Woody v. Prudential Life Insurance Co. of America, 209 N.C. 364 (1936)

Jan. 22, 1936 · Supreme Court of North Carolina

209 N.C. 364

E. D. WOODY and Wife, PANTHEA WOODY, v. PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA.

(Filed 22 January, 1936.)

1. Usury C b—

The burden is on plaintiff, seeking to recover tbe statutory penalty for usury, to show that a commission charged on the loan, and constituting the basis of the claim, was received by the lender.

2. Limitation of Actions A b—

Where an action to recover the penalty for usury is not instituted until more than two years after the last payment of interest, the action is barred by the statute of limitations. C. S., 442.

B. Usury A a—

A sum paid as an attorney’s fee in a settlement between the parties after foreclosure of the property securing the debt and the repurchase of the property by the trustor by paying the original debt, is held not usurious under the evidence in this case.

Appeal by plaintiffs from Grady, J., at September Term, 1935, of Durham.

Plaintiffs instituted this action on 22 January, 1935, to recover tbe penalty for usury alleged to have been exacted by tbe defendant. In tbe complaint plaintiffs alleged that from a loan made by tbe defendant in 1926, tbe sum of $209.00 was deducted and received by tbe defendant for making tbe loan, and that in July, 1934, a further sum of $50.00 was paid by tbe plaintiffs in excess of tbe legal rate. Defendant denied that it charged or received tbe $209.00, and in its answer alleged that if plaintiffs paid this sum it was a commission which was not received by the defendant. The defendant further alleged that the item of $50.00 was an attorney’s fee paid by the plaintiffs in a settlement after a foreclosure sale. Defendant also pleaded the statute of limitations.

Plaintiff E. D. Woody testified that the negotiations with respect to the loan were had with one S. B. Frink, who filled out an application for the loan on the defendant’s blank; that the amount of the loan was $3,000, secured by deed of trust on his home, but that $209.00 was deducted from the amount for negotiating the loan; that thereafter he kept up his payments on principal and interest to 5 July, 1932, and thereafter made no other payments; that in July, 1934, the trustee in the deed of trust advertised and sold the property and the defendant bid it in for $2,500; that in August, 1934, he secured a loan from the Home Owners’ Loan Corporation and paid off his debt, including interest, taxes, and cost of sale, the defendant accepting Home Owners’ Loan Bonds therefor.

At the conclusion of plaintiffs’ evidence, motion for nonsuit was allowed, and from judgment thereon plaintiffs aiipealed.

Bennett ■& McDonald for plaintiffs, appellants.

Basil M. Watkins for defendant, appellee.

Per Curiam.

The judgment of nonsuit must be sustained. The receipt by the defendant of the alleged usury of $209.00 does not sufficiently appear, and, if it did, the statute of limitations is a complete bar. No payments of interest were made after 5 July, 1932.

The other item of $50.00 was an attorney’s fee, paid by the plaintiffs in a settlement made after a sale of the premises had been made in July, 1934, and under the evidence in this case this could not be held to be usurious. C. S., 442; Trust Co. v. Redwine, 204 N. C., 125.

On the record before us the judgment of nonsuit is

Affirmed.