Balme v. Wombough

By the Court. Leonard, J. The statutes of this state direct that any evidence of debt taken or received in violation of the laws against usury, shall be declared void, and any prosecution thereon shall be enjoined, and the same shall be ordered to be surrendered and canceled. The judgment of this court must be so pronounced whenever the usury shall satisfactorily appear by the admission of the defendant, or by proof. The promissory notes mentioned in the complaint are undoubtedly usurious, if they are to be judged by the laws of the state of Hew York. They are made and dated in Minnesota, for money there loaned and advanced by the defendant to the plaintiff, payable at the Addison Bank, Steuben county, in the state of Hew York, two and three years after date, with interest at 26J per centum per annum. The plaintiff, who was the borrower, resided in Minnesota, and the defendant in the state [363] of New York, at the time of the loan. The notes are secured hy mortgage on land in Minnesota. It should perhaps be added that the defendant had no intention to violate the laws of New York in making the loan. By the laws of Minnesota any rate of interest is allowed which may be agreed on by the parties. [New York General Term, November 3, 1862. The usual rule of law is that contracts are to be construed and adjudged by the laws of the place where they are made, except where they are to be performed in another state or country, and in such cases their validity is to be decided by the laws of the place of performance. (Story’s Conf. L. §§ 242, 280. 2 Kent’s Com. 459, marg.) It appears, however, that cases involving the rate of interest, where it is stipulated in the contract at the place where the loan is made, in conformity with the law of the place, at a higher rate than is permitted by the law of the place where the payment is to be made, are not within the exception, but the specified rate of interest at the place of the contract has been allowed. (2 Kent’s Com, 460, marg. 2 Parsons on Cont. 95. Hosford v. Nichols, 1 Paige, 220. Depau v. Humphreys, 20 Martin’s La. R. 1. Chapman v. Robertson, 6 Paige, 627. Pratt v. Adams, 7 id. 632 Pomeroy v. Ainsworth, 22 Barb. 121. Gibbs v. Fremont, 20 Eng. L. & E. Rep. 555.) I am aware that some of these cases have been criticised and doubted. (Story’s Conf. L. § 293, b. c. and note, and §§ 298, 300, and note 1.) Under these decisions the notes would be upheld in Minnesota. We cannot, without overruling the authorities of our own state, declare these notes to be void, or direct them to be surrendered and canceled. . I advise the affirmance of the judgment with costs. J udgment affirmed. Ingraham, Leonard and Peckham Justices.]