73 Fla. 1215 | Fla. | 1917
J. L. Fouts brought a bill to foreclose a mortgage against Mfs. Virginia H. Tucker in the Circuit Court of Pinellas County, Florida. The bill alleges in substance that Virginia H.- Tucker, on the 10th of December, 1914, gave to' the Bank of Safety Harbor, her promissory note of that date for $3000.00 payable 90 days thereafter, with interest after maturity at 8%; that on the same day she executed a mortgage deed to the Bank of Safety Harbor, for certain lands described in the bill, and that the Bank of Safety Harbor for value received, assigned, transferred, sold and delivered to J. L. Fouts, said note and mortgage on the 16th day of March, 1915. The bill was sworn to by the complainant.
Attached to the bill and made a part thereof is an assignment of the mortgage and note to J. L. Fouts, dated March 16, 1915, and the notarial certificate affixed to the assignment shows that it was executed on March 16th, 1915. To this bill the defendant filed her answer, setting up by way of defense that the Bank of Safety Harbor, did willfully and knowingly charge her $475.00 as inter
On the succeeding rule day the complainant filed an amendment to his bill of complaint wherein he alleges that the assignment of the note and mortgage to him by the Bank of Safety Harbor was made on March 6th, 1915, and that he was a bona fide purchaser of the note and mortgage for value before maturity and without notice. To the bill as amended the plaintiff filed her answer which was substantially the same as the answer to the original bill, except that it denied that for value received, the Bank of Safety Harbor assigned, transferred and delivered to the complainant, all its right, title and interest in said note and mortgage on March 6th, 1916, and denies that John L. Fouts was a bona fide purchaser of same for value before maturity and without notice.
The complainant filed his replication, and testimony was taken before a Master, and a decree rendered by the Circuit Judge in favor of the complainant for the sum of $3333-32> and $250.00 solicitors fees. From this final decree the defendant takes her appeal.
There are six assignments of error, but only the first five are argued by appellant, and as these present the
The first question presented for determination is, was the .initial transaction an usurious one? The'charges in the answer as to the circumstances of the transaction connected ! with the loan, are sustained by the testimony. Briefly the facts gleaned from the answer and the testimony are thaese: The appellant was the President of the Espíritu Santo Springs Company and owned a majority of its stock. That extensive developments were being made by the' company on its property, and it- was in pressing need for money to continue the work.1 When the mortgage and note were executed, the $3000.00 loaned thereon was placed to the credit of, and checked out by the Espíritu Santo Springs Company, and it was the beneficiaiy of the loan. W. E. Sinclair was the Vice-Presi•dent and.General Manager of the Company and the confidential adviser and trusted agent of Mrs. Tucker. He negotiated the loan with the Bank of Safety Harbor for Mrs. Tuckér. There is no doubt that a charge of four hundred and seventy-five dollars for a loan of $3000.00 for ninety days, is over twenty-five per cent, per annum, and comes within the condemnation of the provisions of Section 5, Chapter 5960, Laws,of 1909', which provides: “Any person, association of persons, firm or corporation, or the agent, officer or other representative of any person, association of persons, firm or corporation lending money in this State who shall willfully and knowingly charge, or accept any sum of money greater than the sum of money loaned, and an additional sum of money equal to twenty-five per centum per annum' upon the principal sum loaned, by any contract, contrivance or device whatever, directly or indirectly, by way of commissions, discount,
It is contended by the appellee that because the note for four hundred dollars which was given for the loan, in addition to the seventy-five dollars, was the note of the Espíritu Santo Springs Company, it was a mere bonus, and that a bonus for a loan paid by a third person is not usury. A bonus paid by a third person ,may or may not cause a transaction to be usurious, according to the circumstances. Thus, if a third person in order to get some benefit for himself, or for any personal reasons, without the knowledge or consent of the borrower, pays the lender a bonus as an inducement for a loan, the borrower receiving the full amount and paying no part of the bonus and not affected pecuniarily thereby, the transaction is not an usurious one. This proposition is supported by the authorities cited by appellee, but neither this doctrine nor the facts in the cases cited, fit the facts in the instant case. Thus in Madison University v. White, 25 Hun. (N. Y.) 490, the facts were that John L. White and George C. White wanted to borrow $12,000.00 with which to purchase lánd. As an inducement, to-Madison University to make-the loan, one Joseph Mason subscribed and paid to the University Library fund two hundred and fifty dollars, without the knowledge or consent of either of the borrowers., who had the full benefit of the $12,000.00
