{ "id": 708304, "name": "Richard D. BOKUM II, Plaintiff-Appellant, v. FIRST NATIONAL BANK IN ALBUQUERQUE, a National Banking Association, Defendant-Appellee", "name_abbreviation": "Bokum v. First National Bank", "decision_date": "1987-07-29", "docket_number": "No. 16574", "first_page": "143", "last_page": "149", "citations": [ { "type": "official", "cite": "106 N.M. 143" }, { "type": "parallel", "cite": "740 P.2d 693" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "183 U.S. 132", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 8297017 ], "weight": 3, "year": 1901, "opinion_index": 0, "case_paths": [ "/us/183/0132-01" ] }, { "cite": "666 F.2d 780", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 468522 ], "opinion_index": 0, "case_paths": [ "/f2d/666/0780-01" ] }, { "cite": "390 F.2d 239", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2100303 ], "opinion_index": 0, "case_paths": [ "/f2d/390/0239-01" ] }, { "cite": "20 Ariz.App. 479", "category": "reporters:state", "reporter": "Ariz. App.", "case_ids": [ 1249031 ], "weight": 2, "year": 1973, "opinion_index": 0, "case_paths": [ "/ariz-app/20/0479-01" ] }, { "cite": "108 U.S. 143", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3503408 ], "weight": 3, "year": 1883, "opinion_index": 0, "case_paths": [ "/us/108/0143-01" ] }, { "cite": "248 N.Y.S.2d 990", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1964, "opinion_index": 0 }, { "cite": "20 A.D.2d 904", "category": "reporters:state", "reporter": "A.D.2d", "case_ids": [ 3107191 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/ad2d/20/0904-01" ] }, { "cite": "457 So.2d 1102", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 7626631 ], "opinion_index": 0, "case_paths": [ "/so2d/457/1102-01" ] }, { "cite": "70 S.E. 246", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1911, "pin_cites": [ { "page": "249" } ], "opinion_index": 0 }, { "cite": "135 Ga. 687", "category": "reporters:state", "reporter": "Ga.", "case_ids": [ 535102, 535070 ], "year": 1911, "pin_cites": [ { "page": "693" } ], "opinion_index": 0, "case_paths": [ "/ga/135/0687-02", "/ga/135/0687-01" ] }, { "cite": "98 N.M. 541", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1582518 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "544" }, { "page": "828" } ], "opinion_index": 0, "case_paths": [ "/nm/98/0541-01" ] }, { "cite": "88 N.M. 299", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2838553 ], "weight": 2, "year": 1975, "opinion_index": 0, "case_paths": [ "/nm/88/0299-01" ] }, { "cite": "104 N.M. 775", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1595010 ], "weight": 2, "pin_cites": [ { "page": "778" }, { "page": "86" } ], "opinion_index": 0, "case_paths": [ "/nm/104/0775-01" ] } ], "analysis": { "cardinality": 1008, "char_count": 19879, "ocr_confidence": 0.806, "pagerank": { "raw": 8.262683731656366e-08, "percentile": 0.4783022098971793 }, "sha256": "e9c0a4d7c61f98f5b38d93f09b4231872cc596dbf9c56afbd58ab88467080855", "simhash": "1:03c3d754bbbcb980", "word_count": 3290 }, "last_updated": "2023-07-14T15:27:22.270695+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "SCARBOROUGH, C.J., and STOWERS, JJ., concur." ], "parties": [ "Richard D. BOKUM II, Plaintiff-Appellant, v. FIRST NATIONAL BANK IN ALBUQUERQUE, a National Banking Association, Defendant-Appellee." ], "opinions": [ { "text": "OPINION\nSOSA, Senior Justice.\nPlaintiff-appellant Richard D. Bokum II (Bokum) appeals the judgment of the trial court in favor of defendant-appellee, First National Bank in Albuquerque (FNB). Bokum\u2019s amended complaint, filed on April 9, 1985, contained seven counts: (1) \u201cUsury,\u201d in which Bokum alleged that a series of FNB loans were made at a higher rate of interest than allowed by law, and in which he asked the court for a forfeiture of $2,161,871.80 in usurious interest, plus $165,802.52 \u201caffirmative recovery\u201d as penalty for interest paid. The latter plea was based on a remedy for twice the amount of allegedly usurious interest paid, as provided by the National Bank Act, 12 U.S.C. Sections 85 and 86; (2) \u201cNoncompliance with Lending Disclosure Laws,\u201d in which Bokum alleged that FNB failed to comply with the disclosure requirements of NMSA 1978, Section 56-8-11.2 (Cum.Supp.1984), and in which he asked the court to determine the extent of his liability as to certain promissory notes executed by him and tainted by FNB\u2019s alleged noncompliance with the above statute; (3) \u201cConversion,\u201d in which Bokum alleged that FNB converted a mortgage document securing a loan on his residence in Miami, Florida (a count which Bokum abandoned on appeal); (4), (5), and (6) \u201cFraud and Deceit\u201d alleged to have been perpetrated against him by FNB in relation to, respectively, two loan transactions and an accord and satisfaction agreement; and (7) \u201cInjunctive Relief Against Sale of Stock Allegedly Pledged as Security\u201d for three loans made to Bokum in 1982 (referred to herein as the 1982 notes).