Summary
In Wyeth v. Braniff, 84 N.Y. 627, the authority upon which defendant relies, the loan was indisputable — an essential fact, absent from the case under review.
Summary of this case from Cohen v. WaldronOpinion
Argued March 10, 1881
Decided March 25, 1881
J.M. Guiteau for appellant. John D. Stephens, Jr., for respondents.
There is before us a single question whether the evidence sustains the finding of the trial term, that the judgment or decree was assigned to Thomas Braniff, as collateral security for a loan made by him to the plaintiff, at an unlawful rate of interest. The plaintiff was the only witness. He shows that he was the maker of a bond and mortgage, dated May 28, 1856, given to one Moore, to secure the payment of $2,000. A foreclosure was perfected September 4, 1871, and a sale of the mortgaged premises was about to take place. At this point of time, the plaintiff says: "One Van Auken, a broker" (living in the neighborhood), "came to me and said, he had $2,000. I asked him who he represented and he said Mr. Thomas Braniff, and after several interviews in regard to obtaining the loan, he told me it would cost ten per cent. I told him I would pay ten per cent, and some miscellaneous costs, amounting to about $35. Upon that statement I was introduced to Mr. Braniff, by this broker. I saw Mr. Braniff, and he promised to let me have the money, and he did let me have it, and I paid him the ten per cent, and I paid the charges outside, amounting to some $35. I paid Mr. Braniff $235.
Q. What were the terms of the loan?
A. I took the loan for five years from aate of that payment; it was about 3d day of October, 1871. He agreed to let me have the money at ten per cent, and I paid him $200 for the loan, and the $35, and all the back interest." He says the $200 was a bonus, that the payment was made in Mr. Hedley's office. Mr. Hedley was the plaintiff's attorney in the foreclosure suit.
"Q. Did Mr. Braniff pay you the $2,000?
A. Mr. Braniff handed me, when the assignment was made, cotemporaneous with the making and delivery of the assignment, $2,000 in money, and I handed it to Mr. Hedley; he was acting for the Moore estate; I likewise handed him the back interest, which was about $90; I paid him all the costs and took a receipt for the payment of it; I then had $500 in my pocket and I paid the sheriff, and I handed to Mr. Braniff $235, about; it won't vary $2.50 from it.
Q. What was done about the mortgage?
A. The mortgage was assigned, and the assignment passed over, on the payment of $2,000, to Mr. Braniff.
Q. What was the agreement with Mr. Braniff as to the assignment of the mortgage?
A. That it was collateral security for the loan of $2,000; the man that I had the transaction with and borrowed the money of was there; he was the elder Mr. Braniff; the other one, I never heard of him.
Q. The assignment was made to Thomas Braniff, Jr.?
A. Yes, sir."
There is here no cover, no device, and it is quite impossible to construe this testimony so that it shall not bring the case within the statute. There is the agreement for the loan of money; the loan; the taking therefor in pursuance of the agreement of a sum of money greater than at the rate of $7 upon $100, for one year. There is the intent, and the act concurring. The story is very brief, and very plain. It was credited by the trial judge. It was not discredited by the General Term, but that court held that it did not sustain the finding. On the contrary, "that it was not a loan to the plaintiff, but a purchase by defendant Braniff, of a decree in foreclosure." We cannot, however, overlook the fact, that between Braniff and the assignor there was no communication. That the application was by the plaintiff to Braniff for a loan; that Braniff agreed to let him have the money at ten per cent as above stated, and did so. That the money was paid by Braniff, not to Moore, or his attorney, but to the plaintiff, and then that the agreement with Braniff was that the decree should be assigned as collateral security for the loan of $2,000. I can find no element of a sale. It appears, however, that Braniff, with whom this arrangement was made, was not Braniff, the defendant, but Braniff, Sr., the father of the defendant. Braniff, this defendant, then lived in New Orleans, and was there. Braniff, Sr., was his agent, as the trial court found. The learned judge at General Term says: "Assuming the transaction to have been a loan to plaintiff, an agreement with his" (defendant's) "agent to pay him ten per cent to procure the loan does not bring the usurious agreement home to defendant." I can find no evidence of such an agreement. The payment of the $200 was obviously part of the contract of loan, and the case is directly within Algur v. Gardner ( 54 N.Y. 360). Condit v. Baldwin (21 id. 219) is cited in support of the judgment of General Term. But the agreement in that case was unlike that disclosed in the one before us. In that case there was a separate agreement to pay the agent. Here there is a single agreement on the part of Braniff to let the plaintiff have the money at ten per cent. For aught that appears the agreement was authorized by the defendant, and the sum paid in money received by him. Braniff, the agent, is dead, but Braniff, the principal, is not, and could testify concerning this matter if the truth was otherwise. Neither Van Auken, the broker, nor Hedley, the attorney, was examined, yet it is apparent that they had knowledge of part at least of the transaction testified to, and if it had not been fully stated, might have corrected the statement. As it stands there is nothing in the record to show that the usury agreed for, and paid, was not for the benefit of the defendant, or that he did not receive it. ( Algur v. Gardner, 54 N.Y. 360.) The contract between the parties being void, the assignment of the decree, it having been made as security for the performance of the contract, is also void, and transferred to the defendant no right to enforce it. ( Dewitt v. Brisbane, 16 N.Y. 508; Talmage v. Pell, 3 Seld. 328; Schroeppel v. Corning, 5 Den. 236.) The case is not like that of Kellogg v. Adams ( 39 N.Y. 28), where, in consequence of an usurious agreement, the lender (plaintiff) was induced to purchase of Lampson, a third party, not connected with the loan, a valid mortgage, and it was held good in his hands, but is like and case put by the learned judge, there delivering the opinion. He says: "In this case, had the plaintiff taken the assignment of Lamson's mortgage as collateral to the usurious contract, or had the plaintiff loaned the whole $4,000 to Adams, and the latter had paid Lampson his $3,000 and procured him to assign him mortgage to the plaintiff as collateral to Adams' undertaking to repay the usurious loan, it is clear that the assignment would have been void within the principle of the two cases last mentioned" ( Dewitt v. Brisbane, and Talmage v. Pell, supra), and to the same effect is the opinion of HUNT, Ch. J., in the same case. It should be observed that the judgment in this case does not deal with the mortgage, or the decree, but with the assignment only, and subsequent proceedings thereon by the assignee, and therefore is within the limitation suggested by ALLEN, J., in Patterson v. Birdsall ( 64 N.Y. 294). His right to proceed under it depends upon his contract with the plaintiff, and as that is invalid, his attempt to enforce it must, upon the same principle, also fail. As the purchase at the sale, brought about by the defendant Braniff, was made by the defendant Garrett, as the agent of Braniff, and upon no new consideration, that also was properly set aside.
The order of the General Term should, therefore, be reversed, and the judgment of the Special Term affirmed, with costs.
MILLER, EARL and FINCH, JJ., concur; FOLGER, Ch. J., RAPALLO and ANDREWS, JJ., dissent.
Order reversed and judgment affirmed.