and 121 New York State Reporter the question whether or not the defense pleaded has been sustained. It has been held that a sale of accommodation paper is merely a loan of money, the purchaser being the lender and the seller the borrower. When, therefore, plaintiff purchased the $1,000 note in suit for $940, he exacted thereby a promise to pay interest at a prohibited rate, and the promise, by force of the statute, was void. Upon the delivery of the note to him, and the payment by him of the $940, the transaction was complete. Claflin v. Boorum, 122 N. Y. 385, 25 N. E. 360. The instrument did not take effect as a valid obligation until discounted by plaintiff. It may be assumed that before advancing his money thereon he supposed he was purchasing an obligation which bound the parties whose names appeared upon the same. But, as was said in Clark v. Sisson, 22 N. Y. 316: "These circumstances do not relieve the case. Neither the drawer nor the acceptor [here the maker or indorser] made any representations to the plaintiffs beyond the language contained in the contract itself. But if the very words of a contract are to be taken as a representation of facts which estops the party who makes the obligation from interposing a defense inconsistent with that representation, then all contracts must be deemed valid which appear to be so on their face, and not only usury, but duress and fraud, can no longer be alleged." When a note has a valid inception, it is not usurious for the holder to sell it for what it will bring. On the other hand, if it is transferred at a discount beyond the legal rate of interest, not yet, in a legal sense, having had its inception, the transaction is usurious. The note in suit never had its "inception" until discounted by plaintiff, because suit could not have been maintained upon it prior to that time. And this is the true test in distinguishing between a case where a discount of a bill at a higher rate of premium than the legal rate of interest will render the transaction legal, by considering it the purchase of a bill already perfect and available to the party holding it, and where it will be illegal as a usurious loan of money. Eastman v. Shaw, 65 N. Y. 527. And this rule is not confined to the case of accommodation paper, but extends to all cases where the paper, though in the similitude of a note, has no existence as between the immediate parties to it. 65 N. Y. 528. The note in suit was not the subject of sale to plaintiff, but only of discount, and, a larger sum than the regular rate of interest having been deducted, the transaction was usurious. True, there is no proof in the record of any preliminary negotiations to show that the transaction was other than a bona fide one. But this is unnecessary. The defense stated is founded on the loan in question. The law is that no one shall loan money, exacting for its use more than legal interest. While it is well settled that the intention to take usury must have been in the full contemplation of the parties, it is sufficient to show the existence, in fact or law, of the corrupt purpose or intent in connection therewith. Orvis v. Curtiss, 157 N. Y. 661, 52 N. E. 690, 68 Am. St. Rep. 810. This, in my opinion, the record reveals. Whether the defense of usury has been swept away by the passage of the negotiable instruments law, as claimed by the counsel for plaintiff, notwithstanding the decision in Strickland v. Henry, 66 App. Div. 23, 73 N. Y. Supp. 12, to the contrary, is not for me to say or determine. That authority must be followed as a controlling case, until otherwise reversed or modified. I am willing to admit, however, that a very ingenious and plausible argument has been essayed in behalf thereof by reference to certain sections of the law in question. But the superstructure raised thereon has been immeasurably lessened in this case by the basic weakness of the structure itself. It is evident that, if the plaintiff is not a holder in due course, the argument of counsel in support of the contention stated falls to the ground. The statute definition of such a holder is, among other things, that he took the instrument in good faith, and without notice of any infirmity therein. See section 91, subds. 3, 4, Neg. Insts. Law (Laws 1897, p. 732, c. 612). By the evidence the burden was cast upon plaintiff to show these facts, which he neglected to do. The presumption of his bona fides is established by the law in question; but when, as here, it was shown that the note in suit had no legal inception until its negotiation by plaintiff, then it became his duty to establish the fact that he became the holder under the circumstances stated. The remaining question to be determined is whether or not the plea of usury is bad. While there is some lack of precision and certainty. in the averments with reference thereto, I am of the opinion that plaintiff could not have been misled in respect to the defense intended, nor as to the circumstances relied upon to support it. The usual rule for the construction of pleadings applies as well to an answer of usury as to one setting up any other defense. National Bank v. Lewis, 75 N. Y. 516, 31 Am. Rep. 484. There is no doubt, finally, from all the facts and circumstances surrounding the transaction and the intention of the parties, so far as disclosed, that the note in question was