Court Opinion

ID: 3599384
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:46:14.632494+00
Date Added: 2024-06-11T13:58:03.934798
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 278 
Upon the trial, the defendant offered to give in evidence "the declarations and admissions of Reeve, the mortgagee, made previous to his assignment of the mortgage, in regard to the usurious character of the bond and mortgage." To this the plaintiff objected, the judge refused to receive the evidence, and the defendant excepted. After the testimony was closed and the judge had delivered his charge to the jury, the defendant requested him to charge them, that if they found that at the time of the delivery of the bond and mortgage, Reeve intentionally withheld fifty dollars, it was, if unexplained, evidence of a corrupt and usurious agreement." The judge refused so to charge the jury, but instead thereof charged them that "the presumption was in favor of the legality of the transaction;" to which refusal, and to the whole of the charge, the defendant excepted. The exception to the refusal of the judge to charge as requested is sufficiently pointed There was but a single request. The exception to the charge as made, is entirely too general to be of any avail to the defendant, and must be disregarded.
It follows that there are only two questions which can be considered in this court upon the bill of exceptions in this cause. First, can the maker of a bond and mortgage, in an action against him by the assignee thereof, give in evidence upon the trial the declarations and admissions of the mortgagee, made before the assignment, to prove them usurious and void? Secondly, was the intentional withholding from the mortgagor by the mortgagee of fifty dollars of the sum expressed in the condition of the bond and *Page 279 
mortgage, made to secure the payment of five hundred dollars, with lawful interest, if unexplained, evidence of a corrupt and usurious agreement? The manner in which the term evidence was used by the defendant in his request of the judge to charge, evidently shows that it was intended to be used in the sense of proof, or full and sufficient evidence, so that a verdict given against the defence of usury upon that evidence alone and unexplained, would be set aside as against the weight of evidence.
The rule of the law of evidence which excludes hearsay testimony is too familiar to require explanation or illustration. It is a rule of great practical value, and should be applied to all cases which fairly fall within its provisions. It has been applied by the judge at the circuit on the trial of this cause. If the case was a proper one for the application of the rule, the decision of the supreme court was correct. On the part of the appellant it is insisted, that the rule referred to was not applicable, but that the case fell within the operation of another and very different rule, i.e., the rule which allows the declarations of one whose acts may be proved, to be given in evidence, as a part of the act — res gestæ. If the judgment of the court of errors in Paige v. Cagwin, (7 Hill, 361,) as pronounced by Mr. Senator Lott in his opinion, is to be considered as the judgment of the members of that court who voted according to the result of that opinion, then upon the authority of that case the ruling of Mr. Justice Brown at the circuit was right, and the judgment of the supreme court upon this point can not be disturbed. The present supreme court, in Smith v.Webb, (1 Barb. S.C.R. 230,) Parker, J., giving the opinion, decided the same point now under consideration, upon the authority of Paige v. Cagwin. The authorities are so fully reviewed, and I may add so carefully examined, in the opinion of Mr. Senator Lott, as to preclude the necessity of their reexamination. It may, however, be proper to add, that upon principle the admissions of a party holding written securities for a debt *Page 280 
made while such owner, do not necessarily fall within any just notion of the rule which permits them to be given in evidence as part of the res gestæ. They may be given in evidence against him, and against his representatives, when parties in interest in the action, as admissions; but I apprehend not otherwise. It has been urged in the argument submitted, that such an application of the rule would exclude a written receipt or discharge of debt which had been assigned by the former holder, although made at a time when he had a perfect right to give such receipt, or make such discharge. But it is apparent that such a receipt or discharge would of itself be an act between the parties to the instrument thus discharged, and a very different thing from a mere conversation, or ex parte admission. It would be an act ofthe parties to the instrument, which would be capable of proof as such act, an entirely different thing from the mere admission of one of the parties. It would contain an admission to be sure — an admission of satisfaction, but it would be, nevertheless, an act of the parties, and fall within a very different rule from that which admits the declarations of a party to the action