Opinion
January 6, 1931.
January 21, 1931.
Contract — Purchase of promissory notes — Discount — Fraud — Usury.
1. Where defendant purchases promissory notes from a corporation at 10% discount, and agrees to sell them to plaintiff for the same rate of discount, and subsequently the plaintiff discovers that defendant was receiving from the corporation 15%, plaintiff may recover the difference between the 10 and 15 per cent discount.
2. In such case the defendant cannot claim that the transaction was one of discount and not of sale, and that there was usury in the transaction.
3. Usury arises between buyer and lender, not between successive purchasers of obligations already created.
Before FRAZER, C. J., WALLING, SIMPSON, KEPHART, SADLER, SCHAFFER and MAXEY, JJ.
Appeal, No. 149, Jan. T., 1931, by defendant, from order of C. P. No. 2, Phila. Co., March T., 1928, No. 2585, refusing judgment for defendant n. o. v., in case of Samuel Seltzer v. Isaac Sokoloff. Affirmed.
Assumpsit on a contract.
Verdict for plaintiff for $21,395.91.
On a motion for judgment for defendant n. o. v., GORDON, J., filed the following opinion:
This case turned upon a dispute of fact which was, in our judgment, fully and correctly submitted to the jury. The charge of the court adequately set forth our views respecting the important and controlling legal questions in the case. The plaintiff, who had bought notes of the Commercial Acceptance Corporation, testified that he agreed to take the notes from the defendant, who had been buying notes in large quantities for some time from the Commercial Acceptance Corporation, and wanted some relief from the burden of taking so many notes; and that the defendant agreed to sell the notes to the plaintiff for the same discount that he, the defendant, received from the Commercial Acceptance Corporation. Subsequently, the plaintiff discovered that, although he had received from the defendant a discount of ten per cent on the face of the notes, the defendant had actually been receiving fifteen per cent from the Commercial Acceptance Corporation. The suit was for the five per cent, which the defendant thus secretly retained in the transaction. The defendant, on the other hand, contended that no such agreement was entered into, but that the sale to the plaintiff was for the flat price of ten per cent. The issue thus raised was submitted to the jury, and passed upon favorably to the plaintiff. We see no merit in the contention, urged upon us by the defendant, that this was a transaction of discount rather than of sale, and that there was usury, therefore, in the transaction. In the first place, the transaction was one of sale rather than of discount, if there be any distinction between a sale and discount in such circumstances. But whether there be or not, we do not think that it affects the right of the plaintiff to recover in this case. Usury arises between buyer and lender, not between successive purchasers of obligations already created.
The verdict of the jury meets with our approval on the inherent merits of the case, and we, therefore, discharge the rule for a new trial, and overrule the motion for judgment non obstante veredicto.
Defendant appealed.
Error assigned was order refusing motion for judgment for defendant n. o. v., quoting order.
George J. Edwards, Jr., for appellant.
Wolf, Block, Schorr Solis-Cohen, for appellee, were not heard.
The opinion of the learned court below states clearly and correctly the issues involved, and upon that opinion the judgment entered is affirmed.