Opinion
Submitted October 20, 1881
Decided November 22, 1881
David B. Hill for appellants.
Gabriel L. Smith for respondent.
It was not denied that the consideration of the bond and mortgage was money lent, and the trial court was led by the defendant to inquire whether it was upon an agreement void by the statute of usury. No other question was presented. The finding is to the contrary. The General Term have approved it, and I gather nothing from the appellants' argument which should persuade this court to any other conclusion.
According to the answer, the lender imposed as condition beyond legal interest, first, the payment of a bonus of $105, and second, the acceptance by the borrower of an uncollectible judgment against W.W. Albro and others, amounting to $326.84. The evidence left no doubt that this last item was a debt justly due from Covell, a lien upon the property mortgaged, and voluntarily paid to Arnot, the judgment creditor, out of the money loaned. The plaintiff had no concern with, and derived no benefit from it. It is not now contended that the ruling in regard to this item was erroneous. The other item was made up of interest accruing upon the $3,000 for six months prior to the date of the mortgage, and retained by the plaintiff upon the ground that the agreement for the loan was made at that time, and the money held by her agent at the request of the borrower, and upon his agreement to pay interest therefor. Concerning this agreement, the evidence is conceded by the appellants to be conflicting. It is, we think, decidedly in favor of the plaintiff's version, and has been satisfactory to the trial court. It need not, therefore, be repeated here. The court, however, found that the agreement was made on the first of February, while interest was in fact computed for the full period of six months, or twenty days too much; the excess amounting to $11.66. Reliance is now placed upon this circumstance to uphold the defense. The trial court, found that it was retained "by inadvertence and mistake in the computation of time, and not with the purpose and intention of evading the statute against usury, or in violation thereof." The defendant had the burden, and was not relieved from it when it appeared that this sum was retained by the lender. ( Matthews v. Coe, 70 N.Y. 239.) Upon what agreement was it reserved or taken? None is disclosed by the answer, nor is any proven. The case shows, on the contrary, that the agreement was to cast interest for the time the money was held for the borrower. The evidence tends to this, and the court has so found it. It is clear, therefore, that there was a simple mistake in the time for which interest was to be calculated, and whatever was so included cannot be deemed usurious. ( Marvine v. Hymers, 12 N.Y. 223; Fiedler v. Darrin, 50 id., per ALLEN, J., p. 443; Gibson v. Stearns, 3 N.H. 185.) The appellant calls it "extortion." This implies force, or the taking without right, the absence of agreement; and there is no testimony in the case which would justify its retention. The plaintiff could not say, upon any evidence before us, "the defendant agreed to it." What the defendant did agree to was the payment of interest for such time as the money was retained for him — nothing more. And so the trial court properly applied this excess in diminution of the sum secured by the bond and mortgage. ( Guggenheimer v. Geiszler, 81 N.Y. 293; Morton v. Thurber (opinion by RAPALLO, J., October 4, 1881).
As to the reservation of interest for a time anterior to the actual payment of the money or date of the bond and mortgage, no legal ground of objection is perceived. The plaintiff placed her money in the hands of Eldridge, as her agent, for investment, and it was there when the bargain for the loan was made. The borrower knew this, and in consideration of its retention, and for his benefit, promised to pay interest. It was from that time, so far as the plaintiff is concerned, withheld from other investments, and remained subject only to the defendant's success in perfecting the security on faith of which the loan was made. It was, in fact, paid to him as soon as demanded. That Eldridge himself in the mean time used the money on his own account could make no difference. It was without authority from the plaintiff, and a violation of the duty he owed to her. It was held by him for the defendant's benefit, and, as the trial court found, at his request. Such an arrangement might be made a cover for usury, but it was not in this case. No corrupt intent is averred in the pleadings, and the finding of the trial judge is that none existed. A violation of the statute, therefore, was not made out. ( Nourse v. Prime, 7 Johns. Ch. 77; Thomas v. Murray, 32 N.Y. 605; Thurston v. Cornell, 38 id. 281; Dowdall v. Lenox, 2 Edw. Ch. 267.)
I have examined the other exceptions pointed out on the appellants' argument, and find none which, in view of the above conclusion, could affect the judgment. It should, therefore, be affirmed.
All concur.
Judgment affirmed.