Knox v. Goodwin — 25 Wend. 643

Majority

p. 490

Knox vs. Goodwin and others.

Headnote

The giving of a certificate of deposite, payable at & future day, does not render a bill of exchange discounted by a hank void for usury, where the certificate is granted at the request and for the accommodation of the party obtaining the discount, and there is no intent to take usury.

This was an action of assumpsit, tried at the Oneida circuit in October, 1840, before the Hon.. Philo Gbidlby, one of the circuit judges.

The suit was in the name of “ John J. Knox, president of the bank of Vernonan association under the general banking law of this state. The bank, at the request of the drawer, discounted a bill of exchange for $2,000 after it was endorsed by the payee and another person, deducted $25 for discount and charges of collection, and gave the drawer a certificate of deposite for $1,500 payable in fifteen days, and $475 in cash. During the negotiation for the discount the drawer said he wanted a draft on [ *644 ] Ohio at fifteen days to *pay for cattle bought there ; and when told that the bank did not draw on Ohio, he said a certificate of deposite payable at fifteen days would be as good. The officers of the bank agreed to discount the bill; and when the certificate was about to be drawn, the clerk of the bank asked in what form it should be drawn; to which the drawer answered-—make it payable to Norman C. Baldwin, at fifteen days. The cashier remarked that he would as soon draw it at sight, as it would take 15 days to go to Ohio city and return. It in fact returned in 18 days. The cashier testified that the 15 days were no inducement to the discount, that it was no advantage to the bank ; and the business was done in the manner it had been done in compliance with the drawer’s request. The counsel for the defendant insisted that the bill was void for usury, inasmuch as the interest of $1,500 for the 18 days was secured and agreed to be paid upon the loan; and that this was so independent of the motive or

p. 491

reason for giving the certificate at 15 days, the transaction being usurious per se like that in the case of The Utica Bank v. Wager, 2 Cowen, 712; that at all events, the question should be submitted to the jury. The judge held that this was not per se, a usurious transaction ; and as there were no disputed facts in the case, there was nothing to submit to the jury, and charged them to find a verdict for the plaintiff. The jury found accordingly. The defendants ask for a new trial.

J. A. Spencer, for the defendants.

T. Jenkins, contra, cited 1 Bos. Pull. 144 ; 2 Day, 482 .

By the Court,

The only question in this case, is whether usury was taken by the plaintiff in discounting the bill in question. The judge decided the point as a question of law, there being no dispute about the facts, and directed a verdict for the plaintiff.

It is clear upon the facts, that the agreement to discount the bill was made in the usual way, and without any stipulation for, or intention to take usurious interest. They drawer wanted $1,500 of the proceeds in a certificate of deposite in *favor of a person in Ohio to whom [ *645 ] he was indebted, which was given payable in fifteen ‘days. The interest on this sum in deposite with the bank for the fifteen days constitutes the usury relied on. The time was wholly a matter of indifference to the bank, as it would take about that number of days for the certificate to be sent to Ohio and return ; it was not made a part of the agreement, or condition of discounting the bill; but when the clerk was about drawing it, the time was fixed at the request of the drawer. It appears to me impossible to predicate usury upon the facts of this eas,e; and that a new trial should be denied.

Hew trial denied.