Opinion
3 Div. 751.
May 22, 1934. Rehearing Denied June 5, 1934.
Appeal from Circuit Court, Montgomery County; Walter B. Jones, Judge.
Action by E. V. Rush against Mark D. Hornsby on a promissory note. From a judgment for plaintiff, defendant appeals.
Affirmed.
Certiorari denied by Supreme Court in 229 Ala. 68, 155 So. 638.
The agreed facts are as follows:
"1. On, to-wit, December 14, 1933, the defendant executed in favor of the plaintiff a promissory note of that date payable thirty days after date to the order of the plaintiff and in and by said note the defendant waived all right to have exempted to him any property which is now or hereafter may be exempted to him under the constitution and laws of the State of Alabama and agreed to pay a reasonable attorney's fee for the collection of said note and it is agreed that $15.00 is a reasonable attorney's fee. Said note is past due and unpaid. * * *
"2. That on December 14, 1933, the defendant applied to the plaintiff for a loan of $100.00. The plaintiff was engaged in the loan business in Montgomery, Alabama, and was also the agent of Merchants Coupon Service Company of New York, a large firm dealing in all kinds of jewelry, radios, watches and other merchandise, and the plaintiff then and now has catalog of said service company showing a large number of items of merchandise with the prices thereon and that the items therein listed are standard items of merchandise listed at their nationally advertised retail prices.
"3. The plaintiff agreed to make the defendant the loan of $100.00 if the defendant would purchase a $10.00 coupon of Merchants Coupon Service Company of New York at a cost of $7.50 which the defendant could use to the extent of $10.00 in the purchase of $40.00 or more of merchandise from the said Service Company.
"That the said coupon was in words and figures as follows:
" 'Merchants Coupon Service Company 275 Broadway — New York City
" 'This coupon has a value of $10.00, and will be accepted as cash equal to twenty five per cent (25%) of the manufacturer's established retail price in purchasing many nationally advertised brands of merchandise.
" 'Our agent, E. V. Rush, Montgomery, Ala. will be glad to help you select and order the merchandise desired from samples or catalog.
" 'Coupons are acceptable only at the office of Merchants Coupon Service Company through the above agent.'
"The defendant agreed to purchase said coupon under said terms and received said coupon together with $92.50 in cash, being the difference between the amount of the loan of $100.00 and the purchase price of said coupon of $7.50 and executed the note for $100.00 herein above referred to.
"The defendant actually used said coupon in the purchase of merchandise from said Service Company and bought merchandise of the standard retail price of $40.00 by the payment of $30.00 and the surrender of the said $10.00 coupon.
"The note sued on bears eight per cent interest from its date."
Weil, Stakely Cater, of Montgomery, for appellant.
The transaction disclosed was a mere device to evade the statute against usury, and plaintiff was not entitled to recover more than the principal. Lewis v. Hickman, 200 Ala. 674, 77 So. 46; 27 R.C.L. 211; Code 1923, § 8567.
Ball Ball, of Montgomery, for appellee.
The usury statute applies only to loans of money and not to collateral agreements. The transaction in this case was not usurious. Commercial Credit Co. v. Tarwater, 215 Ala. 123, 110 So. 39, 48 A.L.R. 1437; Jones v. Moore, 212 Ala. 248, 102 So. 200; Hogan v. Thompson, 186 Ark. 497, 54 S.W.(2d) 303.
The action was on a promissory note. The plea was usury, in short by consent. The cause was submitted to the trial judge, sitting without a jury, on an agreed statement of facts.
Under the evidence the consideration for the note sued on was $92.50 and a coupon issued by "Merchants Coupon Service Company" of the face value of $10 and an agreed value of $7.50. The defendant executed the note for $100 and by agreement accepted as the consideration $92.50 in cash and the coupon for $10 at a discount of $2.50. This coupon defendant afterwards used in making payment for a purchase of goods, at its face value. The note called for 8 per cent. interest per annum. This is not usury and the trial court so correctly held. 66 Corpus Juris 172 (§ 61); Hogan v. Thompson, 186 Ark. 497, 54 S.W.(2d) 303.
The judgment is affirmed.
Affirmed.