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ments of the £50,000, with interest at seven per cent., forty days before each instalment should mature in London, at the rate of $5 for every £1 sterling. It was understood by the parties that the Trust Company would negotiate the bank's obligations in London, with their own guaranty, in order to meet their certificates of deposit. The arrangement was consummated between the parties.
Held 1. That the transaction was a loan by the Trust Company to the bank, and not an exchange of paper, or a sale.
2. That the reservation of £2000, or four per cent., on the principal sum secured to be paid, rendered the contract usurious.-Ibid.
4. The notes of the bank were negotiated in London to bankers there. Held, nevertheless, that the contract was governed by the laws of New York.-Ibid.
5. Whenever a commission, in addition to legal interest, is charged by the lender on discounting a bill or note, or on making advances thereon, unless it be for some real service distinct from the loan itself, and then be a moderate and reasonable charge, it will be referred to the use of the money loaned. and render the contract usurious. Ibid.
6. On applying for a loan, the borrower offered to the lender's agent a collateral advantage, which was likely to be prejudicial to the former, and was certain to be beneficial to the latter. The offer was accepted and the loan was made.
Held, that the offer constituted one of the terms and conditions of the loan.-Ibid.
7. Where one having a large mortgage on a farm, payable at a distant period, with six per cento interest, at the request of the mortgagor, who had laid out the farm in town lots for sale, cancelled such mortgage, and received in lieu of it, thirteen separate mortgages for the same aggregate amount, on thirteen distinct portions of the whole farm, payable when the original mortgage was to be paid, with interest at seven per cent., and at the same time received from the mortgagor five hundred dollars for granting the accommodation, it was held that the transaction was not usurious.-Neefus vs. Vanderveer, 268.
The advantages proposed to himself by the mortgagor, and the probable inconvenience and hazard to the mortgagee in the exchange of the securities, constituted, the consideration for the payment; and there was no loan or forbearance in the case.—Ibid.
Where a party to an usurious bill or note, gives a new security for it to a holder for value, without notice of the usury, the new security is valid, although the holder could not have recovered on the bill or note. Smedberg v. Whittlesey, 321.
The possession of a bill or note by an endorser is presumptive evidence that it was transferred to him on a good consideration before its maturity.-Ibid.
The giving of a new note without objection, by the debtor on an usurious note held by an indorser, is of itself an admission that the indossee is a bona fide holder of the old note, without notice of the usury.Ibid.
In a suit upon a new note so given, the holder may rely upon such admission in connection with his possession of the old , note, to over
come the defense of usury in the latter. And the burden of proof will be cast upon the defendant to prove that the holder had notice of the usury, or received the usurious note without a sufficient consideration.Jbid.
A resident of Savannah being in New York, with funds which he had just remitted from Savannah, at an expense of 9 per cent, for exchange, loaned the same in New York, stipulating for seven and one-half per cent. of the exchange so paid by him, besides legal interest. Held, that the transaction was usurious, and that a succession of notes given in renewal, were also void for usury; and the last in the series were ordered to be delivered up and cancelled.—Jacks v. Nichols, 313.
A prior remittance of the money loaned from another state or country, not expressly for the purpose of the loan, furnishes no valid pretext to charge the borrower with the charges of such remittance, in addition to interest.-Ibid.
There is an intent to take unlawful interest, within the meaning of the statute, when more than seven per cent. is reserved, although the lender took the surplus under a mistaken idea that he had a right to charge the borrower for expenses or trouble.—Ibid.
The taking of a separate security for the interest and the excess, does not aid an usurious loan; nor is it material that no part of the unlawful interest was ever paid.—Ibid.
Where the last renewal of a series of usurious notes originating here, was made by the parties, residing in this state, signing the new notes and securities here, (the former being payable here,) the contract is to be deemed as made here, and governed by our laws, although the new notes were delivered to the lender in another state, where he was temporarily residing.-Ibid.
Semb the same law would govern, if the new notes had been made and delivered at the lender's residence abroad; there being no new loan, but simply a continuation of the original loan for a longer period.—Ibid.
Where a debtor, owing a mortgaged debt, payable in small annual instalments at a future period, on the application of his creditor, advanced to the latter fourteen hundred dollars, on an agreement that he would apply and indorse two thousand one hundred dollars as a payment on the mortgage, and the creditor receipted that sum on such payment:
Held 1. That there was no loan or any forbearance, directly or indirectly, by the debtor to the creditor, and that the agreement was not usurious.
2. That the agreement was supported by a valid and sufficient consideration, and was not unconscionable.—Righter v. Stall, 608.
Where a defence of usury is interposed to the foreclosure of a mortgage, by the purchaser of the equity of redemption, the complainant cannot overcome it by proof that the lands were conveyed subject to the mortgage, unless his bill sets forth the execution and terms of such conveyance.—Hetfield v. Newton, 564.
Application for a loan was made by parties in western New York, to D. in New Jersey, they expecting D. to obtain the same from H., or some other person there. They offered to give D. $300 for doing the business and delivering them the money. D. obtained the loan of his
father-in-law, H., took the money to the parties in western New York, received their mortgage to H. for the loan, payable with interest, and took a mortgage to himself for the $300.
Held 1. That D. was the agent of the borrowers, and not of the lender in negotiating the loan.
2. That after the loan was agreed upon, he was the agent of both, in perfecting it and taking the mortgage therefor.
3. That the lender was not affected by the agreement of the borrowers to compensate D., and that the mortgage to the lender was not usurious.-Ibid.
In the defence of usury, the proof must strictly sustain the allegation made in pleading. So where in an answer, the usurious agreement was stated to be, that H. was to advance the borrowers $2000, and D. was to give them his notes, one for $150, and one for $450, making the $2600, for which the security was given; and the proof showed an agreement by which H. was to advance $2052 in cash, and $548 in the notes of D., one for $414, and the other for $148; it was held a fatal variance. Ibid.
Where a party setting up the defence of usury, alleged that certain bonds or evidences of debt, were advanced by the lender, and the proof showed that he advanced cash, the variance was held fatal.- The Farmers' Loan & Trust Co. v. Perry, 339.
Acceptance in advance of a premium at an usurious rate, for the future forbearance of a pre-existing debt already payable, or the agreement to forbear such debt at such rate, prevents the recovery of interest on the principal, originally untainted, beyond the day upon which the usury commenced, or was stipulated to commence.—Harp v. Chandler & