Court Opinion

ID: 8264419
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:59:11.622843+00
Date Added: 2024-06-11T16:43:17.684197
License: Public Domain

*626SEPARATE CONCURRING OPINION.
NORTONI, J.
I concur in the opinon in this case for no other reason than that under the Constitution of Missouri, it is my duty to do so, inasmuch as the decision of the Supreme Court of the State in Western Storage Co. v. Glasner, 169 Mo. 38, 68 S. W. 917, seems to be in point and. it is a controlling authority on this court. The case of Landis v. Saxon, 89 Mo. 375, is not mentioned nor referred to therein, however. Prior to the decision of the Western Storage Company case, I had always understood the law as stated by Judge Black in Landis v. Saxon, supra, and I did not understand that the statute of 1891, now section 3709, Revised Statutes 1899, operated upon a transaction of the nature here involved so as to render the lender who was abso>lutely guiltless and Avithout any knowledge of the agent’s commissions, chargeable Avith usury on the mere fact that the agent had received a commission from the borrower on the side, for his services in negotiating the loan. Indeed, I have found nothing to persuade me to the contrary either in the statute referred to nor in the opinion in Western Storage Co. v. Glasner, supra. It is said in that opinion at page 18: “The statute is leveled against taking usurious interest in any form and it expressly recognizes and brings within its contemplation the form of collecting such excess as commission or brokerage, whether the same be for the benefit of the lender or any agent, broker or other person employed by the lender ” Although I have endeavored with care to do so, I can find no such express provision in the statute. I agree that “the statute is leveled against the taking of usurious interest in any form” so far as the lender is concerned, and I agree that “it expressly recognizes and brings within its condemnation the form of collecting such excess as commission or brokerage” when done under that guise or in such- name by the lender, and *627the lender is receiving the benefit of the excess charges so taken in the name of brokerage or commissions, and probably when taken by the agent with the lender’s knowledge or consent, bnt I do not agree that the same “expressly” condemns the contract and forfeits the right of the lender “whether the same be for the benefit of . . . any agent, broker or other person employed by the lender,” unless the lender has-some knowledge of the broker’s or agent’s offense. The result is not in accord with my notion of those ends of justice and perfection sought to be attained in the administration of the law. The statute is in its nature penal and works a forfeiture of contract rights. It should therefore, in my humble opinion, be strictly construed. [26 Amer. and Eng. Ency. Law (2 Ed.), 658; Casey v. Transit Co., 116 Mo. App. 235, 91 S. W. 419.] Upon a strict construction, its provisions are leveled against the practice of the lender in exacting usury in the name of brokerage or commission. The statute reads as follows:
“Usury may be pleaded as a defense in civil actions in the courts of this State, and upon proof that usurious interest has been paid, the same, in excess of the legal rate of interest, shall be deemed payable, shall be credited upon the principal debt, and all costs of the action shall be taxed against the party guilty of exacting usurious interest, who shall in no case recover judgment for more than the amount found due upon the principal debt, with legal interest, after deducting therefrom all payments or usurious interest made by the debtor, whether paid as commissions or brokerage, or as payment upon the principal or as interest on said indebtedness.” [Sec. 3709, R. S. 1899.]
