New-York tribune., 1896-04-07
The News OF BROOKLYN
cAYNOR SAYS IT WAS USURY
r,,r INJUNCTION CONTINUED IN THE
HAWLEY CASE.
AZ OPTION oN STOCK FOR THE MAKING OF A
,o,y HELD TO EE WRONGFUL-A CASE OF
>,.r, .ro .o>-r.v rr<p1-p-

OPTION
,o,y HELD TO EE wRoyGFUL-A CASE OF
IMPORTANCE 70 MoNEY-LENDERs
4. ,riunc.ion was Yesterday continued. pend
=. u,a by Justice Gaynor. Of the Supreme
. ... in an action TO have contract of loan
.,.s,.s void and to enjon the sale Of certain
80 ~ stock and have them surrendered
-, uawey was the plaintiff in the action, and
-, Kountzo and other private bankers
'',.,,,n,s. Hawley alleges that he borrowed
'.~ao ,,om The defendants on October l. 1894
r,s them a demand note al per cent and
s~,rsteral a note made to his order by David
r. Wilbur ana fourteen shares Of the ca taract
General Electric Company. The company was
o-ysnized 10 introduce electric propulsion for
.nal boats on the Erie Canal between Tona-
u.nda and Buffalo. It's shares had not been
,,.ced on the market. and Mr. Hawey said that
!, was agreed between the defendants and him
thu, they should not be sold. 1t was also under
s,,od although the loan was ostensibly payable
:, denard that tho piaintiff was to have the
use Of the money for considerable time.
The attendants however. demanded payment
n April 1885. AMI threatened that unless they
90, their money they would sell the shares.
Hswley induced them % extend the loan, but
,bey made him give them an option 20 purchase
four shares ot the stock at $500 a share, al
though i was worth considerable more accord
INK 10 the plaintiff. \ short time afterward
they did collec; On the aote. ANA threatened that
unless the balance Oh the loan was paid they
would sell me shares. They even fixed day
when they would expose them for sale
Haweys action was brought 10 set aside the
eoo,rac: OF loan on the ground that the de-
fsndants had practised Lsury and to compel them
to s.ye UP the collateral
In continuing the injunction. Justice GaynOr
said;
No doubt the defendants exacted Of the plaintiff.
in alditon l. LAWFUL nteres that he give Them
me option to purchase " A!rl the sAAies oi sio.h
a: inv ltce HNvd. ioT tNe HA"lhs O. t"e .o1h,
otherwise there Was ho re-son Or consideration fot
the option. The eXactins and Iece-yns OF ms
option IN addition - Ia"idl interest," VAS NlOi4-
ton Of the usury statute. me shares OF STOCK
covered by the 3pdon are inc.uaei WIN sh"Ies ns-
posted as collateral 10 ne Ioan, ana the itienl-
ans ase aoouf - Sc. all the shares the loan be-
Ing n de;ant IAls acton : orolsht 10 hate t;le
sale Of The shares u stock and have them surren-
The defendants are private bankers" The
banking .@ws. revised ana combined into one act
ia -, applied generally 70 banking associs uons
and 'icI.F.dual bankers Ten ~ =. ISL VINO
w-re thereby allowed 70 ENJOY, ne pr.yntses Of
and 10 business under the banking a"s supJect
30 the SUPERVISION oi ne STATE banklns keI11d.-
neni. Av SAID act relieved them from the foi-
"a, a,r~y w. ana subjected them instead only
10 a forfeiture Of the entire interest. or. i the
brought within Two years for the recovery ot
twice the amount thereof; the declared purpose OF
the act beng - put State bank associations ana
bankers in this respect upon the same roofing 40
\atona. banks secs 6s 69j. Bui these sections
a.so expressly included and gave the same rcNei
20 private baLkers, although the act did not
su5jec; them 70 Il CT public control. VIZ 70 the
jurisdiction q the Banking Department. II was
doubted II these provisions applied TO any Dut
banking asso iations' and ''indiV-Gual DahkerS
who. has been seen, conducted business under
the regula ons OF the banking laws. and the super
vision OF the State. and thereby became in sense
public bankers, but they were held 10 Apply 70
p-Vate bankers also. This construction made the
act .ncongruoIs, in extending TINS privilege 20 per
sons not answerable 10 its provisions or empraced
within its general scope and policy
AS forfeiture OF the principal may not be decreed
against the defendants. L follows that the PLAIN
TN is not entitled 20 injunction. penang tie
action 10 prevent the defendants from selling the
shares as collateral 20 pay the debt Iney nave
the right 10 sell them TO pay the dept IheE may
noi however lawfully retain the proceeds 70 pay
The interest. nor may they hoid or sell 'hsH uhuer
the option. ,,, ~, n.,s
shares o. stock OF no fxeI or Inal het Fdue, a.
M company in which they are has not got mo
nm oDeraion. and IN an action tor ne statutory
rsnaly OF twice the amount of the usurious eAac-
.ior n would be difcult L. not impossible 20 prove
a sum certain. such an action is, therefore, hot
an adequate remedy. A., 49, a.;,,
:. me Indebtedness in full and surrender up me
~ .es and The collateral and the option. IN "hlcn
$50 ne Injunction viii bc modified upon an dp-
nI.cation upon five days notice 50 as 10 aiio" me
sid ehsres Of stock 70 be sold collateral TO pay
principal.