Schwarz v. . Sweitzer , 202 N.Y. 8 ( 1911 )

This action was brought to recover the sum of $960, claimed to have been loaned to the defendant, the payment of which had been secured by assignment of a mortgage upon real estate as collateral security for the loan. The defense was usury, the defendant alleging that but $800 was received by her for the loan.

The plaintiff was conducting a furniture business in the borough of Brooklyn, her son, John A. Schwarz, acting for her as manager, and authorized to sign checks as attorney. One Lipsky was acting for the defendant as broker. He called upon the plaintiff's son on or about August 23, 1907, and according to the testimony of the son the following took place: "The first time he came to me with a mortgage of $2,150 on Stockton street. He said he had it for sale and wanted to sell it less twenty per cent. I told him I had no money, and that I didn't consider the loan was good enough to approach my mother, and I didn't consider that I would want to give her that loan. Then he went away. A few days after that he came back to me. He said, Mr. Sweitzer, the owner of this mortgage, wanted a loan of $800, and he would give this mortgage as collateral security. He wanted to know could I get the money for him. I told him I didn't know, but I asked him what was in it. He said the man was willing to pay twenty per cent — $160. I said then, he only wants $640.00, and he said, no, he wants $800, he wants a loan, really a loan of $960. So I said, well, you come back this afternoon, I will see my mother, and may be I can get her to make that loan. He came back in the afternoon. In the meantime I asked my mother; she said, yes, I will make that loan, and you can draw out the check, the money from the store. So when he came back in the afternoon I made the loan for my mother. I did not tell my mother anything about the twenty per cent or any bonus in it at that time. I told her the next day about the twenty per cent."

It further appears that the plaintiff's son drew his check as attorney upon the bank in which the business accounts were kept for $800 and passed the same over to the defendant; that subsequently his mother drew a check upon her individual account, by which the $800 was restored to the business account, and that at the end of the week the son paid to her the sum of $15 in lieu of the $175, which was the weekly amount which she drew from the business for household expenses, the son retaining for his own use the remainder of the $175, which was the $160 bonus paid upon the making of the loan. The interest upon the loan was paid for the first six months, after which the defendant defaulted, and subsequently this action was brought.

It thus appears that on the next day the mother was advised about the $160 that was retained by her son, and that subsequently she collected the interest on the loan for the first six months as it matured. It nowhere appears from the evidence that the defendant or her broker in procuring the loan knew that the son of the plaintiff was to retain the $160 for his own benefit. We, are, therefore, of the opinion that this case was brought within the principles decided in the case of Bliven v. Lydecker (130 N.Y. 102), and that consequently the judgment should be affirmed, with costs.

CULLEN, Ch. J., GRAY, WILLARD BARTLETT, CHASE and COLLIN, JJ., concur; VANN, J., not voting.

Judgment affirmed.