43 Misc. 2d 860 | N.Y. Sup. Ct. | 1964
Defendant had secured a ground lease from the World’s Pair Corporation. Plaintiff was engaged to secure financing to enable construction of a pavilion. The advances were to be secured by assignment to the lender of gross rentals of subleases and the advances were to be 90% of such gross rentals. Plaintiff was to receive 5% of the amount advanced. He now moves for dismissal of the defense and counterclaim for insufficiency. They are rested on section 380 of the General Business Law, which reads:
‘ ‘ § 380. Rrokerage on loans
“ No person shall, directly or indirectly, take or receive more than fifty cents for a brokerage, soliciting, driving or procuring the loan or forbearance of one hundred dollars, and in that proportion for a greater or less sum, except loans on real estate security ”. (Emphasis supplied.)
Defendant urges that plaintiff may not recover as compensation any amount in excess of that permitted by the statute and argues in addition that plaintiff cannot recover since he fails to allege he is a licensed real estate broker. The statute is found in article 25 — interest and usury. Plaintiff argues, therefore, that the statute actually is concerned with usury and since defendant is a corporation, it cannot plead the defense. The argument is an historical one and is based on the contention that upon adoption of the original predecessor statute, the Legislature sought to raise an impediment to the lender interposing a broker as a device to augment the charge for the use of money. However, Scudder v. Hoyt (218 App. Div. 11, affd. 245 N. Y. 522) on which both parties rely, held the statute is not strictly concerned with usury and that a corporation may plead the statute as defense. Despite agreement, recovery of legal commission is permissible.
The question remains, therefore, whether the transaction is within the exception of loans on real estate security. The exception was enacted as part of the predecessor legislation as early
The motion is granted and the defense and counterclaim are dismissed.