The act forbidden by the statute as usury, and which vitiates all contracts into which it enters, is defined *Page 283 to be the reserving or taking of any greater sum or value than seven percent for the loan or forbearance of money. The rule is simple: its application, depending, as it does, upon the facts of each particular case, is sometimes involved in difficulty. In this case, there being a direct conflict between the evidence of the plaintiff and that of the defendant, Cornell, upon the material facts, and the jury having found in favor of the former, the facts must be taken to be as testified to by her. We have, then, in brief, the following case presented. The defendant, Cornell, a stranger to the plaintiff, procures himself to be introduced to her, finds her sick in bed, and proposes to borrow $400, offering satisfactory security; the plaintiff has but about half the desired amount on hand, and, when it is suggested that she has money due her in a neighboring village, she admits that she has, but says it is in good and safe hands, and that she does not wish to change it; the defendant urges his pressing necessities, appeals to her to save him from the loss of his property, which, he says, must ensue if he does not obtain the loan, and offers to compensate her for her trouble and expense if she will go to Waverly and collect in this money, in order to loan it to him; she hesitates to undertake the task on account of her ill health, but finally consents to make the effort for five per cent on the amount; she goes to Waverly three times, hiring a conveyance each time, sends a messenger twice, collects money from four different persons, is compelled to resort to borrowing to make up the full amount, and to apply to several persons before obtaining the loan, and then finally completed the amount to be loaned to Cornell. Her health having been injuriously effected by the travel and exertion involved in the business, which was more than she anticipated when she undertook it, she calls Cornell's attention to that fact, and suggests she ought to have increased compensation; Cornell admits the justice of the claim, and consents to increase the compensation to six per cent. The money is paid him, less the compensation agreed upon ($21.50), and the note is taken for the full amount, with interest. The plaintiff testifies, under objection; that her intention, in stipulating *Page 284 for this sum reserved, was to get compensation for her trouble and expenses, in running about and collecting and borrowing the money, and that she did not take it for the use or forbearance of the money loaned. The court was asked, upon this evidence, to direct a verdict for the defendant, on the ground, that, as matter of law, the defense of usury was established, and the question is fairly presented, by the refusal of the court so to direct a verdict, as also by the charge of the court, and the several refusals to charge, whether the lender of money may lawfully receive from the borrower, a reasonable compensation, in excess of interest, for services and expenditures in procuring the money to be loaned, provided the services were performed and the expenditures incurred at the request of the borrower, and upon his express promise to pay therefor. Upon this question, there can be no doubt. The compensation thus received is distinct from that agreed to be paid for the loan or forbearance of the money. The latter is interest and cannot lawfully exceed seven per cent; the former is a stipulated price for work, labor and services done and performed, and for money paid, laid out and expended; as such, it constitutes a distinct demand, which might be recovered in a separate action if not included in the security taken for the principal debt. Indeed, in this case, there is no doubt, it might have been recovered in an action, on the agreement, if the principal debt had not been increased, as if, for any reason, the defendant had declined to accept the loan after the money had been raised for him by the plaintiff. InHarger v. McCullough (2 Denio, 119), a creditor had made a journey at the request of the debtor, and upon his promise to pay for the trouble and expense, for the purpose of effecting a settlement of the claim. A bill of exchange was taken, in liquidation of the demand, in which was included, besides the amount of the debt, the sum agreed upon for the expenses of the creditor's journey. The defense of usury was interposed to an action on the bill. The court, by BRONSON, Ch. J., said, "There was no usury. It (the sum added to the amount of the debt) was so much money paid, laid out and expended, for the defendant, upon *Page 285 request, and was as much a debt as the original demand. It might have been recovered, had no arrangement in relation to the original debt been made. The fact that an arrangement, ostensibly like that in the present case, is often resorted to as a device to cover the exaction of usury, is no objection to the principle here announced. It is always a question for the jury whether the agreement was a lawful or an usurious one. It is a well known practice of money lenders to attempt to cover usurious transactions, by selling property of nominal value to the borrower, and including a substantial price therefor, in the security taken for the loan. The device fails, where it is seen to be such, but no one questions that the price of property, sold in good faith, may be included in the same security with money loaned. It is simply a question for the jury whether the sale wasbona fide, and the price agreed upon, as the actual value of the property, or whether the transaction was a mere device for obtaining usurious interest. (Rose v. Dickson, 7 Johns. 