Opinion
May Term, 1898.
Frederick A. Mann, for the appellant.
Walter S. Hubbell, for the respondents.
Upon the trial in the court below the plaintiff gave evidence tending to show that the notes and mortgages were void for usury, and the evidence was sufficient to have entitled the plaintiff to have had the question submitted to the jury whether the transactions out of which the notes and mortgages grew were usurious. The evidence was the same, we judge, substantially, as that given in the Municipal Court of Rochester in the action by the Flour City Bank upon the notes. The opinion of the court, pronounced by Mr. Justice ADAMS, in the appeal in that case, reported in 4 Appellate Division, 585, sets forth the facts and evidence as to the defense of usury substantially as they appeared upon the trial of this action, and we will not repeat them here. The charge of conspiracy and fraud as against the defendants was not sustained by the evidence upon the trial of this case. The same may be said of the charge against the sheriff that he had made a false return upon the execution.
The only question raised upon this appeal worthy of consideration is whether the defendants are liable for a conversion of the property in question, which involves the further question whether the evidence as to the validity of the notes and mortgages assailed for usury should have been submitted to the jury. If the plaintiff's contention is right in that regard, the notes and mortgages were void and afforded no justification for taking the property by any of the defendants engaged in the transaction of depriving the plaintiff of that property ( Schroeppel v. Corning, 5 Den. 236; S.C., 6 N.Y. 107; approved, Duval v. Wellman, 124 id. 161), nor was it necessary to make a demand upon the Cushmans before the commencement of this action. (See cases just cited.)
The usury taints the whole transaction, and the retention of the property under the cover of these mortgages is a conversion for which all parties to the transaction are liable. It is true that the sheriff and the deputy may be said to have been innocent of any knowledge of the usury and to have acted in good faith, but the sheriff did not justify under the execution, but did attempt to justify under the mortgages, and if the mortgages were void for usury they afforded the sheriff no protection, and he was a trespasser as well as the other defendants who had knowledge of and participated in the usury. We are not to be understood as saying that these notes and mortgages were usurious; we only say that that was a question for the jury under the evidence in this case.
The learned counsel for the Cushmans earnestly insists that no usurious agreement was shown as to the second series of notes, and that, therefore, the mortgages were valid and justified the nonsuit. We cannot sustain this contention. The same exorbitant interest or discount was in fact taken upon the second series of notes as upon the first, and was so connected with the first transaction that it was a question for the jury whether they were not made and discounted upon the same usurious arrangement as the first. There was evidence tending in that direction.
We have reached the conclusion that the judgment and order appealed from should be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment and order reversed and a new trial ordered, with costs to the appellant to abide the event.