Court Opinion

ID: 6548071
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:21:20.050004+00
Date Added: 2024-06-11T15:56:01.603263
License: Public Domain

Wood, J., (after stating the facts). The complaint alleges that appellees falsely claim that there is a balance due them for what they call rent to April 1, 1909, of $13.50, and the original note of $90, making a total of $103.50; that by making this claim appellees are seeking to take undue advantage of appellant and to force him to pay more than is due them.” While this is not a technical plea of usury, it is a sufficient allegation to cause a court of equity to scrutinize the transaction closely, in order to determine whether or not the parties seeking a benefit under it are attempting to enforce an illegal exaction. Plere, while appellees have not asked any affirmative relief, •the court, after hearing the testimony, has treated the answer as if it were amended to ask affirmative relief, and granted to appellees a writ of possession against appellant unless he paid the ninety dollars with interest within ninety days. The court thus treated the contract between appellant and appellees as a mortgage by appellant of the lot in controversy to appellees to secure the latter in the amount of money they had advanced to the former to enable him to pay for the lot. The court was correct in treating the contract as a mortgage, but erred in finding that the amount due appellees under it had not been paid. Appellees should be treated as mortgagees in possession as to the amount of rents they collected from appellant under the contract, and should be held to account to him for the amount of these" rents. So treating them, the evidence shows that appellant has more than paid them the balance due on the ninety dollars with interest. Appellant, however, is not entitled to any judgment for the amount overpaid by him because as to this amount it must be regarded as a voluntary payment. The evidence of appellees shows that they at all times recognized that appellant under the contract was the equitable owner of the lot. Their testimony tends to prove that they, at the request of appellant, took the deed from Davidson in their own name, intending to hold the title to the lot only as security for the amount of money they had advanced to appellant to pay for the lot. They at all times acknowledged the right of appellant, upon the payment of the purchase money advanced by them to him, to have deed to the lot.. The effect of the contract between appellant and appellees, as we view the evidence, was to substitute appellees for Davidson. Thy stood virtually in Davidson’s shoes, and the effect of his contract was to make him a mortgagee holding the title to the lot, “subject to all the essential incidents of a mortgage.” Strauss v. White, 66 Ark. 167, and cases cited. But they say that in the meantime appellant agreed with them that he should pay them a bonus of $1 per week as rent for the lot. There was no consideration for this agreement except the advance made by appellees to appellant of the ninety dollars and interest. Considered in this light, the bonus called rent would be nothing-more nor less than a forbearance for the use of the ninety dollars and interest, and would render the contract void for usury. In Scott v. Lloyd, 9 Peters, 418, Chief Justice Marshall, speaking of the purchasing of an annuity or rent charge which was alleged to be a cloak for usury, said: “Yet if it is apparent that if giving it this form the contract will afford a cover which conceals it from judicial investigation, the statute would become a dead letter. Courts, therefore, perceived the necessity for disregarding the form, and examining into the real nature of the transaction. If that be in fact a loan, no shift or device will protect it.” We are therefore of the opinion that appellant, having paid to appellees the amount due them, is entitled to his deed. The chancery court of Clark County erred in holding otherwise. The judgment is therefore reversed, and the cause is remanded with directions to enter a decree in accordance with this opinion.