Pixley v. Ingram — 24 N.Y. St. Rep. 885

Majority

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Edward H. Pixley, App’lt, v. John C. Ingram and ano., Resp’ts.

(Supreme Court, General Term, Fifth Department,

Filed June 22, 1889.)

Headnote

Promissory notes—Defense of usury—How taker advartagb of— 1 Rev. Stat., 772, § 3.

In an action on two promissory notes sundry payments were allowed in reduction of the amount of the notes. It appeared that the items so allowed were the precise items of usury which, it was alleged, had been taken by the plaintiff for extensions of the time of payment. Held,, that the jury having found in favor of the plaintiff upon the question of usury,

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and no counter-claim, having been set up in the answer as to the payments, as provided by statute (1 R. S., 772, § 3), it was error to hold that the plaintiff’s claim should he reduced by the sum total of such payments.

Appeal by the plaintiff from an order of the county court of Erie county, granting the motion of the defendants for a new trial after a verdict for the plaintiff upon two promissory notes.

George Wing, for app’lt; Fitch & Braulein, for resp’ts.

This action was brought upon two promissory notes made by the respondent, John C. Ingram, and indorsed by the respondent, Margaret Ingram, payable to the order of one Albert Church, who transferred the same to the plaintiff.

The defense was usury. Evidence of the taint of usury was of a conflicting nature, and the county judge submitted the question fairly to the jury, who have rendered a verdict for the plaintiff, for the amount remaining unpaid thereon, in the sum of $105.50. The learned county judge has granted a new trial, upon the ground that, under the undisputed testimony in the case, there has been sundry payments reducing the amount due on the first note to $9.05, and the amount due on the second note to $35.56, making due only $44.61 in all. These several items of so-called payments, which are thus said to be allowable to the defendants, are the precise items of usury which it was alleged had been taken by the plaintiff for repeated extensions of time of payment.

There is no evidence that any one of these items was intended by the defendants to be a payment applicable to the reduction of. the principal of either of these two notes. They were severally made, as stated before, not by way of diminishing the amount unpaid upon the papér, but as consideration, so called, for the omission of the plaintiff to insist upon immediate payment of the original notes. The jury having decided in favor of the plaintiff upon the question of usury, growing out of these several payments, we do not think it was competent for the court, under the pleadings, to hold that the amount of the plaintiff’s claim should be reduced by the sum total of such payments. The statute (1 R. S., 772; § 3) permits a party who, for any loan or forbearance of money shall pay or deliver any greater sum than is allowed by law, to recover in an action against the person who shall have taken or received the same over and above tíre legal rate, provided such action shall be brought within one year after such payment. Under this statute, it was competent for the defendants to set up, as a counter-claim, these payments, and, had they done so, the amount found due upon the notes by the jury would have been further reduced by the several sums which were shown to have been paid within a year, or within any time, for that matter, unless the short statute of limitations had been pleaded by the plaintiff in a reply to such counter-claim. There being no counter-claim set up in the answer, the jury would not have been warranted in finding that these usurious pay

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ments of money, for the forbearance of collection of the loan, were applicable to the principal sum remaining unpaid.

We, therefore, think, that the order of the county court granting a new trial, should be reversed, with costs, and judgment ordered for the plaintiff upon the verdict.

All concur.