Finley v. Wyatt

MR. JUSTICE PLUMMER Delivered the Opinion of the Court.

This is an appeal by the defendant from a judgment of foreclosure in favor of the plaintiff entered in the above-entitled action.

The record shows that on the twelfth day of August, 1921, the plaintiff loaned to the defendant the sum of $2,000. The loan was evidenced by a note of the same date, made payable in three years. To secure the repayment of the money borrowed, a mortgage was executed by the defendant, and delivered to the plaintiff, bearing the same date. Interest was made payable at the rate of eight per cent per annum, payable quarterly. At the time of the execution of the note and mortgage and the loan of the money, as just stated, the defendant agreed to, and subsequently did pay to the plaintiff the sum of $100 as a bonus for the loan. The bonus was paid by the defendant to the plaintiff in installments of $25, payments being made on the following dates: November 12, 1921, $25; February 12, 1922, $25; May 12, 1922, $25; August 11, 1922, $25; making the full sum of $100. Thereafter, and during the year 1924, the note and mortgage were extended for an additional three-year period. For and in consideration of the extension, the defendant agreed to and did thereafter pay to the plaintiff the sum of $100 as a bonus. The date of this payment does not appear in the record, although the extension of the note and mortgage is dated the eleventh day of August, 1924. The agreement as to the payment of the bonus was not in writing, but appears to have been contemporaneous in the first instance with the execution of the note and mortgage and the making of the loan of $2,000, and in the second instance, at the date of the éxeeution of the instrument extending the date of the payment of the note and mortgage for an additional three years.

The record shows that the full sum of $2,000 was paid by the plaintiff to the defendant at the time of the loan, no part of the bonus being deducted therefrom. , The note not being paid, suit was begun to foreclose the mortgage given

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to secure the payment thereof, and judgment of foreclosure entered.

It is contended by the appellant that under the Usury Act (Stats. 1919, p. lxxxiii; Act-No. 3757, Deering’s General Laws of California), the loan under consideration is usurious; that the note and mortgage are void, and if not void