Case Name: The Chatham Bank, Plaintiffs and Respondents, v. Frederick B. Betts, (who was impleaded with Archibald Thomas et al.,) Defendant and Appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1862-11-29
Citations: 9 Bosw. 552
Docket Number: 
Parties: The Chatham Bank, Plaintiffs and Respondents, v. Frederick B. Betts, (who was impleaded with Archibald Thomas et al.,) Defendant and Appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 22
Pages: 552–558

Head Matter:
The Chatham Bank, Plaintiffs and Respondents, v. Frederick B. Betts, (who was impleaded with Archibald Thomas et al.,) Defendant and Appellant.
1. Where P. being asked by T. to discount an accommodation note, replied .he had no money," and being asked to procure it to be discounted, took it, indorsed it, and procured the plaintiffs to discount it for him, at lawful interest, and the plaintiffs credited him with the amount; but on his paying over the proceeds to T. he deducted a large percentage; Held, that these facts fully warranted the Jury in finding that there was no usury in the transaction between P. and T.
2. Where usury is the defense, the plaintiff has a right to have the question whether there was a corrupt agreement, submitted to the Jury; especially where it is to be made out from circumstances, and must be determined, in a great degree, from the intent of the parties.
(Before Moncrief, Robertson and Monell, J. J.)
Heard, October 6;
decided, November 29, 1862.
Appeal from a judgment entered on a verdict for the plaintiffs, and also from an order denying a new trial.
The action was brought by the Chatham Bank against Frederick B. Betts, Archibald A. Thomas and Samuel B. Potter. Betts alone defended the action. The facts are fully stated in the opinion of Bobertson, J. The plaintiff having recovered a verdict, the defendant moved, at Special Term, in May, 1862, for a new trial. The motion was denied, the following opinion being rendered:
Robertson, J. This is a motion for a new trial, upon a case made upon the ground that the verdict was against evidence. The action is on a promissory note drawn by the defendant Betts, in favor of the defendant Thomas, indorsed by him and the defendant Potter. It was for $2,350, payable three months after date at the Mechanics’ Bank, and dated on the 18th of September last. Two defenses are set up in the answer: one, that the suit is prosecuted for the benefit of the defendant Potter, who is the real party in interest, and the other is, that the note in suit was given solely for the benefit of Thomas, without any consideration, and that it was discounted by Potterupon an usurious agreement with the defendant Thomas, by which the former reserved the sum of $150 as extra interest.
On the trial, the defendant Thomas testified that the note in suit was given to realize the amount for Betts’ benefit. The defendant Potter testified that Thomas called upon him repeatedly with the note, asking him to discount it, to which the witness replied, he had no money; when the former said, “You can get it discounted;” and repeatedly stated he must have the money; he did not state for whose accommodation it was; the witness refused to do it. Thomas said, “You can get it done at the bank.” The former finally promised to see if he could get it done at the Chatham Bank; he did call at the bank, villose President said they were short. Thomas again called, and the witness again told him he did not think he could get it discounted, but was finally prevailed on to take the paper, and he offered it for discount. He asked the cashier if he would discount a piece of paper for him, who referred him to the President, who showed some disinclination to take it. Potter again told Thomas he did not think he could get the paper discounted. Prior to Potter going to the plaintiffs, on the. 5th of October, he said to Thomas, “ If I can get this discounted, how much do you want to draw; my account is about drawn out in the bank?” and the latter said, “I must have $2,000.” On the 4th of October, the President said it would be passed to Potter’s credit; on the morning of the 5th it was discounted, and Potter gave Thomas a check for $2,000, and on the 21st, a check for $208; the eight dollars had nothing to do with a prior transaction. In regard to the commission Potter was to charge, there was, as he testifies, “ not the first syllable said about two and a half or three per cent, or any discount named.” When the second check was given, Potter testifies not a word was said about the balance. Thomas asked for a check for the balance, and the witness gave him one for $208, and no words passed. On cross-examination this witness testified, that he had previous notes of Betts, indorsed by Thomas, which he had discounted at the rate of two and a half per cent per month, and gave Thomas the money.
Upon this testimony, it is perfectly clear that Potter acted as the agent of Thomas and Betts in getting the note discounted; and that if he failed in delivering the whole proceeds received by him, whether the amount retained by him was understood to be a commission or not, for his trouble and responsibility in indorsing the note, it did not make the no.te usurious in the hands of the plaintiffs, who discounted it for Potter, at the legal rate, as appears by the testimony of their President, (Hayden.) He testified that the bank discounted this note for Potter, and on his credit, placing, on the 4th of October, the sum of $2,315-n& to his credit. Potter borrowed the money of the bank; prior to that time he had only a small balance of $200 or $300 to his credit; when the note was discounted and the money placed to Potter’s credit, it was his money; after the note was protested, money of Potter’s was left in the bank undrawn for; it was the plaintiff’s custom, in such case, not to allow it to be drawn for; the note was not charged back to him or check presented for it; there was an implied understanding, although no positive arrangement, that the money should remain until the note was paid; the note was discounted at seven per cent.
