MacKenzie v. Garnett, Stubbs & Co.

Jackson, Chief Justice. Garnett, Stubbs & Co. sued MacKenzie upon three contracts about the delivery of cotton; so many bales of it at so much per bale; money to be paid whether the cotton was delivered or not. MacKenzie pleaded substatially that the contracts were without legal consideration ; being all for the consideration of the loan of money and made cotemporaneous with promissory notes at 8 per cent, given for the loan of the same money, and really a mere device to cover up the usury; that every cent agreed to be paid per bale on the cotton, to be charged whether delivered or not, was usurious; that all the principal and interest at eight per cent, had been already paid for the loan in all three notes mentioned, and all three of these contracts were nothing but agreements to pay more interest at the rate of a dollar anda dollar and twenty-five cents per bale; thus, that all, every cent, was usurious interest on consideration of longer time given on said borrowed money. Under the charge of the court, the jury found for Garnett, Stubbs & Co. and MacKenzie brings the case here on error for the refusal of a new trial.. Among other things, the judge charged that “upon the plea of failure of consideration, I charge you that if defendant made the contract sued on by which he agreed to pay plaintiffs the sums of money set out in consideration of the loan of money furnished him, and you believe that defendant got the loan of money, then the loan of such money is a sufficient consideration to support such contracts. If defendant was owing plaintiffs, and in order to get time on the debt, he gave the contracts sued on, and the plaintiffs indulged him by giving the time, I charge you that such indulgence would be- a valuable consideration, and will support the contracts [256] now sought to be enforced;” and refused to charge that “if the parties made these contracts, and there was no consideration except the loan of money in making them, then plaintiffs cannot recover,” and also refused this request, to-wit, that “if defendant borrowed money from plaintiffs, and for the use of such money, he agreed to pay the sum now sued for, they cannot recover, no matter what the same may be called, nor how often the defendant agreed to pay the same.” From these charges and refusals to charge, it appears clear to us that the judge was of the opinion, and so said to the jury, that though the consideration of the contracts sued on was to get time extended for the payment of money borrowed, such indulgence would be a valuable consideration, and will support the contracts. We think that, in the light of the facts disclosed in this record, the charge is vitally defective. Those facts are that the notes, given at the same time with each of the contracts sued on, carried every cent of interest tolerated by the laws of Georgia, and that therefore every cent more given or bargained to be given for the same loan of money is usurious, and if usurious, cannot be collected itself, because illegal, and if illegal, how can it be a valuable consideration and support the contracts sued on ? It is true that afterwards the judge charged generally that usury cannot be covered up by any device whatever, according to our code; but of what value is that abstract charge to the defendant, when he had already applied practically the law to this case, and had told the jury that if the consideration of these contracts sued on was the loan of money, it was sufficient, and “ if defendant was owing plaintiffs, and in order to get time on the debt, he gave the contracts sued on, and the plaintiffs indulged him by giving the time, I charge you that such indulgence would be a valuable consideration and will support the contracts now sought to be enforced.” It strikes us it is as much as to say, “ this is no device; this is a case of money loaned and indulgence [257] in giving further time; the consideration here is valuable and sufficient to uphold these contracts and free from usury or other taint of illegality.” The judge should have charged to the effect that if; in addition to eight per cent, already exacted and paid by the defendant, these contracts add an additional sum, whether payable in commissions for handling cotton-bales or in actual coin, for the loan of the same money, these contracts are entirely for usury, and you are authorized by law so to find; but if the consideration is solely for the manipulation of the cotton and not for additional interest over eight per cent, for the loan of the money on time, or its extension of time by renewal, then the law will authorize you to uphold the contract. Look at all the evidence and see what the truth is, what motive operated on the parties, what was the intention of both in making the contracts. Was it to give and get time that these contracts were made, or was it to handle the cotton and make the profits on such handling alone that moved the making the contracts ? We think that the facts of this case, the testimony of the plaintiffs themselves, abundantly demand a charge like the above; and instructions in positive terms that no sort of pretence, or trick, or device, under the Georgia statutes, can hide usury from the eye of her courts; and wherever it is detected, all the usury is forfeited; and if the contracts are all for usury, legal interest having been all paid, none of such contract can be recovered, because all is illegal and all forfeited. The face of the notes and the testimony of the plaintiffs look that way, and the law of the case has not been reached, and will not be until the issue of law in the light of the facts, is fairly put to the jury on the subject of usury and our statute thereon, without laying down law that if the loan of money and extension of time be the consideration of contracts like these, then the consideration is valuable and upholds the contracts, no matter how much money for the same loan as interest has been agreed upon besides and actually paid. [258] The case of Hollis et al. vs. Swift & Son, 74 Ga. 595, settles the law of the proper manner of submitting such a case; and the cases of Cockle et al. vs. Flack and others, 93 U. S. R. 344, and Uhfelder & Co. vs. Carter’s adm’rs, 64 Ala. 547, sustain it. The South Carolina statute is not like ours, and the decision there in 22 S. C. R. 367, also reported in 53 Am. R. 717, is not the law here. See code of Ga. §§2051, 2757(a) to (g), inclusive; also §2740. Judgment reversed.