
    Albert Smith, Plaintiff and Respondent, v. Robert Paton, impleaded, &c., Defendant and Appellant.
    1. Where the plaintiff was induced, to purchase a promissory note from the payee by the representations of the latter, that the note was a business note, given by the maker, upon full consideration; and upon suit being brought, the maker, in order to insist that the transfer to the plaintiff was usurious, attempts to prove that the note was made by him without consideration, for the accommodation of the payee, he should be held to clear and distinct proof; and a finding of a Referee, upon that point, for the plaintiff, will not be set aside unless very clearly against evidence.
    (Before Hoffman, Woodruff and Moncrief, J. J.)
    Submitted, January 10th;
    decided, January 28th, 1860
    This action was brought against the defendant, Patón, as maker, and Carpenter & Jaques as indorsers of a promissory note, for $1,000, payable four months after date.
    The maker, Patón, put in an answer alleging that the note was an accommodation note, made by him without consideration, and for the accommodation of Carpenter & Jaques, the payees; and that it was discounted by the plaintiff, for the payees, corruptly and usuriously, the plaintiff reserving a rate of interest greater than seven per cent, to wit, the rate of $24 upon each $100 for one year.
    The action was referred, by consent, to Hamilton W. Robinson, Esq., before whom it was tried, on or about the 7th day of May, 1858. On the trial,* one of the payees and indorsers, Jaques, was examined for the defendant, and on his direct examination he testified that the note was made for the accommodation of his firm of Carpenter & Jaques, and that no consideration was given by his said firm therefor; that he went to the plaintiff, and he cashed it, and added, “I think he gave me $920 for it.” I asked what he would discount it for: after some conversation he said he would give me $920 for it; I then gave him the note and took that amount.
    Upon cross-examination he said that previous to that time the defendant and his firm “ had been in the habit of exchanging notes;” about this time lie gave up my notes that he had; I am not positive I did not give my note for this; we had unsettled accounts; he never rendered me an account; we have had no settlement; I have not the notes he gave up to me; I have destroyed them; he was not indebted to me when he gave this note.
    On his own behalf the plaintiff testified that he was urged by Jaques to buy the note in suit; that Jaques represented expressly that it was a Iona fide business note; that he was at work for Baton more or less all the time, and that this note was given for work; that Baton sometimes owed him $10,000, and he considered him perfectly good for all he agrees—for all his promises; that he fully believed those representations, and that it was a good business note, and relying thereon, he purchased the note; that he did not recollect the sum he paid, but the discount exceeded seven per cent per annum; that after it became due he called on Baton and he promised payment; that whenever he saw Baton he would say “ I have plenty of money coming to me to pay all I owe, and have something besides, and you shall certainly be paid; you need have no anxiety, the note is good and shall be paid.”
    Upon this evidence the Beferee reported as follows: “ That I have been attended by the parties, and having heard their proofs and allegations, do find, as matter of fact:
    “ That the defendant, Bobert Baton, has not proved that the note in the complaint mentioned was made for the accommodation of the defendants, Carpenter & Jaques, or without any consideration therefor, or was not a business note, or that the plaintiff discounted the same usuriously.
    “ And I do find, as matter of law, that the plaintiff is entitled to recover against the defendant the amount of said promissory note, with two hundred and fifty-nine dollars and nineteen cents interest thereon, from maturity to the date of this report; said principal and interest together amounting to one thousand two hundred and fifty-nine dollars and nineteen cents, and that judgment ought to be entered for that sum.”
    “All of which is respectfully submitted.
    “ New York, May 7th, 1858.”
    Erom the judgment entered for the plaintiff in conformity with this report, the defendant appealed.
    
      
      George W. Stevens, for the defendant (appellant).
    I. The Referee erred in finding as matter of fact that the defendant had failed to prove that the note was an accommodation note, made without consideration, or was not a business note, or that the plaintiff had discounted the note usuriously.
    II. The note being an accommodation note, and having been usuriously discounted by the plaintiff, never had a valid inception, and is void in the hands of the plaintiff. (Steele v. Whipple, 21 Wend., 103; Rapelye v. Aeby, 1 Hill, 9; Catlin v. Gunter, 1 Kern., 368; Clark v. Loomis, 5 Duer, 468.)
    III. The representation by the payee that a note is business paper, does not estop the maker from pleading usury, if the note be in fact an accommodation note and has been usuriously discounted. (Dowe v. Schutt, 2 Denio, 621; N. Y. Life Ins. Co. v. Beebe, 3 Seld., 364.)
    
      Beebee, Dean and Donohue, for the plaintiff (respondent).
    I. The finding of the Referee, that defendant had not proved that the note was made for the accommodation of Carpenter & Jaques, or without consideration, or was not a business note, or that the plaintiff discounted the same usuriously, is sustained by the evidence.
    1. It is established by what the defendant did not prove, or offer to prove.
    2. A defense, so penal in its consequences as that of usuryf cannot be made out by presuming facts not proved.
   By the Court—Hoffman, J.

The plaintiff undoubtedly took the note on the representations of Jaques, that it was business paper. This is positively sworn to by the plaintiff, and not contradicted or modified by Jaques.

It is true, that this would not deprive Raton of the defense of usury if the note was an accommodation note, and he had not authorized the representations. (Dowe v. Schutt, 2 Denio, 621.) But it would induce us to scrutinize Jaques’ evidence with strictness, had he sworn that it was an accommodation note.

It is necessary that the evidence to this point should be perfectly clear and decisive. On the face of the paper, consideration is implied, and the defendant Patón is responsible as maker. The note then could be purchased at the discount proven, without the claim upon it being invalidated. If an exchange note had been given, each holder would have been a purchaser for value, and he could sell his property on such terms as he chose (Dowe v. Schutt, ut supra; Cobb v. Titus, 13 Barb., 45; affirmed. April, 1854. Selden’s notes of decisions of Court of Appeals.)

Jaques’ testimony leaves this material point in doubt, which ought to have been made out with certainty and clearness. It may have been an exchange on this evidence.

I think the Eeferee was right, and that the judgment should be affirmed.  