Oppikofer v. Murphy — 146 A.D. 581

Majority

p. 581

Florence C. Oppikofer, Appellant, Respondent, v. John W. Murphy, Respondent, Appellant, Impleaded with Edward Stratton, Jr., and Others, Defendants.

Second Department,

October 6, 1911.

Headnote

Bills and notes — action on note — usury — discount — judgment for sum realized.

Where in an action on a note defendant alleged and gave evidence to show that the instrument was usurious at its inception, it is error for the trial judge to direct a verdict in plaintiff’s favor for the amount which was received on the note when first discounted, for if defendant’s contention was established, the complaint should have been dismissed; if not, plaintiff should have had judgment for the amount of the note.

Cross-appeals by the plaintiff, Florence C. Oppikofer, and the defendant, John W. Murphy, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 27th day of April, 1911,

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upon the verdict of a jury for $358.99, rendered by direction of the court, and also from an order entered in said clerk’s office on the 24th day of April, 1911, denying the plaintiff’s and the said defendant’s motions for a new trial.

Louis J. Somerville, for the plaintiff.

John J. McGinniss [Henry M. Cummings with him on the brief], for the defendant Murphy.

The plaintiff brings this action to recover the sum of $830 and interest on a certain promissory note for that amount,- made by the .defendant John W, Murphy to the order of the- defendant Edward Stratton, Jr., indorsed by the defendants Edward Stratton, Jr., Evelyn K. Stratton and Bayside Review Company.' From the record it appears that the indorsements of Evelyn K. Stratton and Bayside Review Company were merely for the purpose of lending their credit to the paper, and as iio judgment is sought against them, they being insolvent, it is not necessary to consider them further in this appeal. The plaintiff proved the note and rested. The defendant Edward Stratton, Jr., was called as a witness and testified that he bad negotiated with the plaintiff’s father, Charles C. Overton, at the túne :of making the indorsement in September, 1908, having had previous business transactions with him, and being hard pushed for money he induced Mr. Overton to discount the note for $315, which was the only money he received on the" note. He. likewise testified that Mr. Murphy owed him no money, and that he had told Mr. Overton that the note was an accommodation note. The defendant Murphy in his answer alleged the usurious transaction, and the learned trial court, in directing the verdict on motion of both parties, told the jury to bring in a verdict for the plaintiff, not for the face of the note but for the amount which the defendant Stratton had received upon the same from plaintiff’s father. This must be deemed to be equivalent to a finding that the nóte, at its inception, was transferred for a consideration which would yield very much more than the legal rate of interest, for unless this was the case the plaintiff was clearly entitled to the full face value

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of the note. If the defendant Murphy had established that the note, at its inception, was tainted with usury, he was entitled to a verdict, and the learned court erred in endeavoring to introduce equitable considerations and directing a verdict in favor of the plaintiff for.so much as the note had realized to Stratton. The law of this case, assuming the facts as they must have been found by the court in .directing the verdict here under consideration, has been fully settled by the case of Strickland v. Henry ( 66 App. Div. 23 ), and it does not appear to be necessary to go over the question again.

The judgment and the order denying defendant’s motion for a new trial should be reversed and a new trial granted, costs to abide the event.

Jenks, P. J., Thomas, Carr and Bich, JJ., concurred.

Judgment and order reversed and new trial granted, costs to abide the event.

Cases cited

Strickland v. Henry 66 App. Div. 23 N.Y. App. Div. 1901-11-22 p. 583