Aeby v. Rabelye — 1 Hill & Den. 9

Majority

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Aeby vs. Rabelye and others.

Headnote

A party who buys an accommodation note before it has been used for any business purpose, stands in the same situation in respect to the defence of usury, as if he were ’the payee named in the note; and this, though he took the note supposing it to be business paper.

Such a party is not entitled to he protected as an endorsee or holder in good faith, &c. within 1 R. S. 772, § 5.

Where a plaintiff requested the judge to charge in respect to the defence of usury, that it must be proved beyond, a reasonable doubt, or the jury must find against it; and he refused so to charge, telling the jury that it was .enough if they were, satisfied usury was made out: Held, that this being nothing more than denying one proposition and affirming another identical with it, afforded no ground for ordering a new trial.

Assumpsit on two promissory notes, one dated February 17th, 1837, and the other February 18th, 1837. Defence, usury. The cause was tried at the New-York circuit, January, 1839, before Edwards, C. Judge.

The notes were accommodation notes made by Rapelye, payable to Gilliland & Raymond ;. and were discounted by the plaintiff at less than their face for the benefit of the payees, after having been endorsed by Gilliland & Raymond and one Carpenter and others, defendants in the cause: but the plain

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tiff had no notice that they were given to raise money. Carpenter suffered judgment by default.

The circuit judge charged the jury, among other things, that though the plaintiff bought the notes, without notice that they were mere accommodation paper; still if they were so in point of fact, and never had been passed in the course of business between the parties, they were void in the hands of the plaintiff, if he discounted them at a greater rate than seven per cent. To this the plaintiff excepted. ■ 0

Upon the point whether, in fact, the notes were discounted at an usurious rate, the evidence not being entirely clear, the circuit judge was requested to charge the jury that the defendants were not entitled to a verdict, unless they had established the usury beyond a reasonable doubt. He refused so to charge; but told the jury that it was enough in this case if, from the testimony, they were satisfied of the fact of usury. To this, also, the plaintiff excepted. The jury found a verdict for all the defendants; and the plaintiff now moved for a new trial on a case made, with liberty to turn it into a bill of exceptions. The cause was submitted upon written arguments.

P. S. Crook & C. O’Conner, for plaintiff.

S. F. Clarkson & S. Sherwood, for defendants.

The notes were given while the provision of the revised statutes was in force, declaring usurious notes, &c. void, but that this should not extend to an endorsee in good faith, for valuable consideration, and without actual notice that the note had been originally given for a usurious consideration. (1 R. S. 760,1, § 5.) They, however, had. their inception by the act of discount; and the case was, therefore, as if they had been directly payable to the plaintiff, on'his advance of an usurious loan. The statute does not protect a man who participates in the original concoction of usurious paper; a man who is himself the prominent actor in the usurious transaction. The two cases of Sauerwein v. Brunner, (1 Har. & Gill, 477,) and Cockey v. Forrest, (3 Gill & John. 483,) settle the

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question. The New-York cases were there considered and applied, on a course of legislation exactly like ours, the latter case being the same as the one at bar.^[1]

To say that usury must be proved beyond reasonable doubt, is substantially the same as saying that the proof must be such as to satisfy the jury of the fact. The latter was the charge, though the former was denied. To deny one proposition, and affirm another which is identical with it, forms no ground for granting a* new trial, provided the latter be correct. It is in effect a revocation of the error committed in regard to the first. The jury being sworn to exercise their judgment on the evidence, were called to act upon it as reasonable men; and if, as such, they were satisfied of the usury, no reasonable doubt could be said to remain on their minds. It is absurd to say that a rational man is satisfied of a fact, when he sees a reason to doubt its existence. The proposition involves two distinct and opposite positions of the mind—reasonable conviction and reasonable distrust—and the judge cannot be understood as having left it to the jury, that though they entertained the latter, they were, notwithstanding, to find usury.

New trial denied.

(a) (a) See Whitworth v. Yancey, ( 5 Rand. Rep. 333 ;) Taylor v. Bruce, (Gilmer's Rep. 42.)