Newman v. Adelsperger

(after stating the facts). It is the first contention of plaintiff, appellant, that a different conclusion should have been reached by the learned circuit judge because there has been a complete and total failure of consideration for plaintiff’s agreement to pay the commission or the notes evidencing that promise. A critical examination of the contract between the plaintiff and Bradford and Riley, viewed in the light of the testimony in the case, convinces us that defendants never secured for plaintiff a contract with Bradford and Riley by the terms of which they were definitely, and at all events, bound to loan to plaintiff the $20,000. The contract in evidence recites that Bradford and Riley shall place in escrow the $20,000—

“according to the terms and conditions of a certain contract executed by and between the said parties of the first part and S. W. Straus & Co.”

The testimony is clear and undisputed that no such contract between Bradford and Riley and Straus & *693Co. was executed at the time plaintiff entered into his ■contract with Bradford and Riléy. It is evident that it was in contemplation of the parties that such a contract would thereafter be entered into, but nowhere in the contract does plaintiff assume any responsibility with reference to such contract. He does not agree to secure the assent of Straus & Co. to such terms as Bradford and Riley might impose. Bradford and Riley were obligated by the terms of the contract to deposit the money for use only after the building had reached a point when $20,000 was sufficient for its completion. It is in evidence that Straus & Co. did not consent to the making of the deposit upon the terms contemplated in the contract between plaintiff and Bradford and Riley. It seems clear, therefore, that defendants never secured from Bradford and Riley a contract for the loan of $20,000 which the plaintiff could enforce, and, if this is true, defendants never earned the commission for which the $2,500 worth of notes were given them by plaintiff. It is urged on behalf of the plaintiff that the two contracts read together are tainted with usury and therefore unenforceable by any of the parties. The statute, section 5998, 2 Comp. Laws 1915, does not make such contracts unlawful and void or even voidable, but penalizes the lender by denying him the right to collect any interest upon his loan.

The conclusion we have reached, however, with reference to the first contention made by plaintiff renders it unnecessary to critically examine these contracts. We are of opinion that there was a total failure of consideration for the notes given and that the decree of the court below should be reversed and a decree entered in this court according to the prayer of the bill, with costs of both courts.