
    Catlin v. Gunter.
    (Before Duer, Campbell, and Bosworth, J.J.)
    October 18.
    November 20,
    When usury is specially pleaded, the proof must correspond, in all respects, with the allegations in the answer. If there is any variance, the defence must be overruled.
    The court will not amend an answer after a trial so as to let in the defence of usury against a holder, for value and without notice, of negotiable paper.
    When the execution of a promissory note, and its possession by the plaintiff as an endorsee, are admitted, a denial that he is the lawful owner, without averring a title in any other person, is irrelevant and frivolous.
    Under the Code, there is no general issue under which facts, in their nature constituting a defence, but not averred in the answer, may be given in evidence.
    Facts, tending to prove that a promissory note, or any other contract, was void in its origin, on the ground of usury, fraud, &c., are in their nature as certainly matter of defence, as facts barring the action which subsequently arose. There exists, therefore, the same necessity for averring them in the answer upon these grounds. Exceptions to the charge of the judge upon the trial overruling a defence of usury disallowed, and judgment, in favor of the plaintiff, affirmed with costs.
    The complaint alleges that on the 24th day of February, 1851, the defendant drew a note to his own order, and endorsed the said note, and transferred the said note so endorsed, so that the same came to the possession of and was owned by the plaintiff; whereby he promised to pay at the Merchants’ Exchange Bank $819 68. That said note became due and payable before the commencement of this action, and the defendant has not paid the same, and is justly indebted to the plaintiff, who is now the lawful holder and owner of the note, in the sum of $819 68, with interest from July 27,1851, and costs of this action.
    
