we have not found them. We desire to add in this connection that, when all of the cases from which we have quoted, and the others to which we have referred, except the ones from Nebraska, Vermont, and Missouri, and possibly the one in 54 N. Y., are carefully examined and analyzed, it will be found that all of them support the doctrine laid down by the Supreme Court of Illinois in the case of Boylston v. Bain, supra. We are also of the opinion that the doctrine as there laid down is the correct one. The question of whether the agent had authority to enter into a contract in violation of law should not be limited to the mere formal inquiry of whether he had the express or implied authority to lend the principal's money. While that question, as a matter of course, is always an [12] element and lies at the very threshold of the inquiry where the authority of the agent is involved, yet, where the transaction involves the violation of a statute, the inquiry should go farther and it should be ascertained whether the agent had the authority to enter into the contract which is alleged to be in violation of law. To establish such authority it need not be shown that the principal expressly conferred it, but it may be shown in the same manner as it usually is shown by proving the facts and circumstances from which the authority may legally be inferred or implied. And in this regard, if it be shown that there was an understanding, express or implied, between the agent and the principal whereby the former should look to the borrower for a commission or bonus as compensation, or if he has made loans for his principal in which such a course was pursued and the principal knew of it, or approved of it, or if there are any other facts or circumstances from which authority may be clearly implied, it may be found to exist. In the case at bar, as we have seen, there is nothing from which authority may be deduced except the naked fact that the uncle of appellant was authorized to exercise his best judgment in making use of the $400 she had left with him. Assuming that all that Mrs. Mansfield claims is true, still the question remains, What authority has the court to declare appellant's money forfeited to the respondent? Certainly our statute does not require that under such conditions the latter's money should be forfeited to the borrower.

The statute says "whenever it shall satisfactorily appear by the admission of the party or by proof that any bond, bill, etc.,.

has been taken or received in violation of the provisions" of the statutes, then, and not otherwise, shall the lender forfeit the whole sum expressed in the contract to the borrower. We held in Culmer Paint, etc. Co. v. Gleason, 42 Utah 344, 130 Pac. 66,

that when the plea of usury is interposed and forfeitures are involved, and “especially such as have the effect of taking property from one and giving it to another (the forfeiture) should be enforced only when the proof is clear and convincing, [13] if not beyond a reasonable doubt." We think that this is what is contemplated by the language of the statute which is, when it shall satisfactorily appear by the admission of the party or by proof that the provisions thereof have been violated, a forfeiture, etc., shall be declared by the court. If this means anything, it means that the proof showing a violation of the statute should be clear and convincing. The proof, in order to be satisfactory, can be no less than this.

Entirely apart, however, from the terms of our statute, the overwhelming weight of authority is clearly to the effect that the burden of proof is upon him who alleges usury and that he must establish it by at least clear and convincing evidence and not merely by a preponderance thereof. Webb, Usury, seetion 417; Yellow Medicine County Bank v Cook, 61 Minn. 452, 63 N. W. 1093; Wood v. Babbitt, 149 Fed. 818; Conover v. Van Mater, supra; Short v. Post, 58 N. J. Eq. 130, 42 Atl. 569. The evidence as it now stands is therefore clearly within the rule laid down in Yellow Medicine, County Bank v. Cook, supra, and is insufficient to support the conclusions of law and judgment.

Appellant further contends that the court erred in overruling her motion to strike the testimony of Mrs. Mansfield. This contention is not tenable. While Mrs. Mansfield's testimony, standing alone, was clearly insufficient to make out a case as against the appellant, yet the testimony was properly received by the court. There is a further assignment that the court erred in admitting and excluding certain evidence.

We have carefully gone over the court's rulings in that regard, and we do not find any error excepting in one particular in connection with the claim advanced by appellant, namely, Mr. Lochwitz claimed that he was to receive the fifty dollars as compensation for obtaining a loan upon Mrs. Mansfield's house and lot and for what he had done in looking up persons who had money to lend before the loan in question was made, and in connection with the claim he attempted to prove that he had in fact assisted Mrs. Mansfield, and he offered to show [14] just what he had done in that respect. The court ruled that he could prove the agreement between himself and Mrs. Mansfield, but also ruled that he could not show what he had done after the loan in question was made. Where usury is attempted to be proved by parol evidence or otherwise, it is always proper for either party to go into the whole

transaction for the purpose of disclosing all of the circumstances relating thereto. The evidence offered by appellant, while somewhat remote, was nevertheless proper in view of the claim made by Mr. Lochwitz. The question was one of weight and not of relevancy. The only objection was that it was not material. It clearly was material and, as we have seen, was otherwise proper. If this were the only error, we should not reverse the judgment, because it appears from the record that most of the offer to which we have referred was nevertheless before the court, as upon crossexamination Mr. Lochwitz was permitted to state about all of the facts in that regard. We have only mentioned the matter as a guide to the court in case a retrial of the case is had.

