Steele v. Franklin

By the Court. There must be a new trial ⅛ this case. When a note, given upon a usurious contract, has been transferred to a third person for a valuable consideration, without notice of the usury, and has been taken up, and a new note given to such third person for the amount of the first note, no deduction can be claimed in a suit on the new note, on account of usury in the first note. Ord, 103, a ; 8 D. & E. 390, Cuthbert v. Haley; 10 Johns. 185, Jackson v. Henry; 4 Espin. N. P. C. 21, Turner v. Hulme ; 2 N. H. Rep. 410, Young v. Berkley; 9 Mass. Rep. 45 Bearce v. Barstow. But when a note, by which unlawful interest is secured, is taken up, and a new note given to one who was a party to the usury, or to his executor or administrator, for the contents of the first note, no doubt is entertained that the new note is subject to a deduction on account of the usury in the first note. Ord, 103, a; D. & E. 531, Tate v. Wellings; 8 Cowen, 669, Powell v. Waters; 1 Green. 167, Warren v. Crabtree; 10 Mass. Rep. 121, Chadburne v. Watts; 2 Starkie’s N. P. C. 237, Preston v. Jackson. [378] In this case the illegal interest in the first note ⅛ transferred to this note. A mere change of the security is not regarded. 3 N. H. Rep. 185, Gibson v. Stearns. Verdict set aside and a new trial granted.