14 Conn. 594 | Conn. | 1842
Several objections have been made, by the defendants, against a decree in favour of the plaintiff in this case.
1. It is claimed, that a material allegation in the bill is not supported by the finding of the committee. It is averred, that the plaintiff endorsed for the company sundry notes to the amount of fifteen thousand dollars, which he has since been compelled to pay, and has paid; and the committee has found, that the plaintiff has paid only two notes, amounting to five hundred dollars.
But this payment shews, that there has been a breach of the conditions of the bond and mortgage deed, and gives the plaintiff a right to bring his bill for a foreclosure. The cash
2. It is next insisted, that the authority given to the president to execute the mortgage deed, was not under seal, and was not recorded.
These questions, it is admitted, were directly decided in the case of The Savings Bank v. Davis & Center, 8 Conn. Rep. 191. But it is claimed, that that decision is erroneous; and as it was made upon a divided opinion of the two judges, the questions are still open for revision.
If we considered ourselves at liberty to review that decision, we are by no means satisfied we should not come to the same result. What, in the present case, is the vote passed by the directors, but a manifestation of their assent to the mortgage, and a direction to the proper officer to make it? The deed is executed in the name of the corporation, as their deed, and has the corporate seal affixed. The corporation could only act, in making the conveyance, by some agent or officer of theirs; and were it necessary for the vote to be executed with the same formality as the deed, a similar difficulty would arise in the execution of that. The certificate annexed to the signature of the president, that he was duly* authorized, is but an assertion that the execution was authorized by the company, and so their deed.
As to the recording of the vote upon the town records, that is never required. The authority given by courts of probate to guardians and executors to sell, is never, by our practice, recorded upon the records of the town. The statute requiring a power of attorney, under which a deed is executed, to be recorded with the deed, has never been considered as-extending to such cases.
But we deem it unnecessary to enter into a discussion of the reasons that may be urged in support of that decision. It is enough for our purpose, that is has been made by the highest court in this state, and accbrding to the provisions of our statutes. And although wade by a court composed of only two judges, and those differing in opinion, we see no sufficient cause for a change in what has been considered the law , upon this subject.
The rule established in that case has become a rule of
3. But the most material question remains to be considered ; and that is, whether the contract made between the plaintiff and the company was usurious, and therefore void.
It was agreed that the plaintiff should endorse for the company, from time to time, as they might require, for the term of one year, to an amount not exceeding in the whole, at any one time, the sum of fifteen thousand dollars, and should also, during that time, advise the agent of the company respecting their financial affairs, as far as he could, consistently, without prejudice to his other engagements. And for his endorsements and services, the company were to pay him a sum equal to six per cent, per annum, on the amount of his endorsements, from the time of giving them until such indorsed paper should be taken up by the company.
Is this contract upon its face usurious, and as a matter of law, void; or only evidence to be submitted to a jury, for them to say with what intent it was made ? That it raises a very strong presumption, that it was designed as a cover for an usurious loan, there can be no doubt; and unless satisfactorily explained, would justify such an inference. But stilly is it conclusive evidence, admitting of no explanation as to the honesty and fairness of the transaction ? This is claimed by the defendants. And they insist, that the contract, by which the plaintiff was to receive a compensation for endorsing the notes of the company, was usurious; and they refer us to the case of Steele v. Whipple, 21 Wend. 103.
We cannot, however, yield our assent to that doctrine. Aside from authority, we are not satisfied that it is usurious for a person to receive a reasonable compensation for endorsing notes payable at banks. He may deem it necessary to keep his funds in a situation to meet his liability, in case the principal should fail to pay. He may thereby be prevented from using them as he otherwise might wish to do. We can-
o. -T. . tiii . . t . fedll, as such contracts are so liable to be perverted to usurious purposes, they are to be viewed with great jealousy. And especially, as in this case, where the contract'gives the endorser power to convert any payment which he may make upon the notes indorsed, with his trouble for endorsing them, into that which is equivalent to a loan at twelve per cent, per annum, until the debt is paid, the conclusion that the contract was made as a cloak for usury, is almost irresistible.
Nevertheless, if the law be, as we consider it, that an endorser may lawfully stipulate for a reasonable compensation for his trouble, then the question becomes one of fact, as to the intent of the parties. The court has no rule by which to determine, as matter of law, what compensation may be lawful, and what usurious.
That such a stipulation may legally be made, we think is clearly inferrible from decisions already made in this state. Thus, where a note for 950 dollars was given for the loan, of 850 dollars, and a charge of 100 dollars for the trouble and expense of procuring the money for the borrower from the banks, the contract was holden not to be necessarily usurious. The question whether the transaction was fair and bona fide, or a cover for usury, was submitted to the jury ; — and they having found in favour of the validity of the transaction, judgment was rendered accordingly. Hutchinson v. Hosmer, 2 Conn. Rep. 341.
So where an agreement was made with commission merchants, by which they were to charge two and a halfper cent. and lawful interest upon money by them advanced upon acceptances made for the accommodation of the drawers, it was left to the jury to say, whether the contract was intended as a cover for an usurious loan, or only as a fair compensation for the trouble of providing for and meeting acceptances, which it was the duty of the drawers to pay ; and the jury having found in favour of the commission merchants, the contract was enforced. De Forest v. Strong, 8 Conn. Rep. 513.
From the principles recognized by this court, in the cases cited, it seems to follow, that the question arising in this case,
But this question has already been referred to a committee to find and report, not the evidence, but the facts in the case. His finding is analogous to the finding of a jury in an action at law. Now, the report states, that the contract fairly expresses the intention of the parties ; was not designed by them to be a contract for the loan of money ; and the sum stipulated to be paid to the plaintiff for his indorsements and services, was no more than a fair and reasonable compensation for such indorsements, having reference to the general embarrassments of the country* at the time, and the kind of security agreed to be given.
Is the contract thus explained by the committee, and as we are now bound to understand it, usurious ? If it was no contract for a loan, and nothing more than a stipulation for a fair remuneration for services to be rendered, can we be justified in holding it void? We think not. And although we have experienced some difficulty in coming to this result, in consequence of the peculiar manner in which, that remuneration was to be made, yet we do not see, but that upon the facts found by the committee, and the principles already established by this court, the plaintiff is entitled to a decree in his favour.
Should it be said, that great danger may be apprehended from the perversion of such contracts to usurious purposes, the answer is, that whenever they are so perverted, they will be void. The intent of the parties in making the contract must govern ; and that is a question of fact, to be determined by that tribunal whose business it is to pass upon such matters ; and if an usurious intent is found, it will vitiate the contract.
We therefore advise the superior court, that the plaintiff is entitled to a decree in his favour.
Decree for plaintiff.
