
    MASON v. ANTHONY.
    September, 1867.
    The rule that an estoppel in pais may avail against the defense of usury, is applicable in the case of representations made by the accommodation indorser of negotiable paper that the note is valid business paper, as well as to such representations made by the maker.
    
    Anthony Mason (for whom, on his death pending the action, George Ressegnie and Oliver Mason, administrators, were substituted as plaintiffs), sued Benjamin M. Anthony and William Jackson, Jr., in the supreme court, seeking to recover from Jackson, as maker, and Anthony as indorser, of a promissory note.
    The defense was usury. The referee by whom the case was tried, found that the note was usurious in its inception, and was passed to the plaintiff before due, by the maker, with the accommodation indorsement of Anthony; that before the purchase by him, the defendant, Anthony, was informed by the agent of the plaintiff that the latter was about to buy the note, and desired to know if it was usurious; that the defendant, Anthony, replied that it was not usurious; that there was a consideration paid for every dollar of it.
    As a conclusion of law, the referee found and decided “ that the representations of the defendant, if made by the maker of the note, would have operated by way of estoppel to prevent his availing himself of the defense of usury; but that an accommodation indorser could not, by his representations, charge the maker of a usurious note, and that a recovery against the indorser would in effect charge the maker.”
    
      The supreme court, on appeal, reversed the judgment, and ordered a new trial, without, however," assigning their reasons.
    Defendant, Anthony, appealed from the order, and stipulated that judgment absolute might be rendered, if the order should be affirmed.
    
      Bowen & Pitts, attorneys for defendant, appellant;
    Cited 
      Pitman on Prin. & Surety, 3, 130, 133, 138; Mauri v. Hoffernan, 13 Johns. 58; Hunt v. Amidon, 4 Hill, 345; Powell v. Smith, 8 Johns. 349 ; Bonney v. Seely, 3 Wend. 481; Pomeroy v. Ainsworth, 33 Barb. 118; Woodruff v. Hurson, 33 Id. 557; Jackson v. Fassitt, 12 All. Pr. 381; S. C., 33 Barb. 645 ; 31 How. Pr. 379; Hanford v. Artcher, 4 Hill, 371; reversing 1 Id. 347; Willoughby v. Comstock, 3 Id. 389 ; Artcher v. Zeh, 5 Id. 300 ; Chautauque Co. Bank v. White, 6 N. Y. (3 Sold.) 353; Martin v. Angell, 7 Barb. 410; Dezell v. Odell, 3 Hill, 316 ; Plumb v. Cattaraugus C. M. Ins., 18 N. Y. 393; Grant v. Morse, 33 Id. 333.
    
      S. H. Fillcins, attorney for jdaintiff, respondent;
    Cited Truscott v. Davis, 4 Barb. 495, 498; Kingsley v. Vernon, 4 Sandf. 361; Dezell v. Odell, 3 Hill, 315; Petrie v. Foster, 31 Wend. 173; Kingsley v. Sandford, 5 Sandf. 364, and cases cited; Lawrence v. Brown, 5 N. Y. (1 Seld.) 391; 4 Duer, 408; 5 Id. 336; 3 Bosw. 348; 39 Barb. 575; 1 Greenl. Ev. § 307; 1 Phil. Ev. Cow. & Hill & Edw. Notes, 453-464, and cases cited; Dowe v. Schutl, 3 Den. 634, and cases cited; Pichard v. Dean, 6 Ed. & Ell. 469; Freeman v. Cooke, 2 Exch. 654; 3 Kent Com. 268, note c; Hicks v. Crane, 17 Vern. 449; 3 Harring, 90; Banzely v. Spring, 3 Shep. 130; Davis v. Thomas, 5 Leigh, 1; Crockett v. Lashbrook, 5 Monr. 530; Duchess of Kingston’s Case, 3 Smith L. Cas., with Hare & W. Notes, 561, and cases cited.
    
      
       Compare Shapley v. Abbott, 42 N. Y. 443.
    
   By the Court.

Bocees, J.

It has been settled in the su-

preme court, in numerous cases, that an estoppel in pais may be urged against the defense of usury, the same as in any other case where the doctrine of estoppel in pais is applicable. The decisions in that court are numerous and uniform. Ferguson v. Hamilton, 35 Barb. 437; Chamberlin v. Townsend, 36 Id. 611; Merchants’ Bank of Brooklyn v. Townsend, 17 How. Pr. 569; Truscott v. Davis, 4 Barb. 495; Dow v. Schutt, 3 Den. 631. The rule was also well settled in the late court of chancery. Holmes v. Williams, 10 Paige, 336; Mitchell v. Oakley, 7 Id. 68. Also in the superior court. Clark v. Sisson, 4 Duer, 408. It is the same in Connecticut. Roe v. Jerome, 18 Conn. 138; Middleton Bank v. Jerome, Id. 443. And perhaps in some other States. The estoppel, too, has often been held to be available against an indorser as well as maker.

The distinction marked by the referee, and on which he based his decision, has never been recognized in any reported case, nor is it sound in theory. There can be no reason why an indorser should not be estopped by his representation that the note is valid business paper, as well as the maker. The consequences to the purchaser are the same in both cases.

There is a question, however, not considered in any of the cases, which lies at the foundation of the rule, apparently so Well established in the supreme court. It is this: whether the doctrine of estoppel in pais should have applicatiou to the defense of usury. This question is worthy of consideration, and is still open in this court. Judge Dentó seems to have had it in mind when discussing the subject in Bank of Geneva v. Patchin Bank, 13 N. Y. 316. In speaking of the rule, he says; This is carrying the principle of estoppel to the length of protecting a transaction prohibited by a positive law, founded upon considerations of public policy.” He adds: " It is not necessary to affirm that doctrine in this case; ” hence he refrained from entering upon its examination. The point was commented on in Ferguson v. Hamilton, 35 Barb. 427, and suggestions were made, here unnecessary to repeat.

On careful reflection and discussion, we are of the opinion that an estoppel in pais may be urged against the defense of usury. The same considerations of morality and public policy exist in that as in other cases where the doctrine of estoppel obtains. ¡Nor should we, on other than grounds of absolute necessity, disturb a rale which has so long controlled the business affairs of the country, and been relied on as settled law.

The order appealed from must be affirmed; and the plaintiff is entitled to judgment absolute, pursuant to the stipulation given on the appeal.

All the judges concurred, except Fullebton, J., not voting.

Judgment absolute, with costs.  