Case Name: STANDEN v. BROWN
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1894-12-14
Citations: 31 N.Y.S. 535
Docket Number: 
Parties: STANDEN v. BROWN.
Judges: 
Reporter: West's New York Supplement
Volume: 31
Pages: 535–537

Head Matter:
STANDEN v. BROWN.
(Supreme Court, General Term, First Department.
December 14, 1894.)
Sale or Pledge—Transfer of Bonds.
On an issue as to whether a transaction was a sale by plaintiff to defendant of notes and mortgages, as claimed by defendant, or was an assignment as collateral security, as it purported to be, and as was claimed by plaintiff, a statement in a letter from plaintiff to defendant’s attorney that the transaction “was only an indirect way to purchase” the notes and mortgages is sufficient corroboration of defendant’s testimony to sustain a finding in his favor.
Appeal from special term, New York county.
Action by William T. Standen against William L. Brown for the cancellation of three bonds of plaintiff, executed and delivered by him to defendant, and for the return of certain collateral securities. The complaint was dismissed, and plaintiff appeals.
Affirmed.
July 28, 1892, the plaintiff was the owner of the following bonds and mortgages:
B. & M. of Philip Godfrey, dated June 15, 1893, to sec. $ 700 & Int.
B. & M. of Wm. H. & M. E. Stead, " " " " " 320 & Int.
B. & M. of Mary E. Taylor, " " " " " 290 & Int.
B. & M. of Burnett T. Kirby, " " " " " 280 & Int.
B. & M. of Joseph H. Bross, " " " " " 320 & Int.
B. & M. of Maurice Hebert, " " " " " 400 & Int.
B. & M. of Edward A. Collins, " " " " " 200 & Int.
B. & M. of Fred H. Kludge, " " " " " 200 & Int.
B. & M. of Geo. Hunt, " " " " " 250 & Int.
B. & M. of Geo. P. Langdon, " " " " " 4,606.67 & Int.
B. & M. of Asa S. Ashley, " " 20, " " 500 & Int.
B. & M. of Grace I. Warner, " " " " " 375 & Int.
B. & M. of Asa S. Ashley, " " " " " 600 & Int.
B. & M. of Fred Nichels, " July 14, " " 200 & Int.
B. & M. of A. J. McCarten, " " " " " 975 & Int.
$10,816.67
July 28, 1892, the plaintiff assigned to the defendant the aforesaid fifteen •bonds and mortgages, by a written instrument, “as collateral security” for the payment of the plaintiff’s bond, executed on that date, by which he undertook to pay to the defendant $10,000 one year from date, with interest at G per cent., payable semiannually. On the same date the defendant, in consideration of said bond, assignment, and of the delivery of said bonds and mortgages to him, gave to the plaintiff his check for $9,800, which was paid. On the Sth of September, 1892, the plaintiff was the owner of the following bonds and mortgages:
