Court Opinion

ID: 5791684
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:10:41.047222+00
Date Added: 2024-06-11T08:42:17.288788
License: Public Domain

Main, J. (dissenting).
We dissent. The majority readily concedes that the note herein provided for an annual yield in excess of 7.5%, the maximum rate allowable by law at the time of its execution. As a consequence, we would order cancellation of the entire obligation pursuant to sections 5-501 and 5-511 of the General Obligations Law because the interest rate charged, however arrived at, was usurious. If we were concerned solely with the compounding of interest, denial of the recovery of the additional interest would be sufficient penalty (Madison Personal Loan v. Parker, 124 P. 2d 143; Young v. Hill, 67 N. Y. 162). Here, however, in addition to compounding which is not usurious per se, we have an exaction of an amount that is unquestionably usurious. In reaching this conclusion, we follow the express dictates of the usury statute which includes as part of the interest charged ‘ ‘ any and all amounts paid or payable, directly or indirectly [to the lender] in consideration for making the loan ” (General Obligations Law, § 5-501, subd. 2).
We would further note that the presumption against the taking of usury (Rosenstein v. Fox, 150 N. Y. 354) is clearly rebutted. The usurious intent of the parties can be determined from the face of the instrument (32 N. Y. Jur., Interest and Usury, §.72), and the remaining elements of usury: (1) a loan or forebearance of money; (2) an understanding that the principal shall be repayable absolutely; (3) the exaction of a greater profit than is allowed by statute (32 N. Y. Jur., Interest and Usury, § 37), were likewise decisively proven.
Moreover, we find no ease relied upon by either the majority decision or by Mr. Justice Cooke in his concurring opinion wherein the compounding of interest resulted, as here, in an effective rate of interest exceeding that which was legally authorized.
*163The order of the trial court should be affirmed.
Herlihy, P. J., concurs with Greenblott, J.; Cooke, J., concurs in a separate opinion; Sweeney and Main, JJ., dissent and vote to affirm in an opinion by Main, J.
Order reversed, on the law, without costs, and summary judgment granted in favor of plaintiff in the face amount of the promissory note, together with interest at the rate of 7%% per annum.