For the reasons stated, the judgment is reversed, the case is remanded to the distriet court, with directions to grant a new trial and to proceed with the case in accordance with this opinion. Appellant to recover costs.

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It is the prevailing doctrine that a principal is not liable for a usurious agreement of his agent which is entered into without the knowledge or consent of the principal and under circumstances which do not impute knowledge to the principal.

United States.-Call v. Palmer, 116 U. S. 98, 6 S. Ct. 301, 29 U. S. (L. ed.) 559, affirming 7 Fed. 737, 2 McCrary 522. See also Dryfus v. Burnes, 53 Fed. 410; Whaley v. American Freehold Land-Mortg. Co. 74 Fed. 73, 20 C. C. A, 306.,

Alabama.-Compare Pearson v. Bailey, 23

Ala. 537.

Arkansas.-Short v. Pullen, 63 Ark. 385, 38 S. W. 1113; Sherwood v. Haney, 63 Ark.

District of Columbia.-See Richards v. Bippus, 18 App. Cas. 293.

Georgia.-Boardman v. Taylor, 66 Ga. 638; McLean v. Camak, 97 Ga. 804, 25 S. E. 493; Wacasie v. Radford, 142 Ga. 113, 82 S. E. 442. See also McCall v. Herrin, 118 Ga. 522, 45 S. E. 442.

Illinois. Bolyston v. Bain, 90 Ill. 283; Cox v. Massachusetts Mut, L. Ins. Co. 113 Ill. 382; Chicago Fire Proofing Co. v. Park Nat. Bank, 145 Ill. 481, 32 N. E. 534, affirming 44 Ill. App. 150; Gantzer v. Schmeltz, 107. Ill. App. 641, modified Gantzer V. Schmeltz, 206 Ill. 560, 69 N. E. 584.

Iowa Gokey v. Knapp, 44 Ia. 32; Brig. ham v. Myers, 51 Ia. 397, 1 N. W. 613, 33 Am. St. Rep. 140; Ammerman v. Ross, 84 Ia. 359, 51 N. W. 6; Greenfield v. Managhan, 85 Ia. 211, 52 N. W. 183; Richards v. Purdy, 90 Ia. 502, 58 N. W. 886, 48 Am. St. Rep. 458.

Kansas. Lusk v. Smith, 71 Kan. 550, 81 Pac. 173.

Minnesota.-Jordan V. Humphrey, 31 Minn. 495, 18 N. W. 450; Mackey v. Wrinkler, 35 Minn. 513, 29 N. W. 337; Brainard v. Prouty, 66 Minn. 343, 69 N. W. 3; Babcock v. Murray, 69 Minn. 199, 71 N. W. 913; Commonwealth Title Ins. etc. Co. v. Dakko, 89 Minn. 381, 94 N. W. 1088. See also Bovee v. Butters, 92 Minn. 149, 99 N. W. 641. Compare Robinson v. Blaker, 85 Minn. 242, 88. N. W. 845, 89 Am. St. Rep. 541,

New Jersey.-Muir v. Newark Sav. Inst. 16 N. J. Eq. 537; Manning v. Young, 28 N. J. Eq. 568; Forbes v. Baaden, 31 N. J. Eq. 381; Coudert v. Flagg, 31 N. J. Eq. 394; Nichols v. Osborn, 41 N. J. Eq. 92, 3 Atl. 155; Lane v. Washington L. Ins. Co. 46 N. J. Eq. 316, 19 Atl. 618.

