(77 Hun, 65.)

#### MEAKER v. FIERO.

(Supreme Court, General Term, Fifth Department.

April 12, 1894.)

1. Usury—AVhat Constitutes Loan.

Defendant’s property was bid in by one H., at a foreclosure sale, under an agreement to convey it to defendant on repayment by her of the_ price. Afterwards, H. conveyed the premises to defendant in consideration of her giving plaintiff’s testator a mortgage thereon for the sum which defendant had agreed to pay to H., and plaintiff’s testator credited the amount on a debt due him from H., as agreed. *Held,*that the transaction amounted to a loan by testator to defendant of the amount of the mortgage, and it was rendered usurious by the exaction of a bonus from her.

2. AVitness—Transactions with Decedent.

H. did not have such interest in the result of the action as disqualified him from testifying as to communications with testator.

Appeal from judgment on report of referee.

Action by William H. Meaker, as executor of the will of Samuel Stokes, deceased, against Haney A. Fiero, impleaded, etc., to foreclose a mortgage of $800 given by defendant, Fiero, to plaintiff’s testator. The defense was usury. There was a judgment in favor of defendant, and plaintiff appeals. Affirmed.

Argued before DWIGHT, P. J., and LEWIS, HAIGHT, and BRADLEY, JJ.

Lyon & Pierce and John D. Teller, for appellant.

F. D. Wright, for respondent.

LEWIS, J.

The defendant, Mrs. Fiero, was the owner of real estate in the city of Auburn on which there was a mortgage. Upon the sale of the premises upon the foreclosure of said mortgage, James H. Hoskins became the purchaser under an arrangement with Mrs. Fiero that he would hid in the property, and would convey it to her upon payment to him of the sum of $800, the amount of his claim upon the property. The testator, Stokes, was, at the time, the owner and holder of a bond and mortgage made by Hoskins for the sum of $2,600, not at that time due. Stokes was desirous that Hoskins should make a payment upon Ms bond and mortgage of $1,500. Hoskins informed Stokes of his relations with the Fiero property, and agreed that, if Mrs. Fiero would consent so to do, he would convey to her the Auburn premises, and take her bond and a mortgage running to Stokes for the sum of $800. It was agreed between Hoskins and Stokes, if Mrs. Fiero consented so to do, that Stokes should receive the bond and mortgage from Mrs. Fiero, with $700 in money, to he paid by Hoskins as a payment of $1,500 upon his said $2,500 bond and mortgage. HosMns thereupon conveyed the premises to Mrs. Fiero, she executed the bond and mortgage to Stokes,, and Mrs. Fiero, Stokes, and Hoskins met at Mr. Hoskins’ office. Hoskins was called as a witness by Mrs. Fiero on the trial, and testified as follows as to what occurred at that interview:

“I went over to the bank and got seven hundred dollars. Laid it with the mortgage and bond (Exhibits 1 and 2) on my desk; also, the deed. I passed the bond and mortgage and the money towards Stokes. He shook his head, and said. ‘No.’ I handed the deed to Mrs. Fiero. He said, ‘No; I want to *470know something about that present.’ I said, ‘Mrs. Fiero, Stokes wants a bonus on this mortgage.’ I so called it. He called it a ‘present.’ Mrs. Fiero got up and came over towards him, and said, ‘What is it, Mr. Stokes?’ He replied, T am always in the habit of taking a present when I take a mortgage. I want one now.’ She said, ‘How much do you want, Mr. Stokes?’ and he answered, ‘Twenty-five dollars.’ She said, T haven’t got twenty-five dollars. All I have in the world is fifteen.’ Here was a pause. I says, ‘Sammy, don’t be a hog. If fifteen dollars is all the woman has got, take it, and not be a hog.’ I was out of patience with him. He then said, Well, give me the money.’ She then took the money out of her pocket, and gave it to him. He then picked up the bond and mortgage and $700. I then wrote the indorsement on the mortgage (Exhibit 3), and he signed it then and there, and went out of the office.”