      The answer admits the making of the note, but denies all the other allegations in the complaint.
    .The answer then sets up usury in the transactions between S. Davenport and Wm. A. Beecher in the first negotiation of the note; and that the defendant received no value for the note, and that the note had been misapplied; and that defendant offered to pay Beecher the amount by him loaned, with interest on the note in suit, and a note for $840 16, and a note for $590 16, and that Beecher refused to receive the same without the usurious premium, and claimed that there was then due him $500 .and upwards for the loan and forbearance; that, the note for $840 16, and the note for $590 16, have been paid, and $667 50 has been paid on the other notes, and that Beecher received $170 and upwards for usurious premiums on the loans.
    The reply denies that loans were made to defendant upon the note, as collateral security upon an usurious agreement with Beecher. '
    The reply also denies that defendant offered to pay Beecher the loans made by Davenport, with seven per cent, interest, or that Beecher refused to receive the same, or claimed there was due him for forbearance $500 or upwards, or that Beecher had received for usurious premiums $170 and upwards.
    The reply also denies the note is void, and the plaintiff charges he has not sufficient information to form a belief as to the other matters set up in the answer.
    The plaintiff then charges that said note was regularly transferred in the ordinary course of business, and was taken for full value duly paid therefor, without any usury or illegality whatever, and that he is the true and lawful holder of said note in good faith, and entitled to recover thereon in the manner prayed for in his complaint.
    The action was tried Hay 17,1852, before the Hon, Lewis H. Sandford and a jury.
    The execution and endorsement of the note were admitted, and read in evidence.
    The defendant then called as a witness, Silas H. Crandall, who testified, that he received the note in question, and other notes from the defendant, and gave that note and the other notes to Silas Davenport, to raise money upon. The defendant received nothing upon them. He gave to Davenport, at the same time, the note in action, and another note made by the defendant for $736 93, a note made by R. Heslewood for $450, and a note made by Schlosser for $117 50.
    On his cross-examination, he admitted that the defendant received no consideration for his notes; one of the other notes, the Schlosser note, was a regular note, the other was not; that the defendant did not give both notes at the same time; that the note for $819 68 was given after the other; that he gave these notes to Davenport some time in March, 1851; that he gave him no other notes at that time to raise money upon for him; that he was to give the defendant the money for his notes; there was no time mentioned when he was to give him the money, nor any particular money that he was to give him; that the defendant was to have the money when he wished, and that he had the right to call for the money at any time; that he never paid the defendant for the notes ; that he would have paid the defendant if he had called for it, and that he had got the money; the notes were for his benefit thus far, that he could use the money till defendant called for it.
    Silas Davenport testified, that'he got the note in action for $819 68, and a note of the defendant’s for $736 93, and a note of Heslewood’s for $450, and one of Sehlosser’s for $117 50, about the 18th March, 1851; that he received these notes from Crandall; on the 18th March, 1851, he received from William A. Beecher, $1,500 on these notes, and that he gave him his memorandum check for $1,500, dated March 18th, 1851, and left with him the above-mentioned notes; that he borrowed the money on the security of these notes; that he borrowed it on the 18th day of March, 1851; that he did not recollect of any specific agreement made at the time of this loan between him and said Beecher; that he had made several loans of him at several times previously, which were at eighteen pence per day on one hundred dollars.
    This testimony was objected to by the plaintiff’s counsel, and the court held it to be immaterial, unless there was something proved to connect this affair with those loans or terms.
    That on the 9th day of April, 1851, he paid Mr. Beecher $500, and he returned him the defendant’s note for $736 93, and he paid him $51 88, for the use of the $1,500, from the 18th March, 1851, to that day, according to his memorandum, and gave Mr. Beecher a new memorandum check for $1,000, dated April 9, 1852. Mr. Beecher gave him no money that day.
    A question was then put as to what agreement was made on the 9th day of April, 1851, between the witness and Mr. Beecher, respecting the interest upon the loan of $1,000; but the court, on the objection of the plaintiff’s counsel, and the witness stating that there was no money paid, or advance made by Beecher on that day, refused to let it be answered; the defendant’s counsel excepted to the ruling.
    The witness further testified, that on or about the 15th day of July, 1851, his check for $1,000 was in Mr. Beecher’s hands. That William H. Scofield has since sued him on that check; Heslewood’s note was paid at maturity, prior to July 15, 1851.
    The evidence of the witness as to what occurred on the 9th of April, and as to the check of $1,000, and as to the payment of the Heslewood check, was all and each part of it objected to by plaintiff’s counsel, as irrelevant and not within the issue in the cause.
    The witness further stated, that on the 15th July, 1851, he went to Mr. Beecher’s with the defendant; he knew no other person as principal, up to that time, but Mr. Beecher.
    The witness was shown two papers, which are in the words and figures following:
    S. Davenport.
    F. A. Tallmadge, April 14, - 150
    L. Schlosser, May 14, - 117 50 ’
    H. H. Hunter, July 27, - 819 68
    Do. Aug. 27, - 840 16
    Do. July 20, - 590 16
    H. Durbridge, June 6, - 750
    Robt. Hunter, Aug. 26, - 418 87
    3,684
    
      Mch. 28, 500
    April 9, 1,000
    May 10, 1,300 75
    2,800 75
    May 23, 100
    2,700 75
    450 00
    2,250 75
    2d Paper.
    Amount of loan July 15, $2,720 48.
    The witness also testified, that on the 15th July, 1851, these papers were made out by Mr. Jones, Mr. Beecher’s clerk, in his presence, and delivered to the witness by his direction.
    These papers were then offered to be read in evidence to the jury; but, on the objection of the plaintiff’s counsel, the court decided they could not be read to the jury; to which ruling the defendant’s counsel excepted.
    The witness farther testified, that the note for $590 16, mentioned in the above paper, was given to Mr. Beecher on some occasion, but he could not tell on what; it was in another operation.
    The defendant’s counsel then offered to show, that the two notes mentioned in the papers just offered, as made by the defendant for $590 16, and $840 19, respectively, had been paid by the defendant, and presented the notes. This evidence was also, on the objection of the plaintiff’s counsel, excluded by the court; to which decision defendant’s counsel also excepted.
    Other evidence was offered, but which was rejected by the judge.
    The learned justice thereupon stated, that the defendant had failed to prove his defence, and directed the jury to find for the plaintiff for the amount of the note and interest. To this statement and direction the defendant’s counsel again excepted.
    