\nFNB filed a counterclaim in which it sought: (1) judgment on two of the 1982 notes, executed by Bokum individually and as president of his solely owned corporation, Quinta Land and Cattle Co., Inc. (Quinta), totaling $724,590.70, plus interest at 16%, costs, and attorneys\u2019 fees; (2) judgment on the third note, executed in the same fashion, in the amount of $82,000.00 at a floating interest rate, plus costs and attorneys\u2019 fees; (3) a declaration by the court that FNB could sell disputed collateral, some 317,000 shares of stock in Bokum Resources Corporation (BRC), pursuant to the provisions of 1981 N.M.Laws, ch. 10, Section 1, virtually identical to the present NMSA 1978, Section 55-9-504 (Cum.Supp.1986); and (4) judgment in FNB\u2019s favor as to an accord and satisfaction agreement entered into by the parties on February 6, 1981 in which Bokum is alleged by FNB to have settled all claims as to any past usury, and otherwise to have started anew in his relationship with FNB, cancelling all past indebtedness and executing the 1982 notes as new obligations.\nTrial without a jury began on September 30, 1985, and concluded on October 9, 1985. The court made eighty-nine findings of fact and fifty-five conclusions of law, and then rendered judgment for FNB on the three 1982 notes, together with attorneys\u2019 fees in the amount of $135,837.00 and costs in the amount of $12,509.00. The court dismissed the complaint with prejudice, and declared that FNB was entitled to sell the disputed collateral.\nFor the reasons set forth below, we affirm the judgment of the trial court in its entirety.\nFACTS\nIn 1972 Bokum began borrowing money from FNB and executing promissory notes evidencing the debts so created. On or about April 25,1974, Bokum executed Note No. 442, executed by him individually and as president of Quinta, renewing what Bokum calls \u201ca secured line of credit\u201d in the amount of $2,500,000.00 at FNB\u2019s prime rate plus 1%. Beginning with Note No. 442, we can trace the parties\u2019 relationship through thirteen more loans in the lineage of notes descending from No. 442, reflected in thirteen additional promissory notes, each of which renewed in whole or in part amounts loaned to Bokum beginning with Note No. 442.\nBokum attached copies of these notes to his complaint. Several of these copies show that some of the notes in this series were signed by Bokum individually, and others by Bokum individually and as president of Quinta. Both in his complaint and in his brief on appeal, Bokum alleges that the irregularity in execution of the notes demonstrates that some of the notes were strictly personal. Further, he contends that FNB deceitfully induced him to execute the notes signed by him as president of Quinta as part of FNB\u2019s scheme to avoid possible later allegation of usury, because NMSA 1978, Section 56-8-9 (Repl.Pamp. 1986) exempts corporations from the penalties associated with usurious interest rates.\nIn his complaint Bokum alleged that nine of the above notes were usurious on their face because the rate of interest charged was more than 10% \u2014 the amount legally allowable under the law in effect at the time the loans were made (1957 N.M.Laws, ch. 209, Section 2, substantially revised in 1980 by the law now found in NMSA 1978, Sections 56-8-11.1 through 11.4 (Repl. Pamp.1986)). As to the remaining five notes in this series, Bokum alleged that, although the rate of interest was less than 10%, these notes were tainted by usury in that previous usurious interest flowed into these notes.\nAt some point in 1976 (the vagueness as to specific dates arises from Bokum\u2019s complaint), a new generation of loans and notes was created, which by August 1977 encompassed debts totalling $1,300,000.00. Accordingly, on October 4, 1977 Bokum\u2019s debts under this new line of credit were consolidated and renewed by a loan reflected in Note No. 51 in the amount of $1,300,000.00 at FNB\u2019s prime interest rate plus 1% (which in his complaint Bokum alleged was usurious). On June 19, 1979, Note No. 51 was renewed by Note No. 94, this time co-signed by Bokum\u2019s wife, in the amount of $1,750,000.00 at prime rate plus IV2%. On the same day Bokum, his attorney and certain others co-signed Note No. 74672-19 (referred to by the trial court as \u201cNote 19\u201d) which was given in payment of accrued interest on Notes 51 and 94. Note 19 was then renewed in Note 27, likewise co-signed by Bokum and his associates referred to above.