discounted by plaintiff in the city of New York. But assuming, as claimed, that there is no evidence upon that point, and that it was negotiated in another state at a rate of interest lawful there, but greater than allowed by the laws of this state, nevertheless it became invalid by the very transaction in question. The Court of Appeals determined that question as early as 1864, in Jewell v. Wright, 30 N. Y. 259, 86 Am. Dec. 372, when it decided that the lex loci contractus governs as to the defense of usury. While it is true for a time thereafter that authority was much criticised, it received reaffirmation by said court in Dickinson v. Edwards, 77 N. Y. 573, 33 Am. Rep. 671, in an exhaustive opinion written by Judge Folger, who there said: "The general rule is and has been that, where the contract either expressly or tacitly is to be performed in a given country, there the presumed intention of the parties is that it is to be governed by the law of the place of performance, as to its validity, nature, obligation, and interpretation [citing authorities]. This rule has been specially applied to the rate of interest to be allowed; and it has been held that where a personal contract is, expressly or by implication, to be paid at a given place, and the rate is not fixed by the parties, interest is to be taken or reserved according to the law of the place where payment is to be made." It is immaterial, therefore, as stated, whether or not there is direct evidence herein of the place of discount of the note in question. It and 121 New York State Reporter was, by its terms, made payable in this city, with no rate of interest fixed therein, and is accordingly to be governed by the interest laws of this state. It follows that judgment must be directed for defendant, with an extra allowance of 5 per cent.; plaintiff to have a stay of 10 days after entry thereof, and 30 days additional time to make and serve a case and exceptions on appeal, if so advised. Judgment accordingly. (42 Misc. Rep. 467.) In re LATTAN'S ESTATE. (Surrogate's Court, Kings County. January, 1904.) 1. DISTRIBUTION OF ESTATES-EQUITABLE INTERESTS. Code Civ. Proc. § 2743, directing payment and distribution of an estate to creditors, legatees, next of kin, husband and wife of decedent, or their assigns, and providing for the determination by the decree to whom a debt, claim, or distributive share is payable, claimants other than those having legal titles will not be recognized, but those claiming interests adversely to such titles, on grounds of equity, will be remitted to other tribunals. Proceedings on the judicial settlement of Louis H. Lattan, administrator of Angelica Lattan. Motion to set aside decree of distribution. Denied. Weeks, Battle & Marshall, for administrator. CHURCH, S. Upon the argument of this motion I gave the interpretation which I had placed on this section of the Code of Civil Procedure (section 2743), upon which I had acted in this and other similar matters. An examination of the briefs of counsel has not changed my determination. Without going over all the decisions upon this subject, it seems to me that it is impossible to state the rule on this matter better than it has been stated by Redfield in the sixth edition of his work (section 968): "Without attempting any discussion of the subject, it is enough to say that, in our opinion, the weight of authority established the true interpretation of the foregoing section of the Code to be this: that in directing 'the payment and distribution to the persons so entitled' (i. e., to creditors, legatees, next of kin, husband or wife of the decedent, or their assigns), and in determining to whom a debt, claim, or distributive share 'is payable and the sum to be paid and all other questions concerning the same,' the court will not recognize claimants other than those having legal titles, but will remit parties claiming adversely to such titles, on grounds of equity, to other tribunals, as not itself having any power to nullify and set aside the deeds of the parties for fraud, or on other equitable considerations." In Matter of Brown, 3 Civ. Proc. R. 39, quoted by counsel for the moving party herein, this rule is expressly recognized, and is directly in conflict with the contention of the moving party. The court says as follows (page 51): "I am informed that in New York county it has been for years the practice of this court to recognize and give effect to assignments when they have not been attacked, but that whenever their validity has been the subject of controversy the court has refused to exercise any jurisdiction concerning them." This is precisely the theory upon which I have acted in this case, namely, that, as at the time of the making of the decree there was no dispute as to the validity of the assignment between either the assignor and assignee or any other person, thereupon I recognized the validity of the same, and directed that distribution should be made to the assignee accordingly, but that, if at such time the parties had attempted to contest before me the same question which they are now attempting to contest, then I should have refused to entertain the same, on the ground that it was an equitable matter, to be determined elsewhere. I may say in conclusion that I am incapable of appreciating the contention of the moving party here in relation to this matter, as he seeks to assail the decree on the ground that there was no authority to make the same, and then suggests that I should pass upon the validity of the equitable assignment, by reason of his client being receiver, and directing the administrator to pay to his client to the exclusion of any other person. The motion is therefore denied. Motion denied. (42 Misc. Rep. 444.) In re BROWN. (Surrogate's Court, Dutchess County. January, 1904.) 