Silverman v. Katz

GIEGERICH, J. The action is on two promissory notes' for $75 each, made by the defendant Alexander Katz to the order of Jacob Katz, and indorsed by the latter and one Nathan Finkelstein. The defense was usury. It appears, without contradiction, that one Julius H. Zieser, the attorney who represented the plaintiff in the transaction, exacted and received $25 as a condition of the loan of $150, for which the two promissory notes in suit were given; but there is no evidence in the record which justifies an inference that the plaintiff received any part of the sum so exacted, or knew of or assented to its exaction. The plaintiff [791] positively denied that he either received any part of said sum or that he had any knowledge that his attorney took the same, and under the circumstances there was no warrant for the trial justice’s finding, as we must assume, from the judgment in favor of the defendants, that he by acquiescence was a party to the Usurious transaction. The plaintiff also denied that he caused to be inserted in a Hebrew newspaper an advertisement, which the defendant Jacob Katz testified was to the effect that Mr. Zieser, the attorney in question, loaned money at the rate of 6 per cent, per annum, and through medium of which he became acquainted with Mr. Zieser, who introduced him to the plaintiff. Mr. Zieser admitted that he caused such advertisement to be inserted in the newspapers in question, because, as stated by him, he, at the time in question, had clients who offered to loan money, and that in this particular case he introduced the defendant Jacob Katz to the plaintiff. A check for $150, the face amount of the two notes in controversy, was left by the plaintiff with Mr. Zieser, to be delivered when arrangements for the loan were perfected. The check was delivered by him to the defendant Alexander Katz in exchange for the notes, and the check was cashed in the presence of Mr. Zieser, who in furtherance of his previously declared intention to do so retained $25 out of the $150 so received from the proceeds of the check. The plaintiff was not present upon any of these occasions, and there is no proof whatever that he knew that such sum was exacted by his attorney. It was incumbent upon the defendants to show that the attorney retained said sum of $25 with the knowledge and consent of the plaintiff. The mere fact that the attorney exacted and retained said sum is not sufficient. Stillman v. Northrup, 109 N. Y. 473, 477, 17 N. E. 379; Bliven v. Lydecker, 55 Hun, 171, 172, 7 N. Y. Supp. 867. Usury cannot be presumed, but the burden of establishing it was upon the defendants. Stillman v. Northrup, supra; Ferguson v. Bien, 47 Misc. Rep. 618, 619, 94 N. Y. Supp. 459; Cameron v. Fraser, 48 Misc. Rep. 8, 10, 94 N. Y. Supp. 1058. As was said in Stillman v. Northrup, supra, at page 478 of 109 N. Y., and page 380 of 17 N. E.: “The defense of usury, involving crime and forfeiture, cannot be established by mere surmise and conjecture, or by inferences entirely uncertain. If, upon the whole case, the evidence is just as consistent with the absence as with the presence of usury, then the party alleging the usury-has failed; and so it has been repeatedly held.” Tested by these rules, it is manifest that the defendants did not sustain the burden of proving usury, which, as seen, it was incumbent upon them to do. The judgment should therefore be reversed, and a new trial ordered, with costs to the appellant to abide the event.