Stein v. Swensen

CourtSupreme Court of Minnesota (US)
Citation49 N.W. 55,46 Minn. 360
PartiesSTEIN v SWENSEN ET AL.
Decision Date20 June 1891

OPINION TEXT STARTS HERE

(Syllabus by the Court.)

1. The question is of usury in a loan, and extension thereof, by plaintiff acting through his general agent to loan money to V. & Co. A writing signed by the borrower, authorizing him to negotiate the loan and referring to extensions, was proved. Held competent to prove an oral contemporaneous agreement in respect to extensions and commissions.

2. Also,held proper to prove the general manner in which the agent transacted the business of his principal in loaning money, as that he ordinarily used a certain kind of blanks, made loans for only one month at a time, and extensions for only one month at a time, and charged commissions of a percentage on the amount upon each loan and extension.

3. The principal is presumed to know the general manner in which his general agent transacts his business.

4. If the principal either authorizes or sanctions the taking for the use of money loaned by his agent of a sum in excess of the lawful rate of interest, even for the agent's own benefit, the principal is chargeable with usury.

5. The taking by the agent of a sum, in addition to the lawful rate, if exacted by and paid to him bona fide as compensation for his services, and not for the use of the money, will not make the loan usurious, even though the sum be unreasonable as compensation. But its unreasonableness is evidence, of greater or less weight, as it is more or less unreasonable, that it was taken in part at least for the use of the money, and that requiring it as compensation was only a cover.

6. Where a party has taken in the cause the deposition of a witness, he cannot claim the right, on the ground of the witness' absence from the state, to prove his testimony on a former trial of the issues.

7. Failure of a witness to recollect the particular facts, short of mental imbecility, will not justify proving his testimony on a former trial.

Appeal from district court, Hennepin county; SMITH, Judge.

Selden Bacon, for appellants.

Simeon Meyers, for respondent.

GILFILLAN, C. J.

This case was here once before on an appeal from an order denying a new trial after a verdict for defendants, and is reported in 44 Minn. 218,46 N. W. Rep. 360. Reference is made to the opinion therein reported for a general statement of the case. After a second trial, ending in a verdict for the plaintiff, this appeal is brought from an order denying defendants' motion for a new trial. The assignments of error are very numerous, but they may be referred to comparatively few propositions.

The loans were made in behalf of plaintiff, a non-resident of the state, by his agent, Henry Stein, doing business in Minneapolis, to Vaughan & Co., the assignors in insolvency of one of the defendants. The authority of Henry Stein to act in behalf of the plaintiff was shown by a letter of attorney, from which it appears that the former was vested with full power,without any restriction, to loan and collect money for plaintiff; in other words, to carry on the general business of a money lender. Henry Stein was a general agent, in the sense that all his acts, within the general scope of his powers in that business, are presumed to be the acts of the plaintiff. The two loans in question were, respectively, for $500 and $300, each for one month, the full interest which parties may stipulate being reserved in each note. There is no dispute that Vaughan & Co., at the times of making the loans, also paid the agent in the case of the first loan $15, and of the second $9; and also paid him similar sums on subsequent renewals or extensions, for 30 days at a time, of the notes. The defendants claim that the $15 and $9 so paid the agent, though paid nominally as compensation to him for services rendered by him for the borrower, such as he had a lawful right to charge for, was in truth paid as part of the consideration for the use of the money, and that the extensions were made pursuant to the original agreement for the loans, and as a means of evading the statute. The plaintiff, on the other hand, claims that the sums so paid to the agent were bona fide paid, solely as compensation for services rendered the borrower, and that at the times of making the loans there was no understanding that there should be extensions. These opposing claims present the main questions of fact. On the trial the notes were introduced in evidence, and on each was indorsed with a rubber stamp the extensions of it. It does not appear that the agent did anything else in the matter of the extensions than to impress these indorsements on the notes, which could hardly be deemed a service rendered the borrower, any more than an agreement for the extensions (agreement for forbearances) could be regarded a service for which a charge could be made. The defendants introduced an instrument signed by the borrower, dated the same day as the first note, and in these terms: “Agent's authority to Henry Stein, Money Broker, 324 Nicollet avenue. I, H. C. Vaughan, hereby authorize and employ Henry Stein to negotiate a loan for me on chattel mortgage security for the sum of five hundred dollars, for the period of one month from date hereof, with interest thereon at the rate of ten per cent. per annum, and agree to pay him as compensation therefor fifteen dollars; and also agree to pay him --- dollars for securing an extension for said loan for each and every month after maturity.” On the examination of Vaughan, a witness for ...

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    ...on trial, either by deposition or in person. 20 Am. Jur. 589; 3 Jones's Commentaries on Evidence (2 Ed.), pp. 2176, 2177; Stein v. Swensen, 49 N.W. 55; 22 C.J. 432; McFarland v. U.S. Mut. Acc. Assn., 124 Mo. 204, 27 S.W. 436; State v. Coleman, 199 Mo. 112, 97 S.W. 574; Vest v. S.S. Kresge C......
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    ...the case on trial, either by deposition or in person. 20 Am. Jur. 589; 3 Jones's Commentaries on Evidence (2 Ed.), pp. 2176, 2177; Stein v. Swensen, 49 N.W. 55; 22 C. J. McFarland v. U.S. Mut. Acc. Assn., 124 Mo. 204, 27 S.W. 436; State v. Coleman, 199 Mo. 112, 97 S.W. 574; Vest v. S. S. Kr......
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