      The jury found, as directed, a verdict for the plaintiff for $865 09.
    Application was now made lor a new trial upon the exceptions.
    
      A. Thompson, for the defendant,
    made and argued the following points—•
    I. The first paragraph of the answer, denying that the plaintiff was the lawful holder and owner of the note, and defendant’s total indebtedness to the plaintiff on said note, was a sufficient answer to let in the defendant’s defence of usury. Because, 1. Usury always could be given in evidence under the general issue without special plea. (1 Strange, 498.) 2. Hew matter in the Code means something arising after the giving of the note, and which avoids the payment. (Code, § 149, 2 Wend. 96; 5 Practice Rep. 14; 6 Prac. Rep. 401.)
    H. The answer sets up also that the note had been misapplied ; that Beecher had been notified of such misapplication; that his money had been offered to him, which he had refused to receive, and give up the note.
    The reply takes issue with the answer, and asserts that the note was regularly transferred in the ordinary course of business, and was taken for full value duly paid therefor, without any usury or illegality whatever; and that the plaintiff is the true and lawful holder of the note in good faith, and entitled to recover in the manner prayed for in the complaint.
    HI. The complaint and reply both allege an original holding by the plaintiff; and identify the plaintiff with the first transfer of the note; and do not, as claimed on the trial, set up that the plaintiff is entitled to a different defence from Beecher.
    TV". If it were necessary to set up the defence of usury, by answer, it was sufficiently set up, and the allegations are to be liberally construed (Code, § 159), and it is sufficient to prove the loan, or forbearance, according to its legal effect. (2 Saun- • ders’s PI. and Ev. 897.)
    Y. Ho value was given for this note prior to the 18th March, 1851, when Beecher gave Davenport $1,500 on his check for $1,500; the note in suit $819 '68, defendant’s note for $736 93, Heslewood’s note for $450, and Schlosser’s note for $117 50, being left as security; and then it first had a legal existence. This transaction was usurious, because,
    1. Though no specific agreement was made that day, yet Davenport had made several previous loans for eighteen pence per day on one hundred dollars; and on the 9th of April, 1851, he paid him $51 88 for the use of $1,500 from the 18th March, 1851, to that day.
    2. This was a direct connexion of this loan with those usurious terms, and proved the usury according to the judge’s ruling. (2 Sandford’s Rep. 64.)
    3. This giving and receiving designedly more than seven per cent, per annum was usury without other proof of the corrupt agreement, than the giving and receiving it, such payment and receipt is prima facie evidence of a corrupt agreement. (2 Cowen’s Rep. 705.)
    VI. The judge erred in deciding that the defendant had failed to prove his defence. Because,
    1. Ho explanation was given, and the proof was full, and the judge was bound, as matter of law, to have charged that the usury was proved. (2 Cowen, 705.)
    2. If any claim had been made that the $51 88 had been received for any other cause, that should have been passed on by the jury, (2 Cowen, 706.)
    VII. The judge erred in not allowing testimony as to the agreement between Davenport and Beecher on 9th 'April, 1851; also the papers made out July 15th, 1851, by Beecher’s direction, and Beecher’s claiming more money on that day than was due. Because,
    1. The securities were altered on 9th April, 1851, and a new check given, and usurious premium paid for the past; and the evidence would have shown directly that the loan of $1,500 was usurious; and the renewal for $1,000 was on the same terms; and the statements, written and verbal, made on the 15th July, 1851, if admitted, would have shown the usury also.
    VIÜ. The judge erred also in refusing to receive the testimony offered jn the 28th, 29th, and 30th folios of the case, Because,
    
