KPANAH GOBA, Appellant, v. HARRIETTE L. DENNIS, Appellee.

APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT, MONTSERRADO COUNTY. Argued October 22, 1969. Decided January 30, 1970. 1. The test of usury is whether the agreement, if performed, would result in producing to the lender a rate of interest greater than is allowed by law, and whether such result was intended. 2. To frustrate the cupidity of lenders of money, the Supreme Court, in determining whether or not an agreement is usurious, will disregard the form of the agreement and look to its substance, condeming it when it finds the requisites of usury present, regardless of the disguises attempted. 3. Unless the evidence presented at the trial establishes the facts clearly, the Supreme Court will order the case remanded for clarification it feels is within the power of the parties. 4. Parties may not, by private agreement, oust the courts of their rightful jurisdiction. 5. When a document is proferted as part of a petition, the proper method for cross-examination of a witness thereon, is to wait until the document is put in evidence, even if it requires the recall of the witness sought to be questioned concerning it before the document had been offered in evidence. 6. In an action for cancellation of a mortgage agreement, a provision for delivery of a full warranty deed by mortgagor to mortgagee upon default by mortgagor, will reinforce the Court’s view, already held, that the facts evidence overreaching on the mortgagee’s part. A bill in equity was filed on February 16, 1965, for cancellation of a mortgage agreement entered into on April 3o, 196o, between petitioner-appellee and respondent-appellant. The agreement was prepared by respondent’s lawyer after the petitioner had approached respondent in serious financial difficulties, having mortgaged the premises owned by her theretofore, and the obligation having become due. It was agreed that the principal sum involved in these proceedings, $7,000, would be loaned to her secured by a mortgage upon virtually all her premises, for a life of five years. The basis of the cancellation suit arose from the provisions of the mortgage instrument relating to the payment of interest on the prin459 460 LIBERIAN LAW REPORTS cipal debt. In the event the mortgagor repaid the debt before the five years provided for, she was to pay interest on the loan at the rate of ten percent annually. If repaid after five years no interest on the loan was to be paid, but in lieu of interest the mortgagee was to be put into possession of the premises, with the right to collect all rents, as interest, in addition of course, to receiving payment of the principal sum. There was great uncertainty as to the totals of the rent collected by the agent for respondent, since he issued no receipts for rents paid, and only the bank deposit slips were offered in evidence by respondent and not the record book of the agent, who had died before the action arose. In addition, the mortgagee’s agent had entered into a lease agreement covering the same premises, with a third party who was out of the country. A final decree was entered in favor of the petitioner, from which respondent appealed. On appeal, although the Supreme Court was clearly cognizant of overreaching on the part of respondent, and usurious intent, the judgment was reversed and the case remanded to the lower court, because the evidence in the case had been inadequately presented by both sides, and the Court preferred a fuller treatment of the facts before rendering its final opinion in the matter. G. P. Conger-Thompson for appellant. Cole for appellee. Samuel B. MR. JUSTICE the court. WARDSWORTH delivered the opinion of A bill in equity was filed by appellee in these proceedings on February 16, 1965, in the Sixth Judicial Circuit Court, Montserrado County, for the cancellation of a mortgage agreement, entered into by and between petitioner-appellee and respondent-appellant. The pleadings progressed as far as the rejoinder and rested. Pe- LIBERIAN LAW REPORTS 461 titioner’s bill for the cancellation of the mortgage agreement contains five counts, and her main or principal contention is that respondent has within the period of three years collected an amount of rent accruing from the premises far in excess of the principal amount of $7,000, and the interest thereon. She is seeking relief against what she claims amounts to injustice. On May 1, 196o, petitioner entered into a mortgage agreement with respondent in which she pledged her house, no. 20 on lot no. Io6, on Ashmun Street, Monrovia, with a right of redemption covering a loan of $7,000, for a period of five years, at the annual rate of ten percent interest. The trial judge ruled on the issues of law on October 19, 1965, ordering the case to trial on the “controversial facts.” The trial of the case began on October 29, 1965, and ended December 3, 1965, with a final decree entered in favor of petitioner, to which respondent noted exceptions and announced intent to appeal. Appellant is now before this Court basing his appeal on a bill of exceptions containing four counts; we deem count one as being worthy of consideration : “Appellant submits that the following exceptions were taken during the trial of the case, namely : “When witness Hairiette Dennis was on the stand in her own right, she was asked the following question on cross-examination : The agreement that you signed if shown to you, do you think you would be able to identify same? “The plaintiff objected to the question on the grounds: usurping the role of the plaintiff, which objection the court sustained over the exception by the appellant. Appellant submits that the question was intended to have the petitioner introduce the agreement which she had neglected to do while on direct examination, which she had referred to