ashis admission, and not as forming any part of such an act. Either upon authority or any sound principle of law, I am unable to see any error in the judgment of the supreme court upon this point. The remaining point arises upon the refusal of the judge to charge the jury "That if they found that at the time of the delivery of the bond and mortgage, Reeve did intentionally withhold $50, it was evidence, unexplained, of a corrupt and usurious agreement." It is manifest that there may be various other causes than "a corrupt and usurious agreement" for which a mortgagee might "intentionally withhold" a part of the sum secured by the bond and mortgage, and which would be perfectly lawful in themselves. The law will not presume "a corrupt and usurious," or any other unlawful agreement from a fact which is equally consistent with a lawful purpose. It is not an infrequent case for a mortgagee *Page 281 
to retain a part of the money loaned until the completion of a building, which is to form a part of the mortgage security. There are other contingencies, to guard against which, a part of the amount included in a mortgage might be retained, as, to cover a balance of an unsettled account between the parties. Besides, he who affirms of another an unlawful act, is bound to affirmative proof of that which makes the act unlawful, and can not insist upon a legal presumption of guilt from an act just as consistent with innocence as with guilt. The authorities which show that "the receiving usurious interest intentionally is sufficient evidence of a corrupt agreement," (8 Cow. 669,) and that "receiving designedly more than legal interest, is, without any express corrupt agreement, usury," (10 John. 185; 10 Wend. 113; 2 Hill, 522; 4 Denio, 104,) have no application to the present case. Conceding that the evidence justified the assumption that it was proved that the mortgagee intentionally withheld $50 of the $500 secured by the bond and mortgage at the time of the delivery, still it does not follow that it was intentionally withheld for the purpose of usury. It nowhere appears in the case for what purpose it was withheld. Had it appeared that it was withheld for interest, premium on the loan, or by way of discount, the case would have fallen within the principles upon which the appellant relies. The cases cited upon this point by the appellant, do not sustain the doctrine advanced in the request to charge, as will be shown by a short reference to the points decided in each of them. In the case 10 John. 185, there was no question as to what would be sufficient evidence of usury. That there was usury was conceded, and the only question was whether the defendant could set it up to defeat the plaintiff's title acquired through a sale under a foreclosure by advertisement, he being the assignee of the bond and mortgage in good faith, under which the sale was made. At the sale the premises *Page 282 
were struck off to one Henry, to whom the plaintiff, as assignee of the bond and mortgage, made a deed. A few days afterwards the plaintiff took a deed of the same premises from the said Henry, acknowledging the receipt of one dollar as the consideration thereof. It was held that the usury could not be set up to defeat the plaintiff's title. This is an authority in favor of the ruling of the judge who tried the cause, upon the question of evidence, but has no bearing upon the point to which it was cited. The case of Hackley v. Sprague, 10 Wend. 113 does not present any question as to the sufficiency of evidence of usury. The point decided in that case was, that the proviso to the section of the revised statutes declaring usurious contracts void, (1 R.S. 772, § 5,) extended only to a bona fide holder of a note or other negotiable paper, to whom it had been negotiated for a valuable consideration, in the usual course of trade, i.e., before maturity. The case cited from 2 Hill, 522, like that from 10 Johnson, 185, is one where the fact of the usurious character of the loan was not questioned, but the question raised was, whether a sheriff who, by virtue of an execution against a mortgagor, had levied upon the goods mortgaged to satisfy a judgment, could set up usury to defeat the plaintiff's claim by force of the usurious mortgage, and it was held he could. In the case cited from 4 Denio, 114, the question was, whether a mortgage security, void for usury, could be made valid by a subsequent endorsement by the mortgagee of the amount which he had originally retained as a usurious premium, and it was held that a security void for usury in its inception, could not be made a valid security by any subsequent act of the parties. There was no question in the case as to what evidence would be sufficient to establish usury, but only whether a security void for usury could be restored to life by a subsequent agreement of the parties that it should stand only for the money actually advanced, and not for so much of its amount as *Page 283 
was originally retained by the lender as an usurious premium for the loan.
I am of opinion that the judgment of the supreme court should be affirmed.
Judgment affirmed.