
    36 N. Y. 319-Followed, 3 T. & C. 360, 361.
    Robert B. Williams et al., Appellants, v. Benjamin B. Tilt, Thomas Thorp and Solomon Newman, impleaded with John S. Birch, Lucius B. Nutting and William G. Nutting, Respondents.
    Where a consignee has received and made advances upon goods in the usual course of his business, without notice of any fraud practiced by the consignor in obtaining the same, he is to be deemed a bona fide holder without respect to the character of the contract made by him with his consignor.
    The term bona fide holder or purchaser has reference to the standing of the holder or purchaser in respect to the original owner, that is, that he shall be free from any privity with the fraud, by having no part in it, or notice of it, either actual or constructive.
    The existence of usury in the contract between the fraudulent purchaser and. his vendor, who, without notice of the fraud, makes advances on the property, does not affect the relative rights existing between him and the original owner.
    The cases of Bamsdel v. Morgan (16 Wend., 574), and Krutzen, v. Parks (2 Sandf. S. C. R, 60), commented on and questioned, by Parker, J.
    A usurious agreement cannot be assailed by one not a party to it, or not claiming under the party injuriously affected by it.
    
      S. T. Sherman, for the appellants.
    
      L. B. Marsh, for the respondents.
    36 N. Y. 319-Distinguished, 26 Hun 647.
   Parker, J.

On the 26th of April, 1857, the firm of John S. Birch & Co., consisting of John S. Birch, Lucius B. Rutting and William Gr. Rutting, by false and fraudulent representations as to their solvency, induced the plaintiffs to sell and deliver to them six bales of silks, on a credit of sixty days. On the 30th of April, William GL Rutting retired from the firm, his interest therein having expired by limitatation. On the 27th of May the remaining partners obtained from the defendant Thorp, acting as the agent of Tilt, an advance of $1,000, upon a promise to consign the silk to Tilt for sale upon commission, on receiving another advance of $2,800 ; and on the 28th of May the silk was delivered by the said two remaining partners to Tilt & Thorp, and such additional $2,800 obtained. Tilt subsequently, and prior to June 12th, sold and delivered two of the bales to the defendant ¡Newman, who, neither at the time of the purchase, nor afterward, up to the time of the trial, paid the price or any part thereof.

On the 12th of June the plaintiffs gave notice to Tilt & Thorp that the silk had been fraudulently obtained from them hy Birch & Co., and demanded its delivery to them, which Tilt & Thorp refused, having four of the bales still in their possession. ¡No demand appears to have been made of ¡Neyzman.

The plaintiffs thereupon brought this suit in the Superior Court of the city of ¡New York, against all the members of the firm of Birch &.Co., and Thorp, Tilt & ¡Newman, alleging in. their complaint the application of Birch & Co. to the plaintiffs to purchase from them six bales of silk on credit, and that upon such application they represented themselves to be solvent and in good circumstances, and possessed of large means. That in reliance upon such representations, and in consequence thereof, the plaintiffs sold the said firm six bales of silk, describing them, amounting in value, at the prices agreed upon, to $4,490.53. That they delivered the said silk to the defendants Birch '& Co., on the 29th day of April, 1857, and the said firm promised to pay the sum above mentioned in sixty days after the said delivery. That the said representations were false and fraudulent, and intended to cheat and defraud the plaintiff, the said firm having been, at the time of the purchase, largely insolvent, as they then well knew, and that soon after. they stopped .payment and made an assignment. “That the said firm of. John S. Birch & Co. put the said silk in the hands of the defendant Thorp, acting as the agent of the defendant Tilt; but that said Thorp & Tilt, as the plaintiffs are informed and believe, received the same knowing that it had been ■obtained under the circumstances above mentioned, and without paying any consideration therefor.” That the plaintiffs, on the 12th of June, 1857, gave notice to Thorp & Tilt that the silk had b'een obtained from them by fraud, and' demanded- the return to them of the same, but that Thorp & Tilt refused to deliver it up, also alleging that Thorp & Tilt retained two of the bales, and had transferred four of them to defendant Newman, who still held the same, and who was also cognizant of the facts above stated, and paid no consideration for the goods, and that the plaintiffs had given notice to him of the fraud, and demanded of him the goods, but that he refused to deliver up the same. The com- . plaint then demands judgment “ that the defendants may be compelled to deliver up to the plaintiffs all the silk in their possession or under their control at the time of their receiving the notice aforesaid, and to pay to the plaintiffs the price of all the goods not so returned, together with the damages sustained by the plaintiffs by reason of the said fraudulent acts of the defendants.”