In Clark v. Sheehan, 47 N. Y. 188, cited by appellee, Sheehan entered into a verbal contract with Clarke & Allen to furnish them with his composition for converting iron into steel,—■ for which Sheehan held a patent.— to be used by them in making pump barrels. Sheehan was also to harden pipes for them if they desired, at a stipulated price, and agreed not to furnish any of the composition to any other parties. Ten days later Sheehan applied to Clark & Allen for a loan of five hundred dollars to enable him to “go right along and furnish * * * the composition without delay.” The parties, acted upon this verbal agreement, and regarded themselves, when the loan was applied for, and agreed to be made, morally, though not legally bound by it. On application for the loan Clarke & Allen suggested that the verbal agreement be reduced to writing, and that a bond and mortgage be executed for the five hundred dollars, conditioned for the payment thereof with interest and that Sheehan faithfully fulfill the conditions of his contract, and in case he did not do so, the whole sum of five hundred dollars and interest should become immediately payable. The
None of these cases fit the facts in this case, or support the contention of the appellee. Mrs. Tucker was the owner of considerable property, consisting of lands, and a majority of the stock in the Espíritu Santo Springs Company. She was interested largely in the development •and improvement of the properties of the Espíritu Santo Springs Company, and was in dire need of money to continue the development. In this situation she sent her trusted agent and personal'representative who was also Vice President and General Manager of the Espíritu Santo Springs Company to the Bank of Safety Harbor to effect a loan of $3,000.00 in order that the work of developing the Espíritu Santo Springs Company’s lands might not be suspended. The contract was made with the bank by Sinclair, her agent; he agreed for her that she would individually give a mortgage for $3,000.00 on lands which she owned in her own name, and pay $75.00 in advance as interest, and the Espíritu Santo Springs Company, of which- she was President and majority stockholder, would execute and deliver a note for $400.00 at 8%« interest to the Bank of Safety Harbor.
. It is clear from the testimony that the loan of three thousand dollars was for the Espíritu Santo Springs
It is quite clear that the transaction by the Bank of Safety Harbor was an usurious one and in contravention of Section 5, Chapter 5960 Acts of 1909. The complainant, however, seeks to avoid the consequences of the usurious contract, by setting up that he is a bona fide purchaser of the note and mortgage for value, before maturity and without notice. Usury having been established,
“The defendant having set up usury as a defense, the burden of proof is on him to establish it, but when the usury is proven, the burden of proving that the holder of the usurious note, purchased it before maturity without notice of the usury, is upon the party relying upon such purchase.” 39 Cyc. 1085-86; Simpson v. Hefter, 87 N. Y. Supp. 243; Richardson v. Stone, 32 Neb. 617, 49 N. W. Rep. 763; Male v. Wink, 61 Neb. 748, 86 N. W. Rep. 472.
Has Fouts successfully fulfilled the requirements of the law which places on him the burden of proving that he is an innocent purchaser and had no notice of the usury, and that he bought the note before maturity? If he has failed to do this in either particular, he cannot recover.
Fouts in his sworn bill says he bought the note and mortgage from the Bank of Safety Harbor on the 16th of March, 1915. This was six days after maturity.
The original mortgage attached to the bill has two endorsements—one undated, which states that “for value received we hereby sell this mortgage without recourse to J. L. Fouts,” and a second and more formal one which sells both note and mortgage to Fouts, which is dated March 16th, 1915, and duly acknowledged by E. N. Morrow, Cashier of the Bank of Safety Harbor, before a Justice of the Peace, who certifies that it was executed on the 16th of March, 1915.
Fouts filed an amended bill contradicting the statement in the original bill that the note and mortgage were bought by him on March 16th, 1915, and alleging that the Bank of Safety Harbor sold it to him on March 6th, and that the long assignment dated March 16th, was exe
Fouts was Cashier of the Citizens Bank of Mulberry, and Morrow was Cashier of the Bank of Safety .Harbor. Their version of the transaction resulting in the sale of the note and mortgage to Fouts, is that prior to March 5th, they had some talk about its sale by the Bank, and on that date Fouts told Miss Annie Glenn, Assistant Cashier of the Mulberry Bank, to telephone to- Morrow at Safety Harbor and ask him if he would sell the $3000.00 note, of Mrs. Virginia Tucker to¡ Fouts; that Morrow said he would, and thereupon Morrow mailed the note and mortgage to him and he received them March 8th. Fouts being hard of hearing, the telephone conversation with Morrow was carried on by Miss -Glenn on behalf of Fouts. She testified that nothing was said about what Fouts was to pay fo^the note and mortgage, nor how it was to be paid, and neither Fouts nor Morrow testify abopt any agreement as to how the, money was to be paid, and on this vague convérsation between Miss Glenn and Morrow, the latter endorsed the note and mortgage over to Fouts and sent them to- him by máil, without knowing' so far as the testimony discloses, how or when Fouts was to pay for them. Fouts says he gave, the Bank of Safety Harbor credit on the Books of the Citizens Bank of Mulberry for fifteen hundred dollars and sent'Morrow two checks of seven hundred dollars each. To corroborate this a duplicate deposit slip written on stationery of the Citizens Bank of Mulberry showing a deposit to the credit of the Bank of Safety Harbor of $1500.00 dated November 8th, 1915, was offered in evidence, Prior to the production of this deposit slip before the Master, L. C. Morrow, then the Cashier of the Bank
