Porter v. Mount

E. Darwin Smith, J. When this case was before us on a former occasion, it came up on a motion for a new trial, the plaintiff having been nonsuited at the circuit, on the ground, chiefly, that the action was barred by the statute limiting actions by the borrower against the lender, for usury paid, to the period of one year after such payment. And the question raised and discussed, was, whether a married woman having a separate estate and loaning money on usury was liable to be sued for the excess secured over legal interest, so as to charge her separate estate. We held that the action was not barred by statute, but lay at common law, as for money had and received, and granted a new trial on both grounds. (See 41 Barb. 562.) On the second trial the jury having found a verdict against Mrs. Mount alone, and rendered no verdict for or against her husband, the plaintiff now asks leave to amend the complaint so as to retain the verdict; and the defendants move for a new trial. The complaint in the action charges the defendants jointly with the receipt of the usurious excess, and does — 425 — not state that they are hushand and wife. They are sued, simply, as joint debtors, and judgment is prayed against them 'jointly. The defendants have defended separately, and both deny the complaint. The jury having only passed upon half the issue, and not having found upon the issue joined upon the answer of John Mount, there is an evident mistrial, and no judgment can be entered upon this verdict. The plaintiff asks to amend the complaint by inserting in it the proper statements, alledging that the defendants are husband and wife, so that the verdict may stand, retaining John Mount’s name in the record as husband, but without any judgment against him. And if this can not be done, he asks leave to discontinue against him, and retain the verdict against his wife, and enter up judgment against her to be charged upon her separate estate. If John Mount is a necessary party upon the record, the plaintiff can not, I think, be allowed to amend the complaint, except upon the payment of costs. He was sued as joint contractor in making the loan and as jointly liable to refund the usurious excess over legal interest, and he has defended the action successfully, so far that the plaintiff has recovered no verdict against him, and he was clearly entitled, if not liable for the usury, to have a verdict rendered in his favor. If the plaintiff, therefore, is to be allowed to amend his complaint by inserting therein the proper allegations to retain the name of John Mount upon the record as the husband of Harriet, upon the assumption that he was a proper party with his wife to the action, although no personal claim was made or recovery could be had against him, it could only be properly done, I think, upon the payment of his full costs as upon a dismissal of the complaint against him. But I do not think this would be correct practice. In common law actions the name of no person should be in or upon the record as a party except such as must have judgment pass for or against them. Married women now sue and — 426 — are suable like unmarried women, and judgments are rendered for and against them, and enforced in the same manner as for or against other persons, under the statutes of 1860 and 1862. In common law actions, before the Code, where husband and wife were necessary parties, judgment always went in favor of or against both, but was collected primarily of the husband’s property, if he had any; if not it might be charged in equity upon the wife’s separate estate. Executions on such judgments went only against the property of the husband for the reason that the wife had no separate personal property ; all her personal property on her marriage vesting in her husband, and the usufruct of her real estate during coverture, belonging to him. To reach the wife’s separate property, now, she must be sued alone; otherwise the judgment against both is really a judgment against the husband as at common law. I can think of no case at common law where a husband can be a proper nominal party and be sued merely as such with his wife. But the plaintiff!, I think, might be allowed to dismiss the complaint, and discontinue the action against John Mount to the same effect as if a verdict had been found in his favor at the circuit, and enter judgment on the verdict against Harriet Mount. I see no difficulty in granting the plaintiff’s motion in this respect, if we are satisfied that justice requires it or would be subserved thereby, and that the verdict was in all respects just and fair and no valid exceptions were taken at the trial. This brings us to the consideration of the defendants cross-motion for a new trial. The exceptions taken to the refusal of the Circuit judge to nonsuit the plaintiff or dismiss the complaint as to one or the other of the defendants, I think, are not well taken. The jury might, upon the evidence, have found a verdict against John Mount or against Mrs. Mount and for the other defendant, and I do not think the judge was bound to take the case from the jury.