Citizens Budget Co. v. O'Connell

177 N.E. 840 | Ohio Ct. App. | 1931

The Citizens Budget Company, plaintiff below, filed its petition in the common pleas seeking recovery against Charles Edward O'Connell and others on a promissory note, dated April 12, 1930, signed by the defendants, payable to plaintiff, in cognovit form. The instrument sued upon authorized: "Any attorney of any court of record to appear for us or any or either of us in term time or vacation at any time after default in the payment of this note or the interest thereon, or of any part of either thereof, and confess a judgment in favor of the holder of this note for such amount as may appear unpaid thereon, plus accrued interest and penalties, and to waive and release all errors which may intervene in such proceedings," etc.

Pursuant to that authority an attorney appeared and by answer entered the appearance of the defendants and confessed judgment as prayed for.

The trial court upon examining the note ascertained from its terms that it provided for interest in excess of eight per cent., and was apparently usurious under Section 8303, General Code. The court interpreted the language of Section 8306, General Code, as authorizing the court to refuse to enter judgment for usurious interest, although usury was not pleaded, and on its initiative refused to enter judgment for so much of the claim as included interest in excess of eight per cent. The court was justified byGoode v. Sutton, 29 Ohio St. 587, in refusing upon its own initiative to include usurious interest in the judgment, and it might have gone further in that respect by so entering judgment as to have included interest at six per cent. only.

However, the plaintiff claimed that it was licensed to conduct a loan business under Section 6346-1 et seq., General Code, and that as such licensee it was authorized by Section 6346-5 to charge interest in excess of the normal charges authorized by Section 8303, and had pleaded its license in its petition. The trial court held that its licensed character should appear in the note, and for that reason refused to render judgment including an amount in excess of eight per cent. interest. To its final order in this respect the plaintiff prosecutes error to this court.

It is doubtless true that the attorney appearing for the defendants cannot make confession beyond the powers expressed in the instrument. He could not confess, therefore, the licensed character of the plaintiff. He could and did confess the liability of the defendants as fixed by the terms of the note, but recovery for the excess interest required proof on the part of the plaintiff of its power to receive the whole amount promised by the defendants. This the plaintiff proposed to prove. It was the duty of the trial court to accept this evidence. Technically the proof offered was not the best evidence, for no license was exhibited. Moreover, the parol evidence was that the plaintiff "is licensed." This sounds in the present tense and relates to the time of trial, to-wit, March 13, 1931. To meet the requirements of the statute proof should have shown that the company was such licensee on April 12, 1930.

The principle for which the plaintiff contends is sound. It has a right outside the note to prove that it was licensed to make the contract for excess interest, and when its licensed character at the time the note was delivered is proved it has a right to a judgment within the limits of Section 6346-5, General Code. In this case it did not make such proof, and because of such technical failure the judgment is affirmed.

Judgment affirmed.

MAUCK, P.J., BLOSSER and MIDDLETON, JJ., concur.

Judges of the Fourth Appellate District, sitting by designation in the Eighth Appellate District.