Savings Bank of New-Haven v. Bates

Bissell, J. The questions in this case arise upon the charge of the judge on the circuit; and to this several exceptions have been taken. 1. It is contended, that upon the facts admitted in the case, the jury should have been charged, that the note in question was usurious. It was admitted, on the trial, that the interest computed, or rather the discount deducted, on this note, was according to the interest tables of Rowlett. Whether this rendered the note usurious in its inception, is a question, which we do not feel called upon to decide; as we are clearly of opinion, that the defence of usury , if any such exist d, is taken away by the statute of 1827. The enactments of this statute are positive and explicit, and forbid the court to entertain or adopt a plea of usury to bar this claim. The act validates all contracts made before its passage, wherein the interest has been calculated according to the standard laid down in these tables, provided such contracts were, in other respects, legal. And whatever may be our opinion, as to the policy of retrospective laws, the right of the legislature to enact such laws, has been too often recognized, by this Court, to be now drawn in question. Goshen v. Stonington, 4 Conn. Rep. 209. Bridgeport v. Hubbell, 5 Conn. Rep. 137. 2. It has been contended, that it was the right of the defendant to pay this note on the 2nd of November, and that the offer then made destroyed the negotiability of the note, as to all persons having knowledge of that offer. It is too well settled to admit of dispute, that in regard to negotiable notes, the days of grace make a part of the original contract. Such a note, payable by the terms of it in 60 days, is in law a note payable in 63 days. Before the expiration of that time, no demand of payment can be made; and if negotiated on the sixty-first or sixty-second day, it is not negotiated over-due. The case, therefore, stands on the same ground as if the offer of payment had been made at any time before the note, by its terms, became due; and the question comes to this: Is it the privilege of the maker of a promissory no te to pay it, before it comes to maturity ? This question, as applicable to notes not negotiable, was expressly decided, in the case of Abbe v. Goodwin, 7 Conn. Rep. 377. The principle upon which that decision went, was, that a court of chancery had no power to substitute another contract for that which the parties had made. [512] This principle applies, surely, with equal, if not much greater force, to negotiable paper, than to a note not negotiable. For then the holder has the legal right to negotiate the note: and this may be much more beneficial to him, than to receive payment. The contract of the maker with the payee of a negotiable note, is virtually this: “You shall have the privilege, to negotiate this note, at any time while it remains due, and I agree to make paympnt to the legal holder, when the note comes to maturity.” Is it in the power of the payee, by any act of his, to put an end to this contract? And can either a court of chancery, or a court of law, aid him in so doing? Would not this be going still further than was claimed in Abbe v. Goodwin, and still further varying the contract between the parties? If this view of the case be correct, it goes far to dispose of the only remaining objection which has been raised. 3. It is objected, that the offer of the Eagle Rank notes, on the second of November, and the notice then given, taken in connection with the insolvency of the Eagle Bank, gave the defendant an equitable right of set-off, us against the bank; and the plaintiffs having taken the note with notice, are affected by the same equity, and of course are not entitled to recover. The jury have found, that the transfer of this note was not colourable, but made to secure a debt bona fide due to the plaintiffs from the Eagle Bank. In the case of Catlin v. The Eagle Bank, 6 Conn. Rep. 133. it was held, that the bank might, even after its insolvency, prefer one creditor to another; and might appropriate its funds to pay and secure the claim of what might be considered a meritorious creditor. And this is all that has been done in the present case. This note was a part of the funds of the bank, and has been so applied. What should prevent this application? The parties to the note had certainly concurred in no act which could prevent it; and the defendant alone could do no act which would have the effect of rescinding or varying his contract. What had he done to create equity in his favour? He had not paid his note, nor had he made a legal tender. He had taken in notes of the Eagle Bank, and for aught that appears, after its insolvency, and with a view to this payment; and had given notice, that he meant so to apply them, when his own note became due. What foundation is here laid for the interference of a court of equity? Suppose that the defendant had preferred his bill in chan [513] cery, stating all the facts found in this case, observing an entire silence as to the time when, and the object for which, he obtained these Eagle Bank notes, not averring, that he took them before the insolvency of the Bank, or in a course of circulation; would not the inference have been irresistable, that he had purchased in this depreciated paper, for less than its nominal value, and for the purpose of paying his own note? And would a court of chancery have interposed, by decreeing the note to be delivered up, or by enjoining against negotiating it, in aid of such a speculation? Would it not have been a sufficient answer to such an application, to say to the plaintiff; “You knew that your note was negotiable, and that this paper would be no payment of it, in the hands of a bona fide indorsee? You took the paper subject to that risk, and must abide the hazard.” It ought further to be borne in mind, that a court of chancery could not have interfered, either by injunction or otherwise, without destroying the contract, entered into by the parties, and substituting another in its place. In support of such an interference no authority has been produced. The cases relied upon do not sustain the position; and I will only say, in the language of the court in Abbe v. Goodwin: “It will be in vain to search for authorities to that effect. None are shewn. It is opposed to the whole doctrine of contracts.” Here then, was no equity, which attached to this note, in the hands of the plaintiffs, which should prevent a recovery by them. The motion for a new trial must be overruled. Hosmer, Ch. J., was of the same opinion. Peters, J., being interested in the event of the suit, and Baggett and Williams, Js., having been of counsel in the cause, gave no opinion. New trial not to be granted. (a) Footnotes [(a)] See note to United Society v. Eagle Bank, 7 Conn. Rep. 476.