Gilmore & Smith v. Ferguson & Cassell , 28 Iowa 220 ( 1869 )

Cole, J.

^■Mt^Ray'oii e\”y.: ln prop_ This suit is brought upon the following contract, to wit: “Received, October 12th, 1863, of W. Gilmore and L. Smith, of Iberia, Morrow County, Ohio, one hundred and ninety-six sheep, to keep on the shares, from one to four years, on the following terms: we, or either of us, promise to pay said W. Gilmore and L. Smith one and one-half pounds of wool per head annually until paid for. The wool to be about three-quarters blood, well washed on the sheep’s back, put up in good merchantable order and delivered at Bella, sometime between the fifteenth of June and the fifteenth of July annually until paid for; and, at the expiration of said time, we, or either of us, promise to pay said W. Gilmore and L. Smith, three dollars per head for the aforesaid sheep, or if we, or either of us, pay said W. Gilmore and L. Smith three dollars per head at the end of any one year, between the fifteenth of June and the first of August, after the annual amount of wool is delivered, then this article is to be null and void and of no effect. Said W. Gilmore and L. Smith will not be responsible for any disease that may originate among the above sheep after delivery. This article will be considered due at the end of any one year, if the annual amount of wool is not paid. (Signed) Milton Ferguson, John H. Oassell.”

The breach alleged in the petition was the failure to* deliver the annual amount of wool between the fifteenth day of June and the fifteenth day of July, 1867. The plaintiffs asked judgment for two hundred dollars for the wool due that year, and for fifteen hundred dollars for amount due upon the contract.

The defendant Oassell was alone served with notice of the suit, and he filed his answer in denial; also, that he was but surety for Ferguson, who had paid the annual amount of wool for the years 1864, 1865 and 1866, worth, at the time of delivery, $747.40; and also, that the contract was made in Iowa, and was usurious.

The cause was tried to a jury, who, by consent of parties, returned, as their verdict, answers to certain questions, substantially as follows: 1. That the actual value of the sheep, at the date of the contract, was three dollars per head; 2. That the one and a half pounds of wool, mentioned in the contract, was not part of the price, but was for interest; 3. That the market price of wool, at the time and place of making the contract, was sixty cents per pound; 4. That at the time of payment, in 1864, wool was worth ninety cents per pound — total value, $264.60; 5. In 1865, fifty-five cents — total, $161.70; 6. In 1866, fifty cents — total, $107.00; 7. And that in 1867, when it should have been paid, wool was worth thirty cents per pound; 8. That Ferguson did deliver the wool, as called for by the contract, in 1864, 1865 and 1866, and the total value of it all was $573.30; 9. That, if the contract was not usurious, plaintiff was entitled to recover upon it, $726.51; and, 10. That, if it was usurious, plaintiff was entitled to recover $14.70.

Upon this special verdict, the District Court held the contract usurious, and rendered judgment accordingly. This holding is assigned as error, and is the only question made in the case.

Upon the contract itself (aside from any evidence tending to show usury), there can be no serious claim made that it is usurious. Nor would the proof that the pound and a half of wool was worth, at the time of delivery each year, more than legal interest upon the value of the sheep, make the contract usurious; for, since its value was uncertain and might be less than legal interest, the fact that it was more would not make it usurious ; and this, although the pound and a half of wool for each sheep may have been stipulated for as interest, as the jury have found. That is to say, one man may rightfully sell his property to another for a certain sum in money down; or he may ask and receive a much larger sum on condition it is not paid for till a future day, arid the fact that the increased price payable at a future day was more than the legal interest on the cash price, would not make the contract usurious. In other words, the owner of property may sell it for such price as he can get, either in cash down or payable at a future day, and although the price payable at the future day may be twice or thrice as much as the down price or as many per cent per month more than it, yet this will not make it usurious. The reason is, that such contracts are not within the statute against usury. Of course, if such contracts are resorted to as a cover for usury — to evade the usury laws — they will be held usurious. But the jury did not so find in this case. See the following analogous cases: Hall v. Haggart, 17 Wend. 280; Cumming v. Williams, 4 id. 680; Spencer v. Silden, 5 Cow. 144; Dry Dock Company v. American Life Insurance and Trust Company, 3 N. Y. 344, and cases cited; see also Bull v. Rice, 5 id. 315; Wilson v. Kilburn, 1 J. J. Marsh. 494; Boswell v. Jackson, id. 48; Tousey v. Robeson, 1 Met. (Ky.) 663; Gale v. Grannis, 9 Ind. 141; Cross v. Hepner, 7 id. 359. These cases illustrate the proposition that under the statutes of those States usury cannot be predicated upon either the loan or sale of property. If the jury had found in this case, in addition to the other facts stated in their verdict, that the contract was resorted to for the purpose of evading the usury laws, or as a cover for the usury, then the judgment of the District Court could have been sustained. For, if the contract is in truth and fact a loan of money at usurious rates, it matters not what devices may be resorted to, for the purpose of covering or concealing its true character; the law will strip from it these devices and adjudge it by what it is in fact, rather than by what it may, in its terms, appear to be.

Some question is made by appellee’s counsel upon the phraseology of our statute, as being different from the original statute of Anne and of the other States from which the decisions above are cited. But since the jury found that the price agreed by the contract to be paid was the actual value of the sheep, and since the contract is not, upon its face, usurious, and the jury have failed to find that the contract was a device to evade the usury laws, or as a cover for usury, it becomes immaterial to examine the difference, even if there is any in legal effect, between our statute and those referred to, for in either view the contract upon the findings cannot be held usurious.

Reversed.