Case ID: misc_77/html/0649-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Giegerich, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William H. Shape, Plaintiff, v. Robert L. Shape, George L. Bready and Edward A. Wilson, Individually and as a Co-partnership, Defendants.
    (Supreme Court, New York Special Term,
    September, 1912.)
    Pleading — answer — motion to strike out — usury.
    Where an answer alleges with sufficient certainty facts which amount to usury, the answer may not be stricken out as insufficient and frivolous for want of an allegation that the agreement was intentionally usurious.
    Motion to strike out as sham an affirmative defense set up in the answers of defendants.
    Eats & Sommerich, for plaintiff and motion.
    Putney, Twombly & Putney, for defendants Shape and Bready.
    Swan & Moore, for defendant Wilson, opposed.
   Giegerich, J.

The plaintiff seeks to strike out as sham an affirmative defense set up in the second paragraph of the answer of the defendants Eohert L. Shape and George L.Bready, and in the second and third paragraphs of the answer of the. defendant Edward A. Wilson, that the note in suit, which is the last of a series of notes, each in renewal of the other given in consideration of a loan of $10,000 made by the plaintiff to the defendants, was made and delivered upon the express understanding and agreement that the defendants were to pay to the plaintiff interest upon said loan of $10,000 at the rate of twenty per cent per annum and afterward at the rate of fourteen per cent per annum, and that the total amount paid to the plaintiff in pursuance of said agreement is $7,616.74. The affidavits submitted in support of the motion allege that the said answers are absolutely false and that the said affirmative defense is a sham defense and is interposed solely for the purpose of delaying the plaintiff in securing judgment on the promissory note of the defendants and enforcing such judgment; that the $10,000 in question was invested with the defendants and not loaned to them, as claimed by the defendants; that the said sum.was placed with the defendants to be invested by them under a guaranty that the plaintiff would derive twenty per cent profit, which was subsequently reduced to fourteen per cent; that such sum was placed with the defendants upon the express understanding that it was to be used in specific deals; that when the plaintiff placed money with them he received a promissory note and that when the deal terminated they would render an account to the plaintiff and ask permission to reinvest the fund in some other deal. The opposing affidavits deny that the facts set tip in the answers are false, but on the contrary allege that they are true. It is further alleged in the opposing affidavits that the loans made by the plaintiff to the defendants were evidenced by promissory notes for stated terms of three months and were renewed from time to time as the same became due; that by the terms of the agreement under which said notes were given the defendants agreed to pay, and did pay, interest at the rate of twenty per cent per annum thereon, and during the period from on or about' February, 1910, they agreed to pay, and did pay, interest at the rate of fourteen per cent per annum; that while all moneys received by the defendants from the plaintiff and divers others persons, from the point of view of the party making the loan, might be considered investments, and while the loans are frequently referred to in the letters as investments, in no instance was any sum of money received from a particular party invested separately, as such, in the name and for the benefit of the party from whom it was received; that the moneys were of course employed by the defendants, but they were employed in their own name, and for their own benefit, the parties making the loans receiving as compensation for the use of the funds interest at the rates above mentioned, and that the said rates of interest were paid by the defendants without regard to any profits which they made during the period covered by the terms of said notes or whether the defendants made any profits during such period. I do not think it has been made to appear by the papers submitted that the affirmative defense in question is a mere pretense set up in bad faith for the purpose of vexation or delay. The defendants’ answers are duly verified, and, as already shown, the opposing affidavits are contradictory of those filed on the part of the plaintiff. Under these circumstances the issues raised by the affirmative defense should not be tried on affidavits, but should be disposed of by a jury. Albany County Bank v. Rider, 74 Hun, 349; Central Bank v. Thein, 76 id. 571; Zimmerman v. Meyrowitz, No. 3, 77 App. Div. 329; Atkiengesellschaft Arnold B. Heine & Co. v. Newmark, 65 Misc. Rep. 51. In Zimmerman v. Meyrowitz, supra, it was held that an answer cannot he stricken out as sham unless its falsity be made to appear beyond a reasonable doubt. After considering all the papers submitted, I do not think that the falsity of the affirmative defense in the case at bar has been made to appear beyond a reasonable doubt. The plaintiff also contends that since there is no statement in the defendants' answer that the agreement is intentionally usurious the answer must be stricken out as insufficient and frivolous. It is not necessary, however, to allege in terms that the transaction was usurious ” or corrupt ” if facts which amount to usury are stated with sufficient' certainty. Miller v. Schuyler, 20 N. Y. 522, 524. That such facts are so alleged appears upon a mere reading of the allegations of the affirmative defense. Motion denied, with ten dollars costs to the defendants to abide the event.

Motion denied.