Green v. . Elmer , 8 N.Y. 422 ( 1853 )

Morse, J.

Had the usurious bond and mortgage been given in payment of the plaintiffs’ debt, they certainly would form no bar to the plaintiffs’ recovery. There is ho ground whatever for saying that the plaintiffs as a firm, or jointly in any manner, took or received this bond and mortgage. The truth of the transaction was, that for the purpose of paying the defendant’s debt to-the plaintiff's, he entered into an arrangement with Green, by which he, (the defendant,) was to borrow of Ayrault, at a usurious rate of interest such a sum of money as could be obtained on the bond and mortgage. From the case it appears that the assignment was in pursuance of the agreement between Green and Elmer. Green, therefore, was by the assignment to becómé, as he did become, merely the surety upon this usurious loan. Green had no other connection whatever with the transaction, than as the mere conduit of title to the bond and mortgage from Elmer to Ayrault, and as the guarantor, that the principal and interest of the mortgage debt, with the costs, were collectable. The money was not loaned by Ayrault to the firm, and by the firm to Elmer. It was loaned to Elmer—not by the firm, but by Ayrault; and Green having the money in his hands, in pursuance of the agreement applied it, as he was bound to do, in the payment and satisfaction of Elmer’s debt to the firm. It is true he also gave Elmer credit for the balance of $54‘77, upon the books of the firm. This however, is quite insufficient to show that the money came from the firm, or in fact that it never came from any where, but that the bond and mortgage were given to the firm, and not, as the whole case shows, to Green, for the mere purpose of being assigned to Ayrault upon a usurious loan by him to Elmer. It will hardly do to presume, in the absence of all evidence upon the subject, that the making of usurious loans was any part of the regular business of the firm. The firm, no doubt, would be capable of taking a void security for a debt as well as an individual. But there should be some evidence to show that the machinery of giving the bond and mortgage to Green, of his assignment and guaranty to Ayrault, and the professed obtaining of the discount of the bond and mortgage by Ayrault, was a mere cover for usury; and that in fact the money was not advanced by Ayrault individually. Of this thére is no pretence; and if there was, there is not sufficient in the case to, raise a suspicion that it was so. The whole of the case is that Ayrault made a usurious loan to the defendant under cover of the purchase of the bond and mortgage from Green; and if without notice and in good faith, he purchased the bond and mortgage of Green, he has a claim over upon him on his guaranty if he fails to collect the amount of the defendant in his suit for foreclosure. The debt which the defendant owed the plaintiffs, was paid in money, and not by the bond and mortgage. The defendant is entitled to a new trial, unless the plaintiffs elect to take judgment for the balance of $107.27, after deducting $54*77, with interest upon such balance from August 1, 1844.

Judgment accordingly.