President of Bank of Salina v. Henry & Pierce

Headnote

Questions discussed.

1. Whether a witness called' as a mere witness and not as a.party under the usury law, to prove, under the plea of the general issue, that a promissory note was usurious and void, was bound to answer, notwithstanding the objection, that his doing so might form a link in the chain of testimony tending to convict him of a misdemeanor, or expose him to a penalty or forfeiture r

2. Whether under the notice annexed to the plea, in pursuance of the Usury Act of 1837, the defendant might prove by the witness, (who was not a party to the record,) that he was the “plaintiff in interest,” and also the “ usurious agreement ” on discounting the note ? Or, whether the fact that the witness was the plaintiff in interest, must not be proved by some other witness ?

3. Whether the statute of limitations, or the Usury Act of 1837, would be a protection to the witness on an indictment for usury, or in an action for a penalty or forfeiture ?

' This was an action of assumpsit, brought to recover the amount of a promissory note bearing date April 28th, 1838, for the sum of two hundred dollars, payable to the plaintiffs at their banking house, in Salina, at sixty-three days.

The suit was commenced by the filing and service of the declaration and notice of rule to plead under the statute. The declaration contained the common money counts, to which was annexed a copy of the note in these words:

“April 20, 1838.

“ $200. Sixty-three days after date, for value received, we

jointly and severally promise to pay to the President, Directors and Company of the Bank of Salina, two hundred dollars, at their Banking House.

“ O. B. Pierce,

“ S. H. Henry, Security.”

To which was added a notice that said note would be given in evidence, under the money counts, on the trial. The declaration was served upon the defendant Henry, the 17th day of June," 1839, but was not served upon the defendant Pierce. The defendant Henry, appeared, and pleaded non assumpsit, and annexed to and served with his plea a notice of the defence of usury, and verified the same by affidavit according to the provision of the statute'. The cause was tried before the Hon. Daniel Moseley, Circuit Judge, at the Onondaga Circuit, on the 8th day of April, 1844. On the trial, the signature of the defendant Henry to the note was admitted, and the counsel for the plaintiffs proved the signature of the defendant Pierce to the said note, and the interest thereon, to be $81,08, and rested. The counsel for the defendant then opened the defence to the jury, and in so doing, stated to the jury, among other things, that the note in question was made to be discounted at said bank, for the sole benefit of the defendant Pierce, and was signed by defendant Henry as his surety, and was in the first instance presented by the defendant Pierce to the said Bank of Salina for discount; that the bank refused to discount it; that this was known to Elisha Chapman, who was at that time the teller of the bank; that the said note was then subsequently presented to the said Elisha Chapman, who with full knowledge that the same had been presented at the bank and refused, discounted the said note, and in so doing, deducted $10 from the face thereof, under a corrupt and usurious agreement between him and the said Pierce. The counsel for the defendant Henry, to maintain and prove the issue on his part, called and had sworn as a witness, Elisha Chapman ; the note was then handed to the witness, and defendant’s counsel proposed to prove by the witness under the plea of the general issue, that the note was usurious and void. This was objected to both by the wit

ness and the counsel for the plaintiffs, upon the ground that the witness was not bound to answer, as his doing so might tend to form a link in the chain of testimony tending to convict him of a misdemeanor, or expose him to- a penalty or forfeiture. In support of such objection it was insisted that the said Chapman when called as a mere- witness (and not as a party of record or interest) to testify to usury, was not bound to answer under the act to prevent usury, passed May 15, 1837. It was also at the same time further insisted that the said witness was protected from answering, under the 1st Revised Statutes, 597, sec. 30, 2d ed., and his honor, the circuit judge, sustained the objection, and defendants’ counsel excepted thereto. The following questions were then put to the witness, all of which, on objections being made by the witness and the complainants’ counsel, were overruled by the circuit judge, and were severally excepted to by defendants’ counsel. Did you receive the note from O. B. Pierce in the year 18381 Did you in April, 1838, receive the note in question under some agreement with O. B. Pierce 1 Did you in April, 1838, make a usurious agreement with O. B. Pierce in relation to said note 1 Did you in April, 1838, discount the note for O. B. Pierce at $10 less than its facel Did you in April, 1838, discount the note and reserve $10 from its face under an agreement between yourself and O. B. Pierce 1 The above questions were objected to on the grounds above set forth. The defendants’ counsel then offered to prove the usurious agreement by the witness, under the notice annexed to and served with the plea, on the 'ground that he, the witness, was then the plaintiff in interest. This was objected to, both by the witness and the plaintiffs’ counsel, on the ground, 1st, that the witness could not be compelled to testify to usury under the notice and under the act of 1837, unless it should first appear that he was the plaintiff in interest and the owner of the note. 2d. That the witness could not be compelled to show himself to be the owner of the note in question, without subjecting himself to a penalty or forfeiture, under the section of the Revised Statutes above cited, or without establishing a link in the chain of evidence to subject himself to a penalty or forfeiture under that statute. The objections were

sustained by the circuit judge, upon the grounds stated, and also upon the ground that the fact that the witness was the plaintiff in interest should be proved by some other witness. The defendants’ counsel in due form excepted: the defendants’ counsel then offered to prove by the witness that he was the plaintiff in interest in this suit and the owner of the note in question. This was objected to as well by the witness as the //plaintiffs’ counsel, and his honor, the circuit judge, sustained the objection upon the grounds last above set forth. Defendants’ counsel then offered to prove by the witness, that he, the witness, discounted the note in question in the month of April, 1838, and ever since that time had been, and still was, the owner of the note, and was then the plaintiff in interest ,in this suit, and then to prove by the witness that he discounted the note at the time aforesaid, at a usurious rate of interest, and that the same was usurious and void. This was objected to as well by the witness as the plaintiffs’ counsel, upon the grounds last above stated, and his honor, the circuit judge, sustained the objections, to which decision defendants’ counsel excepted. The defendants’ counsel then repeated the several questions to the witness in substance which were propounded to him under the plea of the general issue ; and which on being objected to as before, were severally overruled by the circuit judge, and were severally excepted to by defendants’ counsel. And the jury thereupon, under the direction of the circuit judge, rendered a verdict for the plaintiffs for the sum of $281,08, being the amount of the said note and the interest thereon.

The supreme court at general term in January, 1846, affirmed the verdict, and judgment was thereupon entered in favor of the plaintiffs. (Reported 4 Demo.)

The defendants brought a writ of error, and removed the proceedings to this court.