Case Name: William A. Lewis, App'lt. v. Charles Barton, App'lt, and Helen F Barton et al., Resp'ts
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1887-06-07
Citations: 8 N.Y. St. Rep. 546
Docket Number: 
Parties: William A. Lewis, App'lt. v Charles Barton, App'lt, and Helen F Barton et al., Resp'ts.
Judges: 
Reporter: New York State Reporter
Volume: 8
Pages: 546–548

Head Matter:
William A. Lewis, App'lt. v Charles Barton, App'lt, and Helen F Barton et al., Resp'ts.
(Court of Appeals,
Filed June 7, 1887.)
1. Usury—Pleading.
In the foreclosure action the answer alleged that it was agreed that plaintiff should loan defendant $8,000, and transfer three notes amounting to $1,500, upon receiving defendant’s note for $5,000, which was done;, that the mortgage sought to be foreclosed was collateral security to such note. Also, that the transaction was usurious, and in violation of the statute. Held, suffi cient, although lacking'in precision; that the usual rules for construction of pleadings apply as well to an answer of usury as to one setting up any other defense.
3. Same.
That the defense of usury in the answer was not inconsistent with the admission of the averments in the complaint.
8. Same—Estoppel.
Plaintiff claimed that he bought the $5,000 noteas business paper, partly upon the affidavit of Barton, the mortgagor, that it was given for full consideration, and was subject to no defense of “want of consideration, usury or otherwise.” The special term believing that plaintiff had notice that it was accommodation paper, held, that the affidavit of Barton constituted no estoppel against his setting up usury; but the general term reversed the judgment, on the ground that plaintiff had no notice. Held, that as it does not appear from the order of reversal that it was made on the facts, the court must presume that it was on questions of law only, and on those it cannot stand.
These are cross-appeals from judgment of supreme court general term, fifth department, correcting the judgment of the court below so as to reverse the judgment against Charles Barton, and granting him a new trial, and affirming the judgment against the others. The action was one of foreclosure, the defense usury, and an extension of time to pay, made to the creditor without consent of the sureties.
A judgment entered on the decision of Mr. Justice Rumsey, at the Monroe February equity term for 1883, sustaining the defense of usury to the bond and mortgage set forth in the complaint, having at general term been reversed as to defendant Charles Barton, and a new trial ordered as to him, and affirmed as to the other defendants, the said Barton appeals to this court from as much of said order as grants a new trial as- to him,, and plaintiff appeals from so much thereof and from the judgment entered thereon as affirms said judgment as to the other defendants.
J E. Roe, for pl’ff, George Yoeman, for def'ts
Reversing 85 Hun, 666, mem.

Opinion:
Andrews, J.
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 applied as well to an answer of usury as to one setting up any other defense. National Bank 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 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 indorsers 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.