Upon the trial before the court and a jury, evidence was given upon the issue of fraud in the purchase by Birch & Co., and evidence showing the transfer to Tilt of the silk to sell on commission, and his advances thereon ; his sale of two bales thereof to Newman, and the notice to Tilt & Thorp; the demand of them, and their refusal, as above stated. In the course of the proof showing the transfer to Tilt, evidence came out tending to show that Tilt, by arrangement between him and Birch & Co., charged them one per cent per month, besides his regular charges and commissions, for the advances made by him upon the silks.

Upon the evidence affecting the right of the plaintiffs to recover against Tilt, Thorp & Newman, certain questions arose, all of which were disposed of by the court substantially in accordance with the request of the plaintiffs’ counsel, except two, of which one is, that if Birch & Co. acquired no title as against the plaintiffs, the other defendants acquired none from Birch & Co., and no right to hold the goods, as against the plaintiffs, if they obtained them by a pledge or consignment under a contract for a usurious advance of money; and the other, that after the dissolution of the firm of John S. Birch & Co., by the retirement of William Gr. Nutting, the remaining partners had not the power to pledge the property, in order to raise the money for their own purposes. In these two particulars, the requests to charge, to the effect above stated, were refused, and the plaintiffs excepted.

A verdict was found against the defendants John S. Birch, Lucius B. Hutting and William G. Hutting, for the value of the silk, with interest, and in favor of the other defendants.

The court ordered the exceptions to be heard in the first instance at the .General Term, and judgment to be in the mean time suspended.

The General Term refused a new trial, and gave judgment in accordance with the verdict. From the judgment in favor of the defendants, Tilt, Thorp & Newman, the plaintiffs, appeal to this court.

The ruling at the trial that usury was not a question in the case I cannot but think correct. This ruling was sustained by the General Term, on the ground that no issue on the subject of usury was made by the pleadings; and the discussion upon the argument in this court as to whether this ruling was correct has been confined almost entirely to the question whether it was necessary, in order to the raising of the questibn of usury, as it was sought to be raised by the plaintiffs, that they should have set it up in their complaint. •

I cannot agree with the General Term in holding that this was necessary. The case cannot be regarded as one on the equity, side of the court to set aside the sale to Birch & Co., and the transfer by them to these defendants. The whole structure of the complaint, both in its statement of the cause of action and of the relief demanded, makes it a case for trial by jury under sections 253 and 254 of the Code; and it has been, treated by the parties and the court below as an action at law, triable by a jury and not by the court. If the plaintiffs were attempting to reach the property in question through the setting aside of the contract between Birch & Co. and Tilt, on the ground of usury, and were in a condition to make such attempt, it would doubtless be necessary for them to show, by appropriate allegations in their complaint, how that contract was contaminated with usury. But if they are proceeding either to replevy the goods from Tilt, or recover against him for their conversion, the complaint may be very different. In such case, if it sets forth the facts showing the plaintiffs’ title to the goods, and that the defendant has converted them to his own use, or wrongfully detains them from the plaintiffs, it is sufficient. (Tallman, v. Turck, 26 Barb., 167, and cases there cited.)

Such is the condition of the case, as it stands before us. The action, so far as these defendants are concerned, is either to recover possession of the goods, or damages for their com version. In either view, the complaint is sufficient to entitle the plaintiffs to raise the question of usury, as they sought to raise it. The position taken by the plaintiffs in the complaint is, that Birch & Co., having obtained goods from them by fraud, which have gone into the hands of these defendants, under circumstances not entitling them to hold them as bona fide purchasers, they, the plaintiffs, have the right to reclaim them, or recover their value from the defendants. It was not necessary for the plaintiffs to show how these defendants obtained possession of them, that was matter of defense. If the plaintiffs showed title in themselves, as they did prima facie, and possession by defendants and their refusal to deliver them up, on notice of the fraud and demand of possession, that was all they were required to show; and all that their complaint contains more, may be rejected as surplusage. The defendants were thereby put upon showing that they were bona fide purchasers for value; and when, in the process of making out that character, it appeared, either from their own showing, or by rebutting' evidence, that the contract under which their right to the goods accrued was usurious, it was entirely competent for the plaintiffs to avail themselves of that circumstance as a bar to the defendants’ claim of being bona fide purchasers, provided it was of a nature to operate as such bar in their favor. It comes up as rebutting evidence, and therefore could not have been pleaded in the complaint. I apprehend it is not now, any more than formerly, necessary, in pleading, to state matter which would come more properly from the other side, nor to anticipate the answer of the adversary,which, according to Hale, Gh. J., is “ like leaping before one comes to the stile.” It is sufficient that each pleading should, in itself, contain a good prima fade case, without reference to possible objections not yet urged. (Stephens on PI, 354.) But, as I have already said, I am unable to see how the question of usury between Birch & Co. and Tilt, in the transfer of the goods, can affect the plaintiffs’ right to them.

