
    John F. Butterworth, Receiver, &c., Plaintiff and Appellant, v. Jacob Pecare, et al., Defendants and Respondents.
    1. In an action by the Receiver of a banking incorporation against the indorser of a note, an answer alleging that the bank of which plaintiff is receiver, discounted the note on which he sues, upon a corrupt agreement against the form of the statute, that the defendant should receive $300, (the amount of the note being $500, and it being payable three months from its date,) and leave the remaining $200 in the bank until the note became due, then to be applied towards its payment, sufficiently states the defense of usury,
    2. The allegation that the note was discounted, (when unaccompanied by other averments,) imports a discount at a legal rate of interest, for the time the note then had to run. If plaintiff desired more specific details, his remedy was by motion.
    3. Where it is proved that the bank discounted the note at the full legal rate for the time it had to run, and required the indorser to give them his check for $200, in pursuance of an agreement to that effect, on which it was discounted, and the next day charged this check against the credit given on the discount, a verdict finding usury should be sustained. Charging the check in account, shows that the indorser was to have the use of only $300, less the discount on $500, and was to pay therefor interest on $500.
    4. Upon such facts it would be proper to instruct the jury to find for the defendants.
    5. Where the allegations of an answer are such as entitled the defendant to a verdict if proved, and the plaintiff offers on the trial to admit them, and objects to the admission of any evidence on the part of defendants, on the ground that the answer constitutes no defense, he cannot avail himself of exceptions to subsequent errors in the admission of evidence in support of the answer.
    6. A receipt having been identified by a witness as signed by him, it is proper to allow the adverse party to ask for what purpose the receipt was given, though the receipt itself has not then been offered in evidence.
    7. If the witness, in answer to such question, states the contents of the receipt, an objection must be taken to the answer. An objection to the question alone is unavailing.
    (Before Bosworth, Oh. J., and Woodruff and White, J. I.)
    Heard, November 4;
    decided, December 7, 1861.
    Appeal from a judgment entered on a verdict, after trial before Chief Justice Bosworth and a Jury, on the 24th of October, 1860. The plaintiff sued as the receiver of the Island City Bank, to recover on a note made by B. Cohn and indorsed by Jacob Pecare to the bank.
    The contents of the pleadings are sufficiently stated in the opinion of the Court. The defendant Pecare, claimed a small sum as due from the bank to him as a depositor; but this counterclaim it is unnecessary to notice.
    Upon the trial Counsel for plaintiff objected to any evidence as to the terms of the agreement between the bank and the defendants, at the time of discounting the note in suit, on the ground that the answer stated no defense; and he offered to admit the contract to be exactly what it was stated to be in the answer, and objected to any proof on the subject; which objection was overruled, and plaintiff’s Counsel excepted.
    In the course of the cross-examination of the defendant, who had testified as a witness in his own behalf, he was shown a receipt which he admitted to be signed by him.
    On his re-examination by Counsel for defendants, he was asked “what was the receipt just shown you given for ? ” Plaintiff’s Counsel objected, on the ground that the receipt was not offered in evidence. The Court overruled the objection, and plaintiff’s Counsel excepted.
    The witness then answered, stating fully the contents of the receipt. To this answer no objection was taken.
    
      Charles A. Peabody, for plaintiff, (appellant.)
    I. The answer states no defense. It merely alleges “an understanding ” which is no defense. It does not state at what rate, or how much interest was charged, or for how long a time the $300 was loaned, and there is no means of seeing what rate or amount was charged, and it cannot be seen at what rate, for what time, or to what amount in the whole, interest was charged.
    II. The motion for judgment, made by plaintiff at the trial, should have been granted. The answer contained no defense.
    Usury as a defense must be pleaded, and with no less precision than is required in defenses consistent with honesty and good morals. The ancient rule as to strictness in pleading, is in force. (Boyce v. Brown, 7 Barb. 80 ; Manning v. Tylor, 21 N. Y. R., 567 ; Vroom v. Ditmas, 4 Paige, 526 ; N. O. Gas Co. v. Dudley, 8 Paige, 452 ; Curtis v. Masten, 11 Paige, 15 ; Fay v. Grimsteed, 10 Barb., 321-329 ; Gould v. Horner, 12 Barb., 601 ; People v. McCumber, 18 N. Y. R., 315.)
    A motion for judgment on the pleadings is properly made at the trial.
    
