Hubbard v. Brown

Adams, J.: This action is brought to foreclose a mortgage of $2,600, covering certain premises located on Try on place, in the city of Buffalo, and the principal defense thereto is usury. The case was tried before a referee, who reported in favor of the plaintiff, and this court is now asked to reverse his findings of fact and the conclusions of law founded thereon, upon the ground that the same are clearly against the weight of- evidence. [255] This contention upon the part of the learned counsel for the appellants is one which is certainly not without merit; for there is much in the evidence tending to show that the loan secured by the mortgage in suit was tainted with usury, and that the plaintiff was from the very outset the lender and not, as he claims, the mere negotiator of that loan. It is but fair to state, however, that the evidence upon this issue was somewhat contradictory, and consequently, without determining what weight should be given to the appellants’ contention, we pass to the consideration of an exception in the case which, we are persuaded, presents • reversible error. Upon the trial it was claimed by the plaintiff that he was simply a middleman or negotiator of the loan to the defendant mortgagors; that the party who originally intended to make that loan was a man by the name of Perkins, and that the money which the plaintiff received from the borrowers, at the time the offer to make the loan was accepted, was only by way of compensation or commission for his services. It was further claimed that, when the negotiations had reached a certain point, Perkins refused to make the loan, and that the plaintiff thereupon made it himself, and returned the money which he had received by way of commissions to the defendant mortgagors, with directions to pay it over to a third party, from whom, there is some evidence tending to show, it ultimately found its way back into the hands of the plaintiff. This man Perkins was not present at the trial, and it was insisted by the appellants that his connection with the transaction was purely mythical, and that if there was in fact any such person in existence, he never made or intended to make the loan to secure which the mortgage was given. To meet this contention the plaintiff gave some proof tending to establish the existence and identity of Perkins, although it was conceded that his whereabouts at the time of the trial could not be ascertained; and then, by way of proof that he was the party who originally intended to make the loan, the plaintiff was permitted, over the appellants’ objection and exception, to detail a conversation had between him and Perkins, in the absence of the defendant mortgagors, in which Perkins assured the plaintiff that he would make the loan, but that in another and later conversation he informed the plaintiff that he had concluded not to [256] do so, which fact he, the plaintiff, subsequently communicated to the defendant mortgagors. This evidence was no part of the res gestae, but related simply to-a conversation between the plaintiff and a stranger, to which the defendant mortgagors were in no sense- parties. It was, consequently, merely hearsay, and irrelevant to the issue; and the fact that the substance of the conversation was thereafter communicated to the defendant mortgagors did not relieve the situation. (Steph. Dig. Ev. chap. IV, art. 18; Stephens v. Vroman, 16 N. Y. 381.) If any such rule of evidence as is here contended for were to be adopted, it would enable a party so disposed to prove almost any fact by giving evidence of a conversation with a third party, in which the existence of the desired fact was asserted, and then claiming that the substance of the conversation had been subsequently repeated to the opposite party. The record presents one or two other rulings of the learned referee which are not entirely free from criticism; but inasmuch as the one already adverted to is sufficient to require a reversal of the judgment, we do not think it necessary to refer to them with greater particularity. All concurred ; Ward, J., in result only. Judgment reversed and a new trial ordered, with costs to the appellant to abide the event.