Telford v. Garrells

Green, P. J. Appellant’s objections to the decree, so far as complainant Garrells is concerned, are, that the court refused to sustain the defense of usury ; that a solicitor’s fee of $250 was allowed ; that the decree was against the appellant alone ; and the findings of the court were against the evidence. It is insisted the notes are usurious on their face, because it is agreed therein that eight per cent, interest shall be paid for a period of sixty'days longer than .the makers are to have the use of the principal; the nine notes are exactly alike in tlioir terms, except as to the time of maturity, three becoming due in four, and six in five years; hence the following copy of one will correctly show the contract between the parties in each and all: “$1,000. State of Illinois, Madison Count?, | Highland, April 21, 1880. j Four years after date, we, the undersigned, Joseph Telford and Laura A. Telford, or either of us, promise to pay to F. Ryhiner & Co., or order, the sum of one thousand dollars, for money actually borrowed and received, with eight per cent, annual interest from this date until paid, said interest payable annually, sixty days previous to the lapse of each year, at the office and into the hands of F. Ryhiner & Co., at Highland, Madison county, Illinois, against special receipts therefor, signed and delivered by said F. Ryhiner & Co. for each such payment, such receipts to be good and valid toward any subsequent owner or holder of this note, the principal also payable at the office of F. Ityhiner & Co. sixty days before maturity of this note. Given under our hands and seals at the place and on the day and year first above written. Joseph Telford, [Seal.] Bo. 1935. Ladra A. Telford. [Seal.] ” It is said this note, properly construed, binds the makers to pay the principal in forty-six months, and to pay interest thereon for the full period of four years; hence, an excess of interest is reserved for the time the principal is actually used over the amount of lawful interest allowed for its use for that length of time; but we understand by the very terms, “ with eight per cent, annual interest from this date until paid,” interest ceases when the principal is paid, and if that is paid at the expiration of ten months in the fourth year, ten months’ interest for the time the principal was used in that year is all the makers contracted to pay and all the holder has a right to demand, and such was the understanding and intent of the parties; hence, the note, for that reason, is not usurious on its face, nor was it usurious to contract for the payment of annual interest sixty days before the end of each year. Brown et al. v. Mortgage Co., 110 Ill. 235. It is further insisted the money for which these notes were given was loaned to Joseph Telford by Ityhiner & Co., through their agent,'Cone, to whom the borrower paid a commission of two per cent, on the sum loaned, and taking this sum as commission was a mere device to evade the usury laws, and tainted the transaction with usury; but we think the court properly found from the evidence, Cone was employed by Telford and acted as his agent in procuring the borrowed money; that the commission was paid him as a compensation for his services as such agent in negotiating the desired loan, of which commission the lenders received no portion, and from its payment derived no benefit; and that Telford received from Ityhiner & Co. the full sum of §12,000, for which the notes were given. If the borrower employs an agent to effect a loan and agrees to pay him as compensation for his services a percentage on the sum loaned, even though such commis'sion is paid by the lender to the agent, by request of the borrower, out of the sum loaned, the lender deriving no benefit therefrom, this will not affect the rights of the latter, or make the loan usurious; and in this State if the principal does not authorize his agent to charge more than legal interest upon the loan, and has no knowledge that a higher rate was charged, and does not receive the interest paid in excess of the legal rate, the defense of usury can not be sustained against such principal. Ryhiner & Co.’s rights were not affected by the transaction between Telford and Cone in the payment and receipt of the two per cent, commission, nor did that transaction make the loan usurious. Boylston v. Bain, 90 Ill. 283; Hoyt v. Pawtucket Inst. for Savings, 110 Ill. 390. Appellant also claims it was usurious to receive interest upon overdue interest. It appears that the annual interest on the nine notes due April 21, 1885, was not paid to Garrells until January, 1886. At that time Telford called on Garrells and paid the year’s interest, and interest on that for nine months it remained overdue. If Telford allowed and paid interest on interest in arrear, we do not understand the acceptance thereof by the holder affected his notes with usury or furnishes a reason for disturbing this decree. Haworth v. Huling et al., 87 Ill. 23. The allowance of $250 for solicitor’s fees is also assigned for error; but it appears by the record the trust deed provided for the allowance of a reasonable attorney’s fee, and $250 was shown by the evidence to be a reasonable compensation for the services rendered by complainant’s solicitors. In the absence of any sufficient reasons for disallowing it, the fee so stipulated to be paid was properly allowed. McIntire v. Yates, 104 Ill. 491. It is