in her state- 462 LIBERIAN LAW REPORTS ment in chief, in order that the appellant could crossexamine her and face her with some of her answers in which she attempted to impute oral understanding to the said written agreement. The denial of the question by the court deprived appellant of the right of cross-examining appellee on said agreement, she being the best evidence to have introduced said document.” This question was intended to elicit from the witness answers concerning a written document in which ambiguity appeared, and which was already in court, having been made profert along with the petition and thereby forming a part of petitioner’s bill. Notwithstanding, the mortgage agreement not having been introduced by petitioner, counsel for respondent, considering this question pertinent, should have kept it in abeyance until eventually the document was introduced and then applied for the recall of the witness. Having failed to do so constitutes a waiver on his part. Therefore, this count is not sustained. The record in this case appears to leave gaps on both sides. However, when on the witness stand, in her own behalf, petitioner submitted a list made by one Boddy Arthur showing the amount of $16,430 allegedly collected by respondent’s agent from sundry persons who occupied the mortgaged premises at various times during the life of the mortgage. This statement submitted by the petitioner was supported in part by some of the tenants who had lived in the house and paid rent to respondent’s agent, Mr. Moeller. Petitioner stated while on the witness stand that she occupied a part of the mortgaged premises and paid $52.00 per month as rent from May 196o, to July 196o. Petitioner said that aside from the amount mentioned paid by her to Moeller, she also collected rent from other tenants and turned the amounts over to Mr. Moeller. The witness was asked on cross-examination whether she had obtained receipts from Mr. Moeller, respondent’s LIBERIAN LAW REPORTS 463 agent, showing the amounts turned over to him. In answering this question she stated : “Mr. Moeller had a book as money was paid to him ; even though you asked for a receipt, he would enter into the book. Not a single soul can say that was living in the house it was his custom to give receipts. I paid this money in the presence of Sims, my ex-husband.” The allegation that the agent refused to issue receipts for monies paid to him by tenants occupying the premises, is supported by the testimony of the several witnesses who testified on behalf of petitioner. On cross-examination petitioner was asked : “You made a positive statement about the assessment and payment of sundry rents to one Mr. Hamdam, which amount you have typed out reflecting the sum of $16,430.00. Beyond this allegation of yours, have you any document, such as a receipt or otherwise, to confirm or substantiate this amount?” The witness answered : “This amount, the parties’ names are attached, each one will come and testify; there are some that I have not subpoenaed yet; but if need be I will subpoena each one.” William A. Arthur stated that as a tenant he paid $55.00 per month, from July 1962, to March 1963 ; this period, amounting to nine months, at $55.00 per month comes to $495.00. The third witness for the petitioner was Anthony Nah, who stated that he was a tenant at the premises in question from June 1962 to March 1963, at $6o.00 per month, which he paid over to Moeller, the total being $66o.00 for the period mentioned. The fourth witness, Mr. George Brown, stated that he lived in the house in question for nine months, paying $43.00 per month, and collected for Moeller $1,495.00, which amount includes his personal payment of $43.00 per month. This witness gave a partial breakdown of the amount, accounting for $789.00 and stated further that he could not remember the names of the other tenants since no receipts were obtained, for Moeller simply 464 LIBERIAN LAW REPORTS noted payments in a certain book, and this book was kept in the possession of Mr. Moeller. Another witness for petitioner was Mr. Michael, who stated that he lived in the house and paid $52.00 per month for four months, and thereafter he paid $4.5.00 per month for fifteen months. He stated that other tenants lived in the house, and named George Brown, A. B. Williams, and Mr. Norty, and that there were other persons whose names he could not remember. On cross-examination, he said that he paid the rent to petitioner, $52.00 per month for the four months, and then to Mr. Brown, then Williams, then to Mr. Moeller. Counsellor I. VanFiske also testified for petitioner, and said: “One day he approached me (that is Hamdam approached Fiske) to prepare a lease agreement between Hamdam and Moeller for the premises in question; the agreement was concluded ; Hamdam was now out of the country*. The witness also identified court marks `13 /3′ in confirmation. (On crossexamination the witness said he did not know the whereabouts of Mr. Hamdam.)” Kpanah Goba took the witness stand and testified on his own behalf and stated, inter alia; that he and petitioner entered into the mortgage agreement in the following fashion: petitioner went to respondent distressed that she had mortgaged this same property to some mandingo people for $7,000, and the time was up, but she did not have the money to redeem her property; she asked respondent to help her out; respondent said he agreed, provided his agent, Moeller, saw and inspected the place, as being in order. Moeller saw the place, found it in order and respondent took petitioner to his lawyer, counsellor Momolu S. Cooper, who drew up the mortgage; respondent stated further that petitioner agreed that the matter of interest should not be discussed ; she, however, agreed that whatever rents were collected from the prem- LIBERIAN LAW REPORTS 465 ises