Nichols v. Levins

Wright, J. 'The cause was referred to Charles J. Rogers, Esq., as referee, who found and reported that the contract was usurious. This finding was confirmed, and judgment entered in accordance therewith. Of the several propositions stated and ably elaborated by counsel for appellant, the following, found in Moncure v. Dermott, 13 Peters, 345, is as succinct a statement of what he claims as any other: “ The bona fide purchaser of a note or bond may take it at any rate of discount, without violating the statute of usury.” All that is said in Crane v. Hendricks, 7 Wend., 569; Shackleford v. Morris, 1 J. J. Marsh., 407, and other similar cases, but recognize the same rule, a rule to which, in the absence of statute, there is no exception. Of course, if there was usury between the original parties, a different question would be presented, especially under statutes like ours; for expositions of which see Bacon v. Lee and Gray, 4 Iowa, 490; Campbell v. McHarg et al., 9 Id., 354; Smith, Twogood & Co. v. Coopers & Clark, Id., 376. The only question in the present case is, whether the rule stated is applicable to the facts; or, in other words, does the testimony justify the finding of the referee, “ That Graves was acting as the agent of defendant, and that the privity of contract subsisting between plaintiff and defendant was such as to authorize the conclusion that the note was tainted with usury as between them ? ” And it seems to us that this finding is not so far in conflict with the testimony as to justify a reversal of the judgment. To discuss this testimony in extenso can serve no useful purpose. We need only state that the impression which it makes on our minds is, that this note was made with the know [365] ledge of plaintiff, to be negotiated, and that the intention was to so arrange the transaction as to place plaintiff in the position of an innocent holder, and thus avoid the statute against usury. It seems to us that Graves, the payee without value, was a mere go-between, and that throughout there was nothing more nor less than a device, by which it was sought to place the contract or the debtor beyond the protection of the law.- The letters referred to do not help or aid plaintiff’s case. They are so far out of the ordinary method of transacting business as to tend to stamp the contract with its true character. And while it is true, as a general proposition, as claimed by appellant, that if a promisor induces a person to take an assignment of a a note, by admitting the .justice of the debt, or by declaring that he has no defense, he cannot afterward deny it to the prejudice of the assignee, yet such a rule has no application in the caseAf usury where the assignee has knowledge of the same, and especially where such declarations are obtained the more effectually to cover and hide the same. Whether they would estop a party from pleading usury under our statute, when the assignee buys without such knowledge, we. need not now discuss nor determine. The judgment is Affirmed.