St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-07-17
IT IS NOT USURY.
JUDGE KELLY SAYS WHEN A
FEE is PAID A BRO
kER
FOR MAKING A LOAN,
THOUGH 1T AMOUNT TO MORE
THAN THE LEGAL IN
TEREST.
EXCESSIVE RATE ALLOWABLE
For Renewal of n Note Also With
out Being Usurious-Decision
in IL Peculiar Case.

In a decision filed yesterday in the
case of James H. Mailer and Lucia
r. Mailer VS.. the Merchants Nation
al Bank of st. Paul and A. K. Brock
elsby, defendants, and the United
States Bank of Hartford, Conn.,, in
tervener, Judge Kelly holds that the
payment of a fee to a broker to act
as agent in the procurement of a
loan cannot be construed as uSury,
when such fee and the interest on the
loan together amount to more than
the legal rate of interest, and that the
payment Of more than the legal rate
of interest for renewal of a note does
not render the transaction usurious
as long as the original transaction was
not
According to the findings of fact,
the plaintiffs in this action paid L. P.
van Norman SCI to have discounted
the1rSSU0 note in February, 1894. The note
was to run six months and the rate
OF interest was 10 per cent. Van Nor
man sent the note to Brockelsby, of
hartford, Conn.,, at the same time
drawing on him for 1851. Brockelsby
mad the note discounted at the United
states Bank of Hartford at per
cent, paying Van Norman's draft out
OF the proceeds Out of the 1851 re-
ce1Ved by Van Norman he paid the
pla1nt1ffS 1874, which was $106, Van
Nornan'S fee and the interest on the
note, less than the face of the paper
When the note came due, plaintiffs
paid Van Norman $3.50 to procure a
renewal for another six months. This
amount the latter forwarded to Brock
elsby, 'gho paid only $3.50 to the bank
for the renewal.
When the note again became due it
was forwarded to the Merchants Ma
tloEal tank here for collection and
a demand was made on the plaintiffs
Tor $l,O21.S5, this being S121.S5 more
than the face of the note, as Brock
elsby had paid that amount of pre-
MUM on two life insurance policies
on Mahler's life. which were given
as collateral security for the note The
plaintiffs declined to pay, and began
an action to have the note declared
void on the ground Of usury.
AS CONCLUSIONS OF LAW.
Judge Kelly finds that the transac-
tons did not constitute usury, and he
diSmisses the action as to the defend
ants, giving them a judgment for
costs against plaintiffs. He finds fur
Their that the United States Bank of
Hartford, interviewer, is the owner of
the note, and gives it judgment for
costs against plaintiffs also
In the memorandum attached to his
decision, Judge Kelly says:
"Usury Is the taking for use or for
bearance of money a greater sum than
is allo ed by law. Our statute makes
10 per cent the highest lawful rate of
interest. Van Norman was clearly
the agent of the plaintiffs. He did
not loan the money himself He acted
merely as an agent to procure it from
some other. 1t was competent for
plaintiffs to hire Van Norman and
pay him for his services. This COM
persation, SCI, and lawful interest at
10 per cent was all plaintiffs paid in
the first instance. 1t becomes imma-
terial. therefore, what Van Norman
paid Brockelsby, the plaintiffs having
paid the former no greater than law
full interest. AS to the renewal, even
If usurious rates were received by
Erockelsby for the extension the orig
1nal transaction being lawful, that
does not make the note usurious. But
at that time, it is clear the bank, not
Brockelsby. owned the note, and the
bank received only per cent interest.
The foregoing is upon plaintiffs
theory that Brockelsby owned the
note originally. My own judgment is
that from the facts found the inter-
Vener, the United States bank, really
was the original owner of, and first
discounted, the paper. Van Norman
and Brockelsby were mere go-be-
tWeens Under this last view, the
transaction has not even the sugges-
ton of usUry'