would go toward payment of the interest; he said if he could not rent the place his interest would be lost; he said the loan was for five years, but if petitioner paid the money before the five years, say two years before the expiration of the due date, then they would consider the matter of interest. Further, the witness stated : “When the mortgage was concluded petitioner asked me to occupy the small houses or rather one of the out houses on the premises ; and I agreed. After two years she asked me to move into the big house and be paying rent; my agent agreed.” On cross-examination, the witness said his agent never gave receipts to the tenants, or accounted to him, except for the deposit slips he tendered in evidence; he even said his agent, Moeller, never informed him about Samuel Hamdam’s lease which everybody, including counsellor Fiske, the maker of said lease, testified to, and which from the evidence was so open and notorious as to convince any rational being in the absence of the lease itself that there was such an understanding; the witness also stated his agent died sometime in 1964, but he could neither remember the date or month; the witness stated further that since the death of his agent no one ever paid any rent, since petitioner stopped the tenants from paying; the witness stated that he never knew how much money his agent collected monthly except for the deposit slips, as before stated. Respondent’s next witness was his son, Henry, who stated the distress petitioner was in when she went to borrow this $7,000 from respondent; he also referred to the understanding that rent from the house would be collected by Kpanah Goba, the respondent, to be deposited, and pursuant. thereto Mrs. Dennis left and Mr. Moeller rented out the whole house. This witness stated that the amount of $1,529.50 was collected by Moeller and other tenants were sued for rent, amounting in all to $1,700.00; he also said the outstanding uncollected rent totals $4,000, 466 LIBERIAN LAW REPORTS more or less. On cross-examination, this witness tried to show that since he took over after Moeller’s death he did not collect any rent but he had to admit that he collected $100.00 from one Mr. King, one of the tenants, as rent from January to April, 1965; this clearly shows that the witness did not tell the truth when he said petitioner had stopped the people from paying rent and respondent, therefore, could not collect any additional rent after Moeller’s death in 1964, or even before then. From the memorandum prepared by the petitioner, and Mr. Arthur and the other evidence, this Court finds the following to be substantiated : $ 156. rent by H. Dennis to Moeller. 2076. rent collected by H. Dennis to Moeller. 1870. rent collected by S. Hamdam to Moeller. 1353. rent collected by G. Brown to Moeller. 405. rent paid by Michael by Moeller’s authority. 405. rent paid by Arthur by authority of Moeller. 66o. rent paid by Mr. Nah by Moeller’s authority. 1755. rent paid Mr. Hamdam to Moeller. 3179. rent paid to Mr. Moeller by Hamdam. $11,949. TOTAL The mortgage giving rise to this suit provided for a mortgage life of five years, and repayment of the principal sum of $7,000 before the five years from the date of signing if annual interest at ten percent was paid on the principal sum, or at the end of five years, without interest, provided the mortgagee was permitted possession of the mortgaged premises, with the right to rent them, except for two small brick houses in the yard, and to retain the rents so received in lieu of interest. It further provided contingencies in the event of default by the mortgagor. It is evident from the foregoing that the respondent and his lawyer contrived to secure financial rewards for the mortgagee far beyond permissible limits. It is also LIBERIAN LAW REPORTS 467 evident that it was the distressed condition of the petitioner, to the knowledge of respondent, that gave rise to the opportunity and realization. To obtain a better understanding of what constitutes usury we have referred to the following: “To constitute usury it is essential that an excess of the legal maximum rate of interest prescribed by statute be exacted in consideration of a loan or forbearance, but the extent of the advantage, or the amount of the surplus, in excess of legal interest is wholly inconsequential. Nor is it necessary that the maximum exceeded be that laid down in the general statute against usury; it suffices if more than the maximum allowable under a special statute applicable to the case be exacted. Furthermore, although there is authority to the contrary, it is generally held that the determination of the question as to the existence of usury is not dependent upon whether or not unlawful interest was actually received by the lender. If there was a purpose in his mind to take more than the legal interest, and by the terms of the transaction and the means used to effect the loan, he may by its enforcement be enabled to get more than the legal rate, the transaction is usurious. The test of usury is whether the contract, if performed, would result in producing to the lender a rate of interest greater than is allowed by law, and whether such result was intended.” 