11 Neb. 487 | Neb. | 1881
This is an action to foreclose a mortgage on real estate. The defense is usury. The cause was referred to a referee, who found the issues of law and fact in
It appeal’s from the testimony that one A. W. Ocoboek advertised in the newspapers that he was making loans in Butler and Dodge counties through one C. C. Cook. That the plaintiff in error, Willis A. Olmsted, applied to Cook for a loan, and was directed by him to Ocobock to see if the plaintiff’s farm which was offered as security would be acceptable to the company. Ocobock sent an agent to examine the farm-, who, being satisfied therewith, presented the following application for the loan to the plaintiff for his signature:
“Whereas I have this day employed the Corbin Banking Company to negotiate for me a loan of $400, for the term of five years, with interest at the rate of ten per cent per annum, upon a note and mortgage securing the same, which shall be a first lien upon my farm in Butler county, Nebraska. Now then if they shall succeed in negotiating said loan within thirty-days, upon the usual conditions exacted by eastern money-lenders as to security, perfecting of title, insurance, etc., I agree to pay the said Corbin Banking Company the sum of $80, which shall be in full of their commissions and the commissions of those whom they' employ to assist them in making said negotiations.
“ Willis A. Olmsted.
“David City, Neb., Feb. 24, 1876.”
The .above was on a printed form, leaving only the amount, time, county, state, and name of the applicant to be filled out. This was accompanied by a printed form containing a minute description of the farm, which concluded as follows:
“The statements made in the above application and the supplement made herewith to the Corbin Banking Company are true, and are made by me to be used by
“Willis A. Olmsted, Applicant.
“Dated David City, Neb., Eeb. 24, 1876.”
Upon this application a loan of $350 was effected, a promissory note, of which the following is a copy, being executed by Olmsted:
“$350.00 Summit P. 0., March 27, 1876.
“Value received, on the twentieth day of March, 1881,1 promise to pay The New England Mortgage Security Company or order three hundred and fifty dollars,, with interest from date until paid, at ten per cent per annum as per coupons attached, at the office of the Cor-bin Banking Company, 61 Broadway, New York City. Unpaid interest shall bear interest at ten per cent per annum. On failure to pay interest within five days after due, the holder may collect the principal and interest at once.
“Willis A. Olmsted.”
This note had coupons attached, and was secured by mortgage to “The New England Mortgage Security Company,” the interest being made payable at the office of the “ Corbin Banking Company, New York City,” on the first day of April of each year. Upon the execution of the note and mortgage, Olmsted was paid $250. In the spring of 1878 he received from Ocobock the following:
“W. A. Olmsted, Summit:
“Dear Sir — Your interest amounting to $35 will be due at the office of The Corbin Banking Company; 61 Broadway, New York City, April 1, 1878.
“It is important that you should make prompt payment, as you will see by enclosed circular.
“Respectfully Yours,
“A. W. Ocobock.
“ Are your taxes paid ?”
“ If the amount is sent to me to forward, an additional charge of fifteen cents is made to cover exchange.
“A. W. Ocobook.”
The circular referred to is as follows:
“ The Corbin Banking Co.
“New York.
“Dear Sir — Please say to parties having interest payable at this office on a day certain, that their money is due here on that day, and to save costs must be here.
“When not paid promptly we shall return to the owners, and they will send to an attorney for foreclosure. The five and thirty days’ delay named in notes relates to the right to collect the principal sum, and does not prevent a foreclosure for non-payment of interest. As soon as a bill is filed the attorney’s fees accrue, and when debtors will not take care of their interest at maturity they cannot complain if a suit and heavy costs follow.
“Respectfully Yours,
“ A. Corbin, President.”
Two other circulars of similar import from the Cor-bin Banking Co. wore introduced in evidence. All the business both before and after the making of the loan appears to have been done by the Corbin Company. To show that the Corbin Banking Co. was not the agent of the defendant in negotiating the loan, the de. fendant introduced the deposition of Henry Saltonstall, who testified that he was president of the defendant, and that on or about the 27th day of March, 1876, the treasurer of the Corbin Banking Company offered him this loan, which after examination he agreed to buy, and on or about the 12th day of April of that year,
The question to be determined is, whose agent was the Corbin Banking Company in negotiating this loan ? If it was the agent of the Olmsteds, they are not entitled to relief from the rapacity of their own employee; in other words, if the Banking Co. acted only as the agent of the borrower, who entered into a contract with it to pay it a stipulated price for obtaining the loan, and the defendant in good faith loaned its money for a lawful rate of interest, it will not be affected by the vice of usury, however glaring it may be, as the law in such case will not permit a party to sustain loss who has not, hy himself or his agent, loaned money at usurious rates. Philo v. Butterfield, 3 Neb., 259. But on the other hand, if a person places money under the control of another to loan for him, and the agent charges the borrower unlawful interest, or receives a bonus from him for such loan, either with or without the knowledge of the principal, he is affected by the act of his agent. The reason is, the principal has entrusted the business of making loans to him and has placed the money in his hands for that purpose, and in transacting the business by agency, there cannot be a distinct agreement between the fender through his agent with the borrower, and a different one between the agent and borrower, as it is in consideration of the loan that the unlawful interest or bonus is paid. The whole transaction is but one contract, which being-made by his agent, the lender is bound by it. Id.
In the case at bar, Mr. Saltonstall, while making
In the case of Cheney v. Woodruff, 6 Neb., 151, the agent making the loan testified that in making the loan he acted as the- agent of the borrower, but as soon as the loan was effected he acted as the agent of the lender. The facts in this case are very similar to those upon which that case was decided. Here the banking-company effected the loan, took the notes and mortgage in favor of the defendant, and continued its agent in this transaction until the commencement of this action. They seem to be acting together, at least so far as this case is concerned, the defendant in the role of innocent purchaser, and the Banking Co. as agent of the borrower; but the proof fails to establish
Decree accordingly.