Grant v. Merrill

Lyon, J. While it is true that an intent on the part of the lender to stipulate for an unlawful rate of interest is essential to render usurious a contract to pay more than legal interest for the loan or forbearance of money, yet, when it is proved that the lender knowingly accepts and retains a contract for the payment of unlawful interest, such intent is conclusively established. In the present case-the testimony tends to prove that the payee of the note agreed with the defendant Merrill, before the note was given, that the loan to him should be $900, and that a note should be executed for $1,000 on account of such loan. But, however the facts may be in respect to the preliminary negotiations for the loan, it is undisputed that Mrs. Galloway knew, soon after the note was signed, that it was for $100 more than she had loaned to Merrill, and for the highest rate of legal interest on the whole sum; and, instead of repudiating the transaction, or taking any steps to purge it of the usury, she retained the note as it was, without objection, and afterwards negotiated it at its face. It seems very clear, .under these circumstances, that the question of intent should not have been submitted to the jury, and that the instructions asked on behalf of the defendants, and refused, should have been given. And we so hold. Some testimony was introduced tending to prove that the defendant Merrill paid the defendant Daniels $200 to indemnify the latter for signing the note. Whether, in case Daniels so received the $200, the plaintiff can recover it from him, we do not here determine. Certainly it cannot be recovered in this action, which is brought directly upon the note. See Harris v. Wicks, 28 Wis., 203. [394] Testimony was also received tending to show that Daniels promised one Durfey to pay the note in suit; and it was claimed that such promise was made upon a valuable consideration. It does not appear that Durfey had any interest whatever in having the note paid. We are quite unable to perceive how such promise (if made) can enure to the benefit of the plaintiff. By the Court. — The judgment of the circuit court is reversed, and a venire de novo awarded.