55 Am. JUR., Usury, � 36. Further, the portion of the mortgage providing for annual interest at ten percent in the event of payment of principal sum before the five years, was calculated to weaken the effort of petitioner to repay the loan before April 3o, 1965, and obtain for the respondent the full five years in which to reap his benefits through the rents derived from those desirable premises. It is obvious that the provision for retention of rent by 468 LIBERIAN LAW REPORTS the mortgagee was a device to obtain a higher rate of interest upon his loan than the ten percent allowed by statu te. In Gibson v. Tubman, 13 L.L.R. 610 (196o), the Court at p. 62o, quoted the following: “The cupidity of lenders and the willingness of borrowers to concede whatever may be demanded or promise whatever may be executed in order to obtain temporary relief from financial embarrassment resulted in a great variety of devices to evade the usury laws. To frustrate such evasions the courts look beyond the form of transactions to their substance. The general rule is that a court in determining whether or not a contract or forbearance is usurious will disregard its form and look to the substance, condemning it when it finds the requisites of usury present, regardless of the disguises they may wear.” ss Am. JuR., Usury, � 14. There are two features of this mortgage transaction which seem to becloud the entire situation. The first is, what accounts for the agent’s denying receipts to the tenants for rent paid? We can only infer that it was designed to frustrate an accounting, should litigation, as it has, ensue. Incidentally, the account book kept by Moeller should have been introduced into evidence to help determine the amount of rent obtained and not merely the deposit slips, as was done. The next aspect of the case which puzzles us is, can it be possible that respondent allowed his agent to collect rents from the mortgaged premises without knowing the monthly intake? Further, although his agent leased out the premises to one Mr. Hamdam at the rate of $66o.00 per quarter, for a period of three years, yet respondent claims no knowledge of this particular transaction. If this is true, what construction may we place on the negligent and indifferent attitude of the respondent in conducting the business relating to the mortgaged premises except LIBERIAN LAW REPORTS 469 that so much had been obtained already that he might not have really cared. The evidence shows that there are missing links in the chain of evidence on both sides and that neither side has fully presented the evidence available so as to aid the Court in coming to a final determination. Evidence, when clear and cogent, enables the Court to pronounce with a reasonable degree of certainty its final decree or judgment, but when vague and unintelligible the Court may remand the case for a new trial. The fourth clause of the mortgage reveals another attempt on the part of appellant to evade the law controlling mortgages and foreclosure proceedings. It provided, inter alia, “that in the event the mortgagor fails to liquidate the loan thus made at the time indicated herein, then and in that case the mortgagor, her heirs, executors, administrators and/or assignees shall execute a warranty deed for the above-described premises in favor of the mortgagee.” This provision is not only illegal and void but savors of an intent on part of appellant, after exploiting appellee in the collection of an enormous amount as rent in lieu of interest, to derive eventual ownership in fee simple, contrary to statute. It is obvious, however, that this provision was designed to circumvent the statute in respect to foreclosure proceedings. Our Property Law provides, 1956 Code, tit. 29, � 155 (g), (h) : “(g). The sale of the mortgaged property, after judgment has been rendered by the court, shall be made in the same manner and upon such publication of notice as that prescribed by law for sale of personal property seized under execution for the satisfaction of final judgment of court. “(h) The net proceeds of the sale, after deduction of costs allowable upon sales of such personal property on execution, including necessary costs of trans- 470 LIBERIAN LAW REPORTS portation and storage, shall be paid to the mortgagee to the extent necessary to discharge the indebtedness, and the balance, if any shall be paid to the mortgagor.” In passing upon the attempt of individuals by private agreement to deny the jurisdiction of courts, as in the instant case, this Court quoted authority as cited below in Grant V. Mission Board, to L.L.R. 209, 217-218 ( 1949 ) “Both in England and in the United States it has been decided in a great number of cases, and conceded in an equally large number of other cases, to be settled law that the jurisdiction of the courts cannot be ousted by the private agreements of individuals made in advance, that private persons are incompetent to make any such binding contracts, and that all such contracts are illegal and void as against public policy. Likewise, every contract discriminating between the different courts of the country is generally esteemed to be contrary to public policy and void. Courts are created by virtue of the Constitution and inhere in our body politic as a necessary part of our system of government, and it is not competent for anyone, by contract or otherwise, to deprive himself of their protection. The right to appeal to courts for the redress of wrongs is one of those rights which are in their nature under our Constitution inalienable and cannot be thrown off or bartered away. “It is well settled in most jurisdictions that an agreement between parties to a contract to arbitrate all disputes thereafter to arise under the contract is invalid and unenforceable as an attempt to oust the legally constituted courts of their jurisdiction.” 14 AM. JUR., Courts, � 196 (1938). 7 R.C.L. 1046 (1915). “The courts are agreed that agreements which have a tendency to obstruct or interfere with the administration of justice are contrary to public policy. . . . It is a general rule that agreements ousting courts of LIBERIAN LAW REPORTS 471 their jurisdictions are invalid. . . .” 12 AM. JUR., Contract, � 186 (1938). Therefore, in view of the foregoing, the final decree is hereby reversed and the case remanded for lack of the full evidence, to be tried on its merits, costs to abide final determination. And it is hereby so ordered. Reversed and remanded.