Payne v. Newcomb

Citations

• 100 Ill. 611
• 1881 Ill. LEXIS 152

Syllabus

<p>1. Agency—whether of borrower or lender of money. A loan agent who is required, to learn the situation of the property given in security for money loaned, and examine and ascertain the title, and who is liable to the lender for any loss he may sustain for any mistakes made in examining the title, or from over-valuation of the property, is the agent of the lender in making the loan of money, notwithstanding he is to be paid for his services by the borrower alone.</p> <p>2. Same—notice to principal that his agent is charging a commission on a loan effected by him. Where it is understood between a moneylender and a loan agent that the latter, in effecting a loan from the former, is to get his commissions from the borrower, as compensation for his services in examining the title to the property given in security, etc., the lender will be chargeable with notice of the commissions paid to his agent, the same as if paid directly to him, and by him paid to the agent.</p> <p>3. Usury—in commissions paid to agent. Where a loan of money is made through a loan agent for the highest legal rate of interest, under an arrangement between the lender and the agent that the latter is to impose upon the borrower the payment for his services in examining the title to the property given in security and ascertaining its value, and the agent deducts from the sum loaned a commission of five per cent, and a further commission of two and a half per cent for procuring an extension of time of payment, the exacting and payment of such commissions will render the loan transaction usurious.</p> <p>4. Same—when it may be deducted. Usury paid with the principal cannot be recovered back, but as long as any portion of the principal remains upon which the usurious interest accrued and was paid, such usurious interest may be deducted from or set off against the remaining principal, and this can not be prevented by a settlement between the parties finding the amount due, which includes usury.</p> <p>5