Court Opinion

ID: 8303959
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:21:40.998403+00
Date Added: 2024-06-11T16:44:27.760418
License: Public Domain

Burnett, Justice
(dissenting).
The majority has written herein an excellent well reasoned opinion down through the bottom of page 351 of the opinion wherein 32 C.J.S. is quoted from. I cannot agree with the conclusion thereafter reached for the following reasons.
The quotation.in 32 C.J.S. is an accurate quotation from that work. The bold type though heading the section from which this is quoted states that this is a general rule, “ which is subject to limitations and exceptions, * * I think that an exception well recognized in the *353law applies here. The exception of which I speak is that it is universally acknowledged that it is admissible to introduce parol evidence respecting’ the consideration. See Sneed v. Hooper, 3 Tenn. 200, 5 Am.Dec. 691 and Snoddy v. American Nat’l Bank, 88 Tenn 573, 13 S.W. 127, 7 L.R.A. 705, 17 Am.St.Rep. 918. This exception is well stated in 10 R.C.L., page 1042, as follows:
“In reference to all instruments acknowledging a receipt of a consideration, it is now well settled that it is competent by parol to show that no consideration was in fact paid or received, or that the consideration was greater or less than or different from the one expressed. This may he done for every purpose except to impeach or destroy the instrument.”
There would be no contradiction of the terms of the note here except by possibility in the destination of the consideration named, and as to this we have already indicated above that the door was open to modifying proofs. The instrument in question shows on its face that it was payable to a credit union. The Legislature of this State long ago approved such organizations, as is shown under Chapter 18, T.C.A., headed “Credit Unions”, wherein under sec. 45-1820, T.C.A., it is provided that loans to members are approved wherein they pay at the rate of one (1%) per cent per month, which covers interest and all other charges. This same section provides that interest shall not he in excess of the legal rate as is stated in the majority opinion. When we take a note that is payable to a credit union that says that it hears one (1%) per cent interest, as this note did, we cannot presume that the credit union violated the law in charging an excessive legal rate, but when it isn’t shown *354on the face of the note that this one {1%) per cent interest is for these charges then the note is left subject to proof of whether or not the charges made were legal.
Of course, it is presumed, and there is a valid legal presumption, that when it appears on the face of the instrument that the interest charged is usurious this raises a presumption to that effect casting the burden on the lender to prove that the agreement is not usurious. Cohen v. Beaudry, City Ct., 100 N.Y.S.2d 519. In Blue v. First Nat’l Bank of Elba, 200 Ala. 129, 75 So. 577, that court held that evidence may be introduced so as to cast the burden on the lender to introduce explanatory evidence.
In 82 A.L.R. 1199, the annotator of the case there under annotation, makes this statement, which is certainly the law of this State. The statement is: “* * * It is a general rule that, for the purpose of showing usury in a written contract, parol or extrinsic evidence is admissible, the parol-evidence rule not being applicable to such a situation. (As pointed out in some of the cases, and as subsequently shown herein, such evidence is admissible notwithstanding it may directly contradict the terms of the writing.) ” Many authorities are cited there and in a subsequent annotation on the subject.
In 91 C.J.S. Usury sec. 115, page 701, the author of this work says:
“Questions as to the admissibility of the evidence in actions involving usury are governed by general rules of evidence, and, broadly speaking, any competent, material, and relevant evidence tending to show the true intent of the parties and the real nature and terms of the contract is admissible. ’ ’
*355In the text following this last quotation statements are made and cases cited wherein parol evidence has been admitted to show that a written instrument valid on its face is in fact usurious and likewise cases are cited wherein parol evidence is admitted when the contract is usurious on its face.
55 Am.J'ur., under the title “Usury”, sec. 167, page 440, is to the same effect as what I have said above.
Thus it is that I feel confident that when a note appears to be made payable to a credit union and the interest shown in this note is that allowed by law then such an instrument would be subject to parol evidence to show the actual consideration and the intent of the parties in making the instrument. To rule otherwise would be in my judgment inequitable and unconscionable because apparently there is no question but that this employee secured this money and because the note did not state in specific terms that this one (1%) per cent was made up of legal charges he then voided the note. I would affirm the Court of Appeals in remanding the case for proof to determine the real merits of the situation.
It is for reasons above that I respectfully dissent from the conclusion reached in the majority opinion.