The first point made by the counsel for the appellants is, that the judge erred in permitting the counsel for the defendant at the trial, to have the closing address to the jury. In this the learned judge was clearly correct. It appears from the case, that the defendant opened the case to the jury by calling the first witness. He had the affirmative of all the issues made by the pleadings, and if he had offered no evidence to sustain them, the plaintiffs would have been entitled, without adducing any testimony, to have a verdict and judgment for the amount demanded in their complaint. The party having the affirmative issue upon the record, is always entitled to begin. It was conceded in this case that the defendant had such affirmative, as he began, and as it would appear without objection. It generally follows that the party entitled to commence his evidence, is *Page 613 entitled to the close, and under our present system of pleading, it very frequently occurs that the defendant has the affirmative, and when he has, it has been also generally admitted that he was entitled to open and close the case to the jury.
Under our former system of practice, if the defendant did not plead the general issue, but admitted upon the record the plaintiff's cause of action, and sought to avoid it by some affirmative defense, the rule and practice of the courts in England prevailed in this State. (2 Dunlap Pr., 637; 1 Paine Duer, 522; Gra. Pr. 289.) That rule is announced in an authoritative and able work on the practice of the Court of King's Bench, where the author observes: "It has been laid down as a general rule, that the party who has to maintain the affirmative of the issue must begin the evidence. Where there are special pleadings, or where a special defense is not intended to be given in evidence under the general issue, it may, perhaps, be more accurate to say that the party who has added the similiter shall begin. If both parties, however, have added the similiter to the different sets of pleadings, in the same cause, then the plaintiff shall begin. * * When a special defense is intended to be given in evidence under the general issue, the party shall begin who would have been entitled to do so, if the defense had been specially pleaded. (1 Arch. Pr., 169, 170.) In Jackme v.Hesbeth (2 Stark. N.P., 518), it was held, that when the affirmative of the issue lay upon the defendant he had the right to begin. BAYLEY, J., after having consulted WOOD, B., said they were both of them of the opinion that the defendant was entitled to begin. In the case of Revett v. Braham (4 T.R., 497), the question was who was entitled to the reply, in an action of ejectment when the lessor of the plaintiff claimed as heir-at-law, and the defendant as devisee, and the court (upon a trial at bar) decided that if the plaintiff proved his pedigree and stopped, and the defendant set up a new case, which the plaintiff answered by evidence which ultimately went to the jury, the defendant should have the general reply, and BULLER, J., said he had so ruled at Winchester in 1789. The *Page 614 general rule, prevailing in this country, and in England, is well stated in Bouvier's Inst. 323, § 3043, as follows: "That the party who alleges the affirmative of any proposition or issue of facts should prove it, because a negative does not in general admit of the simple and direct proof of which the affirmative is capable, and therefore the party who has to maintain or prove the only affirmative, or all the affirmatives, must begin the evidence." See, also, the case of Huntington v. Conkey (33 Barb., 218), where in the opinion of Mr. Justice E. DARWIN SMITH, the authorities are collected, and the doctrine clearly stated. In that case the action was upon a promissory note, which was set out in the complaint. The answer admitted the making of the note, and set up the defense of usury. The plaintiff in that case, as in this, was entitled to a verdict, if no evidence had been offered on the trial; and the judge at the circuit held that the counsel for the plaintiff had the right to open the case to the jury, and to reply. This the General Term held to be error, and granted a new trial.
In the case of Ayrault v. Chamberlain (33 Barb., 229), it was held that each party should be confined to a legitimate and proper opening of his own case, the plaintiff's counsel to a statement of his cause of action, and the defendant's counsel to a statement of his answer to the plaintiff's case, and the evidence he proposes to give to sustain it. And it was held improper for the counsel of the plaintiff to state the case as made by the defendant in his answer, or the evidence he expects to give in reply to the defense set up in the answer. This ruling was affirmed by this court at the June Term, 1862. There was no error, therefore, in the ruling of the judge on the trial, directing the plaintiffs' counsel to sum up to the jury before the defendant's counsel, thus giving to the latter the reply. He had opened the case to the jury, and should consequently have had the reply.
The second point, made by the appellants' counsel, that the verdict is against evidence, presents no ground for a review in this court. The Superior Court having refused to set aside the verdict, we assume it was sustained by the evidence *Page 615 offered on the trial, and we do not look into the evidence to see whether it is or not. That tribunal alone was competent to examine and decide that question, and their decision on that point cannot be questioned here.
