Bayne v. Jolley

BROWN (Gerald), J.

From a judgment for plaintiffs George and Lucy Bayne, decreeing that defendant Orwin H. Jolley had charged them usurious interest on a $50,000 loan and awarding $18,791.53 treble damages, defendant appeals.

Early in December 1960 Bayne sought to borrow $50,000 from Jolley and received a tentative commitment, which was later rescinded. Jolley suggested that Bayne procure the loan through the San Diego Mortgage Company, but in order to avoid paying a broker’s commission Bayne chose not to do so. Jolley’s daughter was employed as a broker for the Mortgage Company, and would normally receive a commission for negotiating such a loan. Earlier she had earned a commission by negotiating a loan between Bayne and her father. Bayne continued to negotiate with Jolley during the months of December and January until early in February

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when Jolley’s daughter called Bayne to arrange an appointment for herself and her father to visit him. At this meeting the loan was arranged. Jolley was to pay $50,000 into escrow; Bayne was to receive the proceeds from escrow less escrow expenses; he was to pay 10 per cent interest and sign a note for $55,000, the additional $5,000 purporting to be paid to Jolley’s daughter as a commission for negotiating the loan; the $5,000 was to be paid to Jolley’s daughter by Jolley outside of escrow. The loan was made. The commission was paid by a bookkeeping entry crediting $5,000 to a prior indebtedness owing to Jolley from his daughter, and she reported the $5,000 on her income tax return.

A contention is made that the trial court erred in finding that the daughter acted solely as Jolley’s agent. Jolley’s position is that she acted for both parties, and materially assisted Bayne in persuading her father to reduce the prepayment charge, and schedule the interest payments. This contention is without merit. The evidence adequately supports the trial court’s finding that the daughter acted solely as her father’s agent. There was evidence that: (1) the daughter was not employed by Bayne; (2) she did not procure the lender; (3) Bayne directly negotiated with Jolley; (4) Bayne was not advised by the daughter that she was representing him; (5) Jolley did not contact her in connection with this transaction; (6) there was a preexisting agreement between Jolley and his daughter that no loan would be made unless she received a commission. Whether the daughter was her father’s agent is a question of fact.