28 Iowa 220 | Iowa | 1869
Lead Opinion
The breach alleged in the petition was the failure to* deliver the annual amount of wool between the fifteenth day of June and the fifteenth day of July, 1867. The plaintiffs asked judgment for two hundred dollars for the wool due that year, and for fifteen hundred dollars for amount due upon the contract.
The defendant Oassell was alone served with notice of the suit, and he filed his answer in denial; also, that he was but surety for Ferguson, who had paid the annual amount of wool for the years 1864, 1865 and 1866, worth, at the time of delivery, $747.40; and also, that the contract was made in Iowa, and was usurious.
The cause was tried to a jury, who, by consent of parties, returned, as their verdict, answers to certain questions, substantially as follows: 1. That the actual value of the sheep, at the date of the contract, was three dollars per head; 2. That the one and a half pounds of wool, mentioned in the contract, was not part of the price, but was for interest; 3. That the market price of wool, at the time and place of making the contract, was sixty cents per pound; 4. That at the time of payment, in 1864, wool was worth ninety cents per pound — total value, $264.60; 5. In 1865, fifty-five cents — total, $161.70; 6. In 1866, fifty cents — total, $107.00; 7. And that in 1867, when it should have been paid, wool was worth thirty cents per pound; 8. That Ferguson did
Upon this special verdict, the District Court held the contract usurious, and rendered judgment accordingly. This holding is assigned as error, and is the only question made in the case.
Upon the contract itself (aside from any evidence tending to show usury), there can be no serious claim made that it is usurious. Nor would the proof that the pound and a half of wool was worth, at the time of delivery each year, more than legal interest upon the value of the sheep, make the contract usurious; for, since its value was uncertain and might be less than legal interest, the fact that it was more would not make it usurious ; and this, although the pound and a half of wool for each sheep may have been stipulated for as interest, as the jury have found. That is to say, one man may rightfully sell his property to another for a certain sum in money down; or he may ask and receive a much larger sum on condition it is not paid for till a future day, arid the fact that the increased price payable at a future day was more than the legal interest on the cash price, would not make the contract usurious. In other words, the owner of property may sell it for such price as he can get, either in cash down or payable at a future day, and although the price payable at the future day may be twice or thrice as much as the down price or as many per cent per month more than it, yet this will not make it usurious. The reason is, that such contracts are not within the statute against usury. Of course, if such contracts are resorted to as a cover for usury — to evade the usury laws — they will be held usurious. But the jury did not so find in this case.
Some question is made by appellee’s counsel upon the phraseology of our statute, as being different from the original statute of Anne and of the other States from which the decisions above are cited. But since the jury found that the price agreed by the contract to be paid was the actual value of the sheep, and since the contract is not, upon its face, usurious, and the jury have failed to find that the contract was a device to evade the usury laws, or as a cover for usury, it becomes immaterial to examine the difference, even if there is any in legal effect, between our statute and those referred to, for in either view the contract upon the findings cannot be held usurious.
Reversed.
Dissenting Opinion
(dissenting).— Section 1790 of the Bevision is in these words: “ No person shall, directly or indirectly, receive in money, goods or things in action, or in any other manner, any greater sum or value, for the loan of money, or upon contract founded upon any bargain, sale or loan of wares, merchandise, goods, clothing, lands and tenements, than is prescribed by this act.” By the preceding section, the highest rate of interest for which parties may contract is limited to ten per centum per annum. The succeeding section provides that when it is ascertained, in any suit upon a contract, that a greater rate has been contracted for, “either directly or indirectly, in money, property or other valuable thing,” ten per centum per annum upon the amount of such contract is forfeited to the school fund, and judgment is rendered therefor against the defendant, and the plaintiff recovers the amount of the principal sum without interest, “ whether the unlawful interest be incorporated in the principal sum or not.”
The foregoing provisions prohibit usurious interest, not only upon contracts for the loan of money, but also upon all contracts founded upon the sale of property. Callanan v. Shaw, 24 Iowa, 452. They as explicitly and unmistakably prohibit it when paid, or to be paid, in property instead of money. The plain language of the statute permits no escape from this conclusion. If, therefore, usurious interest is reserved to be paid in wheat, wool, or any other thing, it avoids the contract as effectually as though it were stipulated to be paid in money. If the interest reserved is to be paid in a given quantity of wheat or wool, without stipulation as to the price of the property so paid, or to be paid, it then becomes a question, to be determined by evidence, whether the interest so provided for is in fact usurious. Suppose a note for one hundred dollars provides, that, as interest
It is argued that, inasmuch as the value of the wool was uncertain, liable to fluctuate, and, at the annual payments, to be of a value less than the highest legal rate of interest, therefore the contract in the very nature of things could not be usurious, for, in fact, it thus would not provide absolutely for the payment of an illegal rate of interest. The argument is ingenious but not sound, and would lead, in its practical application, to the utter defeat of the statutory provision which prohibits contracts for, and the receipt of, property for unlawful interest. The values of all property are fluctuating and, in a measure, uncertain; therefore a contract to pay property as interest could not be usurious. Legal rules must be practical, and framed with a view to their application in the affairs of men. The rule adopted by the majority tends to defeat the statute and open a door through which all usurers may escape.
The opinion of the majority keeps out of view the fact that the wool reserved in the contract to be paid annually was no part of the price of the sheep. Such, however, is the finding of the jury, and we must consider this as a fact not to be contradicted. Tet, as I understand the opinion, it is held that, inasmuch as the payments of the wool annually may have been provided for because the price of the sheep was not paid down, the contract is not therefore usurious. But this hypothesis of fact is directly contradicted by the record.
It is said that, because the jury did not find that the contract was resorted to for the purpose of evading the
The New York cases cited in the majority opinion were decided under statutes differing from ours, and therefore are not, as I believe, in point in this case.
I am of the opinion that the judgment of the District Court ought to be
Affirmed.