      1. Each matter thus offered had been set up in the answer, and denied by the reply and the defendant was entitled prove his defence. The issue was not immaterial; the issue was, whether Davenport loaned the face of the notes, or the face of his check. The jury could have found against the usury, and yet given judgment for the money loaned.
    2. All the paper was then in Beecher’s hands. If the evidence had been admitted, it would have shown only about $5 70 due on the whole of the paper; and all due 15th July, 1851, was offered to be paid.
    IX. The judge erred also in refusing the other testimony offered. Because,
    1. Each issue between the parties had been proved for the defendant.
    2. The plaintiff alleged the note was regularly transferred to the ordinary course of business. It was proved to have been transferred usuriously and misapplied; and it was offered to be shown that Beecher knew it. The plaintiff claimed nothing more than Beecher’s title, nor could he, for he took the note after it was due. (6 Wend. 621.)
    3. The plaintiff claimed only on Beecher’s title; if he claimed that he was entitled to recover on account of any other person having taken the note in good faith for value, before it was due, he should have shown such person’s title; and the defendant was not bound to trace the note from Beecher to the plaintiff. .(2 Denio, 609; 4 Denio, 63; 4 Barn. & Cress. 330; 0 Barn. & Cress. 338 and 208; 4 Adol. & Ellis, 338.)
    
      C. P. Kirkland, for plaintiff, contra.
    The whole gravamen of the answer is, that this nóte was an accommodation note, and that one Davenport delivered to W. A. Beecher this note and another note of defendant for $840 16, and another for $590 16, and a note of Tallmadge for $150, of Schlosser for $117 50, of Durbridge for $750, and of Hunter for $418 87; as collateral to loans made by Beecher to Davenport, namely, $500 on 18th March, 1851, $1,000 April 9,1853, and $1,300 May 16,1851, and that these loans were usurious.
    Unless this contract is proved substantially as laid, the defence of course fails; and instead of being proved, it is wholly disproved by defendant’s testimony.
    1. From Crandall’s testimony it appears that this note was a business note.
    2. The contract between Beecher and Davenport is proved to have been as follows :—
    Davenport, on 18th March, 1851, delivered to Beecher, as collateral to a loan of $1,500, the following notes
    This note in suit -
    Another note of defendant for -
    Heslewood note -
    Schlosser’s -
    $819 68
    $736 93
    $450 00
    $117 50
    And that no agreement was made as to the rate of interest on this loan.
    This ends the case, and required the judge to charge as he did, that the defendant had failed in his defence.
    H. The defence set up is usury, but the defendant also alleges some payments on the loans alleged in the answer. These loans not being proved, but disproved, it follows that no evidence of payment was admissible. Mo payment proved or offered was admissible under the pleadings and under the proof showing the loan really made. The defendant did not set up the loan really made, nor any payment on that. The Heslewood note is nowhere stated in the answer.
    But this question is not raised in the case; defendant took no exception on this subject.
    IH. The judge properly excluded the question put. Mo money was then paid, or advance made or agreed to be : of course there could not, then, have been any agreement for usurious interest. Besides, the defendant had not at all proved the contract of loan set up.
    IV. The judge properly excluded the papers offered. 1. The defendant had wholly failed to prove any contract under which these papers could be evidence. 2. They were at most but the declarations of a former holder of the paper. (Stark v. Boswell, 6 Hill, 405; Whitaker v. Brown, 8 Wend. 490; Bristol v. Dann, 12 Wend. 142; Paige v. Cagwin, 7 Hill, 361.) 3. They could not be evidence against the plaintiff, till some evidence was given to show that Bulkley and Clafflin, of whom he purchased the note, were not bond fide holders, or that they received the note after its maturity. (Nelson v. Cowing, 6 Hill, 336; Pratt v. Adams, 7 Paige, 629; Pinkerton v. Bailey, 8 Wend. 600; Waterman v. Barrett, 4 Harr. Del. 311; Jones v. Wescott, 2 Brevard, 166; 3 Day, 311, per Livingston, J.)
    V. The judge properly excluded the.evidence as to payment of the notes of $84016 and $59016, as being wholly irrelevant under the proof in the cause: they had no connexion with the $1,500 loan. He also correctly excluded the evidence as to the offer made by defendant to Beecher. Ho offer could be of any materiality. This testimony is also liable to the objections stated under the fourth point. He also, for the same reasons, correctly excluded the evidence as to what Beecher claimed.
    VI. ITnder the pleadings and evidence, the judge could not rule .otherwise than he did, namely, that “ the defendant had failed in his defence.”
   Duer, J.

