Zussman v. Woodbridge

Giegerich, J. (dissenting).

I cannot concur with my associates in the conclusion reached by them with respect to the first cause of action.

One of the actions is upon a promissory note for seventy-five dollars made by the defendant Louisa Woodbridge and indorsed by her husband Milton Woodbridge, the other defendant, bearing date May 5, 1905, and payable within one month, with interest at six per cent, per annum.

When the note was signed, only the sum of fifty dollars was paid by the plaintiff to the defendants, the balance having been paid two or three days thereafter. On May sixth, *498the defendants purchased household furniture, the balance -of the purchase price of which the plaintiff seeks to recover by another action. Both actions were tried together and the ■appeals were heard together.

The defendants claim that the plaintiff refused to pay the balance of twenty-five dollars on. the note, unless they purchased the goods in suit, and that they, accordingly, purchased the same at a price far above their real value and that the plaintiff greatly profited by the transaction.

The plaintiff denied that he coerced the defendants into buying the furniture, he claiming that they purchased the :same voluntarily and that the transaction was an accommo-dation to the defendants who were unable to pay for the furniture and who were to repay plaintiff in monthly installments of hot less than fifteen dollars.

The'plaintiff was not corroborated by any witness upon "this point, except by his daughter, from whose testimony it .appears that she heard Mrs. Woodbridge ask her father whether he sold furniture and that he said it was not in his .line, but to go to a certain house and pick out some furniture and that he would “ take it on his account for cash ”. The -defendants, on the other hand, were corroborated by the wit-mess Leonard B. Quinn, who testified to being present, en August fifth last, at an.interview between the plaintiff and "the defendant Milton Woodbridge in the course of which the latter requested the plaintiff to accept, on account of the note, "twenty-five dollars (which sum he produced) and to make -out a new note for the balance, and that the plaintiff refused to accept the same, he saying, “ that he (Woodbridge) should "first buy something. Woodbridge says, ‘I don’t want to buy anything, I don’t need anything, I want to clear off this ■debt’. He said, ‘Ho, you must buy something and then we will make out a fresh note’. ‘What is the object of my buying all the time’, Woodbridge said, or something to that effect and he said the law only allowed him six per cent, .interest and that was not enough and it was on his sales he made his profits ”. •

The defendants also called one Daniel Higgins, a furniture dealer, who testified that the market value of the furni*499ture in suit when new was thirty-two dollars at wholesale, and forty-five dollars at retail, while on the installment plan it was worth from sixty-five to seventy-five dollars.

The testimony of these witnesses completely supports the contention of the defendants that the purchase of the furniture was a mere cover for the exacting of an unlawful rate of interest on the note; and it is evident that, had it been given the weight it deserved, the finding of the justice must have been in favor of the defendants, so far as the issue of fact was concerned. This finding in favor of the plaintiff upon the action on the note is, therefore, against the weight of evidence.

My associates, however, have decided that, though coercive measures may have been adopted by the plaintiff to compel the defendants to purchase goods after the procuring of the note, they cannot be construed as evidence of an agreement for an usurious rate of interest. If this means, that such measures were subsequent to the original agreement, in the sense that they could not reach back and taint it with usury, I differ on the construction of the facts. There was only a single transaction. The loan and the requirement that furniture be purchased were, in effect, contemporaneous. Indeed, the first installment on the purchase was paid out of the last installment of the loan. Many a device, more cleverly contrived than this and more substantial in appearance, has been swept aside by the courts as a cover for usury.

If, on the other hand, the affirmance is intended to be based on the proposition that an unlawful rate of interest is essential to usury, I differ on the law. The excess above the legal interest need not be in the form of a rate of interest or even in the form of money. The statute defining usury prohibits the taking of “ any greater amount or greater value ” than the legal rate. 1 R. S. 772, § 5. Even though the additional benefit is contingent, it constitutes usury none the less. Browne v. Vredenburgh, 43 N. Y. 195, and authorities cited.

I am also in favor of a reversal of the second judgment, but on different grounds from those adopted by my asso*500dates. As no claim was made, either on the trial or on the appeal, that the recovery did not follow the pleadings and the proofs, it does not seem to me a reversal ought to be based on the ground of such departure. Indeed, the answer of the defendant Milton Woodbridge admits the purchase, while the answer of his wife is a general denial, apparently on the theory that she had no part in that transaction. But, as the judgment embraces an usurious profit, it should be reversed and, on a new trial, the amount of such profit should be deducted.

If the plaintiff will stipulate that the judgment he reduced by six dollars and forty cents, which is the amount he admitted was his profit on the sale, according to the testimony of the defendant Milton Woodbridge, I would favor an affirmance of the judgment, as so modified.

Judgment reversed, no costs.