Olmstead v. New England Mortg. Sec. Co.

• Decision Date: 07 July 1881
• Citation: 9 N.W. 650,11 Neb. 487
• Parties: WILLIS A. OLMSTED AND MARY E. OLMSTED, PLAINTIFFS IN ERROR, v. THE NEW ENGLAND MORTGAGE SECURITY CO., DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

9 N.W. 650

11 Neb. 487

WILLIS A. OLMSTED AND MARY E. OLMSTED, PLAINTIFFS IN ERROR, v. THE NEW ENGLAND MORTGAGE SECURITY CO., DEFENDANT IN ERROR

Supreme Court of Nebraska

July 7, 1881

ERROR to the district court for Butler county. Tried below before POST, J.

Phelps & Thomas, for plaintiff in error, cited 11 Central Law Journal, 203. Clark v. Sisson, 22 N.Y. 312. Tyler on Usury, 421. Philo v. Butterfield, 3 Neb. 259. Cheney v. White, 5 Neb. 261. Cheney v. Eberhardt, 8 Neb. 423.

D. G Hull and E. R. Dean, for appellee, cited Palmer v. Call U. S. Circuit Court of Iowa, Opinion by Judge Love. Tyler on Usury, 103, 156, 172. Condit v. Baldwin, 21 N.Y. 219. Dragnel v. Wigley, 11 East 43. Solastie v. Mellville, 7 Barn & Cress, 427. Coster v. Delwink, 8 Cowen 299. Smith v Marine, 21 N.Y. 219. Bell v. Day, 32 N.Y. 165. Baxter v. Buck, 10 Vt. 548. 16 N.J.Eq. 537. 44 Iowa 32. 45 Iowa 46, and the result summed up in 17 Albany Law Journal, 119.

OPINION

MAXWELL, CH. J.

This is an action to foreclose a mortgage on real estate. The defense is usury. The cause was referred to a referee, who found the issues of law and fact in favor of the defendant in error. A decree being rendered in its favor, the plaintiffs bring the cause into this court by petition in error.

It appears from the testimony that one A. W. Ocobock advertised in the newspapers that he was making loans in Butler and Dodge counties through one C. C. Cook. That the plaintiff in error, Willis A. Olmsted, applied to Cook for a loan, and was directed by him to Ocobock to see if the plaintiff's farm which was offered as security would be acceptable to the company. Ocobock sent an agent to examine the farm, who, being satisfied therewith, presented the following application for the loan to the plaintiff for his signature:

"Whereas I have this day employed the Corbin Banking Company to negotiate for me a loan of $ 400, for the term of five years, with interest at the rate of ten per cent per annum, upon a note and mortgage securing the same, which shall be a first lien upon my farm in Butler county, Nebraska. Now then if they shall succeed in negotiating said loan within thirty days, upon the usual conditions exacted by eastern money-lenders as to security, perfecting of title, insurance, etc., I agree to pay the said Corbin Banking Company the sum of $ 80, which shall be in full of their commissions and the commissions of those whom they employ to assist them in making said negotiations.

"WILLIS A. OLMSTED.

"DAVID CITY, NEB., Feb. 24, 1876."

The above was on a printed form, leaving only the amount, time, county, state, and name of the applicant to be filled out. This was accompanied by a printed form containing a minute description of the farm, which concluded as follows:

"The statements made in the above application and the supplement made herewith to the Corbin Banking Company are true, and are made by me to be used by said company as my agent in procuring me the above loan.

"WILLIS A. OLMSTED, Applicant.

"Dated DAVID CITY, NEB., Feb. 24, 1876."

Upon this application a loan of $ 350 was effected, a promissory note, of which the following is a copy, being executed by Olmsted:

"$ 350.00 SUMMIT P. O., March 27, 1876.

"Value received, on the twentieth day of March, 1881, I promise to pay The New England Mortgage Security Company or order three hundred and fifty dollars, with interest from date until paid, at ten per cent per annum as per coupons attached, at the office of the Corbin Banking Company, 61 Broadway, New York City. Unpaid interest shall bear interest at ten per cent per annum. On failure to pay interest within five days after due, the holder may collect the principal and interest at once.

"WILLIS A. OLMSTED."

This note had coupons attached, and was secured by mortgage to "The New England Mortgage Security Company," the interest being made payable at the office of the "Corbin Banking Company, New York City," on the first day of April of each year. Upon the execution of the note and mortgage, Olmsted was paid $ 250. In the spring of 1878 he received from Ocobock the following:

"W. A. OLMSTED, Summit:

"Dear Sir--Your interest amounting to $ 35 will be due at the office of The Corbin Banking Company, 61 Broadway, New York City, April 1, 1878.

"It is important that you should make prompt payment, as you will see by enclosed circular.

"Respectfully Yours,

"A. W. OCOBOCK.

"Are your taxes paid?"

This letter is on the same sheet with the circular referred to, and is printed, except the names of Olmsted and Ocobock, and there is printed in red ink across the face of the same the following:

"If the amount is sent to me to forward, an additional charge of fifteen cents is made to cover exchange.

"A. W. OCOBOCK."

The circular referred to is as follows:

"THE CORBIN BANKING CO.

"NEW YORK.

"Dear Sir--Please say to parties having interest payable at this office on a day certain, that their money is due here on that day, and to save costs must be here.

"When not paid promptly we shall return to the owners, and they will send to an attorney for foreclosure. The five and thirty days' delay named in notes relates to the right to collect the principal sum, and does not prevent a foreclosure for non-payment of interest. As soon as a bill is filed the attorney's fees accrue, and when debtors will not take care of their interest at maturity they cannot complain if a suit and heavy costs follow.

"Respectfully Yours,

"A. CORBIN, President."

Two other circulars of similar import from the Corbin Banking Co. were introduced in evidence. All the business both before and after the making of the loan appears to have been done by the Corbin Company. To show that the Corbin Banking Co. was not the agent of the defendant in negotiating the loan, the defendant introduced the deposition of Henry Saltonstall, who testified that he was president of the defendant, and that on or about the 27th day of March, 1876, the treasurer of the Corbin Banking Company offered him this loan, which after examination he agreed to buy, and on or about the 12th day of April of that year, paid for the same the sum of $ 350.00. He also testified that the defendant had no "agent or brokers at any place or places who act for said company in placing loans of money for it." Also that defendant had received no rebate, commission, or fee, nor had he any knowledge of "any commission, or fee of any kind paid or agreed to be paid."

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