Real Estate Trust Co. v. Rader

Larremore, J. The defendant, in 1872, employed Allen, a real estate broker, to negotiate a loan upon certain real estate in the city of Hew York. At the suggestion of Allen, defendant and his wife, on May 6,1872, executed a bond and mortgage upon said premises to Andrus B. Howe for $20,000, payable in two years, with interest. The mortgage was acknowledged on the 4th and recorded on the 6th of June, 1872, but no consideration passed from Howe to defendant upon its delivery. Howe, through Allen, made application to the plaintiff for the purchase and sale of these securities, which was consummated June 22, 1872, by an assignment thereof to the plaintiff for $18,000, which amount was paid. At the same time the usual mortgagor’s certificate was executed and delivered to the plaintiff, whose officers testified to their belief in the truth of the statements contained in said certificate, and upon the faith of which they took the assignment. I think the whole testimony justifies such a conclusion, and although said bond and mortgage as to Howe had no legaj inception, yet in the hands of the plaintiff they are valid and subsisting liens to the extent of the consideration advanced upon them (Payne agt. Burnham, 62 N. Y., 69). An attempt was made at the trial to charge plaintiffs with knowledge of the original transaction between Howe and defendant, but the weight of evidence is in favor of the fact that Allen was not the agent of the plaintiffs, but of Howe and the defendant. The plaintiffs having thus acquired a valid title to the securities in question, no subsequent usurious agreement to [237] extend the time of payment could impair or avoid the original obligation (Ayand agt. Ball, 1 Alb. L. J., 181; Lesley agt. Johnson, 41 Barb., 359; Hawks agt. Weaver, 46 id., 164). Upon this theory evidence to establish such an agreement by the payment of $1,000 was excluded under plaintiff’s objection, and said amount having been credited on the account of the principal of the bond and mortgage, a rebate of interest thereon must be allowed from the time of such payment. The defense of usury is overruled and judgment ordered in favor of plaintiff for $17,000 and interest, and for a foreclosure and sale of the premises described in the complaint