Stanton v. Demerritt

Lord, J. There is no question raised upon the bill of exceptions in this case, that was not raised and expressly adjudicated in Dunscomb v. Bunker, 2 Met. 8. In that case, as in this, the transaction was a New York one, and was governed by the laws of New York as the locus contractus. In that case, as in this, the usurious agreement was oral, and not incorporated into the contract itself. In that case, as in this, the suit was not upon the original obligation, but was upon a note given in payment of, or substitution for, or collateral to, the original obligation. In that case, as in this, the suit was not against the party who originally agreed to the usurious interest, but against one who was liable as an accommodation promisor. Chief Justice Shaw says in that case : “ It is very clear, that all bills, notes and securities, given in satisfaction or in security of usurious debts, are avoided by the statute, because their design is to enforce pay [498] ment of the usurious debt; and to give effect to them would be directly contrary to the statute, and enable the lender to recover upon a security which the law declares void.” The defendant testified that, at the time he gave the note in suit, he agreed with the plaintiff to pay him, as interest, the same per cent, allowed by Rice to the defendant on a note given by Rice to the defendant; and it is very clear that it was competent for the defendant to introduce that note, for the purpose of showing what in fact was the percentage of interest upon that note, and for this purpose, and to this extent alone, it was admitted by the court. In the case of Dunscomb v. Bunker, there were facts much more favorable to the plaintiff’s claim than in this. It did not appear hi that case that the defendant had any knowledge of the usurious contract between the plaintiff and the party to whom the loan was made, to whom his accommodation note was given. Upon the authority of that case, therefore, these Exceptions must be overruled.