196.) And the fact, that the price of the property was large and more than it might have been obtained for, does not necessarily condemn the transaction as usurious. The question is, as to the intent of the parties. (Sign v. Miller, 1 Hill, 227.) And this might be true cause if the sale of the property was insisted upon as a condition of making the loan. In the numerous cases where the owners of real estate, in growing communities, cut it up into lots and offer to purchasers to loan them money to be expended in improvements, the sale of the lots is a condition of the loan; but, even though the price thus obtained for the property is larger than it would have brought but for the loan accompanying it, yet, if the transaction be, in good faith, what is here described, it would be absurd to pronounce it usurious. So, too, the hiring of services may be made the condition of a loan of money. As where a clerk or salesman, having some capital, and seeking employment, makes it a condition of loaning his money, that he shall be employed at certain wages. The contract would not be usurious, unless it should be found that the price put upon the services, was in fact, intended as a cover for obtaining unlawful interest *Page 286 for the money loaned. In all these cases, we arrive at one result, viz., that the character of the transaction depends upon the intention of the parties, and that is a question for the jury. The rule applies to the case at bar, and the instruction given to the jury was strictly correct. The same reasoning, also, disposes of all the defendant's exceptions to the several refusals of the court to charge as requested. The only one of these exceptions which it can be necessary to notice farther is, that to the refusal of the court to charge, "that if the extra money paid was, in the mind of the plaintiff, an inducement to make the loan, it was usury." This might seem, at first sight, to be substantially equivalent to the proper item, that, if the extra money was received by the plaintiff, in any manner, as compensation for the loan, then it was usury. The latter is a correct proposition, and was in substance charged by the court. But the proposition contained in the request to charge was a different one. According to the testimony of the plaintiff, which the jury seem to have believed, the extra money paid was, in one sense, an inducement to make the loan, and yet, was not received, in any measure, as compensation for the use of the money. It was an inducement to make the loan, in that it induced the plaintiff to incur the extra trouble and expense, without which the loan could not have been made. But, in this view, it was distinct from the compensation for the loan itself, and hence, was not usury. This request to charge was, therefore, properly refused.
I do not think there was any error in the rulings of the court, in the admission of evidence. The subject of the plaintiff's state of health and of the effect upon it, of her travel and trouble in collecting the money to be loaned, entered into the negotiations between herself and Cornell, in fixing the amount of compensation to be allowed her for her services, and so far it was a part of the res gestæ. She had a right to show, upon the trial, that her representations to Cornell, in that respect, were true, and that they were made in good faith, and not as a cover, for enhancing the compensation to be allowed her, for the use of her money. The *Page 287 same may be said of the admission of the plaintiff's evidence, that her money was already in safe hands. She had so represented the fact to Cornell, as a reason why she should not undertake the task of collecting it for his accommodation, and her evidence that such was the fact bore upon the good faith of the transaction. The only remaining question arises upon the admission of the plaintiff's evidence, as to what her intention was in stipulating for the extra compensation reserved, and here I cannot doubt the correctness of the ruling of the court. We have seen that the whole case was resolved into a question of fact for the jury, viz., what was the intention of the plaintiff in reserving this sum of $21.50? Not, it must be observed, whether she intended to take usury; for the law defines what usury is, and whether it be taken intentionally or ignorantly is immaterial. But, whether it was intended as compensation for the loan, or as compensation for trouble and expense incurred in collecting the money to be loaned, was precisely the question of fact for the jury; and the law is now well settled, under the rule admitting parties to testify in their own behalf, that, where the character of the transaction depends upon the intent of the party, it is competent, when that party is a witness, to inquire of him what his intention was. (Seymour v. Wilson,14 N.Y. 567; Forbes v. Waller, 25 id. 430; Griffin v.Marquardt, 21 id. 121; McKown v. Hunter, 30 id. 625;Bedell v. Chase, 34 id. 386.) The answer to such question is, of course, not conclusive, but to be weighed and considered, by the jury, with the other evidence in the case, in passing upon the question of actual interest.
In this case, to find a verdict for the plaintiff, under the charge of the court, the jury must have found that the sum reserved by her, upon the face of the note, was taken exclusively for expenditures of time, services, and money in obtaining the money to be loaned to Cornell, without any intent to evade the statute against usury; that those expenditures were made at the request of Cornell, and upon his express promise to pay her therefor, and that the sum reserved was not more *Page 288 than a reasonable compensation for such expenditures. Such being the findings of the jury, and no error appearing in the rulings or the charge of the court, the motion for a new trial was properly denied.
The order appealed from should be affirmed.
Judgment affirmed. *Page 289