28 S.D. 353 | S.D. | 1911
This action was brought to recover the-amount claimed to be due upon a promissory note given plaintiff by defendant. The defendant pleaded usury, asked that certain payments made by him be credited on the principal, and consented that judgment for the principal less the sums paid be entered
The note was .executed in Wisconsin, and it is conceded that the contract entered into is to be construed under the laws of that state. The note was for $500, dated March 7, 1902, due in one year, and bore interest at 6 per cent, per annum. There were indorsed thereon a number of small payments, in all a total sum of $125. Under the law of Wisconsin, in force when the note was executed, it was usurious to contract even in writing for a greater rate of interest than 10 per cent, per annum, and section 1690, c, 79, Statutes of Wisconsin for the year 1898, provided: “All bonds, bills, notes, assurances, conveyances and all other contracts or securities whatever, whereby there is reserved or secured a rate of interest exceeding ten dollars on one hundred dollars for one year, shall be valid and effectual to secure- the repayment of the principal sum loaned; but no interest shall be recovered on such securities or on any money or other things loaned by such contract, except such bottomry and respondentia bonds and contracts and no corporation shall interpose the defense of usury.”
The note was upon its face valid, and, as the payee had not designated in the indorsements made as to how she had applied the payments, neither the note nor the indorsements thereon gave any evidence of an usurious contract. The defendant, however, pleaded that the real contract between the parties, as verbally entered into at time of the giving of the note, was that defendant should pay, for the use of the $500 that was then loaned to him by .plaintiff, the sum of $5 per month payable monthly; that, under-such verbal contract, he had paid $120 which was knowingly and intentionally received and applied by the plaintiff as and for interest for two years from March 7, 1902, to March 7, 1904; and that he had paid the further sum of $5.
Plaintiff was not present at the trial; her evidence being received in form of deposition. She denied the alleged oral contract; testified to receiving the several payments and making the indorsements at times of payment; and swore that she’had never intended to apply such payments to usurious interest
It is not claimed that the evidence was insufficient to support the verdict, and, while appellant assigns certain errors in the court’s ruling upon admission of evidence, such assignments are not discussed in his brief; he relying, for reversal of the judgment and order herein, upon alleged errors in the trial court’s instructions to the jury. Among the alleged erroneous instructions were the following:
A. “It" will not be sufficient for you to find that there was the oral agreement claimed by the defendant, unless you also find that the defendant afterwards made and the plaintiff accepted payments of interest at the usurious rate claimed by the defendant. If there was such oral agreement and the parties never acted upon, carried it into execution, then the defense of usury is not established. A promissory note is not to be altered in such a material respect as the rate of interest therein specified by changing that rate from a legal rate to an illegal rate or usurious rate by a mere oral agreement not executed. By ‘executed’ I mean acted upon, put into force and effect, carried out for at least a certain period or to some extent.”
*357 B. “If the indorsement on the note showing small payments thereon at divers times were made by the plaintiff at the times the same were received and promptly, then the same are very strong evidence in plaintiff’s favor as they are indorsements showing payments credited upon the principal and interest of the note and have a strong tendency to establish that the plaintiff did not knowingly and intentionally or otherwise or at all accept payments of interest at an usuurious rate or.any payments of interest merely.”
C. “On the other hand, the receipt signed by the plaintiff and introduced in evidence by the defendant is also entitled to consideration; yet it does not necessarily overcome or alter the fact that the said credits of payments, if indorsed promptly at the times when the payments were made, were and are on their face and in legal effect payments of and to be applied upon the entire indebtedness evidenced by the note, principal and interest included. That is apparent from the fact that each indorsement of itself as' if appears is evidence of a part payment of the note, not of the principal only, nor of the interest only, but of the note both principal and interest as against' the plaintiff, and, if she freely and voluntarily made those indorsements promptly, in each instance, upon receiving payments from the defendant, then she has never taken or received any illegal or usurious interest.”
In Roe v. Kiser, 62 Ark. 92, 34 S. W. 534, 54 Am. St. Rep. 288, it is said: “It is a well settled and recognized general rule that parol evidence cannot be admitted to contradict or vary the terms of a written agreement. But this rule is not without exceptions. This rule assumes that the instrument has a legal existence and is valid. Testimony to show it to be void is always pertinent. Illegality of an agreement may be shown, to avoid a writing purporting to evidence it. See 2 Philips on Evidence, 684, note 500, and authorities there cited, and note 495, p. 673, and cases cited; Wilhite v. Roberts, 4 Dana [Ky.] 175. In an action on a note, the defendant may show a distinct parol agreement, made at the time the note was given, to pay usury upon the