Traders Credit Corp. v. Thyle

NOURSE, P. J.

Plaintiff sued for $3,500, the balance due on a promissory note. Defendant admitted the execution of the note and pleaded that the transaction was usurious. The cause was tried without a jury. Plaintiff had judgment as prayed and defendant appeals upon a bill of exceptions.

On September 21, 1927, defendant wired plaintiff’s assignor : “We will gladly pay you five thousand shares (stock in New England Consolidated Mines Company) as bonus for the loan of five thousand dollars for ninety days.” Plaintiff’s assignor wired back: “Company will make loan if you endorse note. Seven per cent interest after maturity.” On the same day plaintiff’s assignor wrote a letter to defendant in which he stated: “Just received your wire asking for loan of $5,000, for ninety days, without interest, but with a bonus of 5000 shares of your Mine Company’s stock. . . . You will notice though that as I do not know anything about the financial complexion of the Mining Company, I am asking you to endorse the note, and to make it read 7% interest after maturity, should it not be paid in time.” On September 23d following defendant mailed his personal note in conformity with these instructions and at the same time wired plaintiff’s assignor to send him $2,000 through Western Union and to mail certified check for $3,000. This was done. Defendant received the full sum of $5,000 and plaintiff’s assignor received the note in suit. On October 8, 1927, defendant mailed to plaintiff’s assignor a certificate for 5,000 shares of the mining company without any further explanation or direction as to the purpose

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of sending it. The certificate was received and retained by plaintiff’s assignor. Payments of $1500 were made upon the note, together with one payment of interest in the sum of $90.43. Prior to the commencement of the action plaintiff’s assignor tendered the return of the stock as worthless. The judgment covers the balance due on the note and interest and $350 as attorney’s fees.

On this appeal the appellant states two points—that the transaction was usurious, and that in an action for the principal sum loaned the borrower may set off the value of the bonus paid in contravention of the usury statute. The second point may be conceded. The first is a pure question of fact. The findings on this issue are adverse to appellant, hence it is incumbent upon him to show that these findings have no substantial support in the evidence.