which adopt it ;' and the most approved text writers generally follow the adjudicated cases.? Where a party, temporarily in New York, where the rate of interest is seven per cent., made a note bearing twenty per cent. interest, which was valid by Texas law, and dated it “Matagorda, Texas,” it was held legal and valid, the date showing it was intended to be governed by Texas law. 8 $ 924. When instrument is usurious by law of place where made, and where payable also.-If the bill or note bear usurious interest both by the law of the place where made and of the place where payable, the law of the place where made will govern as to the legal consequences of usury, and the effects imposed by way of penalties. But a bill or note can not be made payable in a particular place where the rate of interest is higher than at the place where the contract is made, for the mere purpose of creating a liability for the higher rate of interest ; for such an arrangement would be a mere shift or screen to avoid the statutes against usury. The doctrine is advanced, however, that if the money is really obtained for use at a particular place, the rate of interest allowable at that place may be charged, although the bill or note be both made and payable within another State. This is certainly carrying comity very far. It was held at one time, in New York, that if by the law of the place of making, and also of payment, there be usurious interest charged, the instrument can not be negotiated within another State where it is not usurious, and 1 *Story on Bills, $$ 148, 149. ? Whart. Confi. of Laws, $ 507; 2 Parsons N. & B., 336, 337, 338, 378, 379 Edwards on Bills, 717, 718. • Bullard v. Thompson, 35 Tex., 318. * Andrews v. Pond, 13 Pet., 65; De Wolf y. Johnson, 10 Wheat., 367; Mix v Madison Ins. Co., 11 Ind., 117. • De Wolf v. Johnson, 10 Wheat., 367. • Wharton's Conflict of Laws, $ 508. thus become valid ; but it was subsequently held, that if made or accepted for accommodation in one State, and there payable, the instrument may, nevertheless, be negotiated in another State at a rate of interest not usurious there, although usurious in the State of the accommodation making or acceptance, it being presumed that it was intended by the accommodation parties that the instrument might be so used by the party accommodated. In a still later case, in which the authorities were reviewed, the New York Court of Appeals held that, where a promissory note was made in that State by a resident thereof, and there dated, by its terms payable in that State, with no rate of interest specified, and no intention of the maker existing that it should be discounted elsewhere, the negotiation of it in another State at a rate of interest lawful there, but greater than the legal rate in New York, was usurious. The true test is the intention of the parties; and if they contemplate the law of the State where the rate is usurious as controlling, then the negotiation will be invalid. It makes no difference that the rate of interest is usurious at the place of negotiation if not so at the place of making or payment. $ 925. Shifts to cover usury.—In the cases hitherto cited, the transaction is supposed to be bona fide. If a mere shift to cover usury, it will be void, though otherwise it would be valid. Thus, where a bill was drawn in New York payable in Alabama, and was for an antecedent debt, and a larger discount was taken from the bill than allowed by the law of either State for the supposed difference of exchange, the United States Supreme Court considered the real question to be as to the bona fides of the transac Jewell v. Wright, 30 N. Y., 260. tion.1 It seems that the law of the place where the note is made will govern as to the legal consequences of usury when it is usurious by the law of that place and by the law of the place of payment also. In respect to interest as well as to other liabilities, the place of delivery controls the law of the contract between the parties. Where the law of the place of payment prohibits corporations from pleading usury, but its bonds were tainted with usury by the law of the place where made, as well as by that of the place of payment, it has been held that in a suit brought in the State where they were made, usury might be pleaded. 1 Andrews v. Pond, 13 Pet., 65. * Ibid. Cook v. Litchfield, 5 Sand., 330. See Com'rs of Craven Co. v. A. & N. C. R.R. Co., 77 N. C., 289. 'Com'rs of Craven Co. v. A. & N. C. R.R. Co., 77 N. C., 289. END OF VOLUME FIRST. $500. APPENDIX. FORMS OF BILLS AND NOTES. 1. USUAL FORM OF BILLS. New York, 31 March, 1876. On demand (or at sight or ten days after sight-or thirty days after date) please pay to JOHN B. Astor, or order (or bearer), five hundred dollars, value received, and charge the same to my account. Sixty days after date, please pay to BAKER, VOORHIS & Co., or order, five hundred dollars, this our first of exchange, second and third not paid. Harper Brothers. To Messrs. T. & T. Clark, Edinburgh, Scotland. 3. Usual Form of Negotiable Promissory Note in England. £500. London, 31 March, 1876. Two months after date (or at any other specified time), I promise to pay to BARING BROS., or order (or bearer), five hundred pounds, value received. VOL. I.-56 J. P. Benjamin. (881) 4. Usual Form in many of the States is same as above. In New York a common form is: $500. New York, 31 March, 1876. Value received, I promise to pay WM. BUTLER DUNCAN, or order, five hundred dollars on demand. Jay Gould. 5. Form of Joint Note. $500. New York, 31 March, 1876. On demand, we promise to pay WM. BUTLER DUNCAN, or order, five hundred dollars, value received. Cornelius Vanderbilt. Jay Gould. $500. 6. Form of Joint and Several Note. New York, 31 March, 1876. One month after date, I promise to pay (or we joint= ly and severally promise to pay) JOHN B. Astor, or order, five hundred dollars, value received. Cornelius Vanderbilt. |