- And the same view — 427 — applies to" the exceptions to the refusal of the judge, at the close of the trial, to charge the jury that there was no evidence to warrant a verdict for the plaintiff, which was equivalent to an application to the circuit judge to direct a verdict for the defendants, which I think he was not bound to do. It is true, the evidence tending to charge Mrs. Mount with any knowledge of or assent to the receipt by her husband of the sums of money mentioned in the complaint was very slight. But I am not prepared to say that it was so slight that it should not have been submitted to the jury, and we are not now seriously asked by counsel to set the verdict aside as without evidence, or as so entirely against the evidence. Another exception taken was to the refusal of the judge to charge, as requested, that the evidence must satisfy the jury beyond any reasonable doubt that the defendant Harriet Mount received or authorized the reception by John Mount as her agent of the several sums mentioned in the complaint, or some of them, or' else the defendant was entitled to a verdict. This request was right, and asked a proper direction to the jury,- except in respect to the rule relating to the weight of the evidence which it asked the judge to apply. It asked the judge to instruct the jury to apply to the evidence the liberal and benign rule which juries are ordinarily instructed to apply in favor of the defendants, to the evidence on criminal trials. It is true that the taking of usury is a criminal offense, and in a civil action involves a forfeiture, but I do not think that courts or juries should lean particularly in favor of the usurer. A verdict finding usuiy should doubtless be based upon clear and satisfactory evidence, as it involves by way of penalty the loss of the whole debt, and I do not think that the charitable rule giving to defendants, in favor of life or liberty, the benefit of every reasonable doubt, should be extended to civil actions, in such cases. I think the judge rightly disposed of this question. — 428 — Another exception was taken on the ground that the circuit judge allowed the jury, against the ' objection of the defendants’ counsel, to take to their room the bond and mortgage received in evidence at the trial. In England there are some cases, and perhaps in this country, where new trials have been granted on such grounds, hut it is time they were exploded and repudiated. In Graham on New Trials, p. 80, it is said: “ That in this state the practice is not to allow the juries to have the papers produced in evidence, without the consent of parties.” If written documents or papers used in evidence on a trial can only be taken to a jury room upon the consent of parties, it is quite apparent that the practice in such cases stands upon a very uncertain footing. Such consent will, many times, be withheld when the papers and documents would materially aid the jury in their deliberations. It is properly a question to be left unqualifiedly to the discretion of the circuit judge. The judges who preside at nisi prius find constant occasions when the written evidence, used on the trial, should be allowed to go to the jury rooms, and I think we should assert and hold the true rule and the law to be, that the judge at the circuit may, in all cases, in his discretion, with or without the consent of the parties, allow the jury to take to their room any written documents or papers received and used in evidence on the trial of a cause. The circuit judge in this case, I think, exercised his discretion properly in allowing the mortgage in question to be taken to the jury room, and this exception should be overruled. There is one other exception in the case, which I find some difficulty in overruling. The learned judge, in his charge to the jury, among other things, said: “ That if the defendant Harriet Mount knew that the defendant John Mount was receiving money on his own account from the plaintiff, on account of the loan, she would be liable for the money so paid.” I do not think this proposition can' be sustained. The'action is at common law, — 429 — for money had and received. To support such action, it is necessary to prove that the defendant herself, or her agent, actually received money for the use of the plaintiff. (Chitty on Cont. 602.) The form of the indebitatus count, for money had and received, is, that the defendant is indebted to the plaintiff in a certain sum, for money had and received by the defendant for the use of the plaintiff. There is no evidence and no pretense in the case that the defendant Mrs. Mount ever received or had one cent of the money for which this action was'brought and the verdict rendered. It, confessedly, never was, or any part of it, in her possession or control,'or was applied to her use or benefit. A recovery against her for such money, therefore, can not be had, put or sustained, except upon the ground that it was received by her agent for her use and benefit. There is no other ground upon which she can be held liable for this money, at least in this action. The proposition in the charge, to which the exception I am considering