Carpenter v. Lamphere

START, C. J. This action was brought to foreclose a real-estate mortgage, securing a note of $1,500 executed by the defendants to Richard E. Carpenter on July 6, 1885, payable five years after date, with interest at ten per cent, per annum, which was assigned to the plaintiff, the wife of the mortgagee. The defense was a partial payment of $500, and, further, that the note and mortgage were usurious. The trial court found for the defendants upon both issues and directed judgment for the defendants, canceling the note and mortgage. The plaintiff appealed from an order denying her motion for a new trial. The loan in question was made at Moorhead, in this state, by a loan agent, Daniel Titus, a brother of the plaintiff, who deducted from the amount thereof $75, as a bonus or commission in excess of interest at the highest rate permitted by law, as his compensation for services in making the loan. Questions of fact only are raised by this appeal, and the important and pivotal one is: Was Titus the general agent of Carpenter in making the loan? The trial court found as a fact that he was, and the question we have to answer is whether such finding is sustained by the evidence. The evidence as to the business relations of Carpenter and Titus was largely documentary, consisting of their correspondence, some 50 letters in all. It is true that Carpenter denied such agency, but the correspondence speaks for itself. It will serve no practical purpose here to discuss or analyze this voluminous correspondence. We have attentively considered the whole of it, and content ourselves with stating the conclusion reached, which is that the finding in question is sustained by the evidence. It is further urged on behalf of the plaintiff that, conceding that Titus was Carpenter’s agent, still the transaction was not usurious. The mortgaged premises were vacant lots, and the loan was made to enable the defendants to erect a dwelling house thereon, and by agreement of the parties the money was to be paid to the defendants in instalments as the work progressed. The evidence does not justify the conclusion that any part of the $75 was paid to Carpenter. It is the claim of the plaintiff that it was paid to Titus for services rendered to the defendants for examining the title, draw [544] ing the necessary papers connected with the making of the loan, and for his supervision of the work on the house, and examining and paying the bills therefor; hence no part of the $75 was retained for the use of the money loaned, and the exaction of it by Titus for his services rendered to the defendants does not render the loan usurious. If the plaintiff’s premises were correct, the conclusion would be also. Stein v. Swensen, 46 Minn. 360, 49 N. W. 55. The trial court, however, found, as a fact, against the correctness of the plaintiff’s premises, and found in effect that the $75 was not withheld for the payment of legitimate services of Titus rendered to the defendants, but as a bonus to be paid in excess of the highest legal rate of interest for the use of the money loaned. The plaintiff assails this finding as unsupported by the evidence. There is evidence in the record fairly tending to show that it was understood between Carpenter and Titus that the rate of interest named in the note should be net to the former, and that the latter was authorized and expected to collect from the borrower compensation for whatever services Titus rendered to Carpenter in making the loan; and, further, that the retention of money loaned by Titus, and its payment in instalments to the defendants, as the work on the house progressed, were done at the request and for the benefit of Carpenter; and that Titus in fact rendered no services with reference to the erection of the house, except to so retain and pay the loan in instalments. This evidence, in connection with the admitted fact that only $1,425 was paid to the defendants on their note and mortgage for $1,500, and the evidence of the defendant George N. Lamphere that the agreement was that the mortgagors should pay interest at the rate of ten per cent, per annum and a commission of five per cent, for securing the loan, is sufficient to sustain the finding and conclusion of the trial court that the transaction was usurious. Hall v. Maudlin, 58 Minn. 137, 59 N. W. 985. The repudiation on the trial of the act of Titus in exacting the $75 by the plaintiff, and her offer to indorse the amount on the principal, did not purge the transaction of usury. Order affirmed.