Staples v. Nott — 34 N.Y. St. Rep. 175

Majority

p. 175

Oren G. Staples, Resp’t, v. Copley A. Nott, Impl’d, App’lt.

(Supreme Court, General Term, Fourth Department,

Filed December 6, 1890.)

Headnote

Usury—Note to be used in another state—Conflict of laws.

The note in suit was given in renewal oi a former one and was drawn with interest at the rate of seven per cent.. It was given in pursuance of an agreement made at Washington, where plaintiff lived, and where that rate was legal, and was to be used there, but it was executed in this state. Held, that the question of interest was to be determined by the law of Washington, and that consequently the note was valid.

Appeal by the defendant, Copley A. Nott, from a judgment entered in Jefferson county on May 8, 1890, against the defendants, Sylvester Gr. Nott and Copley A. Nott, upon a verdict directed for the plaintiff for $1,492.93, at the Jefferson circuit, and from an order denying a motion for a new trial upon the minutes.

The action is upon a note made by the defendant, S. Gr. Nott, and endorsed by the defendant, C. A. Nott, a copy of which is as follows:

“ $1,400. Washington, D. C., April 5, 1889.

“ Six months after date I promise to pay to the order of 0. A. Nott fourteen hundred dollars, at Jefferson County National Bank, Watertown, N. Y., value received, with interest at seven per cent per annum until paid. S. Gr. Nott.”

The defense is usury, in that the interest is seven per cent.

At the close of the evidence the defendants moved that a verdict be directed in their favor. This motion was denied and defendants excepted. Thereupon the motion of the plaintiff for a verdict in his favor was granted. The defendants did not ask to go to the jury on any question of fact.

If. If. Waters, for app’lt; John C. MaCartin, for resp’t.

The facts in this case are in the main undis-

puted. So far as there is any dispute about them, the verdict, as directed, is to be treated as the verdict, in fact, of the jury, as no request was made to go to the jury. Dillon v. Cockcroft, 90 N. Y., 649 .

At Washington, where the note purports to have been made, it was lawful for the parties to agree that the rate of interest should be seven per cent. The appellant, however, claims that the question as to the validity of the agreement as to interest should be determined upon the theoiy that it was a New York contract and therefore usurious. The circumstances upon which he mainly relies are that the note was payable in this state and that it was, in fact, signed and endorsed in this state.

It appears that on the 5th April, 1888, the plaintiff, who lived at Washington, loaned to the defendant, S. GT. Nott, $3,000, taking therefor a note for that amount, dated at Washington, D. C., April 5, 1888, made by S. Gr. Nott to the order of and endorsed by C. A. Nott, payable one year after date at the National Metropolitan Bank, with interest at seven per cent. No question is made as to the validity of this note. Some payments were made upon it, and shortly before it became due the maker ap

p. 176

plied to the plaintiff for a renewal as to the balance. He saw the plaintiff at Washington, and there the amount due on the old note was figured up, and the note in suit was then drawn by the plaintiff for the balance due, and handed to S. G. Nott, who took it and immediately went to Syracuse, in this state, where 0. A. Nott resided. There S. Gr. Nott signed the note and 0. A. Nott endorsed it and mailed it to the plaintiff. The understanding at Washington between plaintiff and S. Gr. Nott was that upon the return of the new note, so executed, the plaintiff would send to S. Gr. Nott the old one.

The case of Wayne Co. Savings Banh v. Low, 81 N. Y., 566 , is quite in point. There, in pursuance of an arrangement made in Pennsylvania between plaintiff, a corporation of that state, and defendant, a resident of this state, for the renewal of a note held by the plaintiff, made by the defendant, the plaintiff’s cashier wrote and sent by mail to defendant a note for him to execute and return. This note was dated and executed by defendant in this state, and. was made payable here, and was returned to plaintiff by mail with a check to pay the discount The discount was at a rate lawful in Pennsylvania, but greater than lawful interest in this state. It was held, that as the note was executed to be used in Pennsylvania, the law of that state must control, and that, therefore, the note was not usurious. Eapallo, J., says: “ It cannot be contended that a party who goes into another state and there makes an agreement with a citizen of that state for the loan or forbearance of money, lawful by the laws of that state, can render his obligation void by making it payable in another state, according to whose laws the contract would be usurious. Neither can it be claimed that because the obligation, instead of being signed in the state where the contract was made, is signed in another state and sent by mail to the place of the contract, it must be governed by the usury laws of the place where it was signed.”

A similar doctrine is laid down in Pratt v Adams, 7 Paige, 616 ; Balme v. Wombough, 38 Barb., 352 , 363.

In the present case the evidence warrants the finding that the note was executed to be used in Washington in pursuance of an agreement there made between the maker and plaintiff. The terms of the note, one of which was the rate of interest, were there agreed upon. The purpose for which the. note was given was known to the endorser; he himself sent the note to the plaintiff. Upon its receipt by the plaintiff and the surrender of the old note the arrangement was completed. The endorser as to this defense has no greater rights than the maker. Stewart v. Bramhall, 74 N. Y., 87 .

There is no essential difference between this case and the Wayne County Savings Banh case above cited. No authority or consideration is presented by the appellant that would justify us in disregarding the authority of that case. It follows that the question of interest is to be determined according to the law at Washington, and consequently the note is valid.

Judgment and order affirmed, with costs.

Hardin, P. J., and Martin, J., concur.