      Fx necessitate, a Court cannot avoid giving judgment for the plaintiff in such a case. There is no issue to be tried. (Van Valen v. Lapham, 13 How. Pr. R., 243.)
    III. By the transaction, Pecare, to whom the $200 belonged, became the debtor of the bank as indorser of the note in suit.
    The bank hold this, sum as security for the payment of the note, or as payment in anticipation—a lawful purpose. The fact that as an incident to this ■ arrangement, the money would, in the meantime, remain in the possession of the bank, did not make the transaction usurious. (Manning v. Tylor, 21 N. Y. R., 567 ; See p. 569 ; Woodruff v. Hurson, 32 Barb., 557 ; Nourse v. Prime, 7 John. Ch. R., 69 ; 1 R. S., 772, §§ 1-5 ; Laws of 1837, ch. 430, § 1 ; Greggs v. Howe, 31 Barb., 100 ; Cloyes v. Thayer, 3 Hill, 565.)
    
      Anthomy R. Dyeit, for defendants, (respondents.)
    I. The plaintiff’s motions were properly overruled.
    1. Upon the grounds set forth in the case. (Code, § 173 ; Id., § 153 ; 3 Kern., 127 ; 3 Abb., 82 ; 24 Barb., 288.)
    2. The motions asked for too much. All the plaintiff in any event could have asked for, was the amount of the note, less the $200 and the $60 deposit set up in the answer.
    3. The answer is entitled to as liberal a construction as any other, (Catlin v. Gunther, 1 Kern., 368,) and, tested by §§ 149 and 159 of the Code, sets up defense of usury sufficiently.
    4. At best for the plaintiff, here was a good defense defectively pleaded.“ The Court will not listen to objections to such an answer at the trial. The Code does not save such objections, as it does those to the complaint. (4 Seld., 289 ; 4 Kern., 248 ; 22 Barb., 394 ; 23 Id., 26 ; Code, §§ 169-176.)
    This verdict would have been sustained on a motion for judgment non obstante veredicto, before the Code, by the statute of jeofails.
    5. Justice has been done. The defendant has a verdict. Ho surprise was pretended, (Code, § 169) > no evidence offered by the plaintiff to contradict our evidence; and no exception taken to the Judge’s charge; and the Court will not disturb the verdict. (Belnap v. Sealey, 4 Kern., 143.)
    H. The exceptions relating to the evidence are not sustainable.
   By the Court—-Woodruff, J.

The various points urged by the Counsel for the appellant, on the argument herein, (with one or two exceptions,) all involve the questions whether usury was sufficiently alleged as a defense in the defendant’s answer, and whether evidence of such usury was given on the part of the defendants which it was proper to submit to the Jury.

I. The action is brought upon a promissory note made by the defendant Cohn, and indorsed by the defendant Pecare, and the plaintiff claims as the Beceiver of the effects of the Island City Bank, who were holders of the note when the plaintiff was appointed Beceiver.

The answer states that the Bank discounted the note for the defendant Pecare, under and in pursuance of an agreement wherein it was, corruptly and against the form of the statute, agreed that the said bank should lend and advance to him the sum of three hundred dollars, and charge to him the interest on the sum of five hundred dollars; and that this was done by the form of a discount of the note in question for five hundred dollars, with the understanding that (notwithstanding interest was to be charged, as above agreed, on five hundred dollars) he should only receive or draw out three hundred dollars, and the residue of the apparent proceeds of the discount should remain in bank until the note became due, and then be applied towards the payment of the note.

To whatever criticism this answer may be liable for want of particulars of rate of interest, or of the time for which it was charged, we do not hesitate to say that it states a transaction which was usurious on its face.

"Whenever the discount took place, the answer plainly imports a discount for the time the note then had to run. That is the natural and proper meaning of an averment that the Bank discounted the note. Such a statement imports (when unaccompanied by other averments) that the Bank received the note and deducted therefrom the discount for the unexpired term, and allowed to the party for whom it was discounted the then present worth. And so, in the absence of further specification, that would be taken to mean a discount at the legal rate of discount.

If the plaintiff desired any more specific details of time or rate, or other particulars of the transaction, he should have sought it by motion.

That a corrupt agreement to lend three hundred dollars and charge the borrower the interest on five hundred dollars, is a usurious agreement, we think clear; and the delivery to the lender, of a promissory note, in execution of such an agreement, passes no title.

2. Did the defendants prove such an agreement, or give evidence tending to establish it, which it was proper to submit to the Jury.

The defendant Pecare, testified, that on his application to the Bank to procure the discount of the note, the President “ said he would discount the note for five hundred dollars, charging me,” (Pecare,) “interest of course, and that I should give my check for $200, which would be kept there against me, (to be made out to the order of the cashier,) so that I would have $300, less the discount on the $500 I agreed to that arrangement, and it was carried out. The full discount on the whole $500, was taken out, from the time I received the note until it became due. I was credited with the amount of the discount; my book showed $400 and odd. I gave back my check for $200. I could not draw the $500, because I had given my check to the cashier for $200. I could not draw the $200, because they had my check for it, and my account was charged for the $200. I was allowed to draw for the $300 less the discount on $500.”

