Beadle v. Munson

Hinitan, C. J. The only question in this case arises upon that part of the charge in which the jury were told that a charge of commission beyond the legal rate of interest, for the trouble of discounting a note, or procuring a loan of money, was not usury, provided it be a fair and reasonable compensation. The facts to which the charge applied are very similar to the facts in the case of Hutchinson v. Hosmer, 2 Conn., 341, where the same doctrine was expressly sanctioned by this court. And that such is the law of Connecticut is admitted by counsel, as it certainly ought to be after this express decision, subsequently sanctioned and uniformly acted upon. De Forest v. Strong, 8 Conn., 513. Beckwith v. Windsor Manufacturing Co., 14 id., 604. But as this was a New York transaction it is claimed that the same rule does not exist there ; and the question arises therefore, whether there is any difference in this respect between our own law and the law of New York. The general principles as to what constitutes usury are the same in both states, and also in England, though the rate of interest is different. Hence the English cases are always cited and relied upon in New York as well as with us. And we suppose it to be very well settled that under the English statutes it is lawful to take the customary commission or exchange on bills or notes, and reasonable incidental expenses, over and above the interest. Winch v. Fenn, 2 T. R., 52, note; Barclay v. Walmsley 4 East, 55 ; Carstairs v. Stein, 4 Maule & Selw., 192. And in a note on this subject by the reporter of the case of Jones v. Davison, 1 Holt, 256, it is said that if a 179 lender, having some function, office or mere employ with respect to the borrower, shall reserve to himself at the time of such loan a fair compensation for his discharge of duties, such compensation will not be usurious, Stoveld v. Eade, 4 Bing., 51. The facts of this case bring it clearly within this principle. The plaintiff did not charge the commission for the loan as made by himself. Indeed it was not, when the service was rendered, contemplated that he was to loan the money at all. He came to Connecticut for the purpose of raising the money , from others on the defendant’s paper, but, finding that he could not do this, he determined to raise the money himself. Now, why should he not be paid for the service rendered at the defendant’s request, and for his expenses while engaged in it ? But we are referred to two or three cases in New York which are claimed to be decisive against the plaintiff on this point. We do not so consider them. The most important of these cases is Jacks v. Nichols, 1 Seld., 178, the marginal abstract of which would seem to favor the defendant’s claim. But there is nothing in the case itself contrary to the views which we have herein expressed. The' money loaned in that case was not at Savannah at the time, but in New York, where the loan was made. The excess above the legal rate of interest was not charged on account of the difference in the exchange, or as a compensation for transferring the funds to New York, but was in fact agreed to be paid without any other consideration than the loan itself. True, the lender claimed, when the loan was made, that it had cost him five per cent exchange to get his money from Savannah to New York, and gave this with other facts as a reason for asking more than the legal rate of interest. But so long as he did not incur this expense at the borrower’s request, and for the mere purpose of getting the money for him alone, it was clearly a mere color for charging unlawful interest, and was therefore properly characterized by the court as “ a case of unmitigated usury.” And that the court did not intend to decide that exchange may not be taken without rendering a party guilty of taking usury, is evident from the circumstance that the law of New York had previously been settled the other way. 180 Cayuga County Bank v. Hunt, 2 Hill, 635. Merritt v. Benton, 10 Wend., 116. Ketchum v. Barber, 4 Hill, 224. Nor do we perceive any thing in the other cases relied upon by the defendant that satisfies us that there is any peculiar law on this subject in the state of New York. And we are therefore of opinion that the charge to the jury was unexceptionable, and a new trial is not advised. In this opinion the other judges concurred.