Frederick H. Kennedy testified that he was present at the interview referred to by the witness Hoskins; that they were talking about the $800 mortgage Mrs. Fiero was giving to Samuel Stokes. His account of the affair was substantially that related by Mr. Hos-kins. It is the contention of the appellant that the transaction did not amount to a loan or forbearance of money, for the reason that no money in fact passed between the parties. We think the transaction, in effect, amounted to an advancement by Stokes to Mrs. Fiero of the sum of $800, for which she gave her bond and mortgage for the payment of that sum with interest. Had Stokes handed to Mrs. Fiero $800 in currency, and Mrs. Fiero had handed the money to Hoskins, and Hoskins delivered it to Stokes, and the indorsement had been made as stated, it would be conceded that the defense o£ usury was established. As the law looks, not to the form of the transaction, but to its substance, was not what occurred in substance and effect the same thing? Mrs. Fiero, by the transaction, paid her debt to Hoskins, and Hoskins secured an indorsement upon his indebtedness to Stokes, and Stokes obtained the bond and mortgage of Mrs. Fiero for the $800, with interest, and, in addition to the lawful interest, demanded and received the $15 bonus. The referee held—and, we think, correctly—that it amounted to a usurious agreement for the loan and forbearance of money, and that the bond and mortgage were usurious and void.

The plaintiff objected to Mr. Hoskins’ testifying to the transaction between Mr. Stokes and Mrs. Fiero upon the ground that he was interested in the event of the action, and was the person from, through, or under whom the defendant derived her interest or title. The subject-matter of the litigation was the bond and mortgage. Hoskins, after they had been accepted by Stokes, had no further interest or concern in them. He had conveyed his interest in the premises to Mrs. Fiero before the bond and mortgage were accepted by Stokes, and had received his pay in full from Mrs. Fiero. He certainly had no direct interest in the result of the action. It is' the contention of the appellant that he at least had a contingent or remote interest; that the bond and mortgage of Mrs. Fiero having, by the arrangement with Stokes, been indorsed upon the $2,500 mortgage as a payment, the avoidance of the security because of usury had the effect to revive his indebtedness to Stokes to that amount. Mrs. Fiero, in good faith, took title to the premises, and paid her debt to Hoskins by her bond and mortgage. Hoskins was *471not a party to the usurious agreement between Mrs. Fiero and Stokes. He had conveyed to Mrs. Fiero all the interest he had in her land, and because Stokes saw fit to demand usury of Mrs. Fiero, and in consequence is not able to recover his money, Mrs. Fiero’s indebtedness to Hoskins is not thereby revived. If so, he is the only party who is to suffer by a usurious agreement to which he was not a party. Had Hoskins been the maker of the $800 bond and mortgage, and they had been avoided, because of usury, the rule contended for by the appellant might apply. He would in that case have been a party to the usurious agreement which he was instrumental in having declared void. The most that can be claimed is that Hoskins had a remote or contingent interest. Such an interest did not disqualify him. McGlynn v. Seymour, 14 Daly, 420; Hobart v. Hobart, 62 N. Y. 80; Wallace v. Straus, 113 N. Y. 238, 21 N. E. 66; Connelly v. O’Connor, 117 N. Y. 91, 22 N. E, 753; Beakes v. Da Cunha, 126 N. Y. 293, 27 N. E. 251. Hoskins was not the person through or under whom either of the parties derived their title or interest in the subject-matter of the litigation. The bond and mortgage in controversy were given by Mrs. Fiero to Stokes. Hoskins had no direct interest in them. The case of Smith v. Cross, 90 N. Y. 549, to which we are referred by appellant’s counsel, does not sustain his contention. The witness Wilson in that case had a direct interest. He was the maker of the bond and mortgage, and was, at the time they were given, the owner of the premises upon which the mortgage was a lien. After negotiating the bond and mortgage, he conveyed the premises upon which the mortgage was a lien, with a covenant of warranty, to the defendant. He was therefore directly interested to defeat the mortgage. We find nothing in the plaintiff’s exceptions requiring a reversal of the judgment. It should be affirmed, with costs. All concur.