149 F.2d 832 | D.C. Cir. | 1945
This is a suit to recover moneys alleged to have been usuriously exacted from appellee, Seven Corners Realty, Inc., by appellant Plitt. The case involves a loan of $15,000. A brief statement of the facts leading up to the challenged transaction follows :
Appellee, hereafter called “Realty Company,” was organized April 12, 1941, under the laws of Delaware and its stock, thereafter issued, was wholly owned by Louis Burman and Eva Burman, his wife, who were respectively President and Secretary of the corporation. At that time the Bur-mans held an option or contract to purchase a lot of land in the District of Columbia. They purposed acquiring this land in the name of Realty Company, and planned to have Realty Company erect thereon a building which it would contract to lease to the Great Atlantic & Pacific Tea Company. The Burmans were then short some $15,000 or $16,000 of the amount necessary to carry through the project. Accordingly, on April 12, 1941 (the day of incorporation of Realty Company), they individually entered into a written agreement with appellant Plitt in Baltimore, whereby in consideration of $15,000 in cash to be advanced to them by him, they would cause Realty Company to execute its one-year note for $19,000 (to themselves), to be endorsed by themselves and, which, together with other collateral to be furnished by themselves, would be delivered to Plitt as security for the loan. The details of this arrangement were subsequently carried out through a title company in the District of Columbia, and in November, 1942, Realty Company, in the District, paid Plitt the full sum of $19,000, with interest at six per cent (6%) to that date, in discharge of its note. The result of this closing of the transaction was that Plitt received, then and theretofore, in addition to the principal sum loaned by him, the further sum of $5,648.24, to recover which this suit was brought, on the ground that the payment was in excess of the lawful rate of interest under District of Columbia laws..
After both sides had submitted evidence, each moved for a directed verdict. The District Judge, being of opinion, “on the undisputed facts that the transaction occurred in the District of Columbia,” directed a verdict in favor of Realty Company and entered judgment for the amount sued for. Under the laws of Maryland a corporation may not avail of the usury laws, bu't under the laws of the District of Columbia it may. Accordingly, the case was argued here on the question whether the transaction was controlled by the laws of Maryland,
“Seven Corners Realty, Inc., a Delaware corporation, hereby executes the foregoing memorandum for the purpose of evidencing its agreement to, and its execution hereby, of all the covenants and conditions provided therein to be performed by it in connection therewith.”
An examination of the terms of the contract shows that the Burmans agreed that Realty Company would acquire the land, contract for the improvements thereon and assign the A. & P. lease to further secure the holder of the $19,000 note. There was no undertaking on Realty Company’s part directly to Plitt. As it now appears, however, counsel agreed that the loan was for the benefit of Realty Company, and on its admission that it got Plitt’s money— through the Burmans — and ultimately paid off the debt, by agreement of parties, the trial was allowed to proceed in the name of Realty Company as the proper party-plaintiff in the suit.
Affirmed.
Md.Code Aun. (Flack, 1939), Art. 23, §129.
D.C.Code 1940, §§ 28 — 2702, 28-2703.
The original complaint was filed in behalf of Realty Company alone. Subsequently an amended complaint was filed in the name of the Burmans and Realty Company. After the opening statement of counsel for plaintiffs, there was a colloquy between the court and counsel, as a result of which the court directed the elimination of the Burmans as parties-plaintifr. The case thereafter proceeded in the name of Realty Company alone and was tried on the theory, as then stated by counsel for Plitt, that “the corporation went to Baltimore and arranged with Mr. Plitt * * * under the terms of which Mr. Plitt was to purchase from the corporation a note in the sum of $19,000, for which Mr. Plitt was to pay the corporation $15,000.”
An examination of the authorities indicates the inter- and intra-jurisdictional conflicts which the problem has provoked. See Beale, Conflict of Laws, § 332; Cook, Logical and Legal Bases of the Conflict of Laws, The Validity of Contracts, pp. 347-432; Restatement, Conflict of Laws (1934) §§ 311, 332-347; Note, Us