Case Name: Bernard Feldman, Respondent, v. Frederick J. McGraw and Michael Brennan, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 1 A.D. 574
Docket Number: 
Parties: Bernard Feldman, Respondent, v. Frederick J. McGraw and Michael Brennan, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 1
Pages: 574–576

Head Matter:
Bernard Feldman, Respondent, v. Frederick J. McGraw and Michael Brennan, Appellants.
Usury—Substituted securities — when usury is sufficiently pleaded.
In an action upon a promissory note for $650, the defendants alleged usury. Upon the trial it appeared that the lender, Edward Brennan, actually paid the maker only §37 in cash; that he returned to the maker his notes, one for §290, one for §240, and two checks, one for $38 and one for §50; that the §290 note was payable five days after September 21,1894; that the §240 note was payable three days after September 18, 1894; that the $33 check was dated on the 19th day of September, 1894; that the §50 check was dated September 24, 1894, the day when the §650 note was given up, and was handed by McGraw to the lender, for the express purpose of enabling the lender to return it to him immediately as part of the consideration of the §650 note.
The defendant McGraw claimed that the lender discounted the §650 note for the §50 and the usury taken upon the other notes. After having testified to the reservation of the $50, the defendants attempted to show usury in the other notes, but the evidence was excluded upon the ground that the facts sought to be elicited bad not been pleaded.
Held, that the ruling was erroneous;
That where a security tainted with usury was given up, and a new security was substituted, the substituted security was void;
That the answer having alleged that the lender reserved an unlawful percentage, amounting to $138, the defendants were entitled to prove usury in other transactions to the extent of the difference between the §50 directly taken and §138;
That the defendants were not required to plead the particulars attendant upon the reservation of the §88 additional to the §50 directly taken.
Appeal by the defendants, Frederick J. McGraw and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the '17th day of June, 1895, upon the verdict of a jury rendered after a trial at the New York Circuit; and also from an order hearing date the 14th day of June, 1895, and entered in said clerk’s office denying the defendants’ motion for a new trial made upon the minutes.
W. Tazewell Fox, for the appellants.
Ten FyoJt, dk Remington, for the respondent.

Opinion:
Barrett, J.:
This was an action upon a promissory note for $650. The defense was usury, the defendants averring that the lender exacted over twenty-one per cent upon the loan represented by the note, and that this exaction amounted to $138. It appeared upon the trial that the lender, Edward Brennan, actually paid McGraw in cash but $37 upon the transaction in question. The rest of the $650 was made up by his returning to McGraw the latter's obligations as follows: Two notes, one for $290 and one for $240; and two checks, one for $33 and one for $50. The $290 note was payable five days after the 21st of September, 1894. The $240 note was payable three days after the eighteenth of the same month. The $33 check was dated on the nineteenth of the same month, and the $50 check was dated on the very day when the $650 note was given — September twenty-fourth — and was handed by McGraw to the lender for the express purpose of enabling the latter to return it to him immediately as a part of the consideration of the $650 note. The defendant McGraw claimed that the lender discounted the $650 note for this $50, plus the usury on the other notes. He testified to the reservation of the $50, and then- attempted to show usury in these other notes. He commenced by asking the question whether the lender had discounted the $290 note prior to the twenty-fourth of September, and what was the amount in cash he gave for it? This was objected to generally, the plaintiff's counsel specifying no ground. The learned trial judge sustained the objection, stating that he did so upon the ground that the fact sought to be elicited had not been pleaded, and the defendants excepted to the ruling. We think the court erred in excluding the question. The defendants had a right to show that the $650 note was not only tainted with the usurious reservation of $50, but that it was a substitute for other notes which were also usurious. Where a security tainted with usury is given up and a new security substituted, the substituted security is void. (Treadwell v. Archer, 76 N. Y. 196; Stanley v. Whitney, 47 Barb. 588.) The plaintiff did not object to the question upon the ground that usury in the original notes had not been pleaded. His objection, as we have seen, was general. We think, however, that the plea was sufficient to entitle the defendants to prove the facts. They were not required to plead their evidence. The testimony, if allowed, might have shown the fact of a usurious agreement precisely as pleaded. The plea was that the lender reserved an unlawful percentage amounting to $138, that is $88 beyond the $50 directly taken. If the defendants had proved usury in the other transactions to the extent of $88, they would have proved the usury as averred. They were no more bound to state the circumstances attending the reservation of the $88 than the fact that the $50 was reserved by the check device. The particulars of the reservation of the entire sum of $138 was matter of evidence. We think, therefore, that the defendants should have been allowed to prove the entire transaction.
The respondent also claims that the defendants should have followed the question which was excluded by an offer to prove usury in the original notes. But they were not bound to make an offer. Nor was it necessary, in view of the ground upon which the learned judge placed his ruling, to follow up the excluded question with other questions tending in the same direction. Where the question is excluded because the fact sought to be proved is not pleaded, counsel surely need not multiply questions on the same head, nor incumber the record with useless offers.
The judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.
Yah Brunt, P. J., Rumsey, Williams and Patterson, JJ., concurred.
Judgment reversed and new trial ordered, with costs to the appellants to abide event.