Cucco v. Pacific Finance Corp.

In an action in replevin to recover possession of an automobile seized by defendant, order of the Appellate Term, affirming judgment of the Municipal Court, Borough of Richmond, Second District, in favor of plaintiff, unanimously affirmed, with costs. The plaintiff and her husband borrowed $200 from one Rosenfeld and as security delivered a chattel mortgage upon their Plymouth automobile. Defendant is the assignee of the mortgage. The mortgagors received only $151 of the loan, and defendant claims that the balance of $49 was deducted by the mortgagee for the assumption by the mortgagee of the various hazards enumerated in the mortgage. Upon default in payment of installments due under the mortgage, the defendant seized the automobile. The mortgage on its face shows that the consideration for the loan was a charge for certain risks or hazards ostensibly assumed by the mortgagee. Such a charge comes within the prohibition of the Banking Law (§§ 340, 352, 357, 358) and renders the agreement void. (Equity Service Corporation v. Agull, 250 App. Div. 96; Stuback v. Sussman, 8 N. Y. Supp. [2d] 141; affd., 256 App. Div. 903; affd., 281 N. Y. 719.) Whether the agreement was also void for usury under the General Business Law (§§ 370, 373) need not be determined. Present — Lazansky, P. J., Carswell, Johnston, Adel and Taylor, JJ.