Fed. Bond & Mortg. Co. v. Burstein
Decision Date | 22 March 1923 |
Docket Number | No. 69.,69. |
Citation | 192 N.W. 549,222 Mich. 88 |
Court | Michigan Supreme Court |
Parties | FEDERAL BOND & MORTGAGE CO. v. BURSTEIN et al. |
OPINION TEXT STARTS HERE
Error to Circuit Court, Wayne County; Frederick J. Mayne, Judge.
Action by the Federal Bond & Mortgage Company against Isadore Burstein and another. Judgment for plaintiff, and defendants bring error. Reversed, and new trial ordered.
Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, and STEERE, JJ.Guy A. Miller, of Detroit (Charles Bowles, of Detroit, of counsel), for appellants.
Stevenson, Carpenter, Butzel & Backus, of Detroit (Samuel R. Williams, of Detroit, of counsel), for appellee.
The defendants owned certain real estate in the city of Detroit and were desirous of erecting thereon an apartment building. They had some money, but not sufficient to finance the project. They applied to plaintiff to secure for them a mortgage loan of $125,000. The matter was talked over, an agreement reached, and a written contract made, one section being as follows:
In reliance on the agreement plaintiff went forward with the bond issue and sold, in advance of their issue, $23,100 worth and gave interim certificates. After a considerable time and money had been expended, defendants, by reason of certain disagreements, refused to execute the mortgage and repudiated the contract. By reason of this refusal plaintiff was obliged to repurchase the interim certificates at a premium of 1 per cent. and make payment of interest which had accrued on the certificates. To compensate it for its loss, plaintiff brought this suit and recovered at the hands of a jury the sum of $8,750.
1. The defense in the main was that plaintiff was a money loaner, and that the provision for services to be rendered defendants in the erection of the building and looking after the payments for material and labor was a mere subterfuge for the purpose of exacting and collecting an illegal rate of interest on the loan. The written contract provided for a charge of 8 per cent. for procuring the mortgage loan and rendering certain services in connection therewith. Considerable testimony was taken bearing on this question. We are not impressed with defendants' claim in this respect. Plaintiff, like many other companies of its kind doing business to-day in the large cities, assumes the attitude in the contract of an agent of defendants to float a mortgage loan with itself as trustee. For its services in connection with the matter it charged 8 per cent. of the loan. This may have been more than the services were worth, but we see nothing in the contract which leads us to conclude that the agreement was a usurious one, or that plaintiff posed in the contract in the attitude of a money loaner. This method of raising money to finance large and expensive structures in the cities has become so common that we may take notice of the relative position of trust company and client in deals of this character. It will not be necessary, however, for us to dwell further upon this phase of the case, as the court submitted defendants' theory of usury to the jury, and they found against their contention.
2. While there are some other questions raised, we think...
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...that he was advised that he had a right to do this. This leads us to infer that the holding of this court in Bond & Mortgage Co. v. Burstein, 222 Mich. 88, 192 N. W. 549, is being misconceived. It was decided in that case that the service which the plaintiff company undertook to render in d......
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