The book-keeper of the Bank showed that the note for $500 was discounted, and the proceeds $497.12, placed to the credit of Pecare, on the 20th day of August, 1857, and that the check for $200, was charged to Pecare against that and other credits in account, on the next day. This established, in contro vertibly, that Pecare had the use of no more than $297.12 upon that transaction.

To our minds, this testimony did prove the agreement set up in the answer, and that it was carried into execution.

Computation shows, that on the day of the discount, August 20th, the note had 29 days to run, (to September 18th, when it became due,) and that the Bank charged $2.88 for the discount, which is a few cents over the legal discount, and, indeed, a few cents over the legal interest of 7 per cent on $50.0 for the 29 days.

There was no material contradiction of this testimony; on the contrary, the evidence of a similar previous transaction, which might very properly bear upon the intent of the parties, and the entries in the books, seem to corroborate it.

Indeed, had the Court instructed the Jury that usury was established by the proof, we incline to think such an instruction would have been sustained. It is at least pal-" pable, that the most the plaintiff could ask was', that the case be submitted to the Jury.

The plaintiff, however, insisted that he was entitled to a peremptory instruction excluding the question of usury from the case. So far from being entitled to this, he had, we think, all the indulgence which, in any aspect of the proofs, the case would justify.

From, the tenor of the charge and the corase of examination of the witnesses, it appears that the effect of the evidence tending to establish usury was sought to be avoided by this view of the transaction, viz.: That the note in question was discounted at a legal rate and the proceeds placed to Pecare’s credit, but that he was required to leave in the hands of the cashier his check for $200, as security to that extent for the payment of the note when it should become due. That there was, therefore, no permission to the Bank to use $200, and no intent to retain or charge interest on a greater sum than was lent, and placed out of the control or use of the Bank during the period of the loan.

It is obvious that the fact, proved without contradiction, that the Bank charged Pecare the $200 check at once, and so took the money to that extent from his account and had it in hand to use for its own purposes without restriction, pretty effectually contradicted such an explanation of the transaction. And, besides, we are not here to be regarded as conceding that any such explanation was warranted by the evidence, or could affect the legal character of the transaction, so long as Pecare was only allowed the use of $297.12, and the $200 was, in fact, in the possession and at the use of the Bank, and the check protected them in that possession and use.

Kevertheless it will suffice to say that the plaintiff had the benefit of a fair submission of this theory of his case to the Jury, and they have rejected it.

That the whole question, including the actual intent of the parties, might be passed upon as one of fact, and that the plaintiff’s attempted explanation might be presented to their minds, so that, if there were no intentional corrupt agreement to take usurious interest on the loan, the plaintiff might have a verdict, the Court instructed the Jury, in a manner most liberal to the plaintiff, that “if the agreement was, that on the note being discounted and passed to the credit of Pecare, $200 was to be left there for security for the ultimate payment of the note, without any expectation on the part of the Bank to use that $200 to its own profit, the agreement would not be usurious, and the plaintiff would be entitled to recover.”

But the Jury found that the arrangement was made with the intent of securing to the Bank interest on $500, (less discount,) for the time the note had to run, for the use of $300, (less discount,) and upon this finding, we think the instruction that such an arrangement was usurious, clearly right.

In regard to the plaintiff’s exceptions, not embraced by the views thus expressed, we remark, first, that the plaintiff’s offer to admit the facts stated in the answer, would, we think, have justified the Court in deciding, as matter of law, and without receiving further evidence, that the defendant was entitled to a verdict. The reception of evidence has done the plaintiff no harm. It has rendered the defendant’s case, it may be, more definite in its details than was set down in the answer, without departing therefrom in any substantial particular. The Jury have found from the evidence, what the proposed admission would have required them to find.

The testimony in regard to the previous note discounted under a similar arrangement, was not important, but it might properly aid in showing the corrupt intent.

The conversation with the plaintiff tended to show an admission by him that only $300 had been received by the defendant.

The question what a receipt testified to was given for, if it had called for the contents of the receipt, would have been objectionable, but it simply called for the purpose of the receipt. It was the answer to the question which was in this respect objectionable, and that was not objected to. If the objection that the receipt should be produced, ought to have led to the exclusion of the question, the objection was afterwards obviated by the production of the receipt.

It is suggested on the argument, that the transaction was a sale of the note by Pecare, and that a sale for any sum, however small, would not have made the transaction, usurious. No such question appears to have been raised on the trial. If it was, the verdict of the Jury rejects that interpretation of the contract. No doubt a chose in action may he sold, and when the transaction is, in the mind and intent of the parties, a sale, it will not he usurious; but even when the form and terms of a sale are used by the parties, if in truth it is with a corrupt intent, and for the purpose of securing to a lender usurious interest, it is void. Here the Jury have found that the agreement was with that intent and purpose.

The judgment and order denying a new trial should be affirmed.  