23 Ind. 4 | Ind. | 1864
Suit upon a note and mortgage. The
“$500. Logansport, November 15, 1855.
“ One year after date, I promise to pay to the bearer of this note five hundred dollars, for value received, with interest, and without any relief whatever from valuation or appraisement laws. Samuel McElhenny.”
It is necessary in the cause, and may as well he done at this point, that we declare the exact character of the above-copied note. It is a negotiable promissory note, and at common law might, as to defenses against the same, have a bona fide holder. A negotiable note at common law is one payable to order or bearer; that is to say, oné whose tei’ms authorize its transfer to another person than the one to whom it is originally executed: and such note, as to defenses, may have a bona fide holder; that is, a holder who has honestly received it for a consideration, ignorant of any vice in its original execution, and against whom such vice can not be set up as a defense to a suit upon the note. It is this class of notes that elementary writers refer to when they speak of negotiable notes. 2 Par. on Notes and Bills, 426; 2 Par. on Cont. 422, et seq.
In Indiana, though all those notes which were negotiable at common law, and many others, are negotiable so far as to he transferable and suable by the holder, yet they have not the other qualities of a negotiable note at common law, and can not, as to defenses, have a bona fide holder; this incident not attaching to them unless they are payable at a hank in this state. The common law privileges of negotiable notes are confined, in this state, by statute, to that portion of such notes as are drawn payable at a hank in the state* Snyder v. Oatman, et al., 16 Ind. 265. See The City, etc. v. West, 22 Ind. 88. But, notwithstanding the maker of the note m question could not he prevented by the law-
1. If usurious interest is taken out in advance, then it makes a case of want of consideration, in a note covering the amount, to the extent of such interest; and if the note be drawn with interest from date, in an amount covering interest taken out in advance, then there is a want of consideration for the note to the whole amount thus taken out of the sum nominally loaned, or added to the amount of the note, if that course is taken, beyond what is actually paid to the maker, or is actually due from him, with the accruing interest on such excess, because the legal interest is provided for and runs upon the note by its terms.
2. If usurious interest is paid on the note after its exe-. cution, it amounts to a payment of so much on the principal of the note; and if the amount thus paid exceeds the principal, it may be recovered back.
Another proposition may be here stated; viz: that while a man may sell for what he pleases notes he may own, executed by third persons, he can not sell, for cash, either himself or by agent, his own note—that is, a note of which he is maker, especially if the note is not one governed by the law-merchant—for a price less than that expressed on its face, and by such sale preclude himself from setting up want of consideration to the extent of the discount, unless perhaps, where the sale was by agent, a possible case of estoppel might be created. See Par. on Notes and Bills, supra. Selling one’s own note is giving one’s own note for the consideration received on the sale.
In the ease at bar, McMhenny received $400, and no more, as the consideration of the note. About this fact there is no dispute, and that sum, with interest, is all that Musselman, the holder, can recover, unless there is an es-; toppel in the case. Is there such? "We do not inquire whether an estoppel was so pleaded that evidence of it was property admissible on the trial, but whether the evidence shows one to have existed. We shall state the case upon the plaintiffs, the appellant’s, hypothesis, as alleged in his complaint, and proved by his evidence. It is this, in short: McMhenny, a citizen of Logansport, borrowed of one Haney, on the 15th of November, 1855, $400, and gave his note for $500, with interest. McMhenny told him he would give a mortgage to any holder to secure the note. On the same or the following day, Haney offered to sell the note t o'Musselman, also a citizen of Logansport. Musselman agreed to buy it if a mortgage was executed to secure it. Haney went to McMhenny and obtained the mortgage in this suit, drawn in the usual form to Mussel-man, to secure the note in question. Musselman never in
Per Curiam.—Judgment affirmed, with costs.