To be available as a defence, the usury complained of must be taken upon the transaction itself, which is sought to be impeached. A security given for a precedent loan, though usurious in effect, was accordingly held not to be within the statute, inasmuch as no advance was made, at or after the time when such security was given. Carson vs. Ingalls, 33 Barb., 657.

Nor will the giving a fresh check to a bona fide holder, on a partial renewal of one previously given, render such holder liable to the defence of usury, in respect of the original transaction between the payee and the maker. Smalley vs. Doughty, 6 Bosw., 66.

But, when a transaction is usurious in its origin, the original taint will attach to all subsequent obligations or securities, by whomsoever given, in payment or discharge, or growing out of it. Vickery vs. Dickson, 35 Barb., 96.

As before stated, the law will presume nothing in favor of the defence, but rather against it. A corrupt agreement, or intention to take or reserve more than the legal rate, must in all cases be shown. A mere taking or reserving more than the legal rate, does not per se constitute a transaction usurious, still less a mistake, arising from error in computation or otherwise. Bailey vs. Lane 21 How., 475; 13 Abb.. 354. See, as to mortgage transactions, Booth vs. Swezey, 4 Seld., 276; Banks vs. Van Antwerp, 15 How., 29; 5 Abb., 411; Citizen's Mutual Loan Association vs. Webster, 29 Barb., 263. As to the money remaining in the lender's hands, but subject to the call of the borrower, Keyes vs. Moultrie, 3 Bosw., 1. As to a check or note, payable in foreign bank-bills, Codd vs. Rathbone, 19 N. Y., 37; Robbins vs. Dillaye, 33 Barb., 77. As to the making of drafts, payable at different localities in the state, though involving a difference of exchange, no condition being imposed, Oliver Lee's Bank vs. Walbridge, 19 N. Y., 134; International Bank vs. Bradley, 19 N. Y., 245; Marvin vs. Hymers, 2 Kern., 223; Price vs. Lyon Bank, 30 Barb., 85; Cuyler vs. Sandford, 13 Barb., 339. See also generally, Hurd vs. Hunt, 14 Barb., 573; Murray vs. Barney, 34 Barb., 336.

A banking arrangement, on discount of one note, by which it was made a condition that the proceeds of another, required to be simultaneously discounted, should be left to the credit of the customer, to secure the payment of the first, was held clearly usurious, in East River Bank vs. Hoyt, 22 How., 478.

The taking of a commission or bonus, by an agent, but without the privity of his principal, will not taint the transaction with usury. Condit vs. Baldwin, 21 N. Y., 219. See also same case, 21 Barb., 181; Davis vs. Illius, 9 How., 450; North vs. Sergeant, 33 Barb., 350; 20 How., 519. Nor will the taking of a commission, by an aoVOL. II.-9

commodation indorser, in respect of his indorsement. Flint vs. Schomberg, 1 Hilt., 532; Elwell vs. Chamberlain, 4 Bosw., 320. Or the retainer by such an indorser, out of the avails, of a debt due to himself. Duzer vs. Howe, 21 N. Y., 531.

Van

So likewise, the taking of a commission, on accepting a draft on a deposit of goods, there being no loan of money, will not be usury. Ryckman vs. Coleman, 21 How., 404.

Nor will the receipt of instalments on collateral securities, and the use of the money by the lender, pending the loan, constitute usury, unless such use by him, without interest, was part of the original agreement. Morgan vs. Mechanics' Banking Association, 19 Barb., 584.

The lender cannot, under any circumstances, impeach the transaction on this ground. La Farge vs. Hester, 5 Seld., 241; Elwell vs. Chamberlain, 4 Bosw., 320; Oneida Bank vs. Ontario Bank, 21 N. Y., 490. See also Draper vs. Trescott, 29 Barb., 401.

