C. L. Keim & Co. v. Avery

Maxwell, J.

The plaintiffs brought an action in the district court of Richardson County upon a promissory note, of which the following is a copy:

“$500. Falls City, Neb., Oct. 20th,1874.
“On the 20th day of December, 1874, we promise to pay to C. L. Keim & Co., or order, the sum of five hundred dollars, without defalcation, for value received, * * * payable at the Falls City bank, Falls City, Nebraska.
“ P. O. Avery,
“Wm. C. Kern.”

The note contained the following endorsement:

“C. L. Keim & Co. received on within January 21st, 1876, $500 (five hundred dollars).”
The defendants answered the petition of the plaintiffs alleging that at the date and delivery of said note said plaintiffs contracted for eighteen per cent interest thereon from the date thereof until the payment thereof; that on January 21st, 1876, said defendants paid said note in the full sum of $500; that said plaintiff contracted for illegal and usurious interest on said note,” etc.

*57No reply was filed to the answer. On the trial of the cause, the jury found a verdict for the defendants, on which judgment was rendered dismissing the case. The cause is brought into this court by petition in error.

The errors assigned are:

First, that the court erred in overruling the motion for a new trial. Second, that the answer tendered no issue. Third, that the court erred in rendering judgment in favor of defendants. Foivrth, that the court erred in not granting a new trial. Fifth, that the court erred in not rendering judgment for the plaintiffs.

On the trial of the cause P. O. Avery, one of the defendants, on cross-examination, testified as follows:

Q. Did you promise to pay eighteen per cent on this note?
A. "Well, I so understood it.
Q. I want a direct answer; “yes ” or “no,” whether you promised to pay eighteen per cent on this note?
A. Yes, sir.
O. L. Keim, one of the plaintiffs, called as a witness in their behalf, testified as follows:
Q. What interest did you contract for at the delivery of this note?
A. Eighteen per cent.
■ Q. Who was to pay the eighteen per cent?
A. The Association.

It appeared from the testimony in the case, that the money was loaned to the “ Humboldt Patrons Association,” and that the defendants were merely sureties. When the note became due, the interest thereon for 180 days was paid, and the time of payment extended. The only question at issue is, whether the contract was usurious or not.

Section five, of chapter 34, General Statutes, 446, provides that: “ If a greater rate of interest than is herein-before allowed (12 per cent) shall be contracted for or *58received, or reserved, the contract shall not therefore be void; but if, in any action on such contract, proof be made that illegal interest has been directly or indirectly contracted for, or taken, or reserved, the plaintiff shall only recover the principal without interest, and the defendant shall recover costs; and if interest shall have been paid thereon, judgment shall be for the principal, deducting interest paid.”

There appears to be no question-about the rate of interest agreed upon in this case, one of the plaintiffs having testified that the rate was eighteen per cent.

A surety may plead as a defense to an action on a promissory note, that usurious interest was agreed upon by the parties at the time' of the execution of the note. It is not necessary, to constitute usury, that the illegal interest be expressed in the note.

It is claimed that the answer of the defendant fails to set up a .sufficient plea of usury to make an issue or constitute a defense. It appears from the bill of exceptions that the plaintiffs themselves proved the contract to be usurious. Such being the case, it would be the duty of the court (if necessary), to permit an amendment of the answer to conform to the facts proved. But the answer is sufficient, after verdict, to sustain the judgment.

A number of affidavits were filed in support of the motion for a new trial, showing that Avery had testified on a former trial that no rate of interest was agreed upon, and that, in consequence thereof, the plaintiffs were taken by surprise. The testimony of Avery was merely cumulative, and could not affect the result.

The judgment is clearly right, and must be affirmed.

JUD&MENT AEBTBMED,