applies, assumes that Mrs. Mount did not receive the money, and that it was not received for her use and benefit, or by her authority or direction. It is, “if Mrs. Mount knew that John Mount was receiving money on his own account from the plaintiff on account of the loan, she would be liable for it.” This proposition, it seems to me, is in conflict with the very theory and essential principle upon which the action for money had and received rests. John Mount received this money—he had it in his possession—he received it for his own use—applied it to his own use and benefit. But the charge in this particular doubtless was made upon the principle, and proceeded upon the assumption, that the action for money had and received would lie for the usurious excess over legal interest whenever a contract was infected with usury. In this view the charge asserted and, in effect, implied that the contract for the loan o£the $1000 to the plaintiff and the two agreements to extend the time of payment of such loan, — 430 — would be usurious if Harriet Mount knew that John Mount was receiving money on account of such loan, from the plaintiff—though it was for his own exclusive use and benefit. The proposition, in the broad and unqualified sense, it seems to me, is opposed to the law of usury as asserted and applied in the case of Condit v. Baldwin, (21 N. Y. Rep. 224, and 21 Barb. 185,) and other cases. That case, so far as it stands upon any principle, which I much doubt, can only stand and be sustained upon the ground, that the premium of $25 received in that case by the agent of the plaintiff, upon the loan, was received for the sole use of the agent, and was not received for the use and benefit of the lender or upon her authority or assent. In the opinion in that case, in this court, my brother Johnson said: “ But where the agent of the lender, and the borrower, agree without the lender’s knowledge, and in no respect for his benefit or advantage, that such agent shall have a commission out of the moneys loaned, it must,. I think, be held to be the agreement of the agent, and he alone, if any one, should be held accountable for the wrong.” And in the Court of Appeals, Judge Davies, who gave the opinion of the court in the same case, says: “ The agent has taken and received this gratuity or usury and not the principal. To render the transaction usurious as to this plaintiff, we have to establish that she took and received the unlawful interest, and from this fact infer the corrupt intent. Williams took it for alleged services rendered by him. Can it, for a moment, be contended that the plaintiff could have recovered this money of Williams as so much money paid to him for her use ? Clearly not.” He says, further: “ Baldwin had an action to recover the excess; but against whom could he have maintained it ? Certainly not against the plaintiff. She never took or received it. The agent was never authorised to take or receive it. On no principle could the action baye been sustained against her.” — 431 — This is precisely this case. But the action is brought to recover the usurious excess, and is brought against the principal. Judge Davies said such actions could not be maintained against the plaintiff in that case, because she had never received the money or authorized her agent to receive it. This was the reason why that was not a case of usury— because the lender had not received or agreed to receive any excess over legal interest, and the usurious excess confessedly received by her agent was received for his own use and benefit, and not for the use of his principal. In Fellows v. The Commissioners of Oneida, (36 Barb. 655,) which case presented substantially the same facts as that of Condit v. Baldwin, and was decided on the authority of that case, Judge Bacon, in giving the opinion of the court, says: “The rule, therefore, that when an agent, while strictly pursuing his authority, commits a wrong, he thereby binds his principal, does not apply to a case where the agent, departing from the line of duty, is bargaining on his own account, and securing a benefit for his own private advantage exclusively.” That is this case precisely, assuming that John Mount was the agent of his wife, which he and Mrs. Mount distinctly deny. The only question which remains in this connection is, whether the principle is or is not affected by the knowledge, or want of knowledge, by the lender, that the agent is receiving a bonus or premium upon the loan. In Condit v. Baldwin it is mentioned, and some stress is laid upon it in the opinions, that the plaintiff was ignorant of the fact that Williams exacted and received the $25 premium. If this fact of knowledge was essential to-the decision, the plaintiff in' that case must, it seems to me, be deemed to have had knowledge of the fact of the taking and payment of the premium, for Williams made the contract of loan and advanced the money himself. He was not an agent to procure the loans. He made the loans himself. The contract of loan was a single one, and made by him with the money of his principal in hands, — 432 — The agreement to pay the $25 premium was