The morning news. [volume] (Savannah, Ga.) 1887-1900, 1888-01-12
Loan Companies ana usurv.

The MORNING NEWS some time ago pre-
sented the leading points in Judge Speer's
charge TO the jury in the case Of the New
England Mortgage Security Company
against Jacob NJ. Gay, of Ellaville, Schley
county, but the charge, 1t seems, is not yet
fully understood in some localities, and 1t is
said that a number of the borrowers from
the mortgage companies are refusing to
meet their obligations to them because of
it.
Jacob NJ Gay borrowed $500 at 8 per
cent. interest, through the Corbin Banking
Company, of New York, for which he gave
his notes, which were secured by a mort
gage. The notes were made payable to
Charles l.. Flint, President of the New En-
gland Mortgage Security Company, and
by him Endorsed and delivered to the COM
pany. The loan was negotiated for Mr.
Gay by Mr.. German. an attorney of Geor-
gia, and for his services he charged com
mission of 20 per cent Before Mr.. Gay re-
ceived the money he was required to sign a
contract in which he stated that Mr.. Cor
man was his agent. The commi sion which
Mr.. Gay paid amounted to $l,700. and, of
course, il was deducted from the loan. He
was required, however to pay s per cent
interest on the entire amount for which the
notes called.
When the notes became due Mr.. Gay re-
fused to pay them. The New England
Mortgage Security Company sued him and
he plead usury.
In this State any excess Of the legal in
terest is forfeited, and the amount forfeited
may be plead as set Off in any action for
the recovery of the principal sum. All
titles 10 property made as part of usur-
ious contract, or to evade the laws against
usury, are void. Judge Speer permitted
Mr.. Gay to go behind the written contract
and present evidence to show that Mr.. Cor
man was not his agent, but the agent of the
Corbin Banking Company, and that the
President of the Corbin Banking Company
was director and the largest stakeholder
in the New England Mortgage Security
Company The evidence showed that of the
20 per cent. commission, Mr.. German, the
Georgia agent, retained only 1926, while the
Corbin Banking Company got 81 ,275.
Judge Speer instructed the jury to this
effect: The written contract which Mr.. Gay
had signed. in which it was declared that
Mr.. German was his agent, did not prevent
him from showing that such was not the
case; that if Mr. German was the agent of
Mr.. Gay then the plea of usury could not be
sustained; but if Mr.. German was not the
agent Of Mr. Gay, and the written contract
showing that he was had been obtained for
the purpose of evading the usury laws, then
the plea could be sustained and the amount
that had been paid in excess of the lawful
interest should Ike set Off against the claim
of the New England Mortgage and Security
Company.
The jury found that German was the
agent of tho Corbn company and that the
contract which Mr.. Gay had signed, recogniz-
ing him as his agent, was device to avoid
the usu-v laws. There is no doubt that the
Judge stated the law correctly and that the
verdict was in accordance with the law and
evidence Foreign loan companies which
| loan money in this State will be protected
in doing what is right, but they will not be
sustained in trying to evade the laws.