We think that the learned judge who tried this cause rightly instructed the jury to find a verdict for the plaintiff for the full amount that was claimed, since we agree with bim in the opinion that the proof wholly failed to sustain the defence set up in the answer. All the material allegations in the complaint were admitted by the answer; and there was, in reality, no question of fact arising upon the pleadings and evidence that could properly have been submitted to the determination of the jury.

It has been contended that the answer sets up two or more defences not inconsistent with each other, and distinct in themselves ; but it seems to us quite evident that the only defence which it sets up is that of usury. It is true, that the answer alleges that the defendant received no value for the note in suit, and that it was misapplied by the agent in whose hands it was placed to be negotiated for his benefit; but it contains no averment that either the plaintiff, or Bulkley and Clafflin, from whom he purchased the note, or Beecher, to whom it was first negotiated, had any notice of its fraudulent misapplication, nor was there the slightest evidence to bring home this knowledge to either of them. The plaintiff, indeed, purchased the note when it was overdue, and therefore took it subject to any-subsisting equity; but no equity, of which the defendant was entitled to avail himself, is either averred', or proved, to have been then attached to it. Hence, the averment that the defendant received no consideration for the note, when he placed it in the hands of Crandall, is not otherwise important than as connected with, and indeed forming a necessary part of, the defence of usury. As to the allegation of a partial payment, it is not distinctly connected even in the answer with the note in controversy; and the proof offered upon the trial related wholly to other notes, and was therefore properly rejected as irrelevant. The whole case, therefore, turns upon the question whether the defence of usury, as set forth in the answer, was established by the evidence upon the trial; or, more properly, was any evidence given in support of this defence which the judge ought to have submitted to the jury; and the necessary answer to this question is, that not only were the allegations in the answer embodying the defence of usury unsustained by proof, but they were, in reality, contradicted and disproved by the very witnesses who were adduced to support them.

The allegations in the answer are, that the note in suit and two other note,s made by the defendant,—one for $840 16, the other for $590 16,—a note of F. A. Tallmadge for $150, another of L. Schlosser for $117 50, another by W. Durbridge for $750, and another by R. Hunter for $418 87, were all delivered by Crandall to Davenport, and by him placed in the hands of Beecher, as collateral security for three several loans made to him by Beecher, one of $500 on the 18th March, 1851, one of $1,000 on the 9th of April, and the last of $1,370 75 on or about the 16th May, in the same year; and that each of these loans was made upon an express agreement that Davenport should pay, and Beecher receive, 18f cents upon each $100 for each day that the loan or forbearance should continue.

The transaction, as proved by Davenport, was, that on the 18th March he borrowed from Beecher the sum of $1,500, on the security of the note in suit, of another note made by the defendant for $716 93, a note of R. Heslewood for $450, and the Schlosser note for $117 50, and none other; and that when this loan was made there was no specific agreement whatever between him and Beech'er as to the rate of interest' to be paid.

The answer alleges that there were three loans, founded upon the security of seven different notes, and upon an express agreement for the payment of an usurious rate of interest.

The proof is, that there was but a single loan, not corresponding in amount with either of those stated in the answer, founded upon the security of four notes only, two of which are not mentioned at all in the answer, and accompanied by no agreement whatever as to the rate of interest.