It is not denied that, if Tilt was a dona fide purchaser of consignee of the goods from Birch & Co., for value, without notice of the fraud, he is entitled to hold them as against the plaintiffs. But it is insisted that if the contract of transfer by Birch & Co. to him was infected with usury, that circumstance prevents his being a dona fide consignee, and entitles the plaintiffs to recover against him.

In support of this position the plaintiffs’ counsel cite Ramsdell v. Morgan (16 Wend., 574) and Krutzen v. Parks (2 Sandf. S. C., 60). These cases clearly hold the doctrine contended for by the plaintiffs. In the first, the learned judge who gave the opinion of the court, rests his decision of this question on the statement that, there is a solecism on the face of the expression, 6 a dona fide purchaser on usury.’” I cannot but regard the remark of the learned judge as embodying a mistaken application of the dona fides required, which is, with reference to the original and not the intermediate vendor. The purchase must be without any complicity with the fraud committed on him. If the second purchaser is free from any privity with that fraud, by having no part in it, and no notice of it, either actual or constructive, he is a dona fide purchaser, without reference to his standing as to his immediate vendor. It is not good faith to him, which is the subject of inquiry, but to the original owner. The existence of usury in the contract between the fraudulent purchaser and his vendee, who, without notice of the fraud, makes advances on the property, does not at all affect the relative rights and equities between him and the original vendor. The case of Krutzen v. Parks follows Ramsdell v. Morgan as authority without discussion. Aside from these two cases we are cited to none, and I do not find any which authorize such departure from the reason and logic of the rule.

If it should be said that, in addition to the requirements already averted to, the purchase must be in the usual course of trade, I reply that the consignment in the case at bar Was in the usual course of trade. In the first place, the goods came to Tilt in their accustomed channel. Birch & Co. had the goods to sell. Tilt was a commission merchant, whose business was to receive consignments of goods for sale, upon making advances upon them, a customary mode of dealing with such property. Again, he paid value for them at the time he took them. Said Spencer, Oh. J., in Coddington v. Bay (20 J. R., 651), I understand by the usual course of trade, not that the holder shall receive the bills or notes thus obtained (that is, from a fraudulent payee) as securities for antecedent debts, but that he shall take them in his business as a payment for a debt contracted at the time.”

In this view I am strongly impressed with the belief that Tilt was to be regarded as a Iona fide purchaser, notwithstanding the usury in the transfer to him, and that the cases of Ramsdell v. Morgan and Krutzen v. Parks are wrong in principle and not supported by authority. But however that may be, it is quite clear that, in another point of view, they are in conflict with a long course of decisions.

It has been long held, and should now be deemed settled in this State, that a usurious agreement cannot be assailed by a stranger, that is, one not a party to it, nor claiming under the party injuriously affected by it. The rule was stated by Bronson, J., in Dix v. Van Wyck (2 Hill, 522), as follows: “ a mere stranger, or one who has no legal interest in the question, shall not officiously intermeddle in the matter, nor take advantage of a statute not made for his benefit.” A similar statement was made by the chancellor in Post v. Dart (8 Paige 640). He said, “ a mere stranger cannot insist upon the invalidity of a usurious security, * * but the defense of usury may be set up by any one who claims under the mortgage, and in privity with him.” This is the extent to which the cases have carried the right, and even the right of privies may be cut off by the waiver of the original party. (Sands v. Church, 2 Seld., 347.) The contract is not absolutely void but only voidable, at the election of the borrower, or, those who are privies in interest or in contract with him. Hence, no other party can make the objection. (2 Parsons on Notes and Bills, 407; Jackson v. Henry, 10 J. R., 185; Shufelt v. Shufelt, 9 Paige, 145; Post v. Bank of Utica, 7 Hill, 391, 406; DeWolf v. Johnson, 10 Wheat, 367, 393; Green v. Kemp, 13 Mass. 515; Bridge v. Hubbard, 15 Mass., 103; Morris v. Flood, 5 Barb., 136; Bullard v. Raynor, 30 N. Y., 197; BiWmgton v. Wagoner, 33 id., 31.) It is difficult to see how, under the rule above referred to, the plaintiffs in the case at bar can be heard to complain of usury in the contract "between Birch & Co. and defendant Tilt. They are not claiming the property in question under Birch & Co., but by permanent title. Hot having succeeded to the title of Birch & Co., plaintiffs cannot take their place with reference to the contract, and claim the benefit of a statute not made for them.

In regard to the proposition that, after the retirement of one member of the firm of Birch & Co., the other members of the firm had no power to pledge the property in order to raise money for their own purposes, which the plaintiffs’ counsel asked the court tó charge, there are several answers. It is enough that there is no evidence in the ease tending to show that the remaining members of the firm were seeking to obtain money for their own purposes; on the contrary, the presumption is, that the money they raised was in the due administration of the property of the firm, and for its benefit.

On the grounds above stated, I am of the opinion that the judgment appealed from should be affirmed.

All affirm.

Affirmed.  