\nUp until this point FNB is in agreement with Bokum as to the facts surrounding the loans as set forth in Bokum\u2019s complaint (tracked above), except as to Bokum\u2019s allegations that the interest rates were usurious and that FNB deceived Bokum into co-signing some notes as president of Quin-ta. We now reach the factual dispute which forms the gravamen of Bokum\u2019s cause of action. On February 6, 1981 Bokum executed two notes, No. 752 in the amount of $394,360.70 and No. 108 in the amount of $830,000.00. Bokum contends that these notes were renewals of the two lines of credit referred to above, and thus that they continued FNB\u2019s usurious conduct into the present.\nFNB, on the other hand, contends that all debts reflected in the two lines of credit, starting with Notes 442 and 51, respectively, were eliminated in an accord and satisfaction agreement executed by FNB, Bokum individually, Bokum as president of Quinta, and Mrs. Bokum, and dated February 6, 1981. Thus FNB contends that Notes 752 and 108 were entirely new notes, reflecting entirely new debts. On February 6, 1982, Notes 752 and 108 were renewed (both parties agree) by Notes 753 and 109, in the sums of $394,360.70 and $330,230.00, respectively. On June 9, 1982, Bokum executed Note No. 5052 in the amount of $82,000.00, which Bokum alleges was a renewal of past indebtedness, and which FNB contends was a new note.\nBokum admits that he executed the accord and satisfaction agreement, but he contends that he did so without reading it, because he was under the time pressure of having to consider the agreement immediately before attending the closing on the sale of his home in Miami, Florida, and because he received fraudulent assurances from FNB\u2019s agents that the agreement embodied an earlier and different understanding. Bokum makes this assertion in spite of his attorney\u2019s admission that he advised Bokum by telephone not to sign the agreement.\nThe uncontested terms of the accord and satisfaction agreement are as follows: (1) Bokum, Quinta, and Mrs. Bokum stipulated that as of February 6, 1981, they jointly owed FNB for all indebtedness going back \u201cover the many years of their banking relationship,\u201d $2,650,000.00, comprising the indebtedness reflected in Note No. 94 for $1,750,000.00, in Note No. 744 for $500,-000.00 and in Note No. 19 for $400,000.00. FNB agreed to forego the full amount of interest owed to it, and Bokum, et al. stipulated that none of the previous loans exacted usurious rates of interest (as alleged shortly before the date of the accord and satisfaction agreement, when Bokum\u2019s attorney started to review Bokum\u2019s relationship with FNB).\nThe parties also stipulated that by the accord and satisfaction agreement they \u201cfully and forever settle and compromise their relationships in the past.\u201d On the strength of this agreement FNB contends that the subsequent 1981 Notes (Nos. 752 and 108) were new notes, renewed by the first two 1982 Notes (753 and 109), and that the third 1982 note (5052) was itself an original note. Bokum disagrees, insisting that the three 1982 notes were reproductions of the entire usurious relationship extending back to Note No. 442 executed in 1974.\nI. Credibility of Witnesses\nOn appeal Bokum asks us to set aside many of the trial court\u2019s findings of fact on the grounds that FNB\u2019s witnesses contradicted themselves or otherwise deviated from the truth. He asserts that the issue here is not that of the trial court\u2019s weighing substantial evidence, but of the complete incompetence and unreliability of the testimony. We disagree. Close study of the 1210-page transcript leads us to conclude that FNB\u2019s witnesses were not untruthful. Instead, we find that severai of FNB\u2019s witnesses simply could not remember detailed transactions occurring over four years before trial, and for this they are not to be faulted, since it was Bokum himself who was dilatory in filing his amended complaint \u2014 a complaint which covered events as much as eleven years old, and which was filed four years after the date of the disputed accord and satisfaction agreement. We hold, then, that this is a substantial evidence issue, and we therefore conclude that \u201cany evidence unfavorable to the trial court\u2019s finding will be disregarded and only favorable evidence considered.\u201d Tafoya v. Casa Vieja, Inc., 104 N.M. 775, 778, 727 P.2d 83, 86 (Ct.App.1986). Our function on appeal is not to weigh conflicting evidence, but to view the evidence in the light most favorable to the prevailing party. Duke City Lumber Co. v. Terrel, 88 N.M. 299, 540 P.2d 229 (1975). Accordingly, we accept as accurate the trial court\u2019s finding of facts, many of which we do not need in order to reach our decision herein, but which demonstrate nonetheless the trial court\u2019s mastery of the issues here involved.