Horkan v. Nesbitt

Buck, J. Only two questions are involved .in this action, viz. one of usury, and the other as to whether the court below erred in withdrawing the case from the jury, and directing a verdict for the defendants. 1. Within the rule laid down by this court in the ease of Kemmitt v. Adamson, 44 Minn. 121, (46 N. W. 327,) and the case of Hall v. Maudlin, ante, p. 137, (59 N. W. 985,) we are of the opinion that the transaction between the parties was usurious. The plaintiff, John Horkan, was a nonresident of this .state, having a brother, William Horkan, who resided at Duluth, and who was the general agent and general manager for plaintiff in loaning money for him on chattel and real estate mortgages. The defendants are husband and wife, and the husband, George K. Nesbitt, on the 24th day of April, 1893, applied to William Horkan for a loan of $125, stating to him that the interest or bonus which would he charged him was no object, as he expected to get a lot of money out of it, and would only want it for ten days or two weeks, and that he would pay $10 for two weeks. William Horkan answered him, and said, “I said we did not make loans for less than a month; that he could have it a month for $10.” In pursuance of this agreement, the defendants made their note to plaintiff for $135, dated April 24, 1893, drawing interest at the rate of ten per cent, per annum, due in one month, and to secure the payment of the note, at the same time, executed a chattel mortgage upon a piano and other personal property, and paid the $10 referred to in the conversation between William Horkan and the defendant George K. Nesbitt. William Horkan testified that, when he finally closed the deal, “he charged defendants ten per cent, interest, and put in this ten dollars.” As we understand the evidence, defendants only received $125, but executed the note and mortgage for $135, which note and mortgage [491] included the extra $10, the note running to John Horkan, the plaintiff. The defendants paid from time to time on this indebtedness thh sum of $65, the last payment being the sum of $20, paid November 1, 3893. Default having been made in the payment of the balance due, the plaintiff brought an action for the recovery of the mortgaged property, or for the value thereof if a return could not be had. The defendant interposed the defense of usury. Upon the trial the defendant offered no evidence except the cross-examination of plaintiff’s witnesses, and, after the plaintiff rested, the court instructed the jury to return a verdict for the defendants. The appellant contends that the evidence shows that the $10 was paid to one Mullarkey for his services in making out the papers, examining the property, looking up the records, going to the residence of defendants, and taking acknowledgments. Mullarkey was the clerk for William Horkan in loaning money, and the attorney for John Horkan, and his general agent in the loaning and collecting of money, but he testified that he did not know what arrangement Mr. William Horkan had with Mr. Nesbitt about paying the $10. This evidence, considered in connection with the testimony of William Horkan that he told Nesbitt he could have the $125 for one month for $10, before anything was done by Mullarkey, clearly establishes the fact that the $10 was received or charged by William Horkan for the use of the $125 for one month, besides drawing ten per cent, interest, not only on the $125, but upon the $10, for the note wa.s made for $135, while defendants received only $120. That this transaction was usurious is too clear for argument. The note was made out to John Horkan, and so was the chattel mortgage securing it. He is now seeking to enforce that mortgage, not merely for the amount of $125 and ten per cent, interest, but for the full face value of the note, less the actual payments of $65. Instead of repudiating-his general agent’s usurious agreement, he is trying to enforce it by an action at law. In view of this fact and of all of the evidence,, none of which was given by defendants, it is quite immaterial that William Horkan testified that John Horkan had nothing to do with the transaction. When plaintiff’s general agent loans only $125, and takes a note and mortgage therefor for $135, running to plaintiff, drawing ten per cent, interest per annum, and which plaintiff receives492 and seeks to enforce, he must abide by all the consequences of a usurious transaction. Loaning money through agents who charge usurious and illegal interest under the guise of pretended services rendered the borrower constitutes a void transaction. 2. A careful review of the evidence leads us to the conclusion that there was no such conflict of evidence as to require thé court below to submit the case to the jury. The order of the court below is affirmed. .(Opinion published 60 N. W. 132.)