New York.-Condit v. Baldwin, 21 N. Y. 219, 78 Am. Dec. 137; Bell v. Day, 32 N. Y. 165, following Condit v. Baldwin, supra; Estevez v. Purdy, 66 N. Y. 446, reversing 6 Hun 46; Guardian Mut. L. Ins. Co. v. Kashaw, 66 N. Y. 544; Van Wyck v. Watters, 81 N. Y. 352, affirming Van Wyck v. Watters, 16 Hun 209; Phillips v. Mackellar, 92 N. Y. 34; Stillman v. Northrup, 109 N. Y. 473, 17 N. E. 379; Flanagan v. Shaw, 174 N. Y. 530, 66 N. E. 1108, affirming 74 App. Div. 508, 77 N. Y. S. 1070; Sniffen v. Koechling, 45 Super. Ct. 61, affirmed 84 N. Y. 677; Lee v. Chadsey, 3 Abb. App. Dec. 43; North v. Sergeant, 33 Barb. 350; Fellows v. Commissioners, etc. 36 Barb. 655; Moore v. Bogart, 19 Hun 227; Ditmars v. Sackett, 92 Hun 381, .36 N. Y. S. 690; Cowenhoven v. Pfluger, 22 App. Div. 464, 47 N. Y. S. 1122; Friedman V. Bruner, 25 Misc. 474, 54 N. Y. S. 997; McWhirter v. Longstreet, 39 Misc. 831, 81 N. Y. S. 334; Brown v. Jones, 89 Misc. 538, 546,

152 N. Y. S. 571; Silverman v. Katz, 120 N. Y. S. 790; Jones v. Gay, 139 N. Y. S. 158. See also Baldwin v. Doying, 114 N. Y. 452, 21 N. E. 1007. Compare Bliss v. Sherrill, 24 App. Div. 280, 49 N. Y. S. 561, reversing 42 N. Y. S. 432.

Oregon.-Barger v. Taylor, 30 Ore. 228, 42 Pac. 615, 47 Pac. 618.

Texas.--Williams v. Bryan, 68 Tex. 593, 5 S. W. 401; Carden v. Short, 31 S. W. 246, citing Williams v. Bryan, supra. See also Texas Loan Agency v. Hunter, 13 Tex. Civ. App. 402, 35 S. W. 399.

Utah. See the reported case.

Vermont.-See Baxter v. Buck, 10 Vt. 548. Wisconsin.-Franzen V. Hammond, 136 Wis. 239, 116 N. W. 169, 128 Am. St. Rep. 1079, 19 L.R.A. (N.S.) 399.

Thus in Brown v. Jones, 89 Misc. 538, 546, 152 N. Y. S. 571, it was said: "And to make out a case against a lender, in a case where the usurious loan has been made by his agent, it must be made to appear that the lender had knowledge of the usurious agreement and assented to it." And in McLean v. Camak, 97 Ga. 804, 25 S. E. 493, the court said: The general rule is now well settled, that commissions paid or agreed to be paid by the borrower to an agent of the lender for his services in procuring or advising the loan, and which, if added to the stipulated interest, would exceed the statutory limit, do not render the contract of the loan usurious, provided that such commissions are not in any manner shared in by the lender and are not exorbitant or unreasonable in amount; or, if excessive, that they were exacted by the agent without the lender's knowledge or consent." 27 Am. & Eng. Enc. of Law, p. 1004." In Lusk v. Smith, 71 Kan. 550, 81 Pac. 173, wherein it appeared' that a son obtained five thousand dollars from his mother and loaned it at usurious interest which was paid to his mother, it was said: "The facts proved, considering the relationship of the parties, lead to the conclusion that the pay ment of usurious interest for more than ten years by the son to his mother was not made in compliance with a contract in which she exacted the rate received. It is a more rational view to attribute the sums paid every month to a recognition of filial duty on the son's part, regardless of whether the mother's money earned the amount paid to her or not. The court cannot escape from giving heed to those sentiments of parental affection which tend to excite liberality in a son when the support and welfare of his mother are concerned. If the deceased received the money for the purpose of investing it for his mother, the fact that he may have exacted and collected usurious interest from persons to whom he loaned it, and paid the usurious rate to his mother, is immaterial in this case." In Brigham v. Myers, 51 Ia. 39, 1

N. W. 613, 33 Am. Rep. 140, it was held that the act of a husband who loaned his wife's money and exacted a usurious commission without the knowledge or consent of his wife did not bind the wife. In Richards v. Purdy, 90 Ia. 502, 58 N. W. 886, 48 Am. St. Rep. 458, wherein it appeared that an agent who negotiated a loan was an agent of both lender and borrower, a commission charged by the agent and unauthorized or unknown to the lender was held not to be binding on the lender as usurious.