\nII. Validity of the Accord and Satisfaction Agreement\nIn order to agree with Bokum that\u2014 without understanding what he was doing \u2014 he was induced by FNB into signing an agreement which reordered his entire financial existence, we must leap over an unbridgeable chasm separating fact from fiction. The record supports the trial court\u2019s findings of facts numbers eleven through fifteen that Bokum \u201cis a competent and experienced businessman who has had extensive dealings with banks across the country * * * [That he] has founded or been closely involved with several corporations over the years * * * [That he] has dealt with high officials in both the United States and foreign governments and counts among his friends many famous government, industry, banking and finance figures * * * [That he] retained capable lawyers and accountants to represent him in his many business dealings * * * [And that he] was represented by competent counsel throughout the time during which the events in question took place.\u201d\nIn short, Bokum either knew or should have known what he was effecting in signing the accord and satisfaction agreement, but if he signed the agreement without reading it, or without being accurately apprised of what he was signing (contentions which lay hidden for four years, until the filing of his complaint), then he is nonetheless responsible for the legal effect of the document. (See Smith v. Price\u2019s Creameries, 98 N.M. 541, 544, 650 P.2d 825, 828 (1982), in a very similar factual setting with respect to the issue of detrimental reliance on purportedly fraudulent inducement, where we stated:\nAt the time of the formulation of the agreement between the parties, Mr. Smith was approximately 28 years of age, had a working knowledge of the duties of a route man for a dairy products distributor, and had previous experience working with a finance company, and additionally he had worked both as an insurance salesman and as a police officer. Mr. Smith also had three and one-half years of college education. Under the circumstances no material disputed factual issue has been shown to exist concerning lack of adequate opportunity to fairly review the contract, inability to understand the provisions of the document, or lack of opportunity to seek independent professional advice regarding the terms and provisions of the agreement.\nThe Smiths although conceding that they were aware of both the existence and language of the termination clause, argue that they were assured prior to the execution of the agreement that the contract would continue to remain in effect as long as they performed satisfactorily under the distributorship. Even assuming the truth of this assertion, in the face of the clear wording of the rights of the parties under the termination clause, the oral statement of Price\u2019s made prior to execution of the agreement cannot be deemed to constitute fraud or misrepresentation.)\nHere the trial court concluded that the accord and satisfaction agreement was duly executed by Bokum, et al. without fraud, and that the allegations within his complaint \u201cfall within the scope\u201d of the agreement. Hence, the notes executed on February 6, 1981 constitute entirely new transactions, and the 1982 renewal notes were properly held by the trial court to be due and owing on maturity. Therefore, the effect of the 1981 accord and satisfaction agreement with respect to the claim of pre-existing usury was to purge any such usury from the parties\u2019 relationship, and, as the agreement itself stated, \u201cto lay the past to rest forever, to adjust and compromise and rearrange their affairs, and to start out again with a clean slate.\u201d\nAs the courts of this country have stated early and often when considering the issue of usury under the National Bank Act, \u201c[i]f the debt was infected with usury, the creditor could purge it of the usury in a settlement with his debtor.\u201d First Nat\u2019l Bank v. Davis, 135 Ga. 687, 693, 70 S.E. 246, 249 (1911). The cases of Credit Alliance Corp. v. Timmco Equip., Inc., 457 So.2d 1102 (Fla.App.4 Dist.1984), and Clinton G. Bush Co. v. Franklin Nat\u2019l Bank, 20 A.D.2d 904, 248 N.Y.S.2d 990 (1964) likewise stand for the proposition which we advance here \u2014 namely, that a debtor, by entering into a settlement agreement with his creditor which purges asserted usurious conduct, may waive or be estopped from asserting the defense of usury, when there is an abandonment of the usurious note and the execution of a new note or notes at lawful interest.