Parshall v. Lamoreaux

By the Court, Welles, J. The note in question had no legal validity or existence as an obligation binding upon any one, until it was transferred to and purchased by the plaintiff at a usurious rate of interest. The transfer and purchase were between Lusk and the plaintiff; the former acting as the agent of Warner, the maker. If Lusk, on the occasion of the sale and transfer of the note, and before it was consummated, represented to the plaintiff that it was given for a valuable consideration, or, in other words, that it was a 'valid business note, and the plaintiff purchased it upon the faith of such representation, and in ignorance of the fact that it had never had a legal existence as a note, he, and Warner, his principal, would be estopped from alleging the contrary of such representations, or from availing themselves of the present defense of Usury. But Lamoreaux, the defendant, was a mere accommodation guarantor. He received no consideration for guaranteeing the note, and made no representations to the plaintiff or any one else in regard to the character of the paper, or the circumstances under which it was given. It does not appear that he was cognizant of any representations made or to- be made to the plaintiff or any one else, and there is nothing in the report of the referee, or the evidence, to estop him from setting up the present defense of usury. There is no doubt of his right as guarantor of the payment of the note, under the circumstances of the case, to interpose this defense, equally as if he had been a simple indorser of the note. These questions are all too well settled to render necessary 'the citation of authorities to prove them. The judgment should be reversed, and a new trial granted. Welles, B. Darwin Smith and Johnson, Justices.]