52 How. Pr. 387 | N.Y. Sup. Ct. | 1876
— The plaintiff was pressed by her creditor for the payment of two mortgages upon her property, upon one of which a judgment of foreclosure and sale had been obtained; the other was due. In her straits, she applied to the defendant Landon 0. Gray, through one Kamping, a broker, for aid.
As far as the two mortgages are concerned, the facts justify the conclusion that the understanding of the parties was, that the defendant Landon 0. Gray should provide the funds and take an assignment thereof, with the judgment of foreclosure, and give forbearance to the plaintiff for one year.
It was also understood that the defendant should loan the plaintiff the sum of $3,000, in addition, for which he was to receive a mortgage upon the plaintiff’s premises. It was agreed that the defendant should receive a bonus of ten per cent for his aid and forbearance.
The defendant Landon 0. Gray claims, however*, that the ten per cent was to be computed upon the two mortgages only. The evidence justifies the conclusion that it was the understanding of the parties that the bonus was to be paid out of the $3,000 agreed to be loaned.
The two mortgages and the judgment of foreclosure were held and owned by James Thomson, upon which there was due and owing, when the transaction was closed, the sum of $8,432.30. The parties met at Thomson’s office to pay the money due him, and receive assignments of the mortgages and judgment. The defendant’s agent, who had represented him in the previous negotiations with the plaintiff and the broker, brought to Mr. Thomson’s office a certified check for $7,189.07, and $3,000 in currency.
The check he delivered to Mr. Thomson, and the $3,000 in currency he claims to have delivered to the plaintiff, and in this he is substantially corroborated by the broker, Kamping. The plaintiff, on the other hand, testifies that she received only the sum of $1,756.75 in money. The fact is, that Thomson received the balance of his claim, over and
The securities which the defendant Landon O. Gray, through his agent, received, amounted to $11,432.30, yet he paid and advanced only $10,189.25. The difference between these two sums, $1,243.25, and which was not paid by the defendant, was designed to cover the bonus agreed to be paid the defendant for his accommodation, and was retained for that purpose, and for professional services rendered by the defendant’s agent, who is an attorney and counselor at law.
If the bonus was computed only on the amount of the Thomson mortgages, as is claimed by the defendant’s agent, there was an excess of $400 which is claimed by him for such services.
I find nothing in the case which justifies the conclusion that it was understood and agreed that the defendant’s agent and attorney should receive compensation to that amount for any services he might render in the matter. On the other hand, if the ten per cent was computed on the whole amount of $11,432.30, there would still be an excess of $100 to cover such services, and Kamping, the broker, says such sum was retained or received by the defendant’s agent for extra services in the matter.
Taking the defendant at his word, that he was to purchase the mortgages from Thomson and hold them for one year, and as Thomson was to make, and did make, no deduction from the amount due him, it can, as already observed, make no real difference whether. he or the plaintiff paid to Thomson the amount of $1,243.25, over and above the check for $7,189.07, out of the $3,000. The defendant received assign
In this view, the plaintiff did not receive, nor was it the understanding of the parties that she should receive to her own use the $3,000, the payment of which was secured by her mortgage. The payment thereout of the sum of $1,243.25 was a method resorted to by the parties of securing to the defendants an illegal bonus or premium on the loan, and forbearance of money over and above the interest allowed by law.
That such bonus should be paid was a part and parcel of the negotiation which resulted in the assignment of the two mortgages, and the making of the additional one for $3,000.
The vice of usury enters into the. $3,000 mortgage made to raise the amount to satisfy this illegal claim. The moneys ostensibly secured thereby being, with the understanding of all concerned, used for such unlawful purpose.
I do not think that this attempt to evade the statute against usury affects the two mortgages assigned; they were valid instruments, and were, in fact, purchased by the defendant. He did, in effect, pay the whole amount claimed by Thomson. Without payment in full, he could not, as he well knew, secure the assignments; and the result is, that the $3,000 mortgage covers the excess paid on the purchase over and above the certified check, and this includes the illegal bonus exacted on the transaction. In this view, the $3,000 mortgage is illegal and void.
In addition to this, at the expiration of the year from the making of the assignments, the plaintiff not being prepared to pay, a new bonus of $1,100 was demanded from her, and paid partly in cash, and the residue by her note to the defendant’s order.
The case of The Real Estate Trust Company agt. Keech (7 Hun, 253), while it holds that the payment of a bonus, in addition to lawful interest on the extension of a valid debt, does not invalidate the debt, yet decides that the amount paid
Whatever amount has been paid by the plaintiff as a condition of subsequent extension, over and above lawful interest, should be applied upon the two mortgages, and they should be reduced pro tanto.
The chattel mortgage referred to in the pleadings and in the evidence, while it was in part given to secure a valid debt, also includes the amount of a note for §500, given as a condition for the extension of previous advances. To this extent it is invalid.
The action of W. Farley Gray in the matter of the extension, and the bonus exacted, must be regarded as the action of the defendant Landon 0. Gray, whom he, in truth, represented, and for whom he acted in all the negotiations.
Judgment must be given in pursuance of the above direc-' tions, and findings made accordingly. Under the pleadings and proofs, I do not think a tender of the valid claims covered by the chattel mortgage was necessary as a condition to maintaining this action.
