71 N.Y.S. 67 | N.Y. App. Div. | 1901
The alleged usury relates to the loan of the money evidenced by the promissory notes mentioned in the mortgage. It appears that the defendant Weir retained from the avails of the three notes dated December 18, 1896, aggregating $850, the sum of $100, and also retained from the avails of the $800 note, dated February 1, 1897, the sum of $100. Had Weir been the person who loaned the money, this, together with what was at the time said between the parties, might properly be construed as an agreement to pay more than lawful interest. But it appears clearly from the testimony that Weir’s relation to the nqtes was that of accommodation indorser only, and that, for the sum mentioned, he, at the
The allegation of lack of consideration seems to stand upon the following facts, as established by the proof: The $800 note mentioned in the mortgage, and for the payment of which the mortgage was in part given to secure, is a note made by the mortgagor at the date of the mortgage, and the mortgage was made to follow the note into any hands it might afterwards pass. On the day of the execution of the note and mortgage both note and mortgage, as contemplated by the parties, passed to the First National Bank of Binghamton. This bank loaned to the maker of the note and mortgage the $800 on these instruments. To that extent there can be no question of consideration for the mortgage. The mortgagor does not appear to be maker or indorser of either of the three other notes aggregating $850, mentioned in the mortgage; but an examination of the record discloses that at the time of executing the mortgage the mortgagor did have indirectly a personal and financial interest in the payment of these notes, and had at the time of their inception pledged his individual property to secure their payment. Birdsall, the mortgagor, and McCallum, one of the makers of these three notes, were partners conducting the business of the Manhattan Club at Scranton, Pa. They jointly were the owners of the fixtures, furniture, and equipment of the club, which they had purchased from one Morey shortly before the date of these notes, and had paid or agreed to pay therefor $1,000. To obtain money in part to complete the payment for this personal property, these notes were made, and the indorsements thereon of Wheeler and Weir secured; but such indorsement was given on the agreement of Birdsall and Mc-Callum to transfer to Wheeler and one Mercereau the title to _ this property, and before the avails of the notes were paid over a bill of sale absolute on its face was made to Wheeler and Mercereau, and they gave back to Birdsall and McCallum a written promise to surrender a half interest in the property upon the payment of these three notes. At the time of the execution of the mortgage, neither
As to the remaining alleged ground of invalidity of the mortgage, to wit, that the money was borrowed to be used in aid of gambling games to be conducted by Birdsall and McCallum at the Manhattan Club in Scranton, Pa., in violation of the statutory prohibition of that state, the proof shows that the residence and domicile of all the parties to the transaction was then and is now in the state of New York; that the transactions touching the execution and negotiation of the mortgage and all the notes occurred in this state, and the mortgaged property is situated here; that there is no proof that Wheeler, Weir, or the First National Bank of Binghamton had any actual knowledge touching the statutory law of the state of Pennsylvania on the subject of games of chance, or that they were prohibited in that jurisdiction; that the First National Bank of Binghamton became the first owners of all the notes mentioned in the mortgage,—the owners at their inception; that the First National Bank of Binghamton had no knowledge whatever at any time that the money loaned by it on these notes, or notes and mortgage, was to be used for the alleged purposes; that there is no sufficient evidence to support a finding that either Wheeler or Weir, at the time of their indorsement of the first three notes, dated December 18, 1896, had any knowledge that the avails of these notes, or any part of such avails, were to be used in aid of prohibited gambling games; that there is sufficient proof to support a finding that both Wheeler and Weir, at the time they indorsed the $800 note on February 1, 1897, knew that the purpose of the proposed loan was to obtain money to be used in the conduct of gambling games at the Manhattan Club in Scranton, Pa. As we have, seen, however, these indorsers acted only as agents of the borrowers, and their kntiwledge is not to be imputed to the bank where the loan was negotiated. In the hands of the bank the notes and mortgage were free from all taint suggested by this allegation. In the hands of Wheeler and Weir, to the extent, at least, of the first three notes, the mortgage was equally free from all such taint; and this seems to dispose of this remaining charge against the validity of the mortgage in
Judgment affirmed, with costs. All concur in result, except PARKER, P. J., who dissents.