In the Minute Book of the Directors of the Bank of Safety Harbor there appears this entry, dated March 15th, 1915, and signed by five of the Directors: “We the undersigned directors of the Bank of Safety Harbor hereby authorize the sale of the Virginia H. Tucker Mortgage and Note for $3000.00 to J. L. Fouts.” The Teller’s Daily Balance Book of. the Bank of Safety Harbor shows an entry on March 16, 19x5, of a credit to Citizens Bank of Mulberry under heading “Notes Payable” “Number thirty-eight, Three thousand dollars.” The Cashier testified that the note number 38, was the Vir
To meet the burden of proving that he took the note before maturity, we 'have Morrow’s and Fouts’ testimony that the sale was consummated between the 6th and 8th of March. Against this, we have Fouts’ sworn statement in the bill, that he bought the note on the 16th; the entry in the Minute Book of the Directors of the Bank of Safety Harbor on March 15th, authorizing the sale of the Virginia Tucker note for $3000.00 to J. L. Fouts; the entry in the Books of the Bank that the note was paid on the 16th, and a-credit on that day of $3000.00 in favor of Citizens Bank of Mulberry, of which Fouts was Cashier, Fouts and Morrow say that all these records are mistakes, but it is taxing- our credulity to too great an extent to expect us to believe that chance alone caused all but one of these mistakes to be made on the same day and that chance alone controlled the dating of the minute entry on the Directors’ Books authorizing the sale of the Virginia Tucker note to Fouts on the 15th of March, the day before the other entries show the sale was finally consummated.
There are two' letters from Fouts to Sinclair which strongly support the appellant’s contention that Fouts ^boug'ht the note after maturity. One dated’ March 8th,
We think the appellee has not only failed to meet the burden of proof which was on him, to show that he took this note before maturity, but that the evidence clearly establishes that he took it after it became due. The rule is clear that one who purchases an usurious note aftei maturity, takes it subject to the defense of usury which may have been set up1 against the original holder.
, The evidence is still stronger that Fouts had notice of the usurious character of the transaction between the Bank of Safety Harbor and Mrs. Tucker. Sinclair testified that having learned that the Bank of Safety Harbor would not extend the note when it came due he sought elsewhere to raise the money to take it up, and entered into negotiations with Fouts with that end in view. They had an interview in Tampa on Sunday the 28th of February, 1915, and then took an autofnobile and went to Safety Harbor and looked at the lots, and Fouts said the security was sufficient, and that if Sinclair would pay $1000.00 for the money for six months he would let him have $3000.00, and if he could not pay it when due, Fouts would renew it for another six months. Sinclair says that at this time he explained to Fouts the $475.00 interest he had paid the Bank of Safety Harbor for the loan to Mrs. Tucker, and that the bank was taking advantage of him. Fouts denies that Sinclair told him about having paid the Bank $475.00 for the loan to Mrs. Tucker.
Sinclair’s statement is more probable, as it is usual
It appears that Sinclair was willing to submit to this hard bargain, but on March 3rd, Fouts wrote him to the effect that he would get the loan for him, but Mrs. Tucker must give her note for $4120.00 payable in six months, secured by a mortgage on thirty-five lots instead of twenty-seven as offered; that there was to be no contract providing for further extension, and making other hard terms. The testimony does not show that Sinclair .replied in writing to this letter, but in Fouts’ letter of March 8th he says'“reference to our conversation,” etc. It is apparent from this that between March 3rd and 8th, there was a conversation between Fouts and' Sinclair in relation to this transaction. Sinclair says it took place in Safety Harbor on the 3rd or 4th of March. Fouts denies that he was in Safety Harbor'’any week day in March except the 10th, but makes no attempt to explain where the conversation referred to in his letter of the 8th took place. It was not a telephone conversation for the bill for such service for March shows no conversation between Fouts and Sinclair. Miss Alma Pearce, O. M. Goodrich and Sinclair say it occured in Sinclair’s office in Safety Harbor on the 3rd or 4th of March. Sinclair says that on this occasion he again told Fouts about the $475.00 he had paid the Bank of Safety Harbor for the loan, and when Fouts got angry and threatened to buy the note and put him in a hole, he shook his finger in Fouts, face and said “I notify you if you buy that paper
We are satisfied from the testimony that Fout bought Mrs. Tucker’s note from the Bank of Safety Harbor after maturity, and that he had notice of the usury with which it was tainted, and has therefore forfeited the entire sum both principal and interest. Having reached this conclusion, it is not necessary for us to pass upon the effect of Section 5 of Chapter 5960 Acts of 1909, on an innocent holder for value before maturity.
The decree is reversed.
Taylor, Shackleford, Whitfield and Ellis, JJ., concur.