Flower v. Millaudon

19 La. 185
CourtSupreme Court of Louisiana
DecidedJuly 15, 1841
StatusPublished
Cited by6 cases

This text of 19 La. 185 (Flower v. Millaudon) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flower v. Millaudon, 19 La. 185 (La. 1841).

Opinion

Bullard, J.

delivered the opinion of the court.

The second trial of this case resulted in a judgment similar to that which was reversed by this court at a former term, when it was remanded for a new trial. Upon this second appeal the case comes before us with all the evidence adduced by the parties so as to enable us to pronounce finally upon the questions both of law and fact involved in the controversy.

In reviewing the judgment of the Parish Court the most convenient method will be to take up the claims of the plaintiff in reconvention, in the order in which they are recapitulated in-his accounts and in the judgment itself.

1st. The.balance of W. Flower’s loan account amounting on the21st March, 1831, to $19,930 06.

2d. Balance of all accounts,'with W. &. D. Flower, amounting at the same period to $4,480 16.

3d. The balance of W. Flower’s commercial account, $3,397 63.

4th. The amount of a judgment rendered against Millaudon in favor of M‘Donald et al., for a debt due by the firm of W. & D. Flower, amounting to $1,377 62, and now claimed in reconvention.

The aggregate of these four items forms the sum for which judgment has been rendered in favor of the plaintiff, in recon-[187]*187vention, and it now becomes our duty to analyze them in order . , f i . . „ to ascertain how much of the amount is made up of interest, according to the principles assumed by us in our former judgment, and to what extent the original plaintiff has sue-ceeded in showing errors or omissions in the various accounts between the parties.

I. This first and largest item is made up of a principal of $11,000, with interest at ten per cent, and compound interest from the year 1827. The history of the transaction from its origin, is clearly established by evidence. On the 22d of June, 1822, W. Flower gave his promissory note to Millaudon for $11,000, payable on the 1st of May, 1824. The only consideration for it was a note of V. Nolte & Co., for $10,000, transferred by him to Flower, payable on the 10th of May, 1824, that is to say, a few days after Flower’s note would fall due. At the maturity of his note Flower stipulated to pay an interest of ten per cent, on the eleven thousand dollars.

If this latter sum was really and justly due, it is clear the stipulated interest was not above the rate permitted by law. The question therefore, whether the contract was usurious, must depend upon the character of the original exchange of notes; for if the defendant can recover the whole of the principal sum he is entitled to the interest.

The operation was a very simple one. If both notes had been paid at maturity, Millaudon would have gained one thousand dollars without disbursing a dollar. He gave no equivalent but his endorsement on Nolte’s note for less than two years and obtained the note of Flower, secured by mortgage on a number of slaves. If instead of Nolte’s note he had given the amount of it in money, less the discount at ten per cent., or, about eight thousand dollars, and received at the expiration of two years eleven thousand dollars, it is obvious he would have secured an interest of upwards of eighteen per cent, per annum. Suppose instead of transferring Nolte’s note he had given his own, it would have amounted to a loan not of meney but of his name, and for the purpose of raising [188]*188it by discount. That such, was the true character of the transaction we are quite satisfied. Under such circumstances if Flower, at the maturity of his note, had contested the payment of it, on the ground of want of consideration as to the amount over ten thousand dollars, which he was to receive ten days afterwards on Nolte’s note, would the defence have availed him ? We think it would, and that only the principal sum could have been recovered. Nothing would be more easy ^lan to eva<le ^ prohibition of usury, if we were to regard only the form of contracts, without any scrutiny into their real nature. An agreement to take even a legal rate of interest on a larger sum than is really due, has been held by this court to be. usurious: 3 Martin, N. S. 622.

, gave his own $11,000 payable recei-redrS’ a^n noteTof'a third person, endorsed by B," for $10,000 payable ten days after Ins own: Held, that it was an agreement to give' and receive usurious interest, and null. An agreement to take even a legal rate of interest on a larger sum than is really due, is usurious. So a contract advances'5 anTto receive ten per cent. interest thereon, and be entitled to one third of the profits of the firm to which tcTbemade6 was held_ to be usurious.

II. The second branch of the inquiry relates to the accounts between the defendant and W. & D. Flower.

The relations of the defendant with that firm commenced in 1822, under a contract by which the latter engaged to furnish $20,000 in cash and endorsements of their notes of accommodation, for an interest of ten per cent, on the cash part of the advances, and one third of the profits of the concern. We pronounced our opinion on a former occasion, that such a contract Was usuri°us- We have heard, as argument to convince us that we were in error even on the hypothesis assumed J 1 W the parish iudge on the last trial, that the interest applied J r t exclusively to the cash advance, and the profits were intended . . P , r ' o r , as commissions for endorsing. In point ot fact ten thou-san(^ dollars upon which the interest is charged, were not advanced at first in cash. Millaudon, it appears from the receipt A L given at the time, loaned them in cash one thousand dollars, gave his notes at sixty days for six thousand five hundred dollars and his endorsement on their note for twelve thousand five hundred dollars, amounting together as the receipt expresses it “ to the sum of $20,000, which loan is granted to us on the condition as per óur agreement entered into this day with the said E. Millaudon.” Admitting that the defendant’s notes at sixty days were equivalent to cash, yet the money -part of the [189]*189advance falls short two thousand five hundred dollars, of the sum promised; and yet the interest is charged on ten thousand, besides profits on the first year’s commercial operations.

Accounts which have' not been objected to and received by the party, although they contain extravagant charges for commissions and usurious interest, will not be reopened in a suit for a iinal settlement and to recover a balance. Usurious interest once paid cannot be recovered back.

-In pronouncing on this part of the case, upon the first appeal, we neither intended, it is true, to direct the judge a quo what judgment he should render upon the new trial, nor to preclude a review of our own opinion, when all the evidence in the power of the parties should be before us, and after listening to all the arguments they might think proper to urge. Our examination of this point has brought us again to the conclusion, that so far as the defendant seeks, in this case, to recover the interest and profits under that contract, he cannot succeed. But whatever interest or profits may have been paid or are considered as paid, by the appropriation of funds in the hands of the defendant, with the assent of the plaintiff, cannot be recovered back by the plaintiff; 3 Martin, N. S. 622; 2 La. Rep., 431; 4 Idem, 544.

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Bluebook (online)
19 La. 185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flower-v-millaudon-la-1841.