It is needless now to inquire whether other circumstances were not proved by Davenport, from which the jury i would have been warranted to infer that .the loan made to him was, in fact, usurious, notwithstanding there was no express agreement to that effect at the time of the loan; for even had an express, contemporaneous, and clearly usurious agreement been proved, it would still have been the duty of the judge to have instructed the jury that, from the variance between the usury as alleged, and the usury as proved, the defence had wholly failed, and consequently, that the plaintiff was entitled to their verdict. He could not have instructed them otherwise, without departing from the rule that has uniformly prevailed in courts of law, as well as of equity, that where usury is specially pleaded, the proof upon the trial or hearing must correspond, in all respects, with the allegations in the pleadings, or the defence will be overruled; unless the correspondence is exact and entire, the proof must be wholly rejected. (Tate v. Willing, 3 Term R. 538; Vroom v. Ditmas, 4 Paige, 526, 533; New Orleans, G. & B. Co. v. Derby, 8 Paige, 458; Rowe v. Phillips, 2 Sand. Ch. Ca. 14.) The last of the cases cited, Rowe v. Phillips, is particularly strong, since the fact of usury was clearly proved, and the only variance between the proof and the allegation was, that the excess, above the legal rate of interest, was somewhat less than the amount specified in the answer.

We certainly have no inclination to depart from the rule which the decisions, to which we have referred, and many others, so clearly establish, nor do we apprehend that the provisions of the Code have released us from the obligation of following it. We have now, indeed, a large discretion in amending pleadings so as to conform them to the facts of the case, as disclosed by the evidence, and we have, not unfrequently, exercised this power at a General Term, even when no motion to amend had been made upon the trial; but, in our judgment, it would not be a proper exercise, but an abuse of our discretion, so to amend an- answer after a trial, as to let in the defence of usury against a holder for value, and without notice, of negotiable paper. It has, however, been insisted, that no amendment of the answer was necessary in the present case, to let in the defence of usury, but that, striking from the answer all the specific allegations which the proof failed to sustain, the defence was admissible under the general denial which the answer contains, that the plaintiff was the lawful holder and owner of the note, and that the defendant was indebted to him thereon in the sum claimed to be due, or in any sum whatever. But these positions appear to us so manifestly groundless, that, had not the defence of usury been specially pleaded, the answer would, in our opinion, have been plainly frivolous, and the plaintiff entitled to an immediate judgment. The answer controverts no material averment in the complaint. It admits the making and transfer of the note, and its possession by the plaintiff, and these are all the facts which the plaintiff was bound to aver, and if denied, to prove, in order to maintain his action. Hence the denial in the answer, that the plaintiff was the lawful owner of the note, and that the defendant was indebted to him thereon, raised no issue of fact whatever, but was a denial merely of a conclusion of law, which, as such, the judge upon the trial, so far from admitting evidence under it, was bound to disregard as irrelevant and nugatory. We are in the constant habit of striking out such a denial as irrelevant or frivolous, and we believe that the same construction has uniformly been given to it by the judges of the Supreme Court. (Pierson v. Squire, 1 Code Rep. 91, id. 84; McMurray v. Gifford, 5 Howard P. R. 14; Biddington v. Davis, 6 Howard, 402.) The Code has given no sanction to the revival in any form of a general issue, under which facts, in their nature constituting a defence, although not aA'erred in the answer, may be given in evidence upon the trial; and facts tending to prove that a promissory note, or any other contract, was void in its origin upon the ground of usury, fraud, duress, &c., are, in their nature, just as certainly matter of defence, as facts subsequently arising; and .there exists, consequently, thesame necessity for averring them specifically in the answer. The system of pleading which the Code has introduced, whatever objections upon other grounds may be made to it, rests upon very sound and obvious principles. The complaint must distinctly aver all these facts which, if denied, the plaintiff must, in the first instance, prove upon the trial, in order to maintain his action. The answer must aver as distinctly all those which, when the case of the plaintiff is admitted or proved, the defendant must prove, in order to defeat a recovery. There are other questions arising upon the evidence in this case, which we have deemed it unnecessary to consider. It may be seriously doubted, whether the note in suit was not a valid business note, in the hands of Crandall, and if not, whether there was any evidence that it was first transferred upon a usurious consideration, that, under any state of the pleadings, conld properly have been submitted to the jury; but we decline to express a definite opinion upon these questions, as we prefer to place our decision upon the single ground, that no other defence than that of usury was set up in the answer, and that the allegations in the answer were wholly unsustained by the proof.

The exceptions stated in the case are overruled,. and the judgment upon the verdict affirmed with costs.  