5 F. 573 | U.S. Cir. Ct. | 1881
This cause was referred by consent of parties given by counsel in open court, and has now been heard upon questions submitted by the report of the referee. Some doubts have arisen as to whether the courts of the United States have power to try questions submitted by, and
Upon the first question it is apparent that the notes did not become operative until they were delivered to and accepted by William Dickinson, which was in Massachusetts. The contracts evidenced by them were made in that jurisdiction. The interest reserved upon the discount of the notes was taken there. As to what the rate of interest shall be where a note is made at a place where the law provides one rate, and it is payable at another place where the law provides a different rate, and all other questions arising out of which law the parties are presumed to have intended to contract with respect to, there seems to be no fair question but what the law of the place of payment is to govern. The
In Andrews v. Pond, 13 Pet. 65, Mr. Chief Justice Taney said, with reference to this question: “The question is not which law is to govern in executing the contract, but which is to decide the fate of a security taken upon an usurious agreement which neither will execute? Unquestionably, it must be the law of the state where the agreement was made, and the instrument taken to secure its performance. A contract of this kind cannot stand on the same principles with a bona fide agreement made in one place to be executed in another. In the last-named cases the agreements were permitted by the lex loci contractus, and wil] even be enforced there if the party is found within its jurisdiction. But the same rule cannot be applied to contracts forbidden by its
In Tilden v. Blair, 21 Wall. 241, the acceptance in controversy was executed in New York, and made payable there, but was negotiated in Chicago, at a rate exceeding that allowed by law at either place, but the consequences were different. It was held that the contract was made in Illinois, and was to be governed by the law there. These cases are sufficient to govern the ruling of this court in this case. As this was a Massachusetts contract, no reason is seen why so much of the law of that state as relates to the security itself should not be applied to it. That law was that “when, in an action brought on such contract or assurance, it appears that a greater rate of interest than is allowed, by law has been directly or indirectly reserved, taken, or received, the defendant shall recover his full costs, and the plaintiff shall forfeit threefold- the amount of the interest unlawfully reserved or taken, and no more, and shall have judgment for the balance remaining due after deducting said threefold amount. ” Under this statute, when unlawful interest is reserved on a note and the amount, is carried by renewal into other notes, the threefold amount is to be deducted in an action upon the last note. Upham v. Brimhall, 11 Met. 526. So, in this action, threefold the amount of such unlawful interest as was brought forward into these notes is to be deducted as of the dates when these sums were brought in. The amount is shown by the report to be the amount reserved on Nos. 1, 5-, 8, and 9, on page 4, and might be readily computed, except that the length of time for which No. 9 was discounted does not appear. As the two notes in each suit are of the same date, and alike, one-half the amount to be deducted should be applied to each. The recovery of costs by the defendant, under that statute, relates to the forum, and cannot apply here in a different forum.
It is argued that as the corporation’s stock transferred to William Dickinson was a pledge, for the security of thé notes, a conversion of it to his own use would operate as a payment
The further question is whether what he did so impaired the security as to affect the .right of the surety. Under the circumstances he was bound to so manage it that the surety should not, in any substantial degree, be deprived of its application to the debt. He was not at all responsible for the depreciation in its value. Ho is only to be affected by what would affect its title injuriously. Placing it in other hands would not have that effect, unless it was so placed as to be beyond his and the surety’s reach and control. The power of attorney would keep it within his control, unless it was revocable against his will. TIad it been their property it would be, but coupled with his interest it would not bo. Hunt v. Rousmanier, 8 Wheat. 174; Story on Agency, § 477.
Still it is argued that the title had been put out of his hands for an illegal purpose, and that no court would enable him to regain it, and that so the right to it was affected injuriously to the surety. It is said that the conveyance was made to avoid a liability or duty. This is not quite correct, so far as
Judgment on the report for the plaintiff for the amount of the notes, after deducting the threefold interest applicable, which,on amendment of the report, is found to be $28,893.40.