part and. parcel of the contract, and it is impossible therefore, it seems to me, to hold that it did not infect and taint it, except upon the single consideration that the premium in question was stipulated for and received by and for the sole benefit and use of the agent, and that the principal actually lent and advanced to the borrower the full sum specified in the security, and in no way received any benefit from the premium or bonus paid her agent. But this case, it seems to me, stands upon much firmer ground than that of Condit v. Baldwin, for in this case Mrs. Mount herself actually lent her own money. The application to loan the money was made to her in person, and she agreed to make the loan, and actually advanced the money to the plaintiff and took the security in her own name; and she swore that she was accustomed to do her own business, and that her husband was not her agent to make the loan or do any act in regard to it. It is quite apparent from the evidence that Mount took advantage of his position and relation, as the husband of Mrs. Mount, to sell his services and influence with her to procure the original loan to the plaintiff, and to extend the same from time to time for the sums of money paid to him by the plaintiff. He performed the office of a sort of broker or intermediate man between the parties to negotiate the loan and the extension, and extorted the money paid him by the plaintiff in consideration of such services. This would not affect the validity of the contract, inasmuch as Mrs. Mount actually advanced the full sum of $1000 of her own money on the loan, and received nothing but legal interest, within the following cases and others: Dagnall v. Wigley, 11 East, 42; Coster v. Dilworth, 8 Cowen, 299 ; Barretto v. Snowden, 5 Wend. 181; Crane v. Hubbel, 7 Paige, 413. It is the constant practice of brokers and agents to negotiate loans and receive payment by way of commissions or otherwise for their services, and it must be generally well known to lenders — 433 — that the broker in such cases is to receive a compensation for his services. The fact of the mere knowledge of the lender, in such cases, that his agent or broker or the common agent or broker of the parties, is paid by the borrower a commision or other compensation, can in no case affect the validity of the contract, except when advantage is taken through such agent by some device, to secure more than legal interest to such lender, to go to such agent on the money lent. The case of Moagage v. Liman, (1 Moody & Malkin, 121,) illustrates this point. In that case an agent had procured a loan of £1000 and retained £100 for his services. Lord Tenterden said, in Ms charge to the jury, that if the lender had-caused the transaction to pass tMough the hands of Coats (the broker) in order that he might receive the premium over and above the regular discount, that would be usury, though he retained notMng himself beyond the legal interest. Referring to that case, my brother Johnson, in Condit v. Baldwin, (supra,) said of it: “ To tMs rule I subscribe. In such a case payment to the agent, at the request and as a condition imposed by the lender himself, is a payment to him.” This I think entirely sound. If a lender imposes or makes it a condition of the loan that a bonus or premium shall be paid to his agent, such sum should be deemed paid to the principal, and should affect the validity of the contract and be recoverable, precisely as if made to the lender Mm-self. But notMng of that Mnd is proved or pretended in this case, and the cause was not submitted to the jury upon any such ground; nor can the verdict, I think, be sustained upon any such theory of the case. This question comes before us upon exceptions to a particular portion of the charge. The whole charge is not given, and we can not therefore see that this proposition was qualified or explained so that no injury was done by the apparent error. The proposition in the charge, as it stands, negatives the — 434 — idea that the money received by Mount was received for the use and benefit of Mrs. Mount, or was received by any authority, consent, contrivance or connivance on her part, and forbids the jury to render a verdict upon any such theory or assumption. I can not see how she can be liable for money so received, in a simple action at common law for money had and received. For this error in the charge therefore, I think there should be a new trial. But my brethren think differently from me on this single point, for the reason expressed in the opinion of my brother Johnson, and a new trial as against Mrs. Mount must therefore be denied. And we all concur that the complaint should be dismissed as against Mr. Mount; and as he is the more guilty party, and the money received by him for his services was quite extortionate in amount, we think, under the provisions of section 306 of the Code, where several defendants are sued not united in interest and making separate defenses, we have discretion to deny him costs as upon a verdict in his favor, and the complaint as against him should therefore be dismissed without costs ; and it is so ordered.