B. & M. of Annie Patterson, dated June 23, 1892, to sec. $116.67 & Int.
B. & M. of Jno. S. Crawford, " July 12, " " 500 & Int.
B. & M. of Philip Godfrey, " " 14, " " 260 & Int.
B. & M. of Margaret Reed, " Aug. 9, " " 320 & Int.
B. & M. of Gilbert J. Augevine, " " " " " 460 & Int.
B. & M. of Jacob Freund, " Sept. 1, " " 400 & Int.
B. & M. of Jacob Freund, " " " " " 360 & Int.
B. & M. of George Hunt, " " 2, " " 810 & Int.
B. & M. of Nathan P. Tyler, " " " " " 150 & Int.
$3,376.67
September 8, 1892, the plaintiff assigned to the defendant said nine bonds and mortgages, by a written instrument, “as collateral security” for the payment of the plaintiff’s bond, executed on that date, by which he undertook to pay to the defendant $3,37G.G7 one year from date, with interest at 6 per cent, payable semiannually. On the same date the defendant in consideration of said bond, assignment, and the delivery of the bonds and mortgages to him, gave to the plaintiff his check for $3,300, which was paid. On the 18th of October, 1892, the plaintiff was the owner of three shares of the stock of the Pelhamviile Land & Homestead Association, of the par value of $600 each. October 18, 1892, the plaintiff assigned to the defendant said three shares of stock, by a written instrument “as collateral security” for the payment of the plaintiff’s bond, executed on that date, by which he undertook to pay to the defendant $1,623.33 one year from date, with interest at 0 per cent., payable semiannually. On the same date the defendant, in consideration of said bond, assignment, and the delivery of said shares, gave his check to the plaintiff for $1,590, which was paid. On November 8, 1893, this action was begun to have the three bonds and the three assignments, executed by the plaintiff to the defendant, canceled as usurious and void. The plaintiff alleges in his complaint that the difference ($200) between the plaintiff’s bond and defendant’s check of July, 28, 1892, the difference ($76.67) between the plaintiff’s bonds and defendant’s check of September 8, 1892, and the difference ($33.33) between the plaintiff’s bond and the defendant’s check of October IS, 1892, were retained by the defendant, pursuant to a usurious agreement between the litigants that the plaintiff should pay, and defendant receive, these sums in excess of the legal rate of interest on the sums which the plaintiff obligated himself to pay by those bonds. The defendant, in his answer, denies that any usurious agreement was made between the parties.
Argued before VAU BRUNT, P. J., and FOLLETT and PARKER, JJ.
Grove M. Harwood, for plaintiff.
Eugene S. Ives, for respondent.-

Opinion:
FOLLETT, J.
The special term found as a fact that the transactions were not loans by the defendant to the plaintiff, but were sales by the plaintiff to the defendant, and that the securities mentioned in the assignments and the three bonds given by plaintiff to defendant were for the purpose of guarantying the payment of the bonds and mortgages sold to defendant. The plaintiff filed exceptions to the facts found by the special term and to its conclusion of law. The only question involved on this appeal is whether the findings are contrary to the weight of evidence. The fact that it was recited in all of the assignments that the bonds and mortgages were assigned by the plaintiff to the defendant "as collateral security"' for the payment of the bond of even date is strong evidence that the three transactions were loans instead of purchases. Again, the fifteen bonds and mortgages assigned July 28, 1892, amount, without interest from their dates to July 28, 1892, to $10,216.67, while the bond given by plaintiff to defendant was for $10,000, and the check given by him to plaintiff was for $9,800, making a discount of $416.67, besides accrued interest on the securities. The nine bonds and mortgages assigned by the plaintiff to the defendant September 8, 1892, amount, without "interest from their dates to September 8, 1892, to $3,376.67. The bond given by the plaintiff to the defendant on this transaction was for the same amount, and the plaintiff's check was for $3,300, making a discount of $76.67, aside from accrued interest on the securities. The par value of the three shares' of stock assigned by the plaintiff to the defendant October 18, 1892, was $1,800. The plaintiff received from the defendant $1,590, and gave his bond for $1,623.33, making a discount of $33.33. It will be observed that the first bond is less, by $216.67 and the accrued interest, than the amount secured by the first fifteen bonds and mortgages. If the transaction were a sale and guaranty of payment of the securities sold, it is difficult to see why the purchaser did not execute a guaranty of the payment of the bonds and mortgages,, principal and interest. The second transaction is not open to this criticism, though the bond taken is not equal to the principal and interest of the nine mortgages assigned. In respect to the third transaction, it does not appear that the value of the three shares of stock was agreed upon or even discussed between the parties,, which is usual when a sale is made. The plaintiff swore positively that the three transactions were loans, and that the three assignments were, as recited in them, intended as collateral security for the payment of the sums loaned. In this he was corroborated by Charles M. Marvin, who was present at the first and second transactions. This witness testified that the agreement was that, the plaintiff should pay the defendant a bonus of 2 per cent in addition to the legal rate of interest, and that the two transactions were loans. In opposition to this, the defendant testified that the transactions were not loans, but were purchases of the securities assigned, and that the bonds were taken as guaranties of the payment of the securities assigned. Exactly how the payment of the three shares of stock was or could be guarantied is not explained. In a letter written by the plaintiff, September 12, 1893, to the defendant's attorneys, reference is made to a letter written by them to him September 11, 1893. Unfortunately, the letter of the 11th was not put in evidence. In the plaintiff's letter he says:
"When these transactions were made, it was certainly understood that this was only an indirect way to the purchase by Col. Brown of the numerous little mortgages which I held, and it was done in this way in order that the colonel might not be bothered with the collection of small amounts of interest, but might look to me for such payments in one sum."
This statement is a strong corroboration of the testimony of the defendant, and we regard it as of sufficient probative force to sustain the finding of the learned trial judge, who had the witnesses before him, and had an opportunity to observe their manner. The judgment should be affirmed, with costs. - All concur.