But in Bliss v. Sherrill, 24 App. Div. 280, 49 N. Y.. S. 561, reversing 42 N. Y. S. 432, wherein it appeared that a husband made a loan of fifty thousand dollars and obtained as a commission ten thousand dollars, five thousand dollars of which he deposited to his wife's credit, the court disregarded the wife's testimony that she was ignorant of the transaction on the theory that she was under a duty to exercise supervision over a loan of that magnitude and that her acceptance of the benefit of the loan constituted a ratification of the agreement. The court said: "It was the duty of the plaintiff to know something about her bank account-to have her husband report to her what he was doing with this large amount of her property. She could not, without investigation and care, permit her husband to proceed with this property, violate the law, oppress the public by usurious contracts, giving her the benefit of it, and she neglecting and refusing to know anything about it. Left all my matters to Mr. Bliss,' as she says, 'gave him the entire control,' 'paid no attention to the details of business.' In so doing she infringes ancther principle of the law of agency, which requires that 'a principal should, within a reasonable time, examine his agent's report and disavow such acts as are unauthorized, and, if he fails to do so, his silence will be deemed good evidence of a ratification.' (1 Am. & Eng. Enc. of Law [2d ed.], 1206, and cases cited in note (3.) "7

It has been held that the usurious contract of an agent in lending money binds an undisclosed principal who knows nothing of the usurious character of the loan. Glick v. Bramer, 78 Ia. 568, 43 N. W. 531. Tan

The mere fact that an agent represented that a bonus exacted by him was for his principal has been held not to alter the rule that a principal is not bound by the unauthorized usurious transaction of his agent. Estevez v. Purdy, 66 N. Y. 446, reversing 6 Hun 46.

Agent's Conduct Known or Authorized.

IN GENERAL.

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Where the usurious agreement of an agent is either expressly or impliedly authorized or

ratified by the principal, or where the cireumstances are such that the agent's conduct is presumed to be known by the principal, the courts have been fairly uniform in holding that the principal is bound.››

United States,-New England Mortg. Security Co. v. Gay, 33 Fed. 636; In re Kellogg, 113 Fed. 120, affirmed 121 Fed. 333, 57 C. C. A. 547. See also Best v. British, etc. Mortg. Co. 79 Fed. 401.

Arkansas. Banks v. Flint, 54 Ark. 40, 14 S. W. 769, 16 S. W. 477, 10 L.R.A. 459. See also Martin v. Adams, 66 Ark. 10, 48 S. W. 494.

*

District of Columbia.-Richards v. Bippus, 18 App. Cas. 293.

Georgia.-McCall v. Herring, 116 Ga. 235, 42 S. E. 468.

Illinois. Meers v. Stevens, 106 III. 549. Iowa. See Griswold v. Dugane, 148 Ia. 504, 127 N. W. 664.

Indian Territory. McEwin v. Humphrey, 1 Ind. Ter. 550, 45 S. W. 114.

Kentucky. See Fitzgerald v. Maupin, 5 Ky. L. Rep. 242 (abstract.)

Minnesota. Lukens v. Hazlett, 37 Minn. 441, 35 N. W. 265; Kemmitt v. Adamson, 44 Minn. 121, 46 N. W. 327; Robinson v. Blaker, 85 Minn. 242, 88 N. W. 845, 89 Am. St. Rep. 541.

New Jersey. O'Neil v. Cleveland, 30 N. J. Eq. 273; Anonymous, 40 N. J. Eq. 502, 2 Atl. 369; Demarest v. 'Vandenberg, 41 N. J. Eq. 63, 3 Atl. 69; Pfenning v. Scholer, 43 N. J. Eq. 15, 10 Atl. 833; Hughson v. Newark Mortg. Loan Co. 57 N. J. Eq. 139, 41 Atl. 492. See also Leipziger v. Van Saun, 64 N. J. Eq. 37, 53 Atl. 1; Knoup v. Carver, 74 N. J. Eq. 449, 70 Atl. 660; McFadden v. Palmer, 83 N. J. Eq. 621, 92 Atl. 396; Zabriskie v. Spielman, 46 N. J. L. 35. See also Borcherling v. Trefz, 40' N. J. Eq. 502, 2 Atl. 369.