The third point is in substance that the judge erred in his second proposition submitted to the jury. The defendant had insisted, in his answer, that the plaintiffs had no legal title to the note sold to him, and that, therefore, there was an entire failure of the consideration for his check, for the reason that the note was an accommodation note, and had no legal inception before it was passed to the plaintiff, and that it was void for usury. The judge charged the jury that if they were satisfied, on the evidence, that the transaction of the exchange of the note of the plaintiffs for that of Lane, West Co., on which the 2½ per cent commission was charged and received by the plaintiffs, was in fact a sale of the plaintiffs' credit, and that the commission charged was a compensation for the sale of such credit, and that the transaction was not that of a loan, nor a cover for usury, then the reservation of these commissions, though exceeding in amount 7 per cent on the face of the note of Lane, West Co. for the time it had to run, does not stamp the transaction with usury, nor make that note void in the plaintiffs' hands on that ground; otherwise, if it was a cover for usury. This charge is unobjectionable in view of the decision of this court in the cases of The Dry Dock Bank v. The American Life Insurance andTrust Company (3 Comst., 344) and Leavitt v. De Launy (4 Comst., 364). In the former case Judge GARDNER, in delivering the opinion of the court, said: "The credit of one person may be rendered available to another by gift, or sale, or in any other way. This may be done by a direct contract between the parties; as an exchange of notes, which is the sale of one promise for another; by an undertaking with third persons directly; or one to be used for the benefit and according to the discretion of the donee or vendee. Where the responsibility is incurred gratuitously, it is, in popular language, called a loan; and when for a consideration, a sale of credit." He adds: "It is sometimes *Page 616 asked, why should a man be permitted to receive ten per cent on an exchange of notes, when if he advanced money on the same security he would get but seven. The answer is, for the same reason, that he is permitted to receive $20 for six months' use of furniture valued at $100. The one is prohibited, the other is not. No man can exchange his promise to pay $110, at the end of a year, for $100 in cash. 1st. Because he would thereby agree to refund in kind precisely what he had received, and this is the definition of a loan; and the $10 must, therefore, be a compensation to the vendee for the use of the money, whatever name may be given to the transaction. This the statute forbids. The legislature has fixed the interest of money at seven per cent. This includes a compensation for the use and the risk of its repayment. Nothing more can be received by, or secured to, the vendee. The consequence is, that a promise to pay $107 one year hence, is, in law, an equivalent for $100 in money presently received, no matter whether the promise is made by a Rothschild or a pauper. This is legally true, because the legislature has so enacted. But they have not declared that a promise to pay money is money, or its precise equivalent, in any case except that of a loan. Hence upon an exchange of promise, as in an exchange of property, parties are left to their own judgment as to their relative value. They are sales, subject to the same rules, and their validity is tested in the same manner as other sales. Upon the sale of property on time, the purchase money becomes a debt, which is forborne for the period limited by the credit. The case of Leavitt v. De Launy (supra) is in harmony with this doctrine. The question there arose upon contracts relative to the purchase and sales of bills of exchange, and it was said, in the opinion of the court, that the most favorable aspect to the complainants was whether upon a sale of credit, made in good faith, the vendor can receive or secure to himself more than seven per cent without rendering the agreement usurious. It was said that this question was substantially decided in the affirmative in the Dry Dock Bank case (supra) and by previous adjudications, to which reference is then made. It *Page 617 is not denied that a sale of exchange in form may be adopted as a cloak for a usurious loan. But the party impeaching an agreement upon that ground must by evidence remove the covering from the transaction, and exhibit it as a loan of money. A brief reference to these authorities will illustrate the principles of these decisions and the grounds upon which they were decided. InTrotter v. Curtiss (19 Johns., 160), and in Suydam v.Westfall (4 Hill, 211), it was held that a commission of 2½ per cent for accepting, in addition to interest on the money advanced, was not usurious. So when a bond and mortgage was sold for $2,600, and the bond of the vendor given to the vendee, conditioned that the mortgagor should pay $3,000, the amount of the mortgage sold, it was held that the transaction was on its face a mere sale of a chose in action, unconnected with a loan, and, therefore, not usurious per se. (Rapelye v. Anderson, 4 Hill, 472.)
