Opinion
Argued May 7, 1887
Decided June 7, 1887
J.E. Roe for plaintiff. George Yeoman for defendants.
We think the answer sets out with sufficient distinctness and accuracy the transaction constituting the alleged usury as proved on the part of the defendants, and that there was no essential variance. It alleges in substance that Briggs Co., the makers of the note to which the mortgage in question was collateral, applied to the plaintiff for a loan of $5,000 for nine months, and that it was thereupon agreed between them that the plaintiff would loan to Briggs Co., $3,000 for the time stated, and transfer to them three notes he then held against third parties, amounting in the aggregate to $1,500, upon receiving the note of Briggs Co. for $5,000, payable in nine months, with interest, and that the transaction was consummated as proposed between the plaintiff and Briggs Co., and the note of $5,000 given, indorsed by the defendant Barton and by John T. Briggs for the accommodation of the makers, and that the mortgage sought to be foreclosed was a further security to the plaintiff for the loan. The answer also alleges that the transaction was usurious and in violation of the statute There is some lack of precision and certainty in the averments in the answer, but the plaintiff could not have been misled in respect to the defense intended, or as to the circumstances relied upon to support it. The usual rule for the construction of pleadings applies as well to an answer of usury as to one setting up any other defense. ( Nat. Bk. of Auburn v. Lewis, 75 N.Y. 516.) The claim that there was no sufficient denial in the answer of the averments in the complaint, if well founded, furnishes no ground of error. The defense of usury was not inconsistent with the admission of the averments in the complaint, and as the case turned wholly upon that defense, it is unimportant that the defendants may have admitted what but for the existence of the usury would have constituted a cause of action. On the merits the evidence was conflicting. The plaintiff was sworn as a witness in his own behalf. He admitted that he advanced only $3,000 in money and $1,500 in notes for the note of $5,000 and the mortgage. It was not disputed on the trial that the note of $5,000 had its inception on its transfer to the plaintiff, nor that the defendant Barton was an accommodation indorser for the makers. But the plaintiff testified in substance that he bought the $5,000 note as business paper, believing at the time that it was such, and that he took it in reliance upon the credit of the parties to the paper and the mortgage of Barton, and also upon the certificate of the makers and indorser of the note and the affidavit of Barton, the mortgagor, executed contemporaneously with the note, that it was business paper, and was given for a full consideration, and was subject to no defense of "want of consideration, usury or otherwise." On the other hand evidence was given on the part of the defendants, tending to show that the plaintiff when he took the note and mortgage, had notice that the note was accommodation paper. Upon this ground the learned judge at Special Term held that the certificate and affidavit of Barton constituted no estoppel against his setting up the defense of usury against the mortgage. This was manifestly right upon the basis of the facts which the evidence of the defendants tended to establish. But the General Term, as appears from their opinion, reversed the judgment of the Special Term in favor of the defendant Barton, on the ground that the preponderance of evidence was in favor of the contention of the plaintiff that he took the note supposing it to be business paper, and without notice that Barton was an accommodation indorser, and that, therefore, Barton was estopped by his certificate and affidavit from defeating the mortgage on the ground of usury. But in the posture of the case on the appeal to this court, we cannot regard the reversal below as having been made on the facts, because this does not appear from the order of reversal, and we are bound to presume that the reversal was on questions of law only. On looking at the exceptions we find none upon which the order of reversal can stand. The question of pleading has already been considered. Exceptions were taken to findings of the trial judge that the transaction in its origin was a loan from the plaintiff to Briggs Co., upon security of the note and mortgage, and that the plaintiff when he took the note and received the certificate and affidavit of Barton, knew his relation to the note, and did not rely upon the truth of the representations contained therein, and various exceptions were taken to the admission and rejection of evidence. There was evidence, we think, to support the findings excepted to, and we can find no exception to the admission or rejection of evidence which presents any material error. Dealing with the case, therefore, as we must, as one involving questions of law only, our conclusion is that the order of the General Term should be reversed, and the judgment of the Special Term affirmed.
All concur.
Order reversed and judgment affirmed.