Citation Numbers: 6 Fla. Supp. 17
Judges: Crawford
Filed Date: 8/26/1954
Status: Precedential
Modified Date: 1/12/2023
This cause came on to be heard on a complaint for a declaratory decree and supplementary relief filed by the plaintiff International Company, Inc. and the answer and counterclaim of the defendant Hyman Yaffee, individually and as trustee. The court has considered the pleadings, the facts, and the argument of counsel and their briefs.
On May 20, 1954 the parties filed the following stipulation—
It is hereby stipulated and agreed by and between counsel for the respective parties as follows:
1. That Hyman Yaffee is a resident of a state other than the state of Florida.
2. That International Company, Inc. did execute its promissory note in the principal sum of $440,000, dated April 1, 1953, payable to Hyman Yaffee as trustee, and that the photostatic copy of said note attached to the bill of complaint is a true and correct copy of said note, and that said note, marked plaintiff’s exhibit A, may be introduced in the evidence without objection.
*20 3. That to secure the note indebtedness, International Company, Inc. did, on April 1, 1953, execute and deliver to Hyman Yaffee as trustee, a mortgage in the principal sum of $440,000, and that a photostatic copy of said mortgage attached to the complaint, marked exhibit A, is a true and correct copy of the original mortgage, and that exhibit A may be submitted in evidence without objection.
4. That at the time of the delivery of the note and mortgage by the plaintiff to the defendant, said defendant did pay and deliver to the plaintiff the sum of $360,000, and that he did withhold from the sums provided to be paid on the note indebtedness the sum of $80,000, $40,000 of which was a bonus for the making of the mortgage and the sum of $40,000 representing the first year’s interest paid in advance.
5. That the defendant did intentionally and wilfully exact a bonus in the sum of $40,000, and did request the payment of the sum of $40,000 for the first year’s interest paid in advance for the reason that at the time of the execution of the note and mortgage, the plaintiff was under the disability to plead usury as provided in section 612.62 F.S.A.
The facts disclose a genuine issue existing between the parties requiring a declaration by the court. On April 1, 1953 plaintiff corporation executed its negotiable promissory note in the principal sum of $440,000 payable to the defendant Yaffee as trustee. Simultaneously with the execution and delivery thereof plaintiff executed and delivered a mortgage encumbering real property to
At the time the note and mortgage were delivered and the funds disbursed section 612.62, Florida Statutes 1951, was in existence, providing that “no corporation shall interpose the defense of usury in any action in any court in this state.” At the same time the usury statutes, sections 687.02 and 687.03, Florida Statutes 1951 and 1953, were also in existence. Although section 612.62 was repealed, the repeal becoming effective on October 1, 1953, sections 687.02 and 687.03 remain on the statute books. Plaintiff seeks a declaration whether the interest required under the terms of the note and mortgage is usurious under provisions of sections 687.02 and 687.03 and if so, in view of the repeal of section 612.62, whether it may have the same declared usurious and avail itself of the relief provided by section 687.04, Florida Statutes 1951 and 1953, set forth in part below—
Any person, or any agent, officer or other representative of any person, willfully violating the provisions of § 687.03 shall forfeit the entire interest so charged, or contracted to be charged or reserved, and only the actual principal sum of such usurious contract can be enforced in any court in this state, either at law or in equity; and when said usurious interest is taken or reserved, or has been paid, then and in that event the person, who has taken or reserved, or has been paid, either directly or indirectly, such usurious interest, shall forfeit to the party from whom such usurious interest has been reserved, taken or exacted in any way, double the amount of interest so reserved, taken or exacted; * * *
Considering this sum of $120,000 in connection with the principal amount of $360,000 actually paid, the loan and contract were usurious, violating provisions of sections 687.02 and 687.03 in that the interest and bonus reserved exceeded 10% per annum. These statutes were in effect when the parties entered into their contract and remain unchanged.
In my opinion the repeal of section 612.62, Florida Statutes 1951, did away with a remedial and ■ procedural bar — leaving the contract open to attack for the usury it contained at its inception.
Plaintiff is entitled to an application of the penalties provided in section 687.04. Defendant is required to forfeit double the amount of $120,000, or $240,000. Plaintiff is entitled to a cancellation of all interest provided under the terms of the usurious agreement. Plaintiff, having actually received $360,000, and being entitled to a forfeiture of $240,000, is now indebted to defendant in the principal sum of $120,000, which sum it is required to pay to him at the maturity of the note and mortgage, without interest.
Defendant in his answer and counterclaim requests an .award of attorney’s fees for defending this suit. He bases his request on a provision in the note and mortgage for the payment of attorney’s fees by the maker in the event of enforcement of the obligation. The request should be denied. The note and mortgage were not in default during this litigation, defendant in fact accepted an interest payment. This being litigation for a declaration of the rights of the parties and not for the enforcement of the obligation defendant is not entitled to attorney’s fees by virtue of the provision mentioned. Should plaintiff ever be in default and defendant seek enforcement of the note he would be entitled to such an award.
The court having made its findings and declaration, and having considered plaintiff’s request for supplementary relief, it is ordered, adjudged and decreed as follows—