1. LEGACIES-ABATEMENT. Testatrix had informally adopted a child two years old, and supported him during his minority, and received his wages. She devised to him a specific legacy of the amount due on a bond and mortgage given by him on a house which he built to enable her to live with him and his wife, in which she lived for seven years, and where she was living when she made her will. Held, that the legacy was not subject to abatement. In the matter of the judicial settlement of Elizabeth A. Brown, executrix of Mary McKay. Decree of distribution entered. Walter Farrington, for executrix. George Wood, for legatee James B. McKay. Charles F. Cossum, for legatees Barbara Jack and James Brown. HOYSRADT, S. Mary McKay, late of Wappingers Falls, in this county, in her will gave, first, to James McKay the amount due upon a bond and mortgage which she held against his property; secondly, to her sister-in-law Barbara Jack and to her nephew James Brown, both of Glasgow, Scotland, all money which she had on deposit in the savings bank. It appears from the accounts of the executrix that the mortgage referred to and the savings bank deposits were substantially all of the personal assets. The account also shows that debts aggregating $1,231.73 have been paid by the executrix, or still remain unpaid, and the question is presented whether the mortgage bequeathed to James McKay shall be sold by the executrix, and the proceeds used, with the savings bank deposits, to discharge the liabilities of the estate. and 121 New York State Reporter Both are specific legacies, and ordinarily would be resorted to without discrimination; but James McKay claims that the relation of parent and child existed between the testatrix and himself, and that a construction of her will which would free his legacy from liability for the debts of the testatrix is warranted by the extrinsic facts and circumstances, and that such was her intention. James McKay, whose proper name was James Brown, was taken by Mary McKay and her husband, apparently as their own child, when he was but two years old, but without any legal form of adoption. They gave him their name, maintained and educated him. They brought him with them to Wappingers in 1866, and during his minority James gave his wages to Mary McKay. He married in 1881, and his father, the husband of Mary McKay, died in 1887. In 1895 James McKay built a house at Wappingers Falls, in which rooms were especially arranged for his mother, Mary McKay. James had not means sufficient to build the house, and she offered to let him have $2,000, and said they would all live together. As security for the loan, she took a mortgage of $2,000 on the property, which was preceded by a first mortgage of $1,500 held by the Wappingers Savings Bank. The principal of the second mortgage was reduced to $1,500. James McKay now has the custody of the mortgage papers, at the direction of the mortgagee, although no effort is made to prove a gift outside of the will. The will of Mary McKay was executed August 30, 1900, when she was occupying apartments in the house of James McKay, built principally with her own funds. It may be reasonably deduced from the circumstances referred to, and the harmonious relations with her son and his family, that he would be the natural object of her bounty. If the question now presented to the court, of freeing her adopted son's legacy before bequeathing her actual money to a nonrelative and a nephew in a foreign country, had been then presented to her, there can be no reasonable inference that she would have failed to give him the full benefit of forgiving his debt. While the will is practically devoid of any expression which would lead to a solution of the question presented, I am convinced that a construction which will exempt the forgiveness of the son's debt from liability for debts of the testatrix is fully justified by the extrinsic facts and circumstances. There are no words or expressions in the will actually conveying such a meaning, but under some circumstances the courts have found an intention to prefer without express words on the part of the testator. In Lewin v. Lewin, 2 Ves. 415, the executor was directed to pay an annuity to the wife for the maintenance of a child, and this was held to have been intended as preferred, particularly as it was a provision for a child not otherwise provided for. In Scofield v. Adams, 12 Hun, 366, a testatrix gave her huband the use for life of certain articles, and the income of $5,000, with so much of the principal as should be necessary for his comfortable support, with the remainder over to other parties. This was followed by other general legacies far beyond the assets of the estate. It was held that the will should be construed in the light of the surroundings at the time the instrument was made, and that the legacy to the husband, although general, as were the other legacies, was not |