, 76 So. 130; Wilson v. Conner, 106 Fla. 6, 142 So. 606; Graham v. Fitts, 53 Fla. 1046,  43 So. 513; McCullough v. Hill, 105 Fla. 680, 133 So. 846.
I do not think Wicker v. Trust Co., 109 Fla. 411, *Page 207 147 So. 586, or Mason v. Cunningham, 149 So. 331, 111 Fla. 200, are in conflict with what has been above said. On the other hand, a recent Florida case quite closely in point is Hopkins v. Otto,160 So. 203. In that case, the commission was paid to an employe in the lender's office, which the chancellor in effect held was in the nature of a bonus to the lender, which, with the interest reserved, rendered the loan usurious. The chancellor was affirmed. See also the recent Mississippi case of Gully v. Gulf Coast Industrial Loan Co., 151 So. 754, where the broker was the regularly employed agent of the lender, but the borrower signed an application for the loan authorizing the broker to act as his agent. Held, that in spite of this stipulation in the application, the exaction of a commission by the broker from the borrower operated to render the transaction usurious. The earlier case of Allen v. Granada Bank, 160 Miss. 419, 133 So. 648, is discussed and differentiated.
The broker cannot be the employed agent of the lender and also act as the agent of the borrower, and charge the borrower a commission, if the commission, together with the interest, exceeds the legal limit and amounts to usury, 27 R.C.L. 236.
There is considerable respectable authority upholding the rule that a loan is not rendered usurious by the fact that the borrower pays the lender's agent, as compensation for services rendered to the borrower, a sum which, added to the interest, exceeds the legal rate, provided that the services for which thelender's agent is compensated are not such as the lender ought tohave performed or paid for, and the compensation is not shared or agreed to be shared with the lender. See 27 H.C.L. 237, and cases cited. But the case for the Richter Jewelry Co., Inc., does not *Page 208 
measure up to the proviso. If, as it is claimed, the said corporation was short of cash at the time and found it necessary, in order to make this loan to appellee, to borrow some money at the bank, and the bank required its officers in charge of its business to personally indorse the note (which, by the way, was for a larger amount than the loan) before it would lend the corporation the money, this so-called "service" on the part of the corporation's officer, if to be paid for at all, should properly have been paid for by the corporation, who thereby was enabled to make an advantageous and well-secured loan at 10 per cent. The corporation got the money on the note and loaned it out on an acceptably secured mortgage. It was not any business of the borrower to pay for any expense incurred by the corporation in obtaining this money from the bank. To charge the borrower for this, in my opinion, rendered the transaction usurious. "A lender will not be permitted to cloak usurious exactions beneath charges for pretended services to the borrower."
In 66 C.J., at page 224, it is said: "Where a general agent of a creditor, being entrusted with full powers and general authority for the management and administration of the creditor's business and affairs, exacts from a debtor the payment of a bonus or commission for or in connection with the making of a contract of loan of forbearance, the transaction is usurious if such exaction causes the lawful rate of interest to be exceeded, even though it is made without the actual knowledge or authority of the creditor, the case standing upon exactly the same footing as if the exaction were made by the creditor himself."
No doubt the statute should have been written in such a way as to require a party who goes into equity to obtain relief against a usurious lender, where the usury amounts *Page 209 
to 25 per cent. or more, to offer to do equity by paying the lender the principal sum received by the borrower, less the usurious charges already paid, but the statute plainly says that where such large exactions are made the lender forfeits the entire sum, both principal and interest, and the courts have no authority to set aside the legislative policy in this regard.
It would seem that this case might well be affirmed on the well known ground that where the evidence is in conflict the decree of the chancellor will be upheld. But it also seems to me that, even if the appellant's testimony be taken as true, the decree should be affirmed for the above reasons.
ELLIS, P.J., and BUFORD, J., concur.
                              ON REHEARING