
    Hamlin Babcock, App’lt, v. John Stimmel, Resp’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed October 24, 1890.)
    
    Usury—Contract to avoid statute.
    Plaintiff being unable to complete a purchase of real estate, arranged with defendant for a loan of $15,000, for which he was to pay $1,250 for six months or double that amount for a year. Being informed that such contract was usurious, plaintiff sold to defendant his contract on an agreement that defendant should give the necessary mortgage, pay the vendor $11,500 and pay to plaintiff $3,500, and sell the premises to plaintiff at the end of six months subject to the mortgage at an advance of $1,250, with an option of another six mouths by the payment of another $1,250. In an action to restrain proceedings to remove plaintiff from possession and for a conveyance on the ground that the loan was usurious, plaintiff testified that the object of entering into the agreements was to avoid the effect of the statute against usury. Feld, that the fact that the money was to be paid directly to the vendor, without going through plaintiff’s hands, did not divest it of the attribute of a loan; that plaintiff was entitled to have the case considered and weighed by the court upon his evidence, although he was an interested party, and that a dismissal was therefore improper.
    Appeal from a judgment of the special term.
    
      Hamilton Odell, for app’lt; W. Bourlce Cochran and Wales F. ,Severance, for resp’t.
   Daniels, J.

The plaintiff became the purchaser of twelve lots of land situated on Eighty-eighth and Hinth streets, one hundred feet easterly of Avenue B. in the city of Hew York. The sale of them was made by James W. Smith as sole surviving administrator, with the will annexed, of the estate of John Haggerty, deceased. He had paid §240, the auctioneer’s fees, and ten per cent, upon the price of §34,400, and applied to the defendant to loan him the money to pay the down payment of $15,000, and to take the title as security for the loan, subject to a mortgage to be given upon the land for the residue of the purchase price. He was the only witness testifying upon these subjects during the trial. And he testified further that the defendant agreed to loan the money upon the terms that he should be paid $1,250 for it for the first six months; and the same amount for the second six months if he had the use of it for one year. Before the money was advanced the parties-met at the office of the defendant’s counsel, who informed them that these terms were usurious, and the business was entrusted to him and the plaintiff’s counsel to place it in a condition to avoid this objection; and a written instrument was then drawn which was considered to have that effect, by which the plaintiff, in terms,, sold the lots with the house standing upon them, and the contract for their purchase, to the defendant for the sum of $34,440, and the defendant agreed to give the bond and mortgage required by the contract with Smith for $19,440, and to advance $11,500 in cash, to make with the sum of $3,500 paid to the plaintiff the cash payment of $15,000. The defendant, by one of the instruments, agreed, at the expiration of six months, to sell and convey the same property to the plaintiff, subject to the mortgage, to be, and which, 'in fact, was given to Smith, for the price of $35,690, including that mortgage. The sum of $19,440 was to be satisfied by taking the property subject to the mortgage, and the residue paid in money on the delivery of the deed. The agreement also secured the option of another six months to the plaintiff by the payment of a further amount of $1,250.

These terms were modified by a further agreement made on the 17th of July, 1884, the next month, by which the plaintiff obligated himself to pay $36,940 for the property at any time when he should buy it during the year. On the 15th of July, 1885, a. deed executed by the defendant conveying the property to the plaintiff was offered to him, but he refused to receive it, for the ’reason that it would make him assume the mortgage given by the defendant to Smith, instead of being made subject to that mortgage, as it was agreed in the agreement it should be. And on the same day there was tendered on behalf of the plaintiff to the agent of the defendant having the deed a certified check for the sum of $16,346, which he refused to accept, but not for the reason that it was a check. The defendant afterwards instituted summary proceedings to remove the plaintiff from the possession of the land, which possession he became entitled to by the agreement for the nominal sum of one dollar. And the plaintiff brought this action to restrain the prosecution of the proceedings and to obtain a conveyance of the land from the defendant, alleging in support of it that the loan was avoided by the statute for usury. At the close of the plaintiff’s evidence, and without proof being given on behalf of the defendant, and without any formal .submission of the case, the defendant moved for a dismissal of the complaint, and it was thereupon dismissed by the-court, to which the plaintiff excepted.