And any party who gives, directly or indirectly, a certificate, or makes a representation that a note or bill is business paper, will be estopped from setting up this defence of usury, as against a bonâ fide purchaser. Mechanics' Bank of Brooklyn vs. Townsend, 29 Barb., 569; 17 How., 569; Chamberlain vs. The Same, 26 Barb., 611; 7 Abb., 31; Truscott vs. Davis, 4 Barb., 495; Benedict vs. Caffe, 5 Duer, 226; Burrall vs. De Groot, 5 Duer, 379; Ferguson vs. Hamilton, 35 Barb., 427. But one party to such paper, will not be estopped by the representations of another, made without his directions or instructions. Jackson vs. Fassitt, 33 Barb., 645; 21 How., 279; 12 Abb., 281. And, to estop the party himself, in this respect, the representations made by him must be outside the face of the bill. Clark vs. Sisson, 22 N. Y., 312. If, however, a party, intending to purchase such paper, omits to make proper inquiries, the mere omission to disclose its nature, will not amount to a representation on the part of the vendor. Clark vs. Loomis, 4 Duer, 408. See also Bossange vs. Ross, 29 Barb., 576; Hull vs. Wilson, 16 Barb., 548.

The objection of usury is of a personal nature, and, as a general rule, can only be set up, as between the parties to the usurious transactions, and their legal representatives, or privies in estate. See Boughton vs. Smith, 26 Barb., 635; Reyford vs. Widger, 2 Comst., 131; Toole vs. Cook, 16 How., 142.

See, as to the circumstances, under which a subsequent grantee of premises, subject to a mortgage, will or will not be entitled to interpose the defence of usury. Chamberlain vs. Dempsey, 14 Abb., 241; reversing same case, 13 Abb., 61; Sands vs. Church, infra; Murray vs. Barney, 34 Barb., 336.

Usury, in the extension of a note, is no answer to the claim of

a surety, not a party to the extension, that, by its operation, he is discharged. Draper vs. Trescott, 29 Barb., 401. Nor can a mortgage be impeached on this ground, by subsequent encumbrancers. Sands vs. Church, 2 Seld., 347.

By special statute, chapter 172 of 1850, p. 334, corporations, and all associations possessing corporate powers or privileges, are prohibited from interposing this defence.

And this prohibition extends to the receiver or trustee of such a body. He represents the corporation. Curtis vs. Leavitt, 15 N. Y., 9 (296); Same case, 17 Barb., 309; Leavitt vs. Blatchford, 17 N. Y., 521 (542). See also Butterworth vs. O'Brien, 28 Barb., 187; 16 How., 503; 7 Abb., 456; affirmed, 23 N. Y., 275.

And the same rule is equally applicable to the case of a foreign corporation. Southern Life Insurance and Trust Company vs. Packer, 17 N. Y., 51.

But it has been held, that an accommodation indorser for such a body, is not within the operation of the statute, and that the defence may be set up by him, as liable under a separate contract. Hungerford's Bank vs. Potsdam and Watertown Railroad Company, 10 Abb., 24; reversing same case, 9 Abb., 124; The Same vs. Dodge, 30 Barb., 626; 19 How., 39.

Where the contract is made in another state, it is, primâ facie, to be governed by its laws on this subject. See City Savings Bank vs. Bidwell, 29 Barb., 325; Pomeroy vs. Ainsworth, 22 Barb., 118; Cutler vs. Wright, 22 N. Y., 472. And where, by the laws of another state, the contract is not avoided, but a penalty is merely imposed, it has been neld that the defendant could not avail himself of such penalty, by way of defence in this. Willis vs. Cameron, 12 Abb., 245.

But where the contract, though with a foreigner, is made within this state, the law of this state will apply. Bard vs. Poole, 2 Kern., 495. And where a contract, made in one state, is to be performed, or has its actual inception in another, the question of usury, or no usury, will depend upon the law of the place of such performance or inception. Same case; Berrien vs. Wright, 26 Barb., 208; Hull vs. Wheeler, 7 Abb., 411; Pomeroy vs. Ainsworth, supra; Jewell vs. Wright, 12 Abb., 55. And, where the place of contract or performance appears upon the face of a written instrument, the terms of that instrument will govern, and the contrary cannot be shown by parol. Potter vs. Tallman, 35 Barb., 182.

A note, valid in its inception, may be made the subject of sale, at any price, however small, and cannot be impeached on the ground of usury on such transfer. Elwell vs. Chamberlain, 2 Bosw., 230 (237); Troy City Bank vs. McSpedon, 33 Barb., 81. And the giving of exchange

notes by two parties, will form a sufficient consideration, where such exchange is a bonâ fide mutual sale of the credits of the parties, and not a mere cover for usury. Cobb vs. Titus, 6 Seld., 198; Dry Dock Bank vs. American Life Insurance and Trust Company, 3 Comst., 344; Leavitt vs. De Launcey, 4 Comst., 363; Odell vs. Greenly, 4 Duer, 358; Elwell vs. Chamberlain, 2 Bosw., 230; Troy City Bank vs. McSpedon, 33 Barb., 81. But not so, where the exchange notes are not equal in value, and the excess is sufficient to bring the case within the statute, if the transaction was designed as, or was connected with, a loan of money. Thomas vs. Murray, 34 Barb., 157. See also, as to the invalidity of a transaction, where a bonus was given in the exchange of securities, Williams vs. Fowler, 22 How., 4.