So the sale of an indorsement, at three per cent on the amount of the note indorsed, and which was intended to be, and was discounted at the legal rate, was held to be valid. (Ketchum v.Barber, 4 Hill, 225,) affirmed in the court of errors. (7 Hill, 444.) In More v. Howland (4 Denio, 264), it was decided that the bona fide sale of one's credit, by way of guaranty, or by making a note for the accommodation of another, upon an exchange of notes, though for a compensation exceeding seven per cent, is not usurious, if the transaction is unconnected with a loan between the parties. And it was said, in the Dry Dock Bankcase, that the principle of these cases applies to every engagement direct or collateral, assumed in good faith, by one man for another, for a stipulated consideration. The exchange of notes for a premium greater than the legal rate of interest is no exception to the general rule. This was, in effect, determined inDunham v. Dey (13 Johns., 40), where Dunham reserved 2½ per cent on an exchange of notes, which was more than the legal rate of interest on the notes given in exchange for the time the same had to run, and it was left to the jury to determine from the evidence whether the transaction was a device or cover for usury; and they found, as a question of fact, that *Page 618 the exchange was a mere cover for a usurious loan, and the court sustained the verdict. In Ketchum v. Barber (supra), the referee reported that upon a fair construction of the testimony the transaction was a mere sale of indorsements, or, in other words, the giving of a conditional guaranty of the payment of the notes for which the plaintiff received a stipulated compensation, and that there was no loan of money or of choses in action within the meaning of the statute of usury. In Ketchum v. Barber (supra), BOCKEE, senator, in the opinion of the court, says that the following is a very fair and proper test, and in strict harmony with all the adjudged cases on the subject of usury, namely, when the borrower of money or of any property, or thing in action in every contingency, pays more than the legal interest, and the lender of the money, or any property or thing in action, at the same time, directly or indirectly reserves and secures to himself a return of his principal, with more than legal interest, exclusive of any legal charge for commission or services, the transaction must be adjudged usurious, whatever may be its form. If such result is apparent on the face of the transaction, or on the facts appearing to the court, they will decide it to be usury, and it would be needless and improper to refer it to a jury to determine the quo animo or intent of the parties. In other cases, when such result is not apparent, the subject is necessarily referable to a jury to ascertain whether it is a fair business transaction or a shift and device to cover an usurious loan.
In the light of these authorities, the judge at the trial properly left it to the jury to determine whether the exchange of notes, and the payment and receipt of the commissions agreed upon, were a fair business transaction or a shift or device to cover a usurious loan. If the latter, then the note was void in the plaintiffs' hands, and there was consequently no consideration for the defendant's check. Or, on the contrary, if it was simply a sale or exchange of credit, then the transaction was unobjectionable and free from the taint of usury, and the note of Lane, West Co. was a valid security in the plaintiffs' hands, and the sale of it to the *Page 619 defendant vested a good title thereto in him. The requests by the plaintiffs' counsel to charge the jury presented no material qualifications to the charge as made. We have seen that the charge was literally in compliance with the doctrine of many adjudged cases, and if the request implied a departure from them, a charge in conformity would have been erroneous.
No point is now made upon the exception taken at the trial upon the first proposition submitted by the judge to the jury. We must assume that the jury found the truth of the matter stated in the third proposition to the jury, namely, that if Mills told the defendant, at the time he made the sale on behalf of the plaintiffs of the note of Lane, West Co. to the defendant, that the other note of Lane, West Co., then in the Brooklyn Bank for collection, had been paid, and that such statement was not true in fact, and that the defendant gave his check for the note in question, relying upon the truth of that statement and not upon other sources or means of information of his own, then the defendant was entitled to a verdict, notwithstanding Mills may have had no fraudulent intent himself in making the statement. It is not material that the plaintiffs authorized or knew of the alleged fraud committed by their agent Mills in negotiating the sale of the note. They cannot be permitted to enjoy the fruits of the bargain without adopting all the instrumentalities employed by the agent in bringing it to a consummation. They have ratified the sale by seeking to enforce payment of the check given for the thing sold. If an agent defrauds the person with whom he is dealing, the principal, not having authorized or participated in the wrong, may, no doubt, rescind, when he discovers the fraud, on the terms of making complete restitution. But so long as he retains the benefits of the dealing, he cannot claim immunity on the ground that the fraud was committed by his agent and not by himself. (Bennett v. Judson, 21 N.Y., 238.) The plaintiffs, therefore, stand in the same position as if they had made the representation or authorized it to be made, and they are equally guilty of a fraud, whether the representation was *Page 620 made without knowledge of its truth or falsity, or whether at the time it was made it was known to be untrue. (Bennett v.Judson, supra.) It is apparent that the defendant did not intend to purchase this note unless the other was paid, and as the jury have found that he relied upon the representation of the plaintiffs' agent that it had been paid, when in truth and in fact it had not, the judge properly instructed them that if they found the representation as alleged was made, and that the defendant relied upon its truth in making the purchase, and that it was false, then they should find for the defendant. They did so find, and the judgment appealed from should be affirmed.