Eames v. Barber, 192 Mich. 1

192 Mich. 1 | Mich. | 1916

Ostrander, J.

(after stating the facts). 1. The statute of the State of Texas defines interest as:

“The compensation allowed by law or fixed by the parties to a contract for the use or forbearance or detention of money.” Article 4973, Revised Civil Statutes.

So by the statute of New York:

“The rate of interest upon the loan or forbearance of any money, goods or things in action, except as otherwise provided by law, shall be six dollars upon one hundred dollars, for one year, and at that rate, for a greater or less sum, or for a longer or shorter time.”

Consolidated Laws of the State of New York (1909), vol. 2, pp. 1253, 1259, § 370 et seq.

So our own statute (2 How. Stat. [2d Ed.], § 2870 [2 Comp. Laws 1915, § 5998]) is:

“No bond, bill, note, contract or assurance, made or given for or upon a consideration or contract, whereby or whereon a greater rate of interest has been, directly or indirectly, reserved, taken or received, than is allowed by law, shall be thereby rendered void; but in any action brought by any person on such usurious contract or assurance, except as is provided in the following section, if it shall appear that a greater rate of interest has been, directly or indirectly, reserved,, taken or received, than is allowed by law, the defendant shall not be compelled to pay any interest thereon.”

In each State what the statute condemns is taking or receiving directly or indirectly, more than the legal rate of interest. The contract is not avoided; the loss of interest is the penalty.

While a statutory definition of interest may change the definition of usury, there is nothing in the statutes I have referred to which forbids the acceptance of the common idea that interest is a charge for the loan or forbearance of money. See, generally, 39 Cyc. p, 888 et seq.; 29 Am. & Eng. Enc. Law (2d Ed.), p. 453.

The lease affords no evidence of a loan by plaintiffs to defendants. Its reasonable, and, unless the imagination is employed, its necessary, interpretation negatives the idea of a loan to defendants. Defendants’ term began after the land had been fitted and seeded. It is immaterial that they, instead of some one else, superintended the fitting and seeding, at the expense of plaintiffs, or that they even performed the necessary labor and furnished the necessary materials. Suppose that a barn on premises was needed, and the owner undertook to erect it before the tenant’s term began, permitting the tenant to erect it at the owner’s expense, the rent being fixed with reference to the improved premises; in such a case it could not be reasonably contended that the cost of the barn was a loan to the tenant. I can see no difference between the supposed case and the one presented by the terms of the lease. Assuming that the contract which preceded the making of the lease may be resorted to and its terms and those of the lease be considered together, there is then nothing which supports a construction of the lease other than the one indicated. Clearly there is no lawful objection to fixing the rental in terms of a percentage of the total cost of the premises. Defendants, appellees, rely upon Rosen v. Rosen, 159 Mich. 72 (123 N. W. 559, 134 Am. St. Rep. 712); Fisher v. Hoover, 3 Tex. Civ. App. 81 (21 S. W. 930), and other cases as sustaining the doctrine that usury may exist when there is no actual loan of money. Since defendants assert, and assert only, that there was a loan — an advancement — of money to defendants, the proposition stated is not, if sound, of particular interest. However, one has only to read the opinions in the cases cited to see that in each use of money, a debt, was the foundation of the exaction complained about. It is assumed, each party having moved for a directed verdict, that there was no conflicting oral testimony tending, by inference or otherwise, to prove an intention of the parties other than the one to be found in the terms of. the lease. It is asserted in the brief for appellants that there is no such testimony, and defendants’ brief refers us to none, tending to prove that the lease was a mere device for exacting usury — unlawful interest. It may be conceded that the plaintiffs desired to make a profitable investment of their money, but they did not lend it to defendants, and no debt was created for the amount invested. The intention to exact usury is not proven.

2. For appellants it is contended that this cburt should refuse to consider whether the verdict and judgment are in any event right, and should enter a judgment for plaintiffs for the amount of past due rent and interest, plus the amount of unpaid water rental. It is the general rule that an appellate court does not concern itself with errors claimed to have been committed against the appellee. Hughes v. Railway Co., 78 Mich. 399 (44 N. W. 396); Bowsher v. Railway Co., 174 Mich. 339, 345 (140 N. W. 524). But, when an issue determinable as matter of law is determined by the court, and a wrong reason assigned for the ruling, the proper administration of the law does not require a reversal if the ruling is nevertheless right. In Ehinger v. Graham, 190 Mich. 132 (155 N. W. 747, 750), it was said:

“We think the circuit court reached the correct conclusion (although its reasons stated therefor were insufficient) ,”

and affirmed the judgment. In Lentz v. Insurance Co., 96 Mich. 445 (55 N. W. 993), it appeared that three grounds of defense to an action on a policy of insurance were asserted. Upon one of them the court directed a verdict for defendant. It was said, 96 Mich. 446 (55 N. W. 994):

“If it appears that there is any conclusive reason why no recovery should be had, the judgment should not be disturbed.”

A considerable number of similar cases are collected in 1 Mich. Digest, § 854.

In the case at bar the record includes the lease, and the laws of Texas and of New York were proved. It appears to be agreed — at least nothing to the contrary is asserted — that the point is one of law which the court below should and, appellants say, did determine. It is- also a question certain to be raised upon a new trial. Therefore, in my opinion, it should be considered.

The contract is for leasing for a longer period than one year. By the laws of New York and of Texas it is required to be in writing. It is in writing. Is there omitted from the writing anything essential to the contract which it attempts to evidence? If not, then it is not necessary to further test it by the laws of either State. The lease was executed in June and in July and August, 1909. It described the investment made and to be made by the lessors, upon the total of which, the rental was to be reckoned. The terms of the lease are not uncertain. No element of a lease of lands is omitted. The precise amount of rent reserved is not stated; nor is it in a lease of lands for agricultural purposes where rent in kind from crops to be raised is reserved; nor in leases for a considerable period of time during which an appraisal, or successive appraisals, of the property rented is by agreement to be the basis of the rent charge. See Rayburn v. Lumber Co., 57 Mich. 273 (23 N. W. 811); Lamb v. Hydraulic Co., 59 Mich. 597 (26 N. W. 785); Camp v. Moreman, 84 Ky. 635 (2 S. W. 179); Vindquest v. Perky, 16 Neb. 284 (20 N. W. 301); Atwood v. Cobb, 16 Pick. (Mass.) 227 (26 Am. Dec. 657); 2 Page on Contracts, § 704. Beyond this the term began after the expenditures had been made, the amount expended has been agreed to, and for four years the rent reserved in the lease was paid.

The court below- was in error in ruling that the contract was usurious, and right in ruling that the lease was not affected by the statute of frauds of either New York or Texas.

We are referred to no testimony which supports a recovery for the unpaid water rentals.

The judgment is reversed, with costs to appellants, and a new trial granted.

Stone, C. J., and Kuhn, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.