212 A.D. 232 | N.Y. App. Div. | 1925
The amended complaint herein sets forth that on the 26th day of February, 1919, the plaintiff was the owner and entitled to the possession of thirteen Allegheny county (Penn.) bridge bonds due December 1, 1941, in the amount of $1,000 each, of the aggregate value of $13,000; and that on or about that day the bonds were stolen from plaintiff and taken from his possession without his
It is further alleged:
“ V. Upon information and belief, that said agreement and loan were corrupt, usurious and void, in that it reserved for the loan and forbearance of said Ten thousand ($10,000) Dollars, a greater sum than at the rate of six per cent (6%) per annum as allowed by the statutes in such cases made and provided.
“ VI. That by reason of said corrupt and usurious agreement, the note executed by said S. Charles Sugarman to defendant, as aforesaid, is null, void and of no effect and that the pledge of said bonds is likewise null and void and of no effect.
“ VII. That plaintiff has no adequate remedy at law for the relief prayed for herein.”
The judgment demanded is:
“ (1) That plaintiff be adjudged the borrower of the said Ten thousand ($10,000) Dollars within the meaning of section 377 of the General Business Law of the State of New York.
“ (2) That the said note be declared, adjudged and decreed usurious and void, under sections 370 and 373 of the General Business Law of the State of New York.
“ (3) That plaintiff be adjudicated to be the true and lawful owner of said bonds and entitled to the immediate possession thereof.
“ (4) That the defendant be decreed and compelled to deliver up to the plaintiff the aforesaid bonds or account to him for the value of the same.
“ (5) That the defendant may be restrained and enjoined from selling or disposing of ‘the said bonds pending the determination of this action.”
The motion, which was denied, was for judgment dismissing the
Plaintiff relies upon the case of Sabine v. Paine (223 N. Y. 401) as overturning this long-established rule. But I think the Appellate Term of this Department correctly interpreted that opinion in Levy v. Hallager (119 Misc. 695) wherein it said: “Appellant argued, as he does now, that the usurious notes being void the checks given therefor were without consideration. In support of this view he quotes from the language of the opinion in Sabine v. Paine, 223 N. Y. 404: 'An instrument which a statute, expressly or through necessary implication, declares void, strictly speaking, is a simulacrum only. It is without legal efficacy/
“ This language, however, was used to meet the claim that the Negotiable Instruments Law in its provisions defining the rights of a bona fide holder for value had practical^ changed the existing rule so that an instrument void in its inception might be good in the hands of such holder. Thé phrase quoted was not, in our opinion, intended to modify the long-standing and just principle that usury was a ‘ personal defense ’ available only to the maker of a usurious instrument and his privies; or as it is sometimes said not available to a ' stranger/ ”
Plaintiff also relies on the case of Bloom v. Levison (179 App. Div. 885; affd., 226 N. Y. 608). But there the plaintiff, suing for the cancellation of the note and to compel surrender of the collateral, was the maker of the note and was a party to the usurious contract and the person injuriously affected by the usury. The plaintiff, setting up the usury was the aggrieved borrower.
It may be noted, as well, that the complaint contains no offer to repay the amount concededly loaned by defendant to Sugarman, nor is there any claim that plaintiff received any benefit from the loan so as to make him a “ borrower,” within the meaning of section 377 of the General Business Law.
It would seem that whatever rights plaintiff may have to possession of the bonds cannot be adjudged in equity, upon the facts
The order appealed from should, therefore, be reversed, with ten dollars costs and disbursements to appellant, and the motion for judgment granted, with ten dollars costs. .
Clarke, P. J., Merrell, McAvoy and Burr, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.