152 N.Y.S. 571 | N.Y. Sup. Ct. | 1915
Plaintiff has brought this action to foreclose a mortgage in the sum of $3,OOQ on a farm of 102 acres, known as the Bussell farm, in the county of Saratoga, given by defendants Cyrus P. Jones and Nettie J. Jones, his wife, to plaintiff’s testatrix, Frances L. McLean. The defense is usury. The mortgage was dated March 1, 1910, and was to be paid March 1, 1911, with interest. It was collateral to a bond in the same amount. This, also, was executed
Usury can be predicated only of a contract by which one of the parties to it agrees to pay, and the other agrees to take, an unlawful premium upon a loan. 39 Cyc. 920; Philips v. Mackellar, 92 N. Y. 34. To constitute it, both parties must be cognizant of the facts which make out the usurious contract. Lesley v. Johnson, 41 Barb. 359, 361; Powell v. Jones, 44 id. 524; Guggenheimer v. Geiszler, 81 N. Y. 203; Morton v. Thurber, 85 id. 550. 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. Philips v. Machellar, supra; Stillman v. Northrup, 109 N. Y. 473. Usury involves crime and forfeiture, .so that it must be strictly proved and cannot be established by mere surmise and conjecture or by inferences entirely uncertain. Fellows v. Longyor, 91 N. Y. 328; Stillman v. Northrup, supra. The burden of proving it is on the party alleging it and if, upon the whole case, the evidence is just as consistent
In the next place, the amount loaned was $3,000. It was Mrs. McLean’s money and was advanced by means of two checks,- one for $2,000, the other for $1,000, drawn by Scott, as her attorney, against an account in her name in a New York city bank.- -The checks were dated March 1, 1910, and were made payable to both mortgagors. They indorsed the one for $1,000 to 'Wiswall, and Scott received $500 of this amount through Wiswall’s check, dated and sent-to him March 3., 1910, and deposited by him to his own credit March 2, 1910. There is no evidence that Mrs. McLean authorized or assented to the receipt of this money or that she received any benefit from it. Jones and Wiswall did not communicate with her and there is no evidence that Scott consulted her about the transaction. Scott died January 9, 1912. The foreclosure was commenced March 1, 1912. An extension until December 1, 1912, was granted on March 20, 1912. Mrs. Jones wrote to Mrs. McLean in' November, 1912, asking for a further extension after December 1,1912,. and stating that she would convey the property, if she failed to pay within that extension. This was answered by Brown, who had then become Mrs. McLean’s attorney. Mrs. McLean died February 5,1913. Brown was then appointed executor of her will. As such, he was substituted as plaintiff in the action, after which the
It is claimed, finally, that the guaranty of the payment by Wiswall and Scott required inquiry on the part of Mrs. McLean. A person may sell his credit to another by guaranteeing the obligation of that other and may take whatever price he may obtain for the service thus rendered. 39 Cyc. 940. But, if it appears from all the circumstances that the parties intended a usurious loan, the transaction will be held unlawful. Palmer v. Jones, 69 Hun, 240. At the time that the mortgage was given, Mrs. Jones was the owner of an apartment house in the city of Brooklyn, which was subject to a mortgage of $170,000. She was in default on this and foreclosure had been threatened. Her other real property had all been mortgaged to such an extent that none of it was available for a further loan, except the farm in question. One piece, in Saratoga county, was subject to a mortgage of $7,000, which was held by the Adirondack Trust Company and had been guaranteed by Wiswall. Another piece, the Kilmer farm, in said county, was subject to a mortgage of $5,300, which was held by Mrs. McLean and had been guaranteed by Wiswall and Scott, and upon which Mrs. Jones had defaulted or was in default. And the third piece, the farm in question, was subject to a
Judgment accordingly.