Jennings v. Kosmak

The action was on a promissory note for $480, made by Louisa Bauer, and indorsed by the defendant Kosmak. The defense was usury. • It appeared at the trial that the plaintiff paid Bauer $900 for the note in suit, and another, made by Bauer, and indorsed by one Horn, for $560; that the note in suit was indorsed by the defendant Kosmak for the accommodation of Mrs. Bauer, so that it had no inception until discounted by the plaintiff; and it is upon this ground that the defendant urges that the transaction was usurious. The note indorsed by Horn was similar in form to the one in suit; and, while it does not affirmatively appear that it was accommodation paper, the fact that the note was payable to the maker’s order, and was negotiated by her, created the presumption that the indorsement was for her accommodation, and was notice thereof to the plaintiff. National Park Bank v. German-American Mut. W. & S. Co., 116 N. Y. 281 , 22 N. E. 567 ; 1 Daniel, Neg. Inst. § 365; Stall v. Bank, 18 Wend. 466 ; Bank v. Cameron, 7 Barb. 143 . As the notes had no legal inception until they were discounted by the plaintiff, the discount thereof by him at a rate exceeding 6 per cent, made them usurious and void, so that,' if the facts proved by the

Upon the conclusion of the evidence, and while one of the counsel was summing up to the jury, the trial judge stated in their presence and hearing that he regarded the defense of usury as an unconscionable one, to which the defendant’s counsel excepted. The remark was one well calculated to influence the jury to the prejudice of the defendant, for they could hardly be expected to find in favor of a defense pronounced unconscionable by the court.

In Bates v. Voorhees, 7 How. Prac. 234, Justice Harris said:

“The legislature of this state have thought it wise to declare usury to be a legal defense to an action upon a usurious contract. In doing so, they have but followed every other civilized state. With the policy of such laws, courts have nothing to do. When a plaintiff willfully violates the law, by taking a greater amount of interest than the law allows, I do not see upon what principle a court should take upon itself to pronounce the defense, with which the law has provided the defendant, hard or unconscionable.”

The courts at one time undertook to discriminate against this defense, but the modern authorities put it upon the same footing as any other defense. 1 Enc. Pl. & Prac. 499, 500.

In McQueen v. Babcock, * 42 N. Y. 428 , the court said:

“The idea that the defense of usury * * * was to be treated in this respect different from other defenses has been exploded. Courts now regard all legal defenses as entitled to the same consideration.”

The trial judge had no right to declare, in the presence of the jury, that the defense interposed was unconscionable. The remark was unwarranted and prejudicial to the defense. If proper in a case where usury is pleaded, it would be equally appropriate in a case where the statute of limitations or statute of frauds is interposed, or in any other case where the defense might be obnoxious to the judicial mind. If the statement had been made in the charge to the jury, it might have been reviewed by the exception taken; but, under the circumstances, the mode of review is not by exception, for the question should have been brought up on a special motion to set aside the verdict, which was not made in this instance. Daly v. Byrne, 77 N. Y. 182 . True, the defendant has' appealed from the order denying his motion for a new trial upon the grounds specified in section 999 of the Code; but this is not one of those grounds, nor

Apart from this error, which cannot be reviewed upon the present appeal, there is another which we are bound to review. Plaintiff’s •counsel requested the court to charge that, if any witness was contradicted in one point, his testimony was not entitled to the same consideration as that of a witness who had never been impeached, to which the court replied: “If the jury believe that any witness has made any false statement in any part of his testimony, they have .a right to disregard his entire testimony. False in one thing, false in all;” and added: “The jury have.the right to disregard the testimony of any witness if he has proved to your satisfaction that he is not telling the truth in any particular,”—to which charge exception was taken by the defendant. This was carrying the rule too far.

In Wilkins v. Earle, 44 N. Y. 172 , 182, the court said:

“The mere fact that his evidence was contradicted as to any fact or facts as to which he could not be simply mistaken was not conclusive as to the falsity •of the evidence as to those facts. The jury might have believed the evidence, although contradicted. The jury must believe the evidence to be willfully false in some particular before they are authorized to discredit the whole evidence of a witness.”

The fact that the testimony of a witness is shown to be untrue .in some particular does not, as matter of law, where it is not made plain that the testimony was corruptly given, require his testimony as to other matters in which it is not contradicted to be disregarded. Dering v. Metcalf, 74 N. Y. 501 . In Pease v. Smith, 61 N. Y. 477 , it was held that the maxim, “Falsus in uno, falsus in omnibus,” only applies where truth is intentionally disregarded, and not where, by defect of memory, it was innocently departed from. The charge of the trial judge was not in accordance with the controlling decisions cited, but contrary to them, and may have prejudiced the defendant, oresumptively it did. Greene v. White, 37 N. Y. 405 , 407.

The defendant’s counsel also excepted to certain remarks made by the plaintiff’s counsel during the summing up of the cause in reference to the more liberal laws respecting usury in other states, and their beneficial effect on the prosperity of those states, and that usury was not an honest defense. When the objection was made, the record shows “the court instructed defendant’s counsel not to interrupt plaintiff’s counsel in summing up to the jury, and stated he would charge the jury as to the law of the case, and ordered plaintiff’s ■counsel to proceed,” to which the defendant’s counsel excepted.

In Williams v. Railroad Co., 126 N. Y. 96 , 103, 26 N. E. 1048 , the court held that:

“Where counsel, In summing up, proceeds to dilate upon facts not in evidence, or to press upon the jury considerations which the jury would have no right to regard, it is, we conceive, the plain duty of the court, upon objection made, to interpose; and a refusal of the court to interpose, where otherwise the right ■of the party would be prejudiced, would be legal error.”

See, also, Halpern v. Railroad Co. (Sup.; filed April 26, 1897) 45 N. Y. Supp. 134 .

In Brooker v. Filkins, 9 Misc. Rep., at page 149, 29 N. Y. Supp. 70 , the court said:

“We quite agree with appellant’s counsel in the gross impropriety of alluding to matter outside the record in summing up to the jury, or in improperly attempting to influence their verdict by dwelling upon the legal consequences of it, or in any other way attempting improperly to influence them; and, when a proper case is presented to us upon that question, we will have no hesitation in reversing a judgment on any of those grounds.”

The laws of other states must be proved as facts (Code, § 942), and were not before the court or jury for consideration on the subject of usury, or for any other purpose, and were foreign to the issue on trial. Whether the objection was waived by not asking the court to declare a mistrial (Riche v. Martin, 1 Misc. Rep. 285 , 20 N. Y. Supp. 693 ) is not necessary to decide (see Chesebrough v. Conover, 140 N. Y., at pages 388, 389, 35 N. E. 635 ); for, in view of the mode of trial permitted, it is sufficiently clear that the exception to that portion of the charge of the trial judge before referred to entitles the defendant to a new trial, if none of the other exceptions do.

Judgment reversed, and a new trial ordered, with costs to the appellant to abide the event. All concur.