Summary
In Muller v. City of Philadelphia, 208 N.Y. 182, 183, 101 N.E. 762, beneficiaries under a will assigned their interest in an estate as collateral security for usurious loans. It was held that they were not obliged to pay their assignees the amounts loaned, as a condition of obtaining their legacies, but could recover their full share of the estate irrespective of the assignments which they had given as security for the loans.
Summary of this case from In re PrinceOpinion
Argued March 28, 1913
Decided April 15, 1913
David J. Gallert and Walter S. Heilborn for Louis Silverman, appellant.
L.E. Warren for Jacob Brodie et al., appellants. J. Power Donellan and George L. Stamm for Louis Engel, appellant.
Walcott G. Lane for plaintiffs, respondents.
J. Noble Hayes for Charles H. Enos, as administrator of the estate of Roland Enos, deceased, et al., defendants, respondents. David C. Myers and Joseph H. Kutner for Marion L. Enos, defendant, respondent.
Charles H. Tuttle for Evans Museum and Institute Society, defendant, respondent.
Of the nature of this action it is sufficient to say that it was brought by the executors of Thomas W. Evans against the beneficiaries under his will, his heirs at law and next of kin substantially for a distribution of his estate. The respondents represent the estates of two of such heirs at law and next of kin. The appellants claimed interest in the funds payable to the respondents by virtue of certain assignments made by the respondents' testators. The respondents alleged that such assignments were void because given as security for usurious loans, and so they were held to be by the courts below. The proposition of law contended for on this appeal that though the assignments were given as collateral security for usurious loans, the respondents must pay the amount actually loaned with interest because the present action is in equity is destitute of merit. The respondents seek no equitable relief against the appellants; in fact, no relief at all against them, but merely demand that the plaintiffs in the action pay to them the moneys due from the plaintiffs to the respondents. Under our statute the assignments to the appellants were absolutely void, and had the appellants collected under these assignments any part of the fund belonging to the respondents, the latter could have recovered from them as for a conversion the amounts so collected ( Schroeppel v. Corning, 5 Den. 236; Id. 6 N.Y. 107; Ramsdell v. Morgan, 16 Wend. 574; Boughton v. Bruse, 20 id. 234; Tyler on Usury, p. 431 et seq.), and the same was the law in England under the Usury statute of Queen Anne. ( Tregoning v. Attenborough, 7 Bing. 97; Hargreaves v. Hutchinson, 2 Ad. Ellis, 12.)
Nor would the causes of action of the respondents have been barred by the Statute of Limitations if a conversion be possible in a case of this kind before the collection of the money, for the present action in which they have asserted their rights was pending against all the parties before the statute had run. In each of the cases cited by counsel for the appellants the parties sought equitable relief, and, therefore, they have no application to the action before us. The fact that the respondents were involuntarily brought into the action in equity can in no degree impair their legal rights, as they require no equitable relief against any party to the action, either the defendants appellants or the plaintiffs, to recover the money found due.
As to the claim of Engel against the estate of J. Roland Enos we are of opinion that there was no evidence to sustain the allegation of usury. Mrs. Enos, the only witness for the respondents, testified that her husband applied to Engel for a loan and that the latter required an assignment of a part of the fund in double the amount "as security." There was not a word said about interest or bonus, and no note or other obligation was given. The claim of Engel was that he had made a purchase of the interest of Enos in the fund. On this evidence the issue was merely whether the assignment was an absolute sale or a transfer as collateral security. That the court discredited the claim of Engel that the transaction was a sale may, if we assume that there could not have been an honest misunderstanding between the parties, stamp Engel as dishonest in seeking to recover the whole amount of the interest assigned to him, but it does not convict him of usury.
The judgment in all respects should be affirmed, with costs against the appellants Silverman, Brodie and Luria in favor of the respondents Charles H. Enos, Jr., executor, etc., of Juliette C. Henderson, and Charles H. Enos, administrator, etc., of J. Roland Enos, and the judgment as between the appellant Louis Engel and respondent Charles H. Enos, administrator, should be reversed, and a new trial granted only of the issue between the said parties, costs to abide event, unless within twenty days said respondent Enos, administrator, stipulates that there may be awarded judgment in favor of the appellant Louis Engel against him, payable out of the fund, for the sum of $1,000, with interest from November 28, 1902, and the further sum of $1,750, with interest from the 26th day of January, 1903; in case the judgment is so modified it is affirmed, without costs to either party.
GRAY, WILLARD BARTLETT, CHASE and CUDDEBACK, JJ., concur; HOGAN, J., absent; MILLER, J., not sitting.
Judgment accordingly.