To this is opposed the testimony of Thomas, who states that he got the note in suit without paying anything for it, from the defendant Betts, to realize the amount for the benefit of the latter, and a day or two after took it to Potter and asked Mm to discount it for Mm, to take it and see what he couM do for Mm; nothing was then said about the rate; he said he couM not do it at less than two and a half per cent per month, and the witness left the note. This witness states he did not say anything; he left the note with Potter to get the money; he got $2,000 on the 5th of October, and the balance of $200 on the 20th, eight dollars for another transaction being included in the check; Potter deducted $150 for the three months, and took the note at $2,200; Thomas deposited the money he got from Potter in the bank where he kept an account, and passed it to Mr. Betts within a day or two; the transaction was on Betts’ account. On being cross-examined, he stated that he asked Potter .do take the note and try what he could do with it. After receiving the $2,000, he asked for the balance of that note, and received the check for $200; “Potter said he would not do it less than the rate of about two and a half per cent per month; that it would not pay him to go to the banlc to get the money and get it discounted.” He admitted that Potter gave as a reason for not discounting the note, that he had no money and could not do it, and that he told him he got the money he gave him out of the Chatham or Grocers’ Bank; the witness .used the money he got for a little while, and paid it in different amounts to Betts; he admitted that Potter told him the bank was not ready to discount it.
This testimony does not vary the transaction. Thomas knew Potter did not have money to buy the note; that he went to get it discounted; nay, he asked him to take it and see what he could do with it; he waited after he was informed the bank had been applied to, and delayed discounting it until it would agree to do so; did not object when Potter told him that less than two and one-half per cent would not pay him to go to the bank and procure the discount; received the checks of Potter drawn on the bank by whom it was discounted, and obtained thereby the proceeds of such discount; Potter did not pay any money except the proceeds of the discount, which was made by crediting him with the amount for which he drew the check in favor of Thomas. There is no room for the pretense, that Potter first discounted the note at an usurious rate, and then procured it to be discounted by the bank; nor that the 150 dollars was withheld, except to compensate him for the trouble of going there and getting it discounted, which involved the necessity of his indorsing the note.
There is not even a conflict of testimony in this case, except as to the mention of the rate of commission, which is denied by Potter, although mentioned by Thomas, and that does not affect the transaction. Even the worst possible inferences from Thomas’ testimony, would hardly show an intent to make the transaction usurious; the testimony of the other witnesses show it could not have been.
I do not find any error in the charge, or the verdict óf the Jury. The motion for a new trial must, therefore, be denied with costs.
The plaintiffs entered judgment on the verdict, and the defendant, Betts, now appealed both from the judgment and from the order refusing a new trial.
Ira D. Warren, for defendant, (appellant.)
Argued, that the verdict was not only against the weight of evidence, but against the undisputed facts of the case which render the note usurious and void, and a new trial should be granted; citing Catlin v. Gunter, (1 Kern., 368,) Clark v. Loomis, (5 Duer, 468,) Ib., (22 N. Y. R., 312,) Williams v. Storm, (2 Duer, 52,) Powell v. Waters, (8 Cow., 669,) Bank of Salina v. Henry, (2 Denio, 157,) Morse v. Cloyes, (11 Barb., 109,) The East River Bank v. Hoyt, (22 How. Pr., 478, and cases,) North v. Sergeant, (33 Barb., 350,) Cummings v. Morris, (3 Bosw., 560.)
D. M. Porter, for plaintiffs, (respondents.)
Cited Flint. Schomberg, (1 Hilt., 532,) Ryckman v. Cole man, (21 How. Pr., 404, affirmed on appeal at General Term.) Van Duzer v. Howe, (21 N. Y. R., 531,) Condit v. Baldwin, (Id., 219,) Gould v. Rumsey, (21 How. Pr., 97.)

Opinion:
By the Court—Monell, J.
I entirely agree with the learned Justice BoÍbertsoít, who heard and decided the motion at Special Term, that there is not even a conflict of evidence in this case, upon the question of usury, the only defense urged upon the argument of the appeal. The testimony fully warranted the Jury in finding that there was no usury in the transaction between Potter and the defendant. It is clear, I think, that Potter retained the sum. charged as having been taken for usury, as a compensation for procuring the note to be discounted at the plaintiffs' bank for Thomas. Such compensation being retained both as a commission for procuring the money, and as payment for lending the agent's credit is not usury. (Van Duzer v. Howe, 21 N. Y. R., 531.)
The verdict cannot be disturbed on the facts of the case. The only exception is to the refusal of the Judge to charge " that the facts in the case, as they are disclosed in the evidence, render the note usurious and void; and the defendant is entitled to a verdict." To have so charged would have been error.
Whether the note was tainted with usury, was a question of fact for the Jury, and it would not be proper for the' Court to take that question from the Jury, and pronounce upon it as a matter of law. The taking of usury must be in pursuance of a corrupt agreement, express or implied; and it is difficult to conceive of a case, tried before a Jury, where the Judge would be justified in depriving a party of the tight of having it passed upon by them, whether there was such corrupt agreement, especially; when it is to be made out from circumstances, and must be determined in a great degree, by the intent of the parties.
The question of fact was fairly submitted to the Jury, and they were instructed, that if they found such usurious agreement was made between Thomas and Potter, as was claimed by the defendant, they must find a verdict for the defendant.
For these reasons, and for those more forcibly and clearly expressed by the learned Justice who gave the opinion at Special Term, I am of opinion the judgment and order appealed from should be affirmed.
Judgment accordingly.