In giving his evidence as a witness, the plaintiff testified that the object of entering into the written agreements was to avoid the effect of the law forbidding the taking of usury; that the loan was still to be made for him, and that the defendant should receive the same amount for the use of the money, being $1,250 for six months, and $2,500 for one year. This evidence tended to prove that the transaction was to be, and was a loan. And this received some corroboration from the evidence of the witness Wheaton, who stated that the defendant at one time was at the property, and said that he felt a little interest in it for he had made a loan on it to Mr. Babcock. The plaintiff had become bound by the agreement to, and he did make repairs upon the dwelling on the land, and he paid two instalments of interest on the mortgage for two periods of six months.

The case was not, therefore, so devoid of evidence as to present no question of fact to be decided by the court. But the questkgi was directly brought up, whether this was not a usurious loan. That was what - the" parties were in treaty for, and the defendant himself was satisfied that it should have that form, until he was advised that it would be usurious, and then it was changed in form. But that was the only change, for the same amounts were reserved to the defendant, and the same time allowed to the plaintiff, and the amount to be advanced remained the same; upon this evidence the court might very well have concluded as a matter of fact, as the plaintiff testified it was, that a loan only was intended, but to be so disguised as to evade and avoid the statutory consequence. The fact that the residue of the money, being the sum of $11,500, was to be paid directly to the vendor of the property, without going through the hands of the plaintiff, did not divest it of the attribute of a loan. And so it has been considered by the adjudged cases, Stoddard v. Whiting, 46 N. Y., 627; Fullerton v. McCurdy, 55 id., 637, but in the last of these cases the plaintiff failed for the reason that it was found as a fact that there had been no loan. Carr v. Carr, 52 N. Y., 251, and Horn v. Ketaltas, 46 id., 605, are in strict harmony with this view. And the absence of a direct stipulation to repay the money as a loan is by no me'ans conclusive that it was not a loan. Id., 611. But in.this case the evidence of the plaintiff is that it was a loan thoughout, the form of making it alone being changed by the written instruments.

It is true that clear and convincing evidence is necessary to deprive deliberate writings, executed by the parties, of their apparent effect. Nevius v. Dunlap, 33 N. Y., 676, 680; Erwin v. Curtis, 43 Hun, 292 ; 6 N. Y. State Rep., 116; Cadman v. Peter, 118 U. S., 73. And it is equally so that the plaintiff, being the interested party, was not positively entitled to have his statements accepted as the truth by the court. But he was still entitled to have the case, depending as it did on his evidence, considered and weighed by the court, which might accept it as sufficiently proved to entitle him to maintain the action, although it was in conflict with the language of the writings themselves. But that was not accorded to him, for it was dismissed on account of the insufficiency of the evidence assuming it to have been correctly given. That this is the effect of such a dismissal, which can rarely be justified m an equity case, as nonsuits were only sanctioned by the practice in actions at law, was held in Scofield v. Hernandez, 47 N. Y., 313, and Place v. Hayward, 117 id., 487 ; 27 N. Y. State Rep., 710. And it has been there held that no other finding of facts can afterwards be made than such as will present the grounds of the dismissal. And they -were, that the inferences supported by the evidence would not sustain the action. For that reason the findings that there was no usurious or other loan, and no intent existed to evade the statute against usury, cannot now be acted upon as important. For by the dismissal it was necessarily held that the evidence was too defective and inconclusive to be considered. And if it was not wholly unreliable, then the court should have examined and weighed it, to ascertain its proper effect in the way of maintaining the action.

That it rested upon a harsh statute did not deprive the plaintiff df this right, and in the disposition of the appeal he is entitled to the benefit of all just inferences which the evidence given would, have afforded. If the court had considered it, instead of dismissing the complaint when the plaintiff rested, it might have concluded that the testimony of the plaintiff was truthful and the action could therefore be maintained. That consideration might, in the end, have also been adverse to him, but he was entitled to the benefit of whatever advantage might have resulted from these chances. That benefit he has not had, and the judgment should be reversed and a new trial ordered, with costs to the plaintiff to abide the event.

Van Brunt, P. J., and Brady, J., concur.  