Goodwin v. Bishop

Mr. Justice Craig delivered the opinion of the Court: This was a bill in equity, brought by M. E. Lowe, trustee, and E. F. Bayley, successor, to foreclose a certain trust deed, executed by Caleb Goodwin and Elizabeth Goodwin, to secure seven promissory notes made payable to themselves and endorsed to Alexander Bishop,—one note for $5,000, due in three years after date, and six interest notes, for $175 each. The note of five thousand dollars was given for a loan of that amount of money loaned by Bishop to Goodwin, and the defense attempted to be set up in the answer was, that the transaction was usurious. The answer setting up usury, is as follows: “And these respondents say that they did not, nor did either of them, receive the full sum of $5,000 from said complainants at the time of making said loan, nor at any timé, nor did they receive any money at the date of said notes and trust deed, and so these respondents say that the amount claimed by said complainants is largely .tainted with usury.” If a party to a bill in equity desires to set up and rely upon the defense of usury, he must allege the facts showing wherein the usury consists. A general charge of usury in an answer is not sufficient. Mosier v. Norton, 83 Ill. 519. The allegation of the answer may be true, and it by no means follows that the contract between the parties was usurious. The gist of the answer is that the defendants did not receive the full sum of $5,000, nor did they receive any money at the date of the notes. Suppose, however, the next day after the notes were executed they received $4,999, and allowed the mortgagee to retain one dollar to pay for recording the mortgage. This would be in harmony with the facts disclosed in the answer, and yet usury could not be established on such a state of facts. Where the defense of usury is relied upon, the facts constituting the usury should, as a general rule, be clearly set up in the answer and proved as alleged. But it is said, if the answer was insufficient the complainant ought to have filed exceptions. It is a riile of chancery practice, where an answer is defective, it must be excepted to, a demurrer is not allowable. Stone v. Moore, 26 Ill. 165. But where the answer is not under oath exceptions will not lie, because such answer is not evidence for the party making it. Supervisors of Fulton County v. Miss. & Wad. R. R. Co., 21 Ill. 338; Brown v. Mortgage Co., 110 id. 235. But even if the answer was sufficient, we do not think that the evidence establishes usury. Bishop loaned Goodwin $5,000, for three years, at seven per cent interest. Lowe testified that the money was disposed of as follows: Out of this loan Mr. Goodwin received $110.65 in cash. I paid Mr. Ward $4,640.41 on May 8, 1889, to take up his mortgage on this property. I paid the taxes, $73.94. I paid Bayley & Waldo $50 for examination of title, etc., by the direction of Mr. Goodwin, and Mr. Goodwin paid me a commission of $125. These items make up the $5,000 loaned by Bishop, audit will be borne in mind that at the time the loan was made, eight per cent was a legal rate of interest. In order therefore to make out that a greater rate was exacted than eight per cent, it was necessary to prove that Bishop, or his agent, received the fifty and the one hundred and twenty-five dollars mentioned by Lowe in his evidence. As to the fifty dollars, it was paid by the direction of Goodwin to attorneys for an examination of title to the property mortgaged, and under Ammondson v. Ryan, 111 Ill. 506, that was a legitimate transaction, and not usurious. As respects the other item, Goodwin paid that sum to Lowe for his services in procuring the loan. Lowe did not receive the money for Bishop, nor did Bishop, so far as appears, have any knowledge that Lowe received the money. If Goodwin saw proper to pay money to Lowe for his services, that did not render the loan made by Bishop usurious. Ballinger et al. v. Bourland, 87 Ill. 513; Cox v. Life Ins. Co., 113 id. 382. The court allowed a solicitor’s fee of $250, and this is claimed to be erroneous. The deed of trust contains a provision that in case of suit, or proceeding for foreclosure, the proceeds of sale shall, among other things, be applied to pay an attorney’s fee of five per cent upon the amount received. Under this clause of the deed of trust the court allowed the amount complained of, and we think the action of the court was fully authorized. In computing the amount due on the notes, the master in chancery computed interest from the date of the notes, while it appeared from the evidence that the money was not paid over until a few days after the notes were executed. Objection being made, the court, on March 8, 1892, modified the report and deducted $11.72 for excess of interest computed. At the same time, as the amount found due by the master was computed only to the time the report was filed, November 30, 1891, the court added $95, to make up the interest from November 30, 1891, to the date of the decree, March 8, 1892. As interest had accrued after the report was filed, the court had the undoubted right to refer the cause to the master to determine the amount then actually due, or the court could, if it saw proper, compute the interest without a reference. Either course might be pursued and, as the court chose to pursue the latter, we perceive no objection to the action of the court. The judgment of the Appellate Court will be affirmed. Judgment affirmed.