[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 250
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 251 Assuming that the notes of the defendants were given to the plaintiff and accepted by him as a loan of money, the transaction, as found by the referee, cannot be considered usurious. He has fully set forth the facts on which he found, "as a matter of law, that said loan of money and said notes given therefor, and the said mortgage were usurious and void." They are substantially that the defendants, on an application to them by the plaintiff, for a loan of money to discharge an indebtedness by him to divers persons, including a debt to themselves, consented to lend the money wanted, among other terms, "upon the further condition, that the said plaintiff would, in consideration of such loan, undertake to pay to the said defendants the sum of $483.02 claimed by the said defendants to be due from Henry Jones to them, the said defendants," the particulars of which claim were set forth, "and then and there make his promissory note for said amount" and secure the same, with the notes to be given for the amount of the said indebtedness, by the said mortgage, that the plaintiff acceded to the said terms and made the notes and executed the mortgage which he seeks to cancel. He does not find as a fact, or set forth any circumstances warranting or tending to warrant the conclusion, that the debt of Jones was not due, or that the assumption of it was demanded or insisted on in any way, as interest for the loan, or with the intention of taking usury, or as a shift or device to cover it. The fact, and the only fact on which, "as a matter of law," he decides the loan to be usurious and void, is, that the defendants refused to make the loan asked by the plaintiff, unless the payment of the Jones debt was assumed by him and secured by the mortgage. Such a refusal did not, per se, make the transaction usurious, and that fact being, as before stated, the only one found, no other will be presumed to sustain a conclusion that the agreement was corrupt and void. It must be considered the settled rule of law in this State, that the onus is upon the party seeking to avoid an agreement as usurious, not merely to establish a usurious intent, but to prove the facts, from which that intent is to be *Page 253 deduced. (Thomas v. Murray, 32 New York Rep., p. 605, and cases cited at p. 612).
A corrupt and usurious agreement will not be presumed from a fact, which is equally consistent with a lawful purpose, (Booth v. Sweezy, 4 Selden Rep., p. 280, c.) "Where the conclusion of law drawn from the facts by the referee is erroneous, the judgment cannot be sustained, and it must appear that the facts found justify the judgment where there is an exception taken to the conclusion of law, which the referee has drawn from the facts." (Smith v. Devlin, 23 N.Y. Rep., p. 362.)
In the case under consideration, the General Term of the Supreme Court, on review of the findings of the referee, reversed his decision and ordered a new trial. That court, on such review, were not restricted to the facts found, but were authorized to examine the testimony, and reverse on the ground that it did not sustain those facts. They, however, did not reverse the judgment for that reason; but, agreeing with the referee in his findings of fact, yet aided by the light of the circumstances, under which the assumption and security of the Jones debt was made a condition of the loan, they came to the conclusion, that such condition did not make the transaction usurious, and reversed the judgment on that ground.
The facts, on which the referee based his conclusion that the loan, and the securities therefor were usurious, did not perse, as before stated, constitute usury; and while those facts, as found, must be assumed by this court to have been warranted by the evidence, it may nevertheless be proper that such evidence should be referred to, as explanatory of the finding and for the purpose of properly construing its meaning and effect. By such reference it appears that the indebtedness of Jones to the defendants had arisen on the purchase by him, from them, of some of the identical property mortgaged, and that they claimed to be entitled to satisfaction of such indebtedness out of that property, and it, or a portion thereof, had, in fact, at that time, been sold under an execution, *Page 254 issued on a judgment recovered for that debt, and purchased by the defendants, notwithstanding the transfer thereof by Jones to the plaintiff, and the defendants had declared their intention to enforce such claim, and were actually prosecuting proceedings for that purpose. Those facts are sufficient to relieve the transaction from the taint of usury.
Assuming these views to be correct, the judgment entered on the referee's decision, was properly reversed, and the judgment of reversal and the order granting a new trial, must be affirmed, with costs, and, under the plaintiff's stipulation judgment final must be entered for the defendants, with costs.