Smith v. . Hathorn , 88 N.Y. 211 ( 1882 )

We cannot escape the conclusion that the uncontroverted evidence in this case so clearly established that the notes dated Nov. 2, 1874, were originally given to secure an usurious loan, that it was error to refuse to find that fact. If the only evidence of an usurious agreement had been the fact that interest at the rate of ten per cent per annum was paid upon these notes after they had become due, it might with some reason be claimed that such payments were not conclusive evidence that they were made in pursuance of the original agreement under which the notes were given. But the fact of the payments was not the only evidence of the agreement. The controlling feature of this case, and the one which distinguishes it from others which have been cited is, that the four notes for $6,000 being payable in three months, with interest, specifying no rate, the plaintiff's intestate, in February, 1875, when they became due, and in the absence of the makers, demanded of their agent three months' interest at the rate of ten per cent per annum, and stated that it was due upon the notes. This interest was paid to him, in compliance with his demand, and he gave a receipt therefor, in which he acknowledged the receipt of $150 "for the three months' interest, due on the first of February, 1875," on the notes in question. This amount of interest could not be due on thosenotes, unless the rate stipulated to be paid thereon was ten per cent per annum. The interest demanded was that which had accrued from the time the loan was originally made, and it had never been renewed, and there is no room for the theory that the usurious agreement may have been made after the notes had matured and as a consideration for forbearance. Five successive quarterly payments of interest were demanded and made at the same rate and receipted for, as due upon the notes. The mortgage sought to be foreclosed in this action was given December 1, 1874, to secure the payment of the same notes for $6,000, and in August, 1876, the deceased wrote to H. Hathorn reminding him that two quarterly payments of interest were due thereon, and requesting him to pay $300 therefor. From the very commencement interest was demanded at the rate of ten per cent per annum as due upon the original securities taken, and this demand was acquiesced in. This amounted to an acknowledgment by both parties that the original securities were given under an agreement that they should bear interest at the rate of ten per cent per annum.

The judgment should be reversed and a new trial ordered, costs to abide the event.

All concur except DANFORTH, J., dissenting.

Judgment reversed.