German-American Bank of Tonawanda v. Daly

LEWIS, J.

The defendant Daly made his promissory note for the sum of $2,700 on the 19th day of March, 1894, payable three months after date to the order of J. & T. Charlton. The payees thereafter, and before the note became due, indorsed and delivered it to the plaintiff in renewal of a note for a like amount held by the plaintiff, which was made by the same maker to the order of the Charltons, and indorsed by them. The note having matured, and not being paid, this action was commenced. The defendant Daly interposed an answer, alleging th¿t the note had its inception in the hands of the payees, and was void for usury. At the close of the evidence each party requested a direction of a verdict; the said defendant’s request was refused, and that of the plaintiff was granted.

There was evidence tending to prove the following facts: The defendant Daly purchased of the Charltons,. in 1891, a quantity of doors, sash, and house trimmings, in payment for which he gave them his promissory note for $3,000, payable to their order three months after date. The payees indorsed the note, and before it became due sold it for value" to the plaintiff, a banking corporation, located at Tonawánda, N. Y. When the note fell due it was renewed from time to time by the notes of Daly, indorsed by the Charltons. They were delivered to and accepted by the plaintiff, Daly in each instance sending his note for the amount of the one coming due, and his check for the amount of the discount, to the Charltons, and they delivered them to the plaintiff, and the plaintiff handed the maturing note to the Charltons, who mailed it to the defendant. The bank charged and Daly paid interest upon each renewal at the rate of 7 per cent, per annum. There was evidence tending to show that Daly in some instances sent to pay the discount, his check for an amount equal to 8 per cent, per annum, and when that occurred the Charltons paid the bank the 7 per cent, interest, and retained to themselves the extra 1 per cent., claiming it for their trouble in procuring the renewal. In some instances Daly failed to send sufficient funds to pay the bank the amount of the discount. When that occurred, the Charltons made up the amount, and Daly thereafter reimbursed them. Plaintiff’s cashier and one of the payees testified that the entire series of notes, including the one in suit, were the property of the bank. This evidence was taken without objection.

The trial court, in directing the verdict, must have found that the note had its inception in plaintiff’s hands. The defendant’s counsel does not claim that the usury defense can be sustained, if this finding was correct; but it is his contention that it is alleged in the comnlaint, and admitted by the answer, that the note had its inception in the hands of the Charltons. The complaint was drawn in the usual form of complaints upon promissory notes. It is alleged that the note was made by the maker, Daly, payable to the order of J. & T. Charlton; that they indorsed the same and delivered it to the plaintiff before maturity, etc.; and these allegations were not denied by the answer; and the defendant claims from this that it follows that the note had its inception in the hands of the Charltons. This claim was not suggested upon the trial. The case was tried upon the theory that that was one of the questions open to be litigated, and it was litigated. Had the point been raised at the trial the complaint could have been amended, if it was thought necessary, to conform it to the evidence. It is too late to raise this question upon appeal. It is not claimed by the appellant that the taking of more than 6 per cent interest by the plaintiff imperiled the principal, nor that the amount of extra interest received could be set off against the claim, if the note had its inception in the bank. No such defense was pleaded. Similar questions are presented by appeal No. 2, which is between the same parties, and was submitted with this case. The judgment in both cases should be affirmed.

Judgments affirmed. All concur.