Court Opinion

ID: 6584626
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:41:25.88415+00
Date Added: 2024-06-11T15:57:25.208559
License: Public Domain

ROSS, C. J.
The only contention in this court, is in-regard to the construction to be given to the contract, between the parties of Dec- 24th, 1887. At that date the *304plaintiff sold and transferred to the defendant twelve shares of the capital stock of the Barton National Bank, for which the defendant paid then two hundred and ten dollars and gave his obligation to pay the plaintiff ten hundred and fifty dollárs additional, payable one-fifth each year, or before, thereafter until the whole was paid. Then follows this provision : “ The sum of all dividends declared each year on all shares unpaid shall be in lieu of the interest on the same ; but if at any time between the declaring of such dividends, any shares are paid for, the interest on such share, or shares, shall be such a part per share of six dollars as the time bears to the whole year.” The defendant contends that, because of the words, “sum of all dividends declared each year,” the parties intended that interest should be reckoned on the shares unpaid for at their par value from the time of declaring the January dividends each year to the end of that year, and that the dividends made that year are to be added together and their sum applied as a general payment, first to liquidate the interest then due, and the balance, if any, to be applied on the principal. We do not think the language used evidences such an intention. No interest is reserved except on shares paid for between the times of declaring dividends. It is clearly expressed that the dividends on the unpaid shares are to be in lieu of interest on the same. Whether dividends would be declared, and if so, of what amount, was doubtful, and subject to contingencies. If interest was intended to be reserved, we should have expected it would be upon the amount agreed to be paid per share and not upon the par value. We think the parties clearly intended to give the plaintiff the dividends on the shares unpaid for in lieu of interest. The plaintiff was to take the risk of the dividends on the shares not paid for being sufficient to pay the interest on her capital'invested in them. This being the general provision between the parties, there follows the provision commencing with “but” to meet *305a condition which was likely to occur, inasmuch as the contract left the time of payment optional with the defendant; and of which he availed himself. If the defendant elected to pay for any of the shares between the declaring of dividends, then he was to pay interest on such shares from the time of the last dividend.
Nor does this construction render the contract usurious as contended by the defendant. There is no reservation of intei'est above six per cent, by the terms of the contract, nor by any understanding of the parties. It was wholly uncertain whether the dividends would be more or less than six per cent, per annum. Because the defendant happened to select a time to pay for the shares which gave the plaintiff more than six per cent, does not render the contract usurious. The sale of these shares was shortly before an expected dividend. It was practically a sale with the dividends reserved to the plaintiff. No doubt the price agreed to be paid per share was less than it otherwise would have been but for the fact that by the terms of the contract the plaintiff was to have the dividend which was expected to be made in a short time thereafter. If this dividend had not been made the plaintiff would have failed to receive anything for the use of her investment since the dividend next before the making of the contract.

Judgment- of the county coit,rl is affirmed.