51 Ark. 534 | Ark. | 1889
The appellant, claiming title under tlie appellee, brought ejectment in the Garland Circuit Court to recover of her two parcels of land. The lands had been sold under the power contained in two deeds of trust executed by her, and the appellant had purchased them. She seeks to defeat the title thus acquired, upon a plea that the deeds of trust were each given to secure usurious loans from the appellant to her.
The case was tried by a jury. There was verdict and judgment for the appellee, defendant in the court below. The appellant assigns as grounds to reverse the judgment, that the court erred in instructing the jury. It is contended ■on the other hand, that such error, if committed, was without prejudice to the appellant, for the reason that upon the evidence no other verdict than the one found by the jury, ■could have been rendered. The evidence conclusively establishes the following facts:
The appellee applied to one O. F. Smith, a broker in Hot .Springs, for a loan of three hundred dollars; Smith procured that amount from the appellant, and delivered to him one of the notes and deeds of trust to which the taint of usury is now imputed; the note was for $300, due in three months, without interest until due; Smith paid to the appellee $261 ■of the amount procured from appellant, and returned to the appellant the amount of the interest on the note for three months at ten per cent, per annum. Smith retained the amount of his own commissions, and the cost of acknowledging and recording the deed of trust. Whether this exhausted the balance or not, is left in doubt. Afterwards the appellee ■applied to Smith for a loan of one hundred dollars; Smith procured from appellant one hundred and twenty dollars, ■and delivered to him the appellee’s note for that amount, due in three months without interest until due, with a deed of trust on part of the land in controversy, to which note and ■deed of trust the defendant imputes the taint of usury. Smith gave to appellee one hundred dollars of the amount thus procured, returned to the appellant the amount of the interest on the note for three months at ten per cent, per annum, and retained out of the balance the amount of his own commissions with fees for acknowledging and recording the deed of trust. Whether this exhausted the balance or not, is left in ■doubt.
The appellant contends that upon each loan he received interest in advance at the rate oí only ten per cent, per annum, while the appellee contends that he received more.
The notes were not satisfied. The lands were sold under the power in the two deeds of trust, and the appellant purchased them.
Usury is charged, First, because the lender reserved interest in advance, upon the face of the note at the highest lawful rate of interest, and second, because in addition to-the highest lawful interest, paid directly to the lender, interest in excess thereof was paid, by way of bonus, to Smith.
As the notes were given for the entire amount applied for,, and as the amount actually received by the borrower was less than such amount, by the amount deducted for interest, it is. contended that this constitutes usury to a mathematical certainty.
Unless the legislative interpretation of the terms of its mandate was in violation thereof, it is clear that usury can not be’ imputed to the reserving in advance of the highest lawful rate of interest. Although the statute was intended to enforce, if it in fact violates the provisions of the constitution,, it is void. The language of the constitution, as of other similar instruments, is general and comprehensive. It deals, with large topics couched in broad phrase; it attempts neither minute definition or enumeration. It should be so construed as to subserve its broad purposes, and in the accomplishment of this end, it should not be subjected to the application of arbitrary rulés of construction, which it is said, are more often resorted to as aids in ingenious attempts to make the-constitution say what it does not, than with a view to make-it express its real intent. Endlich- Int. of Stat., sec. 506;. Cooley’s Con. Lim., 101.
As a constitution does not deal in detail or enumeration,, we should not give it so broad a meaning as will carry it beyond its true sense and spirit, nor apply to it such narrow or constrained views as to defeat the object of those-who framed it. Cooley’s Con. Lim.; People v. Fancher, 50 N. Y., 291; People v. Cowles, 13 N. Y., 350; Temple v. Mead, 4 Vt., 535.
It has been said by a court distinguished for its learning- and ability, that conventions do not always use language with mathematical accuracy, and that in them exceptions and qualifications are sometimes implied when not expressed. Kennedy v. Gies, 25 Mich., 83.
It is also said to be a correct rule in constitutional interpretation, to construe it not according to its technical meaning, but according to the acceptation of those who adopted it. The State v. Mace, 5 Md,, 337-51.
Mathematical scope and technical signification, should each yield to the purposes of the instrument, to be ascertained upon an examination of its provisions, and a consideration of the evils it was intended to remedy, and the benefits it was intended to secure. The meaning may be drawn from all these sources, and should be in consonance with each of them. It must be presumed that it was framed and adopted in the light and understanding of prior and existing laws, and with reference to them. When the framers of a constitution employ terms, which, in legislative and judicial interpretation, have received a definite meaning and application, which may be either more restricted or more general, than when employed in other relations, it is a safe rule to give to them that signification sanctioned by the legislative and judicial use. Dailey v. Swope, 47 Miss., 367-83.
Nor will it be presumed, that the constitution intended to •destroy or change the existing laws, except as such intent is manifested by its spirit and letter. Endlich Con. Int., sec. 520.
Applying these rules to the construction of the clauses •under consideration, it becomes material to ascertain, whether its terms had received judicial interpretation before it was incorporated into the constitution.
