Opinion
June 26, 1995
Appeal from the Supreme Court, Suffolk County (Doyle, J.).
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is reversed, on the law, that part of the order which granted the defendants' motion is vacated, the motion is denied, and the complaint is reinstated; and it is further,
Ordered that the appellants are awarded one bill of costs.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see, Matter of Aho, 39 N.Y.2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see, CPLR 5501 [a] [1]).
In this action to foreclose a mortgage, the defendant borrowers asserted a usury defense, alleging that the mortgage broker, who retained a broker's fee, was acting as agent for the plaintiff lenders such that the fee should be deemed interest, thereby increasing the interest rate above the maximum legal rate (see, Schwarz v. Sweitzer, 202 N.Y. 8; Robertson v. Merwin, 154 App. Div. 723). While this may be a valid defense, whether a commission is a cover for usury is a factual issue which must be demonstrated by clear and convincing evidence (see, Hammelburger v. Foursome Inn Corp., 54 N.Y.2d 580, 594-595; Feinberg v. Old Vestal Rd. Assocs., 157 A.D.2d 1002, 1004). Contrary to the conclusions of the Supreme Court, issues of fact exist as to whether the broker was acting as the agent of the lenders, and whether the lenders were aware that the broker retained a fee (see, 72 N.Y. Jur 2d, Interest and Usury, §§ 117, 118). We also disagree with the Supreme Court's conclusion that the mortgage note is usurious on its face (see, Freitas v. Geddes Sav. Loan Assn., 63 N.Y.2d 254, 262).
We have considered the parties' remaining contentions and find them without merit. Bracken, J.P., Balletta, Copertino and Hart, JJ., concur.