Righter, Cowgill & Co. v. Philadelphia Warehouse Co.

Mr. Justice Sterrett delivered the opinion of the court, January 16th 1882. If the testimony tended to prove that the transaction between the parties was merely a cloak for usury, and not a bona fide contract, for the storage and sale of the goods, to secure the loan in question, it must be conceded the jury should have been permitted to consider and pass upon the question of fact presented by the plaintiffs’ first and second points: but, we fail to discover, in the provisions of the contract itself, or in the facts and circumstances connected therewith, from its inception to its completion, anything from which the jury would have been justified in finding that it was, in substance and effect, a loan of money at a usurious rate of interest. The contract of August 18th 1879, is prefaced by an invoice of the merchandise “ deposited with and confided to the management, custody and charge of the ” defendant company. This is followed by a recital that the company has advanced to the plaintiffs, “ upon the security of said merchandise,” its promissory note of same date for six thousand dollars, payable October 17th 1879, and has received “ thirty dollars for its responsibility and services, as above, and loan of its credit.” In consideration of the loan the plaintiffs agree to pay the company six thousand dollars at or before the maturity of the note, together with all charges for storage, insurance and other necessary expenses on account of said merchandise.” Then follows a stipulation, on the part of the plaintiffs, to pay the company for its “ continued responsibility and services in the management and custody of the said merchandise,” in case further time is given, upon their request, for the repayment of the amouut advanced. It also contains several other provisions, intended to define the rights and protect the interests of the parties respectively in certain contingencies. The note of the company, as recited in the contract, was given and then discounted for the plaintiffs at the rate of less than five per cent, per annum. There was certainly nothing usurious in that; and, if the plaintiffs had kept their promise by paying the six thousand dollars at or before the maturity of the note, they would have been entitled to forthwith resume pos [294] session of tlie merchandise pledged as collateral security. That would have ended the transaction, at a cost to them of fifty dollars for discount and thirty dollars for defendants’ services and responsibility connected with the custody and management of the collateral. The discount, as has been observed, was considerably less than the legal rate, and the amount agreed upon and paid for services, responsibility, etc., was certainly not an unreasonable compensation therefor. As appears from the testimony of John Neill, one of defendant’s witnesses, there was-.considerable trouble connected with the care and custody of the collateral. He says there were twenty cars of wheat; “ these bills are called straight, not to order. It was necessary to notify railroad companies that we were holders of bills of lading. ' The collaterals were changed from one to another, and at one time changed to Lehigh Yalley Loan or Stock. I suppose I was employed ten or fifteen minutes each day upon this transaction. These bills of lading were handed over to Hoffman & Co. after plaintiffs had failed, and the matter went out of my hands.” There is not a scintilla of evidence that the thirty dollars was paid for any other purpose than that expressed in the agreement, and in the absence of proof, neither court nor jury had a right to presume it was intended for anything else. The transaction was strictly within the scope of the business authorized by the company’s charter, viz: “ to advance money and credits upon any property in its custody, or upon bills of lading, receipts, or certificates representing goods on storage elsewhere, or in transit from one portion of the United States to another, or between the United States and any foreign country, or between any foreign country and the United States, on such terms as may be agreed upon the borrowers and said company.” This provision of the charter contains express authority for everything that was done in this case. The learned judge was clearly right in saying that no question of usury could arise out of the discount, or the payment of thirty dollars for services, responsibility, &c. It was the plaintiffs’ own default that called into active exercise the fourth clause of the contract under which the commissions complained of were claimed. It provides that in case the six thousand dollars shall not be paid at or before the maturity of the note the company may thereupon at any time thereafter, in the discretion of its president, sell or canse to be sold, at plaintiffs expense, the merchandise described in the invoice, at public or private sale, for cash or on credit, and with out notice to them; and shall receive the proceeds thereof and apply the same to the payment in full of whatever may be then due by them to the company, including “the commissions of the company upon such sale, which shall be two and a half per cent.” This provision of the contract was faithfully carried [295] out by tlie company after consulting the plaintiffs as to the best method of disposing of the merchandise. The president of the company employed Mr. Hoffman, an experienced commission merchant, to sell the grain; and the testimony shows that he acted judiciously. There is no complaint as to the time and maimer of selling, and the jury has found that his commissions, claimed and allowed as part of tlie expenses of converting the collateral into money, were just and reasonable. It is very clear, therefore, that Mr. Hoffman’s commissions were a necessary and proper part of the expenses with which the plaintiffs were chargeable; and it is equally clear that the company was entitled to retain, in addition thereto, two and a half per cent authorized by the contract. The testimony tends to show that this was a reasonable compensation for the trouble and responsibility incurred; but, however that may be, it is what the plaintiffs agreed to pay in case a sale became necessary by reason of their default. The third point was rightly refused. The case was well tried, and there is nothing in the charge of the court of which the plaintiffs have any reason to complain. Judgment affirmed.