Opinion
May, 1896.
Lyman W. Reddington, for respondent.
George Putnam Smith, for appellants.
This action is brought against the defendants, members of a copartnership, as indorsers of a promissory note made by a certain corporation and transferred before maturity, and for value, to the plaintiff, the defendants' firm being the payee of the note.
The instrument in suit was received by the plaintiff in renewal of a note also made by this corporation and the defense was usury, based upon the fact that the plaintiff's agent personally received a payment over and above the amount of interest, or rate of discount, due upon the renewal.
That this transaction did not amount to an agreement for the receipt of usury cannot well be in doubt, in view of the fact that the evidence is entirely in favor of this payment having been made in the nature of a gratuity to the agent or a commission for procuring forbearance upon the note renewed. Condit v. Baldwin, 21 N.Y. 219; Estevez v. Purdy, 66 id. 446; Van Wyck v. Watters, 81 id. 352. Furthermore, since the note was that of a corporation, usury was not a defense open to it or to the indorsers. Stewart v. Bramhall, 74 N.Y. 85.
The distinction sought to be made by the appellants that the corporation was an accommodation maker, and that the note practically took inception from the indorsement, cannot be adopted. Whatever the value of this proposition might be in general, we cannot say from the evidence in this case that the corporation was an accommodation maker, a remarkable position in any event for a corporation to assume, and the presumption is that the note was given for value.
Moreover, the evidence is that Breck, the partner negotiating the instrument, informed the plaintiff's agent that it was business paper, and the trial justice was authorized in finding that this representation controlled the transaction. The representation, acted upon in good faith, estopped the indorsers from claiming the contrary. Mason v. Anthony, 3 Keyes, 609.
The record contains sufficient evidence to charge the defendants with liability upon the indorsement made by their partner, Breck, irrespective of the secret limitations upon his powers, and we fail to see how the justice could have escaped determining the cause submitted to him in favor of the plaintiff.
The contention that the recovery should have been only in the actual amount paid for the original note, $930.78, with interest, instead of $1,000, the face of the note in suit, is not well founded.
True, this action is between the purchaser of the note and her indorser, the vendor, and thus should not result in a recovery of a sum greater than was paid as consideration for the sale with interest (Ingalls v. Lee, 9 Barb. 647; Phillips v. Mackellar, 92 N.Y. 34), but the consideration for the note in suit was the cancellation of a note of equal value, enforceable on its face against the maker, at least, for that amount, and it is not for this court, nor was it for the court below, to speculate as to the probability of its payment at, or enforcement after, maturity, if it had not been canceled.
No reduction, moreover, should be made on account of the payment of $65 made by Breck upon delivery of the note in suit and the cancellation of the original note. Of this sum $20 was paid by check made to the plaintiff's order and intended to meet the legal rate of discount, and the remainder was knowingly paid as a gratuity or commission to another individual, personally, and was not in the least a part of the transaction with the plaintiff.
The judgment should be affirmed, with costs.
DALY, P.J., and McADAM, J., concur.
Judgment affirmed, with costs.