The satisfaction of a precedent debt, will also form sufficient consideration to give a note validity in its inception. Gould vs. Segee, 5 Duer, 260. See also Youngs vs. Lee, 2 Kern., 551, and White vs Springfield Bank, 3 Sandf., 222, there referred to. Nor will the tak ing of collateral security for a note thus purchased, taint the transac tion. Odell vs. Greenly, supra.

But if the transaction, though couched in the form of a sale, is made in any manner, by way of a blind, to cover up a transaction, actually a loan by way of usury, the inception of the paper will not be valid, and the defence will be available. Dry Dock Bank vs. American Life Insurance and Trust Company, 3 Comst., 344; Schermerhorn vs. Talman, 4 Kern., 93. See also The Same vs. American Life Insurance and Trust Company, 14 Barb., 131. So also, if there be any difference in the nominal amount of the securities exchanged. Same case. also Thomas vs. Murray, supra.

See

As to the purchase of an accommodation-note, having no legal inception, when made at a discount greater than the legal rate, rendering the defence available, see Williams vs. Storm, 2 Duer, 52; Catlin vs. Gunter, 1 Kern, 368; 10 How., 315; not conflicting on this point with the decision below, 1 Duer, 253; 11 L. O., 201, before cited; Clark vs. Loomis, 5 Duer, 468; Same case, 4 Duer, 408; Bossange vs. Ross, 29 Barb., 576; Hall vs. Wilson, 16 Barb., 548.

An agreement by copartners, to pay to the lender a share of their profits, in addition to the legal interest on money loaned to them, renders the transaction usurious in its inception. Sweet vs. Spence, 35 Barb., 44.

Money received on an usurious transaction, extinguishes the debt for which it is paid, and, on a subsequent impeachment of that transaction, the parties to it cannot go behind it, and recover upon the original consideration. Green vs. Elmer, 4 Seld., 422.

As to a building association mortgage being usurious, where the effect

of the transaction is to burden the mortgagor with payments exceeding the amount of legal interest, see Melville vs. American Benefit Building Association, 33 Barb., 103.

See, as to a mortgage being set aside for usury in the arrangements for the loan, Williams vs. Fowler, 22 How., 4.

§ 179. Statement of New Matter.

ORDINARY DEFENCES.

The subject of those defences, to which the term "special" may more appropriately be assigned, having been exhausted, that of ordinary defences, going generally to the merits, remains to be considered.

Defences of this nature necessarily vary, in every case according to its peculiar circumstances, and it would be going far beyond the scope of the present work, to attempt the consideration, in detail, of every Epecies of subject-matter which may avail to constitute one. It may, however, be convenient to notice a few of the more prominent classes, adapting the citation of recent decisions, rather to the mode of statement, than to the subject-matter of the pleading in each case; though not wholly excluding the consideration of the latter, according to the olan hitherto pursued.

(a.) GENERAL CONSIDERATIONS.

The mode of statement of a defence, resting in matters of fact, does not differ essentially from that of a cause of action. In both, a clear and pertinent statement of the facts relied on, specially directed to the end sought to be attained, is equally requisite, and the general principles which govern the statement of the facts constituting a cause of action (section 142), or the new matter constituting a defence (section 149), are substantially the same. The former statement must be "plain and concise, without unnecessary repetition;" the latter, "in ordinary and concise language, without repetition." The principles applicable to both in common, have been already fully considered, in book VI., chapter I. As to the necessity of a defence, when stated, being complete, see Farmers' Bank of Saratoga County vs. Merchant, 13 How., 10. As to what is or is not new matter in defence, see Bell vs. Yates, 33 Barb., 627.

It may be more convenient to arrange the defences to be referred to in distinct classes, and to consider them in the following order: 1. Defences in tort, including that in replevin.

2. Defences in contract.

3. Defences in equitable actions.

4. Defences in real estate actions.