New Mexico.-Scottish Mortg. etc. Invest. Co. v. McBroom, 6 N. M. 573, 30 Pac. 859.

New York. Wyeth v. Braniff, 84 N. Y. 628; Fellows v. Longyor, 91 N. Y. 324; Bliven v. Lydecker, 130 N. Y. 102, 28 N. E. 625, reversing 55 Hun 171, 7 N. Y. S. 867; Schwarz v. Sweitzer, 202 N. Y. 8, 94 N. E. 1090, affirming 134 App. Div. 939, 118 N. Y. S. 1140, following Bliven v. Lydecker, supra; Braine v. Rosswog, 13 App. Div. 249, 42 N. Y. S. 1098: Dunlop v. Toy, 19 Misc. 627, 44 N. Y. S. 388.

South Carolina.-Brown v. Brown, 38 S. C. 173, 17 S. E. 452; Land Mortg. Invest. etc. Co. v. Gillam, 49 S. C. 345, 26 S. E. 990, 29 S. E. 203; American Mortg. Co. v. Woodward, 83 S. C. 521, 65 S. E. 739.

Wisconsin. McFarland v. Carr, "16 Wis.

259.

Canada.-See Kierzkowski v. Dorion, 14 L. C. Jur. 29.

Thus in Richards v. Bippus, 18 App. Cas. (D. C.) 293, it was said: "The note or obligation is affected with usury if the principal makes the loan, knowing that his agent has exacted a bonus or commission, though for his own sole benefit, which, with the interest payable to the principal, would amount to more than the rate permitted by law." And in Braine v. Rosswog, 13 App. Div. 249, 42 N. Y. S. 1098, it was held that the circumstances therein presented made it fairly inferable that the lender knew that her agent was making a usurious bargain. The court said: "It is undoubtedly the rule that the plaintiff must also show that the act of the agent was authorized by the principal, or that he took the bonus with the lender's knowledge and assent, so that the latter, at least by acquiescence, became a party to the usurious transaction. But here there was more than an ordinary agency. The parties were clearly acting in concert to evade the usury law. They were father and daughter. They lived together. The proceeds of the usury went to support them both. There was no pretense of compensation to the father for his services. The daughter knew that he was exacting compensation from the lender, or else that he was acting gratuitously. seems that she had a small capital deposited in bank in her own name. Upon that the

It

A principal who authorizes his agent to look to the borrower for compensation as a result of which the agent exacts a commis. sion over and above the legal rate of interest to compensate him for his services is chargeable with the usurious character of the transaction. Fowler v. Equitable Trust Co. 141 U. S. 384, 12 S. Ct. 1, 35 U. S. (L. ed.). 786; Vahlberg v. Keaton, 51 Ark. 534, 11 S. W. 878, 14 Am. St. Rep. 73, 4 L.R.A. 462;

