42 Misc. 482 | City of New York Municipal Court | 1904
The action is against a second indorser upon a promissory note for $1,000, dated New York, May 14, 1903, made by one Marx to the order of himself, payable four months after date, at his office, in the said city. The note bears the indorsements of said Marx, the defendant Hefter and the firm of Goldberg & Harrison, in the order named, and, according to the undisputed evidence, was so made and indorsed by Marx and Hefter respectively, without value, and at the request and for the accommodation of Goldberg & Harrison, who then indorsed and delivered the same to the plaintiff for the sum of $940, or $40 in excess of the legal rate of discount thereon. The defense is usury. Plaintiff testified: “ The note came into my possession a few days after the 14th of May, from Mr. Goldberg, and I gave him $940 for the note.” This evidence is not only uncontradicted, but there is no other version of the transaction given by any one. Upon this state of facts I am called upon to determine the question whether or not the defense pleaded has been sustained. It has been held that a sale of accoramx> dation paper is merely a loan of money, the purchaser being the lender and the seller the borrower. When, therefore,
The remaining question to be determined is whether or not the plea of usury is bad. While there is some lack of precision and certainty in the averments with reference thereto, I am of the opinion that plaintiff could not have been misled in respect to the defense intended, nor as to the circumstances relied upon to support it. The usual rule for the construction of pleadings applies as well to an answer of usury as to one
There is no doubt, finally, from all the facts and circumstances surrounding the transaction and the intention of the parties so far as disclosed, that the note in question was discounted by plaintiff in the city of New York. But, assuming, as claimed, that there is no evidence upon that point, and that it was negotiated in another State, at a rate of interest lawful there, but greater than allowed by the laws of this State, nevertheless it became invalid by the very transaction in question. The Court of Appeals determined that question as early as 1864, in Jewell v. Wright, 30 N. Y. 259, when it decided that the lex loci contractus governs as to the defense of usury. While it is true for a time thereafter that authority was much criticised, it received reaffirma,tion by said court in Dickinson v. Edwards, 77 N. Y. 573, in an exhaustive opinion written by Judge Folger, who there said: “ The general rule is and has been, that where the contract either expressly or tacitly is to be performed in a given country, there the presumed intention of the parties is that it is to be governed by the law of the place of performance, as to its validity, nature, obligation and interpretation (citing authorities). This rule has been specially applied to the rate of interest to be allowed; and it has been held that where a personal contract is expressly or by implication to be paid at a given place, and the rate is not fixed by the parties, interest is to be taken or reserved according to the law of the place where payment is to be made.” It is immaterial, therefore, as stated, whether or not there is direct evidence herein of the place of discount of the note in question. It was, by its terms, made payable in this city, with no rate of interest fixed therein, and is, accordingly, to be governed by the interest laws of this State. It follows that judgment must be directed for defendant, with an extra allowance of five per cent. Plaintiff to have a stay of ten days after entry thereof, and thirty days additional time to make and serve a case and exceptions on appeal, if so advised.
Judgment accordingly.