East New York Savings Bank v. Lang

In an action brought to recover interest due and unpaid on a bond made by the defendant and another in favor of the plaintiff, order denying plaintiff’s motion for summary judgment affirmed, with ten dollars costs and disbursements. The defenses of usury present a triable issue as to whether the guaranty was exacted in good faith, or whether it was merely a device to conceal a usurious loan. (Hartley v. Eagle Insurance Co., 222 N. Y. 178.) Depending upon the facts of the particular case, the requirement of a guaranty might be a perfectly legitimate transaction, as in Brown v. Jones (89 Misc. 538), or a mere cloak for usury, as in Palmer v. Jones (69 Hun, 240; appeal dismissed, 140 N. Y. 982 657). The question is one of intention (Hall v. Eagle Insurance Co., 151 App. Div. 815, 826; affd., 211 N. Y. 507), and presents an issue of fact (Thurston v. Cornell, 38 N. Y. 281). In an action brought solely to recover unpaid interest the defense of usury is available under section 108 of the Banking Law. We do not pass on the right of the defendant to affirmative relief by way of counterclaim, or on the sufficiency of the other defenses. Lazansky, P. J., Hagarty, Carswell, Johnston and Close, JJ., concur.