Thompson v. Ingram, 51 Ark. 546, 11 S. W. 881; Payne v. Newcomb, 100 Ill. 611, 39 Am. Rep. 69; Ammondson v. Ryan, 111 Ill. 506; Payne v. Henderson, 106 Ky. 135, 50 S. W. 34, 20 Ky. L. Rep. 1739; Avery v. Creigh, 35 Minn. 456, 29 N. W. 154; Hall v. Maudlin, 58 Minn. 137, 59 N. W. 985, 49 Am. St. Rep. 492; Brown v. Archer, 62 Mo. App. 277, 1 Mo. App. Rep. 465; Texas Loan Agency v. Hunter, 13 Tex. Civ. App. 402, 35 S. W. 399; Nesbit v. Goodrich, 25 Tex. Civ. App. 28, 60 S. W. 1017. See also Union Mortg. Banking, etc. Co. v. Hagood, 97 Fed. 360; Whaley v. American Freehold Land-Mortg. Co. 74 Fed. 73, 20 C. C. A. 306. Thus in Texas Loan Agency v. Hunter, supra, it was said: "But when a lender authorizes his agent to make loans for him, under a general agreement that he must look to the borrower for his compensation, and such agent, for the lender, effects a loan, and charges the borrower a commission, this will make the contract usurious, whether the lender knew of the charge or not (Fowler v. Equitable Trust Co. 141 U. S. 385, 12 S. Ct. 1, 35 U. S. (L. ed.) 786); for this exaction is by the authority of the lender, the principal. Amer. ican Freehold Land Mortg. Co. v. Whaley, 63 Fed. 746; Dayton v. Dearholt [85 Wis. 151] 55 N. W. 148. In this case, Mr. Bright testified: 'We advised, and so agreed with the parties who left money with us, that they should have so much net interest, and that all expenses for loaning and handling the money should come out of the borrower.' Therefore this testimony brings the case squarely within the rule just quoted." In Fowler v. Equitable Trust Co. 141 U. S. 384, 12 S. Ct. 1, 35 U. S. (L. ed.) 786, it was held that the exaction by a lender's agent of an amount of money over the legal interest from the borrower to pay the agent's commission was usurious as against the principal. It was said: "It is not consistent with the law of Illinois, as declared by its highest court, that the lender, when taking the highest rate of interest, shall impose upon borrowers the expense of maintaining agencies in different parts of the state through, which loans may be obtained. We, therefore, hold that the exaction by the Trust Company's agent, pursuant to his general arrangement with it, of commissions over and above the ten per cent interest stipulated to be paid by the borrower, rendered this loan usurious." But compare Acheson v. Chase, 28 Minn. 211, 9 N. W. 734, wherein it appeared that an agent was directed by his principal to loan money at the highest legal rate with the understanding that the agent could collect a reasonable compensation from the borrower, The agent procured a loan at the highest legal rate of interest and received a bonus of fifty dollars from the agent of the bor

rower for effecting the loan. This the court held did not charge the principal with liability for the usury.

AGENT'S USURIOUS COMMISSION DIVIDED

WITH PRINCIPAL.

It has been held that whenever it appears that an agent acting for his principal has obtained a usurious bonus or commission and divided the amount thereof with his principal, the latter thereby confirms and ratifies the usurious act of his agent. McBroom v. Scottish Mortg. etc. Invest. Co. 153 U. S. 318, 14 S. Ct. 852, 38 U. S. (L. ed.) 729; Sherwood v. Roundtree, 32 Fed. 113; Pottle v. Lowe, 99 Ga. 576, 27 S. E. 145, 59 Am. St. Rep. 246; Byrnes v. Labagh, 42 Hun 659, 4 N. Y. St. Rep. 522, 25 N. Y. W. Dig. 461, affirmed 106 N. Y. 669, 13 N. E. 936; Williams v. Rich, 117 N. C. 235, 23 S. E. 257; Collamer v. Goodrich, 30 Vt. 628. Thus in Sherwood v. Roundtree, supra, it was held that an agent who exacted a usurious bonus on a loan and divided the same with his principal bound the principal. The court said: "Now, the agreement by which Mrs. Roundtree promised to pay twenty per cent., in addition to the eight per cent. per annum interest, to pay all premiums of insurance, all taxes, and to pay off all liens, is part of the plaintiff's case; it is an essential part of the contract, and was put in evidence by the plaintiff. Unquestionably it is the rankest usury. It is not disputed that one who negotiates a loan may be allowed reasonable compensation for his expenses and trouble, in addition to interest. But where there is no expense, and no trouble, there cannot properly be charged any such remuneration. Tyler, Usury, 335. And no decision can be found where a court of justice has sustained a charge of twenty per cent., where any knowledge of such charge was traceable to the money lender. But here is twenty per cent. in addition to eight per cent. per annum." And in Byrnes v. Labagh, 42 Hun 659, 4. N. Y. St. 522, 25 N. Y. Wkly. Dig. 461, affirmed 106 N. Y. 669, 13 N. E. 936, in speaking of a transaction of this character the court said: "To such a transaction the law against usury clearly attached for it is a necessary consequence that the bonus paid to the lender by the agent for the loan to the borrowers is in legal effect paid by the principal as a bonus or excessive interest for the use of the money beyond the six per cent reserved in the mortgages. None of the cases go so far as to uphold such a transaction as this, although some of them, it must be conceded, go very far to overthrow the statute against usury. The cases that hold that the exaction from the borrower by the agent of the lender of a bonus for his own benefit