International Motor Co. v. Palmer

Shearn, J. Defendant delivered to plaintiff a series of twenty of his promissory notes in payment for an automobile, each for $125, and in connection with the transaction delivered three other.notes, one for $55 and two for $50. The action is one to recover a balance of $75 on one of the $125 notes, a balance of $13 on another, a balance of $25 on another, and the principal of the three smaller notes, together with an attorney’s fee of $50 on each of the smaller notes. The defense was that the three notes, upon which a balance was claimed, had been paid in full, and that the three smaller notes were unenforcible for usury. The court sustained the defense of usury and submitted the issue of payment to the jury. Plaintiff introduced testimony of an assistant to the treasurer of the plaintiff corporation, who was thoroughly familiar with the account and had had entire charge of it from its beginning. Defendant, who is unable to read or write, testified very positively that the notes were paid, but he was unable to produce the notes or any receipts for the alleged payments or to specify when the payments were made or the amounts of these various payments. He had no books or data with which to refresh his recollection, and his affairs were evidently conducted in a very unbusinesslike manner. A mere oath that an account is paid does not under such [216] circumstances meet the requirement for sustaining the burden of proof with a preponderance of evidence. The verdict is readily accounted for by the great amount of irrelevant testimony which was introduced over the objection of the plaintiff, much of it being calculated to prejudice the plaintiff. The court erroneously charged the rule respecting the rights of a creditor to apply payments in the absence of instructions from the debtor. It was also erroneous to hold that the three smaller notes were void for usury. A stipulation in a loan contract that in case of nonpayment at maturity the borrower shall pay the cost of collecting the debt by legal process, including a reasonable attorney’s fee, does not in the absence of proof of a corrupt intent constitute usury. The debtor was free to discharge the debt by payment of principal and legal interest at maturity. Pomeroy v. Ainsworth, 22 Barb. 118; Sumner v. People, 29 N. Y. 337. Bijur and Page, JJ., concur. Judgment reversed and new trial ordered, with ■thirty dollars costs to appellant to abide event.