Hemenway v. Cropsey

Mr. Justice Lawrence delivered the opinion of the court: This was an action on a promissory note brought by the endorsee against the maker. The note bore date October 17, 1855, and drew ten per cent, interest, without specifying that it was for money loaned. The court below gave judgment for only six per cent, interest, although the plaintiff, so far as appeared, was a bona fide indorsee, without notice that the note was not for money loaned. The statute of 1849, which allowed ten per cent, interest to be taken only for money loaned, was in force when the note was given, and the only question necessary to be considered is, whether the defence here made can be allowed, and the interest reduced from ten to six per cent, as against an indorsee who has bought the note before maturity and without notice. It has been repeatedly held by this court that, under the act of 1845, an usurious contract is not void, and the defence of usury can not be made against an innocent indorsee of a negotiable instrument assigned before maturity. It is only where the statute makes usurious contracts absolutely void, that this defence can be set up against such indorsee. Conklin v. Underhill, 3 Scam., 388 ; Sherman v. Blackman, 24 Ill., 345. There is no substantial difference, as to making this defence, between the acts of 1845, and 1849, except as to the extent of the forfeiture, and this can not affect the question as to whether the defence can be made against the innocent holder for a valuable consideration. In the case at bar, the act of 1849 did not require the note to express on its face that it was for money loaned, and the purchaser had a right to suppose that it was legally given under the statute. The maker, by his own act in signing the note, had authorized him to draw such presumption. Judgment reversed.