Grand Rapids School Furniture Co. v. Hammerstein — 45 N.Y. St. Rep. 863

Majority

p. 863

The Grand Rapids School Furniture Company, Pl’ff, v. Oscar Hammerstein, Def’t.

(New York Common Pleas, General Term,

Filed May 2, 1892.)

Headnote

Usury—Conflict of laws.

Notes executed, delivered and payable in this state, given upon a renewal agreement made in this state with the agent of a foreign corporation, are governed by the laws of this state as to the question of usury.

Motion by plaintiff for leave to appeal to the court of appeals.

The facts of the case appear in the opinion.

John Holden, for pl’ff; George W. Gallinger, for def’t.

The action is by payee against maker, to recover interest upon two negotiable notes, the principal of which has been paid. The notes in suit were in renewal of others given by the maker, a resident of Hew York, for goods sold by the defendant, a Michigan corporation. The notes were made and payable in the state of Hew York, and by their terms reserved interest at the rate of seven per cent, per annum. The plaintiff had a local office and agent in the city of Hew York, and the evidence indicates that the goods for which the original notes were given were sold in this state. So, likewise, it appears that the agreement for renewal was made in this state ; and that the notes were delivered in this state.

On this condition of fact the district court held the notes to be void for usury, and its judgment for the defendant having been affirmed by us on the hearing, we are now moved to allow the defendant to take the case to the court of appeals.

The principle is elementary that the validity of a contract depends upon the law of the place of execution and performance. Hence, where a note made and payable here is negotiated in another state, the laws of Hew York are to control as to the defense of usury. Jewell v. Wright, 30 N. Y, 259 ; Dickinson v. Edwards, 77 id., 573, 578 ; Hibernia Nat. Bank v. Lacombe, 84 id., 367.

The defendant alleges, however, that since the notes in suit were given in performance of an agreement of renewal and forbearance, their validity is to be determined by the law of the place of that agreement. Wayne Co. Sav'gs Bk. v. Low, 81 N.Y., 566 ,572; Western Trans. & C.Co. v.Kilderhouse, 87 id., 430, 439. But the rule relied upon is not inimical to the judgment, because it appears by uncontradicted evidence that the contract of forbearance was made in this state, and that here the plaintiff’s agent procured the renewal

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note. The ease, then, is this : In pursuance of an agreement in this state, for forbearance of a debt contracted in this state, the defendant executed and delivered in this state notes payable in this state, by which interest was reserved at a rate not allowable by the law of this state. That the validity of the notes is to be determined by the law of this state, and that by that law they are condemned as usurious and void, are propositions so plain and incontrovertible that we should be reprehended did we presume to submit them to the court of appeals for argument and adjudication.

Motion denied, with costs.

Daly, Oh: J., and Bischoff, J., concur.