Pass v. N. E. Mortgage Security Co.

Campbell, J., delivered the opinion of the court. The lender in this case, the N. E. Mortgage Security Co., did not take or stipulate for a greater rate of interest for the use of its money than the law allows, and therefore its contract was not usurious. It matters not, if intermediaries, through whom the borrower effected the loan, charged for their services a sum which added to the interest stipulated made the cost of the use of the money to exceed the legal rate of interest. If the borrower has to pay others than the lender for the means of obtaining the loan, that is not usury, for it is not the price of the use of the money, but the cost of getting it at all. If I agree to pay a man a thousand dollars to secure for me from another a loan of five thousand dollars at a legal rate of interest, and he obtains it by his credit or influence or labor, it matters not by what means, I cannot maintain the defence of usury against the evidence of debt executed by [377] meto the person who was induced to part with six thousand dollars as a loan to me, if that person neither stipulates for nor receives for his loan more than the legal rate of interest. Nor does it make any difference that he has full knowledge that the cost to me of securing the loan is so great as that supposed. I may be willing to lend money on the guaranty of an individual. If one desiring to borrow pays that individual even an exorbitant price for his guaranty, and thereby gets my money at a rate of interest to be received by me within the bounds of the statute, there is no usury. I may be willing to lend money on the faith of the representation of another that he thinks the transaction a safe one, and if he charges a borrower for the service rendered him in recommending to me the loan, that is their matter and in no manner affects my loan, if I am not to get more than the law allows for the use of money. The application of these principles to the facts of this ease presents the loan as without any semblance of usury. The N. E. M. S. Co. had money to lend on mortgages of real estate at eight percent, interest, if satisfied as to the security. The Corbin Banking Co. was engaged in the business of negotiating loans of this kind, and was in the habit of effecting them with the N. E. M. S. Co., which had confidence in its business methods and representations, and was willing to lend on transactions it favored. The Corbin Banking Co. found the business of effecting loans profitable, and sought to extend it by agents at different points to whom it furnished printed blanks for making applications for loans according to its methods, and in this case it advanced money to pay off an incumbrance on the land, and thus make it an acceptable security on which the N. E. M. S. Co. would lend the money, and this consummation enabled the Corbin Banking Co. to earn the compensation it had bargained for, if the loan was' effected. The fact that the N. E. M. S. Co. was in the habit of lending money on securities presented and recommended by the Corbin Banking Co. did not create the relation of principal and agent between them. Mere frequency of transactions between inde [378] pendent parties does not create one the agent of the other. One may get beef at a butcher’s every day .in the year for a score of years without establishing any relation of principal and agent between them. This case presents, only somewhat' more distinctly, the same-features as N. E. M. S. Co. v. Townes, MS. (Southern Rep. vol. 1, No. 6, p. 242), in which we held the transaction free from usury. Affirmed.: