Staples v. Nott — 40 N.Y. St. Rep. 416

Majority

p. 416

Orren G. Staples, Resp’t, v. Copley A. Nott, Impl’d, App’lt.^[1]

(Court of Appeals,

Filed October 6, 1891.)

Headnote

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

The note in suit was given in renewal of a former one payable in Washington, and was, drawn with interest at seven per cent. It was given in pursuance of .an agreement made at Washington, where plaintiff lived, but was executed and was payable at a bank in this state, and mailed to plaintiff at Washington. Held,, that the fact that it was executed or was payable in this state did not make it a New York contract; that it was valid under the laws of the District of Columbia, and was enforceable.

Appeal from judgment of the supreme court, general term, fourth department, affirming judgment in favor of plaintiff.

M. M. Waters, for app’lt; John C. McCartin, for resp’t.

The promissory note in suit bears date at Washington, D. C., April 5, 1889, was made payable at a bank in Water-town, D. Y, and carried interest at the rate of seven per cent, per annum. The appellant was endorser upon it, and defends on the ground of usury. If the contract of the parties, which is evidenced by this note, was governed by the lays of this state, the defense should have prevailed; but if made under the laws of the District of Columbia, the judgment was right, and should be sustained.

The note was given in renewal of a balance due upon a prior note, made by and between the same parties, which bore date at Washington, D. C., April 5, 1888; was payable one year after date at a bank in Washington, bore the same rate of interest, and was similarly endorsed. Some payments were made on account -of the principal, but before its maturity the maker requested of

p. 417

plaintiff, a resident of Washington, by letter, to renew for the balance remaining due. Failing to receive any reply, he went on to Washington, and there prevailed upon the plaintiff to agree to take a new note for his debt. This note was then drawn by the plaintiff, and handed to the maker for execution, who took it back to his home in Syracuse, N. Y., where his and the appellant’s signatures were affixed, as maker and endorser, respectively. It had been agreed with the plaintiff that, upon this new note being returned to him, he would send back the original note, and the appellant himself mailed the renewal note to the plaintiff in Washington.

These facts, which were not disputed, should make it perfectly obvious that there was here every essential to a valid contract under the laws of the plaintiffs domicil, and the only accompaniment lacking to a full local coloring was the foreign place named for payment. For the affixing of the signatures to the note by the maker and the endorser, however important as acts, was yet "but a detail in the performance and execution of the contract which had been agreed upon with the plaintiff. But naming a New York bank as the place where the maker would provide for the payment of the note did not characterize the contract in one way of the other. That arrangement was one simply for the convenience of the maker. It could have no peculiar effect. The transactions, which resulted in an agreement to extend the time for the payment of the debt and to accept a new note, took place wholly in the District of Columbia, and what else was enacted in the matter elsewhere neither added to nor altered the agreement of the parties. Though the engagement of the endorser, in a sense, was independent of that of the maker, that proposition is one which does not affect the local character of the contract, but which simply concerns the question of. the enforcement of the endorser’s liability. Whatever the previous knowledge of the appellant as to the negotiations and the agreement for a renewal of the promise to pay, between the maker of the old note and the plaintiff, the question is without importance. When he endorsed the note, which had been prepared and was brought to him, and •sent it through the mail to the plaintiff, his engagement was with respect to a contract validly made according to the laws of the District of Columbia, and when the note was received by the plaintiff the transaction was then consummated in that place. In Lee v. Selleck, 33 N. Y, 615 , it was said, with respect to an endorsement in Illinois of a note made in New York, that the fact of the endorser writing his name elsewhere was of no moment. Upon delivery by his agent to the plaintiffs in New York it became operative as a mutual contract.

The agreement, which was made in Washington for the giving of the promissory note in question, was the forbearance of a debt already due, upon which the appellant was liable % and the renewal of his engagement, as endorser upon the note, without any qualification of liis contract of endorsement, was, in fact, an act in ratification and execution of the previous agreement. That agree

p. 418

inent between the plaintiff and the maker in Washington took its-concrete legal form in a note, prepared there by the plaintiff, with a rate of interest sanctioned by the laws of his domicil, adopted by the appellant, by endorsement in blank, and made operative as-a mutual contract by delivery to plaintiff in Washington through the mails.

For the court to hold because the note was not actually signed and endorsed in the District of Columbia, where the agreement it evidenced was made, or because it was made payable in another state, that the contract was void as contravening the usury laws of the place of signature and of payment, would be intolerable and. against decisions of this court. Wayne Co. Sav. Bank v. Low, 81 N. Y., 566 ; Western T. & C. Co. v. Kilderhouse, 87 id., 430 ; Sheldon v. Haxtun, 91 id., 124.

I think the plaintiff was entitled to recover as upon a contract, made under the government of the laws of the District of Columbia, and therefore valid and enforceable in any state.

The judgment should be affirmed, with costs.

All concur.