\nIII. Issues Relating to the New Mexico Usury Act, NMSA 1978, Sections 56-8-11.1-11.4 (Repl.Pamp.1986)\nIn addition to asserting a cause of action under the National Bank Act, which, incidentally, we find that the trial court correctly disallowed because it was not timely filed \u201cwithin two years from the time the usurious transaction occurred,\u201d 12 U.S.C. Section 86, Bokum also asserts that he has a cause of action under the New Mexico Usury Act as it existed at the time of the facts set forth above \u2014 namely, under 1957 N.M.Laws ch. 209, Section 2, which established the maximum allowable interest rate of 10% in the situation here, and under Section 4, which established the right of \u201cforfeiture of the entire amount of such interest,\u201d and which further allowed a civil action to recover twice the amount of interest paid.\nThe problem for Bokum with respect to this issue is that the statute on which he relies was repealed by the Usury Act cited in this headnote. In the leading case on this issue the United States Supreme Court held that when a usury statute is repealed, any cause of action granted by it dies with the repeal. Further, such a repeal operates retrospectively, so as to cut off the defense of usury for the future, even in actions for contracts previously made. Ewell v. Daggs, 108 U.S. 143, 2 S.Ct. 408, 27 L.Ed. 682 (1883). See American Sav. Life Ins. Co. v. Financial Affairs Management Co., 20 Ariz.App. 479, 513 P.2d 1362 (1973). We follow the Supreme Court\u2019s and the Arizona court\u2019s reasoning by holding that the statute on which Bokum relies was repealed at the time he filed his complaint, and that he therefore had no cause of action under previous New Mexico law.\nDid Bokum, then, have a cause of action under present usury law? He contends he did, but once again he is faced with an insuperable obstacle. Under present law, NMSA 1978, Section 56-8-9(B) (Repl.Pamp.1986), the maximum rates of interest allowable do not apply to a transaction in which a corporation is a debtor, regardless of the fact that an individual is codebtor. Here the trial court explicitly found that Notes 752, 108 and 5052 \u201cwere made by Quinta\u201d (Finding of Fact No. 42). Hence whatever rate of interest is asserted by Bokum to be usurious is exempted by Section 56-8-9(B). Thus, whether he relies on New Mexico Law or on the National Bank Act, which embodies the New Mexico corporate exemption (see McNellis v. Merchants Nat\u2019l Bank & Trust Co., 390 F.2d 239 (2nd Cir.1968)); Federal Deposit Ins. Corp. v. Julius Richman, Inc., 666 F.2d 780 (2nd Cir.1981)), Bokum\u2019s claim is barred.\nThus, since the corporate exemption applies to this case, the maximum rate of interest which FNB was allowed to make in this circumstance is governed by Section 56-8-11.1, which specifies that \u201cThe maximum rate of interest authorized by law shall be that rate agreed to in writing by the parties,\u201d unless the creditor fails to comply with the disclosure requirement of Section 56-8-11.2. But the latter section affords Bokum no relief either, since subsection (C) of Section 56-8-11.2 provides that the disclosure requirement \u201cshall not be required for loans made in excess of fifty thousand dollars ($50,000) when such loans are made for business or agricultural purposes.\u201d\nWe thus affirm the trial court\u2019s ruling in its entirety as to the issues raised above.\nSCARBOROUGH, C.J., and STOWERS, JJ., concur.\n. We need not dwell on the terms of this understanding, as alleged in Bokum's complaint (Counts V and VI), because as we will discuss below, we find that the 1981 accord and satisfaction agreement disposed of any such understanding. As to Count IV of Bokum's complaint, that count was abandoned on appeal.\n. Further, by the decision in Haseltine v. Central Bank of Springfield, 183 U.S. 132, 22 S.Ct. 50, 46 L.Ed. 118 (1901), Bokum is not entitled to a forfeiture of alleged usurious interest already paid. The only remedy under the National Bank Act in such a situation is to bring an action within two years for twice the amount of interest paid.", "type": "majority", "author": "SOSA, Senior Justice." } ], "attorneys": [ "Melton & Puccini, Stephen P. Curtis, Albuquerque, Stephenson, Carpenter, Crout & Olmsted, Lindsay A. Lovejoy, Jr., Santa Fe, for plaintiff-appellant.", "Sutin, Thayer & Browne, Jay D. Hertz, Norman Thayer, Randy Bartell, Albuquerque, for defendant-appellee." ], "corrections": "", "head_matter": "740 P.2d 693\nRichard D. BOKUM II, Plaintiff-Appellant, v. FIRST NATIONAL BANK IN ALBUQUERQUE, a National Banking Association, Defendant-Appellee.\nNo. 16574.\nSupreme Court of New Mexico.\nJuly 29, 1987.\nRehearing Denied Aug. 20, 1987.\nMelton & Puccini, Stephen P. Curtis, Albuquerque, Stephenson, Carpenter, Crout & Olmsted, Lindsay A. Lovejoy, Jr., Santa Fe, for plaintiff-appellant.\nSutin, Thayer & Browne, Jay D. Hertz, Norman Thayer, Randy Bartell, Albuquerque, for defendant-appellee." }, "file_name": "0143-01", "first_page_order": 183, "last_page_order": 189 }