The statute of 12 Anne provided in substance, that no person should take directly or indirectly for loan of money, •etc., interest at a higher rate than five per cent, per annum; and that all contracts whereby there was reserved or agreed to be paid, interest at a higher rate; should be utterly void. The question came before the court of common pleas under this statute, and Sir Wm. Blackstone "conceived that interest may as lawfully be received beforehand for forbearing, as after the term is expired, for having forborn.” Lloyd v. Williams, 2 Wm. Blackstone, 792.
The same principle was approved under the same statute-in so far as it applied to commercial transactions in bills and notes. Auriol v. Thomas, 2 T. R., 52; Marsh v. Martindale, 3 B. & P., 154; Floger v. Edwards, 1 Cowp., 112.
In the case last above, the court say, “upon a nice calculation it will be found that the practice of the banks in discounting bills, exceeds the rate of five per cent.; for they take interest upon the whole sum, but pay only part of the money, viz: by deducting the interest first, yet this is not usury.” Although this practice was held lawful under the usury laws, it was not permitted to become a cover for usury. In the case of Marsh v. Martindale, supra., the court after approving this construction of the law, to the extent indicated, says, “No shift will enable a man to take more than legal interest upon a loan.”
If any English court ever gave to the statute of 12 Anne any other construction, it has not come within our knowledge. Its construction is of the highest importance in construing all subsequent legislation upon the subject, because it has been taken as the model for such subsequent legislation. Usury laws differ widely as to the effects of usury, but there are slight differences in defining its elements. As the American States have adopted the English statute as a model, so the American courts have adopted the construction given it by English courts. So we find the statement, that “the courts uniformly hold, at the present day, that the interest for ordinary paper, having the usual time to run, such as is the custom of banks, may be taken in advance, by way of discount, and not subject the paper to the taint of usury.” Tyler on Usury, pp. 298-338; 3 Par. Con., pp. 131, 132 and note; Morse on Banks and Banking, p. 133; Bank v. Johnson, 31 Me., 414; Bank v. Butts, 9 Mass., 49; Fleckner v. Bank, 8 Wheat, 354; Bank v. Osgood, 15 Johns., 162. Although this relaxation of the prohibition against usury was first sanctioned in the transaction of banks and •other corporations authorized to make discount, a distinction could not be made against individuals and it became universal. 3 Par. Con., p 131; Bank v. Butts, 9 Mass., 49; Marsh v. Martindale, supra; N. Y. F. Ins. Co., v. Ely, 2 Cowen, 703; Cole v. Lockhart, 2 Cart. (Ind.), 631; Parser v. Cousins, 2 Grat., 372.
The question has never been expressly ruled by this court. In an action on a bond, bearing ten per cent., payable semi.annually in advance, given to the Commissioner of Internal Improvements, for borrowed money, the court held the instrument void for usury. Although not decided, the principle of the cases herein cited, seemed to be approved by the •court, which held it inapplicable to the case under consideration, because the bond was not intended to circulate as a negotiable instrument for the benefit of trade. Hogan v. Hensley, 22 Ark., 413. It was not within the rule for the further reason, that the bond was not “ordinary paper, having the usual time to run, such as is the custom of banks” to •deal in. As the Arkansas statute then in force, was in all essential features like the similar statutes of England and the •other states, which had been fully and uniformly construed, it can not be doubted that a similar construction would have •been given. The like usage certainly obtained and was ac- • quiesced in in this State.
The appellant collected the highest lawful rate of interest; in addition to this, Smith, who acted as agent either of appellant or appellee, received a bonus for his services. It is ■controverted whether he acted as the agent of the one, or of the other; this involves a question of fact to be submitted to a jury, and upon its finding would perhaps depend the decision of the case.
If he acted as the agent of the lender, the effect is involved amid a mass of conflicting judicial utterances, embarrassing and irreconcilable.
Some courts hold, that if the agent collect the bonus for his own exclusive benefit, and the lender receives no part of it, that this will not constitute usury, whether the lender knew of it or not. Conover v. VanMeter, 18 N. J. E., 481; Acherson, et al., v. Chase, 9 N. W. Rep., 734. See, also, Mackey v. Winkler, 29 N. W. Rep., 337; N. E. M. S. Co. v. Gay, 32 Fed. Rep., 636.
Others hold that, although the lender had no knowledge that his agent received a bonus from the borrower, still it will constitute usury if he did receive it. Philo v. Butterfield, 3 Neb., 256; N. E. M. & S. Co. v. Hendrickson, 15 C. L. J., 132; 13 Neb., 15 7; Olmstead v. N. E. M. Sec. Co., 11 Neb., 487; Cheney v. White, 5 Neb., 261; Austin v. Harrington, 28 Vt., 130.
The instructions were given under a mistaken view of the law, and state it incorrectly; for that reason the judgment must be reversed and the cause remanded for a new trial in accordance with the law as herein announced.