118 Neb. 383 | Neb. | 1929
This is an original action in the name of the state of Nebraska, on the relation of O. S. Spillman, then attorney general. The purpose of the action was to enjoin and oust the defendant, a nonresident corporation, from doing business in this state. The issues requiring evidence to be taken, the court appointed Honorable L. J. Te Poel, of Omaha, as referee, with instructions to.take evidence and to report the same to this court, together with his findings of fact and conclusions of law. Upon the referee’s report the defendant filed its exceptions and the case was duly briefed and orally argued to the court.
The referee found that the defendant was a corporation foreign to Nebraska, probably originally incorporated under
In addition to the findings of fact the referee concluded as matters of law: (1) That the defendant is a foreign corporation doing business as such in Nebraska; (2) that the transactions had by the defendant company amounted to loans and not to sales; (3) that the defendant violated the positive laws of the state by charging interest at the rate of more than 10 per cent, per annum, in that it charged 20 per cent, a month, and that it has therefore forfeited its right to do business in the state; (4) that no right "of the defendant guaranteed by the federal Constitution is violated by the enactment and enforcement of the usury laws of the state; that the state laws provide a reasonable classification, provide no distinctions, and in no way discriminate against the defendant because it is a foreign corporation; (5) that this is an action in equity, and that the court may properly grant an order enjoining the defendant from continuing to do business in the state; because defendant has so little property that can be reached, the referee sees no practical occasion for the appointment of a receiver and does not recommend such an appointment.
The report of the referee is a thorough statement of the facts shown in the evidence and a learned presentation of the law from which his conclusions are derived.
The exceptions of defendant are many, but its brief and argument narrow the propositions of law to two. The first is: “The buying of earned salaries or wages at a discount is not the loaning of money and is not a violation of the usury laws of the state of Nebraska.” Heading the long list of citations under this proposition is section 2845, Comp.
A considerable proportion of those who obtained money from the defendant were married- men and heads of families. No instrument in evidence, so far as we discover, shows that, when any of the borrowers were heads of families, the signatures of their wives were obtained nor that the instruments were acknowledged. Section 2459, Comp.
The defendant set out in its brief the blank form of instrument as typical of those used, and there are many executed ones in the record. None of these have any place for the execution and acknowledgement by husband and wife required under the section quoted. It is evident that in all such cases the defendant was violating a positive statute. All the circumstances are for consideration in determining defendant’s attitude to the well-known public policy and spirit of the law and in an analysis of the question as to whether the defendant was seeking by evasion and by indirection to make an usurious lohn under the guise of purchasing a right of action.
In the case of Tennessee Finance Co. v. Thompson, 278 Fed. 597, the facts were very similar to those here. The court held that it was the settled rule to look through the forms adopted to evade the -usury laws and to ascertain as a fact whether it wa® a good faith sale or a loan at usurious interest. There it was held to be a loan and not a sale.
In McWhite v. State, 143 Tenn. 222, the defendant was convicted of usury and prosecuted appeal in error to the supreme court. The transaction was with a railroad employee on plans similar to those of the defendant in the case involved in this opinion. The court held that the defendant’s plan was clearly “an extension of credit, an advance, or loan, to the employee, with the assignment held over the employee as a sort of club or collateral security.”
“A loan of money is the delivery by one party and the receipt by the other party of a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with or without interest.” 38 C. J. 126, sec. 1.
“A sale is a transfer of the absolute or general property in a thing for a price in money, which the buyer pays or promises to pay for the thing bought and sold.” 23 R. C. L. 1186, sec. 2.
The courts in such a case as this are not bound by forms but will look beyond form to the real substance. Looking through the scheme of the defendant to acquire and retain :an unlawful and usurious rate of interest for the use of its money, and discerning the real substance of its transactions, we are of the opinion that its transactions pictured in the evidence were not bona fide purchases of rights of action from its customers, but rather were loans of the defendant to its customers. As such they were strongly infected with usury, were unlawful, and were contrary to the public policy of the state.
The defendant’s second proposition is: “A foreign corporation cannot be ousted from doing business within a state unless it has violated a law or laws of the state which carries with it the right of ouster, or unless it be a matter of public concern.”
The answers to this proposition need not take much time nor space. The defendant has, as demonstrated by the evidence, habitually violated the laws of the state, and it is a matter of public concern that all persons within the state shall be protected from a continuation of those acts. For authority we quote from a comparatively recent opinion: “The rule is settled in this state that foreign corporations do business here as a matter of comity and not as a matter of right. The privilege extended to a foreign corporation may be revoked at the pleasure of the state, and quo warranto proceedings brought by the attorney general in the name of the state is one of the proper proceedings to cancel
It is the opinion of the court that the exceptions of the defendant to the report of the referee should be overruled, that the report of the referee should be adopted, and that the defendant should be ousted from continuing to do business as a foreign corporation in this state.
Exceptions overruled, and writ of ouster allowed.