The proper construction of the concluding sentence of the statute, when read in the light of that which precedes, is that upon which the sense must be taken. This sentence is as follows: “after deducting therefrom all payments of usurious interest made by the debtor, whether *628paid as commissions or brokerage, or as payment upon the principal, or as interest on said indebtedness.” The matter contemplated, then, and to which the words “commissions” or “brokerage” refer, is the “payment of usurious interestin other words, “payment of . . . interest.” Now, interest is that which is paid by the borrower to the lender for the use and forbearance of the loan and. is not a commission or brokerage paid to the agent. It therefore appears quite clear to my mind that what the legislators intended to condemn was the taking of an extra per cent as “payment of usurious interest” by the lender under the name or pretext of “commissions” or “brokerage,” —■ or “as payment on the principal” — or “as interest on said indebtedness,” all of which terms indicate an amount reserved by the lender under the several pretexts mentioned for the loan or forbearance, otherwise they would not be spoken of as “payment of . . . interest,” or as “payment on the principal,” or as “interest on said indebtedness,” which could only be brought about by the act of the lender or his authorized agent in collecting and crediting the same on the debt as interest or payment thereon, or otherwise as mentioned by the statute, for it is only the lender or his. authorized agent who would so apply the same. These terms certainly do not refer to the per cent or charge of the agent which is taken by him for services in negotiating the loan, for in no sense can the agent’s per cent, taken as his compensation, to be appropriated to his own use, be considered by the parties at the time as a “payment of interest” or otherwise than as compensation to the agent. The mere employment of the word “brokerage” or “commission” in the statute and the fact that such words usually refer to a per cent charged by a middleman or agent for service rendered, certainly should not influence the court to adjudge the rights of an innocent party forfeited under the penal provisions above quoted, in view of the well-known prac*629tice of some money-lenders to make a charge on the side and denominate the same as brokerage or commissions when lending their private funds, which, in truth, amounts to usury pure and simple. It appears to me that this latter class of operations were those intended to be condemned by the Legislature in this enactment. At any rate, a penal statute must be construed strictly in effectuating its purposes, as-strictly as is consonant with the mischief sought to be remedied, and its provis>ions should not be extended in any case so as to include persons or rights not clearly falling within its terms or manifest spirit. In view of the finding of fact by the learned trial judge, which stands as a general verdict, the plaintiff lender had no knowledge that the agent "exacted commission in this case and there is nothing to show that she placed her funds in his hands and put him forward as her agent to lend the same with the understanding or knowledge that he was to exact commissions from the borrower, as appeared in the case of Brown v. Archer, 62 Mo, App. 277, in which case the president of the lending company actually received a, salary for approving such applications for loans as the agent submitted, at the same time knowing the agent to be engaged in collecting commissions on the side from the borrower. It seems to me that the terms of this statute must be extended beyond its letter or spirit by construction in order to inflict its penalties upon this plaintiff who stands as an innocent lender in good faith without fault, who neither assented to nor had knowledge of the exaction of commissions by the agent. To so extend this penal statute and forfeit the rights and inflict the penalty of paying the costs of suit upon an innocent party on the application of the mere principle of agency, is to apply the principle of agency, in my own opinion, quite beyond the ends sought to be attained by a just administration of the law in such cases. Now, as a proposition, it is true in the law that authority to violate *630the law will never he presumed. Among the presumptions of law, there lies, first, at the very threshold of its administration, the great and sound fundamental principle of presumptive correct conduct, always on the part of all concerned. Prom this it follows that the mere showing of authority in the agent to lend one’s money carries with it only, in the absence of a showing, to the contrary, authority to exercise such agency or power in a lawful manner, and authority to lend money at a legal rate of interest does not imply authority to violate the law by lending at a usurious rate. [Call v. Palmer, 116 U. S. 98-102.] Prom this it necessarily follows that the plaintiff, Mrs. Little, not having expressly authorized her agent to collect usurious commissions, she cannot be held on the principle of agency to have authorized the agent by implication of law, to do so, so as to bring the transaction to which she in no manner had given her consent and of which she had no' knowledge, within the influence of the penal statutes quoted, whereby her rights, those of an innocent party, are forfeited. In such cases the law is well settled that the agents are constructively in collusion with the borrowers and the lenders are not partioeps criminis. [Webb on Usury (1899), sec. 93.] In a case before the Supreme Court of the United States, very similar to the case now in judgment, involving the Iowa statutes on interest and usury, very similar to our own, that august tribunal said, in holding to the doctrine, the justness of which I commend: “These decisions seem .to be founded on plain principles, of’justice and right, for when two persons, the agent and borrower, conspire together for their own profit, to violate the law, how can punishment for their acts be justly imposed on an innocent third party, the lender?” [Call v. Palmer, 116 U. S. 98-102.]
The doctrine that a penal statute should be extended on the mere principle of agency, over the presumption of law that such agency was not for an unlawful *631purpose, so as to include and forfeit the rights of innocent third parties, is so obnoxious to my own sense of justice as to constitute my apology for these comments on the case. While section 6 of the amendment to the Constitution, adopted November, 1884, provides that “the last previous ruling of the Supreme Court on any question of law or equity shall in all cases be the controlling authority in such Courts of Appeals,” the same section provides that “when any one of such Courts of Appeals shall in any case or proceeding render a decision which any one of the judges therein sitting shall deem contrary to any previous decision of any one of such Courts of Appeals or of the Supreme Court, the said Court of Appeals must, of its own motion, pending the same term and not afterwards, certify and transfer such cause and the original transcript therein to the Supreme Court,” etc. I am of the opinion, and I deem the decision in this case contrary to a previous decision of the Supreme Court in the case of Landis v. Saxon, 89 Mo. 375, and therefore respectfully ash that the cause and the original transcript thereof be certified to that court for final determination.