Case Name: MERWIN v. ROBERTSON
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-01-24
Citations: 139 N.Y.S. 723
Docket Number: 
Parties: MERWIN v. ROBERTSON.
Judges: 
Reporter: West's New York Supplement
Volume: 139
Pages: 723–726

Head Matter:
MERWIN v. ROBERTSON.
(Supreme Court, Appellate Division, Second Department.
January 24, 1913.)
Usury (§ 18 )—Usurious Contract.
A contract by which plaintiff advances money to defendant to satisfy claims for payment of which she is pressed, plaintiff to be repaid the amount advanced, with interest, plus the amount of discount obtained by plaintiff on the claims by reason of cash payments, is usurious.
[Ed. Note.—For other cases, see Usury, Cent. Dig. §§ 31-34, 36-38, 40; Dec. Dig. § 18.*
For other definitions, see Words and Phrases, vol. 8, pp. 7246-7249.]
Jenks, P. J., and Thomas, J., dissenting.
Appeal from Trial Term, Kings County.
Action by George P. Merwin against Margaret Robertson. From a judgment dismissing, the complaint on the merits, after a trial without a jury, plaintiff appeals.
Affirmed.
Argued before JENKS, P. J„ and HIRSCHBERG, THOMAS, CARR, and WOODWARD, JJ..
J. Stewart Ross, of Brooklyn, for appellant.
Sarah Stephenson, of Brooklyn (Arthur Garfield Hays, of New York City, of counsel), for respondent.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

Opinion:
HIRSCHBERG, J.
The action is brought to foreclose a bond and mortgage on an apartment house belonging to the defendant, at 53-54 Ocean avenue, borough of Brooklyn. The mortgage is for $7,464.28, which had been reduced by payments at the time the action was commenced, leaving a balance of $3,850.79. At the close of the plaintiff's case a motion was made to dismiss on the merits, on the ground that the bond and mortgage were usurious. The appeal is from the judgment entered on the granting of the motion.
The plaintiff is a married woman, and appears to have acted in the transactions relating to the loans which constitute the basis of the deal ings,-and to the giving of the mortgage intended to secure such loans, solely through her brother, Frank A. Peavey the only witness in her behalf. Neither she nor the defendant took any personal part in the transactions; the defendant being represented by Effingham L. Holy-well, her attorney at law, who occupied an office jointly with Peavey. The apartment house was in process of construction, and the defendant was indebted to certain of the contractors who were engaged in building it and who were pressing her for payment. The agreement was made that Peavey should advance from time to time such money as should be necessary to settle the claims of the contractors, with the understanding and agreement that, if he should procure such settlements in any instances at a discount, the defendant nevertheless would pay for the use of the money so advanced the entire amount of the claim of the creditor, including the discount, with interest at 6 per cent. In other words, assuming that the plaintiff is the real party in interest, the agreement made for her by her agent was in effect that she would lend the money necessary to settle the claims, in consideration of the defendant repaying to her the money so loaned, with lawful interest, together with whatever sum the creditor might be willing to deduct from his claim, with interest thereon also. The question of fact is undisputed, and the learned trial court has found that the agreement was made with the corrupt understanding constituting usury. The bond and mortgage were given to secure the entire advances made, as well as the discounts or bonuses, which were not advanced.
It is sought on behalf of the plaintiff to support the transaction on the ground that the plaintiff had purchased the claims against the defendant, and Was therefore entitled to enforce them in full against her, whether secured by her mortgage or otherwise. No such transaction, however, ever took place. Each claim was canceled or released when it was settled, and no assignment of any of the claims was made to the plaintiff or to any one in her behalf. It is true, as stated in the dissenting opinion of the learned Presiding Justice, that there is nothing in the bond and mortgage, of themselves, indicating the usurious agreement; and it is equally true that, as the defendant owed her creditors all the money, no additional burden was imposed upon her by the agreement in question. The agreement is fairly stated in the dissenting opinion, as follows:
"It was agreed that the plaintiff should advance from time to time such money as would satisfy these claimants, with the understanding that she might retain any discount obtained from them upon cash payments."
I do_ not see how stronger language can be used to indicate usury; the corrupt understanding having been found by the court below as a fact. A party, having money, agrees to advance it from time to time for the use of another, with the understanding that she shall be repaid, not only the amount so advanced, with lawful interest, but also -such other sums of money as might have been required in the transactions, but which circumstances rendered it unnecessary for her to advance. As I understand it, lawful interest is the limit of what a lender may receive for the use of his money, and the payment of more for such use is forbidden. By the terms of the agreement, that burden was imposed on the defendant, of repaying to the plaintiff, with interest, more than the plaintiff had loaned.
It necessarily follows that the judgment should be affirmed.
CARR and WOODWARD, JJ., concur. JENKS, P. J., reads for reversal, with whom THOMAS, J., concurs.