said, however, that Garrells refused to accept the amount due him on the nine notes from Telford unless the $720 claimed in the cross-bill was also paid, and such refusal caused the present litigation; that therefore it was inequitable and unjust that Telford should be compelled to pay Garrells’ solicitors for carrying on a litigation which might have been avoided but for his wrongful refusal to accept the full amount of his claim; but the evidence failed to show that Telford at any time tendered Garrells the amount due him, and he was obliged to file his bill to enforce its payment. The objection that Joseph Telford alone was ordered to pay the mortgage debt is without merit. He procured the money borrowed for his own use, and used it in the purchase of land, and can not be permitted to assign for error the order of the court that he repay the borrowed money. We will now examine and dispose of the objections to so much of the decree as applies to the cross-bill. This portion of the decree is claimed to be erroneous for the following reasons: first, because Telford himself paid the $7520 annual interest alleged to have been paid by Ryhiner & Co.; second, if the evidence fails to prove the payment by Telford, and Ryhiner & Co. did make such payment, they did so as volunteers, and could not maintain a suit therefor, and their assignees are not entitled to recover: and third, if it be held such payment by Ryhiner & Co. was not voluntary, then the claim therefor is res adjudícala, by reason of the final order dismissing the bill of appellees in 1886, mentioned in the statement of this case; and it is further insisted that Telford and the said assignees had a final settlement and adjustment of all claims, including this, in August, 1886. The first contention presents a question of fact, and the court was warranted by the evidence in finding that'Telford did not pay said annual interest, but Ryhiner & Co. did pay it. The second contention, that Ryhiner & Co. were mere volunteers, and as such could not pay the interest due, and thus, without the consent of the Telfords, make them their debtors, is not tenable when the true relation between the parties is understood. The Telfords owed this interest and were primarily liable to pay it to Ryhiner & Co., or to the assignees, if the notes were assigned, or in case of default by the makers and the payment thereof to the assignees by the indorsers, in fulfillment of their contract as such, then the Telfords, as makers, became liable to reimburse the indorsers, who, in discharge of a legal liability, paid for the makers the debt they by their contract had agreed to but had failed to pay, and the relation of debtor and creditor between the Telfords and Ryhiner & Co., to the extent of the interest so paid, was re-established, and to that extent the latter thereby became subrogated to all the rights and interests of the holders of said nine notes in the mortgaged premises. The provisions of th; statute for a recovery by the assignee against the assignor of a note, only upon condition that the former shall first prosecute the maker to insolvency, or show that a suit against him would have been unavailing, are said to apply in this case; but, as is suggested by counsel for appellees, these provisions are intended as a protection to the assignor, and not for the benefit of the maker. This liability of the assignor to a recovery by suit is conditional, but we perceive no reason why he may not waive the benefit of this condition, pay the annual interest due and unpaid upon the notes he has indorsed, and, as against the maker, retain his right to reimbursement. Conwell v. McCowan et al., 81 Ill. 286; Richeson v. Crawford, 94 Ill. 165. The third and last contention above mentioned, that all matters between the Telfords and cross-complainants, including the claim for said §720, were res adjudicata by the decree dismissing said bill of appellees, can not be maintained. The sole purpose of that bill was to enforce the payment of the three notes due in two years, with accrued interest thereon, and the claim for interest paid on the other nine notes was not included or referred to ; it was a bill by those who represented the payees, and against the makers of the notes; but the cross-bill was filed to enforce the re-payment of interest upon nine other notes which the makers had failed to pay and the indorsers had paid. This was a claim and cause of action to recover which a separate suit would lie, and which complainants were under no legal obligation to consolidate with the claim set up in said bill. Conceding the correctness of the proposition insisted upon by the learned counsel for appellant, that under the doctrine of res adjudicata all matters actually determined or properly involved in a prior suit are barred as a subject-matter for a second or subsequent suit between the same parties, yet the facts in this record do not support the contention, nor does it satisfactorily appear that Telford and the assignees settled and adjudicated the claim for $720 in the settlement of August, 1886. The case of The Riverside Co. v. Townsliend et al., 120 Ill. 18, cited by counsel for appellees, supports our view upon the question of res adjudícala, which question is fully discussed in the opinion. We are satisfied the findings of the Circuit Court were justified by the evidence, and find no errors requiring the reversal of the decree. We affirm the decree. Decree affirmed.