Swartwout v. Payne

Spencer, Ch. J. delivered the opinion of the Court. It appears very clearly, that the plaintiff received from the defendant, a note for 400 dollars, drawn by Titus Goodman, jun., payable to N. I. Visscher, and endorsed by Visscher and Titus Goodman, in payment for lands sold and conveyed by the plaintiff and wife, to the defendant. The note was received as part of the consideration money, on the strong assurances of the defendant that it was as good as the bank, and that all he would have to do, would be to leave the note at the bank, and receive the money. If it shall appear that the note was void for usury, and that the defendant knew it to be so, there can be no doubt of the plaintiff’s right to recover. I do not consider it as very material, whether we regard as evidence the proceedings in the suit brought on this note against Visscher. Had the defendant been notified of that suit, and required to attend the trial, and furnish evidence to enable the plaintiff to recover, I should have considered that trial as conclusive upon his rights; (1 Johns. Rep. 517. 6 Johns. Rep. 158. 7 Johns. Rep. 168. Phillip's Ev. 227.) but the defendant had no notice of the suit, and cannot be conclu [297] ded by it. The single question then is, whether the note was proved to be usurious, on this trial ? It appeared, by the evidence of H. Stark, that the defendant received this note, which he passed to the plaintiff, in renewal of a former note, in all respects similar to this, except the date, and that on giving up the first note, atid taking the note in question, the defendant exacted and took from T. Goodman, jun, an additional note, for a premium for renewing the first note, the precise amount of which the witness did not know, but he thought it to be 15 dollars; and that the defendant, after the renewal, told the witness that the note he took for the premium was for more than 15 dollars. The witness saw the old note given up, and the new note taken, and the premium, note delivered. An ineffectual attempt was made to impeach, the testimony of Stark, but it was wholly unavailing. The first note is not shown to be usurious, and we must, therefore, consider that as a bona fide security, and a bona fide debt due from the parties on it, to the defendant. The amount of the argument on the part of the defendant is, that the subsequent usury in taking the new note, did not affect or destroy the antecedent debt, which was free from usury. This is undoubtedly true, and Gray v. Fowler, (1 H. Bl. 462.) and 1 Saund. 295. a. and the authorities there cited, fully maintain the position. But it is equally certain, that if, in receiving the new security, a rate of interest above seven per cent, was received for forbearance, the new securities are void by the statute ; and in this view, it is immaterial whether the illegal interest was reserved, and made payable by a distinct note, or w.as incorporated into one note. They are considered as one assurance, and are all void, into whose hands soever they may come. (1 Saund. 295. a.) The note being a nullity, according to the case of Markle v. Hatfield, (2 Johns. Rep. 455.) the plaintiff had a right to sue on the original contract. Judgment for the plaintiff.