
    Wilhelmina Von Haus, Respondent, v. Ullman B. Soule, Appellant.
    First Department,
    November 3, 1911.
    Pleading — action to set-aside agreement to make loan — complaint not stating cause of action — evidence — parol evidence to show written agreement was usurious.
    A complaint in a suit for the cancellation of an agreement to make a loan upon the ground that .the same was usurious and void and to cancel a confession of judgment by the borrower, fails to state a cause of action where in substance it merely alleges that the defendant having agreed to make a loan of a certain amount at six per cent interest to be paid in certain installments, paid an amount less than the first-agreed installment but accepted a receipt for the full amount thereof and thereafter made payments up to a sum less than the entire loan, but did not pay the balance of the amount agreed upon and that the loan was usurious and void and that the intent of the defendant was to compel the plaintiff to'pay more than the legal rate of interest. Such complaint at the . most shows merely a breach by the defendant of his agreement to make the loan.
    To constitute usury it must appear that there was an intention on the part of the lender to lend at a usurious rate of interest and on the part of the borrower to accept the usurious terms proposed by the lender and the essential facts must be pleaded.
    A written contract lawful on its face may be shown by parol to be tainted with usury.
    Appeal by the defendant, Ullman B. Soule, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered. in the office of the clerk of the county of New York on the 14th day of March, 1911, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’s demurrer to. the complaint.
    
      Charles F. Leining, for the appellant.
    
      Louis S. Posner, for the respondent.
   Laughlin, J.:

The complaint contains two counts for the same relief, which is the cancellation of a certain agreement in writing made between the plaintiff and one Albert Graf, as parties of the first part, and the defendant, as party of the second.part, on the 3d day of September,’ 1909,. on the ground that it was usurious and void, and Of a confession of judgment, and a judgment entered thereon, pursuant to said agreement. The • defendant demurred separately to each count upon the ground that facts sufficient to constitute a cause of action are not stated therein.

It is alleged that since the making of the agreement and prior to the commencement of the action, said Albert .Graf died intestate and left no property; that letters .of administration have not been issued on his estate, and that the plaintiff is his sole heir at'law and next of kin.

The agreement provided, among other things, that the defendant should advance and pay over to the plaintiff and said Graf the sum of $1,150, which amount they agreed to repay to the defendant within one year with interest at the rate of six per cent per annum. Five hundred and eighty dollars and nine cents of this amount was to' be paid on the execution and delivery of the agreement, and the balance in weekly payments of $15 each. The agreement recites the acknowledgment of the receipt by the plaintiff and said Graf of the first payment which was to be made concurrently with the signing of the agreement.

The plaintiff, in the first count, alleges that at the time of the execution of the agreement, the defendant paid over only the sum of $150, and that at his request at that time the plaintiff and said Albert Graf signed and delivered to him a receipt for $580.09, the amount of the first payment provided for in the agreement, and that the defendant thereafter made payments to the plaintiff and said Alfred Graf under said agreement, amounting, with the first payment of $150, to the sum of $755.91, but did not pay the balance of the amount agreed to be paid over as the first payment. It is then alleged that the loan “ was usurious and void, and that it was the purpose and intention ” of the defendant to compel the plaintiff and said Graf to pay more than the legal rate of interest. The second count realleges by reference to the allegations in the first count, and further alleges the circumstances which necessitated the making of said agreement by the plaintiff and said Graf, which it is alleged were known to the defendant. It is therein alleged that the loan was obtained for the purpose of placing said Graf, who was the plaintiff’s brother, who was an attorney and counselor at law, in whom plaintiff trusted and on whom she relied, in a sanitarium and caring for him therein. We fail to see the bearing these allegations in the second count have on the right of the plaintiff to have the agreements and judgment canceled. In neither count is it alleged that there was any agreement between the plaintiff and her brother and the defendant that the defendant was not to advance the entire amount of the loan for which the agreement provided, nor is it alleged that it was agreed or understood that he was to retain any part of it for the use of the money or for any other purpose. The allegations fail to show a usurious agreement. At most the plaintiff shows a breach of the agreement on the part of the defendant ■ in failing to advance to the plaintiff and her brother the amount which he agreed to loan and advance; but for that they have a. remedy by action to enforce the agreement, or to have the judgment which they confessed reduced so that it will stand as security only for the amount actually loaned. We, however, deem the law well settled in this jurisdiction that in order to constitute usury it must appear that there was an intention on. the part of the lender to loan at a usurious rate of interest, and on the part of the borrower to accept the usurious terms proposed by the lender, and the essential facts must he pleaded. (Orvis v. Curtiss, 157 N. Y. 657; Chapuis v. Mathot, 91 Hun, 565; Morton v. Thurber, 85 N. Y. 550; Rosenstein v. Fox, 150 id. 354; Myers v. Wheeler, 24 App. Div. 327; affd., 161 N. Y. 637;. National Bank v. Lewis, 75 id. 516; Laux v. Gildersleeve; 23 App. Div. 352.)

Undoubtedly the rule is, as claimed by counsel for the respondent, that the written agreement made by the parties is not conclusive on the question' as to whether the contract was usurious, and that parol evidence may be given to show that the transaction is tainted with usury, notwithstanding the fact that the writing would indicate that it was lawful. (Mudgett v. Goler, 18 Hun, 302; Orvis v. Curtiss, supra; 17 Cyc. 700; 29 Am. & Eng. Ency. of Law [2d ed.], 461.) The difficulty with the plaintiff’s case is that facts showing the making of a usurious agreement resting in parol or otherwise are not alleged.

It follows, therefore, that the interlocutory judgment should he reversed and the demurrer sustained, with leave to the plaintiff to amend- on payment of costs of the appeal and of the demurrer.

Ingraham, P. J., McLaughlin, Clarke and Miller, JL, concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to’plaintiff to amend on payment of costs.  