Schnitzer v. Heusted — 39 N.Y. St. Rep. 210

Majority

p. 210

Hyman Schnitzer, Resp’t, v. Sabina E. Heusted et al., App’lts.

(City Court of New York, General Term,

Filed June 19, 1891.)

Headnote

Evidence—Usury—Inception of debt.

Where, in an action against the maker and endorser of promissory-notes, the defense is usury, and the endorser procured their discount by

p. 211

plaintiff, the defendants have the right to show by the testimony of the endorser that the notes had no inception until the time of their discount by plaintiff.

Appeal from judgment entered at trial term on direction of verdict in favor of plaintifE.

Action on two promissory notes ; the defense usury.

H. Y. Stillman, for app’lts; D. Leventritt, for resp’t.

—Peter Y. Husted, one of the defendants, testified that he asked the plaintiff to discount the notes for Mrs. Husted (the maker) and himself. He was afterwards asked to state the circumstances under which he got the notes from Mrs. Husted. The question was objected to and excluded. This was error. The defendants had the right to show that the notes had no inception at the time of the discount, and the answers interposed are broad enough to admit such proof The plaintiff was not asked by Mr. Husted to purchase from him existing obligations, but to discount for Mr. and Mrs. Husted the notes presented, which implied that they had not as yet been negotiated or discounted for either of them.

This is the fair import of the language, and brought home knowledge to the plaintiff respecting the character of the paper offered. See Baker v. Union Mut. L. I. Co., 43 N. Y., 283 . In order to create an estoppel in pais, it must appear that the party caused the other to believe the existence of the facts to which the estoppel relates, and also that the other has acted upon such belief. Lawrence v. Brown, 5 N. Y., 394 . An equitable estoppel never takes place where one party does not intend to mislead, and the other party is not actually misled. Jewtt v. Miller, 10 N. Y., 402 . The evidence, showing the circumstances connected with the making, delivery and negotiation of the notes, should have been received, and it was then a question for the jury to determine whether the plaintiff relied upon the representation, and whether he would be wronged if the defendants were not held to it The defendant recalled the plaintiff as a witness, and he gave testimony that the defendants thought proper to contradict, and the trial judge refused to permit them to do so, on the ground that they were attempting to contradict their own witness. The defendants had the right to contradict him, but not impeach his credibility. Thompson v Blanchard, 4 N. Y., 303 .

For these reasons the judgment appealed from must be reversed ■and a new trial ordered, with costs to the appellant to abide the event.

McG-own and McCarthy, JJ., concur.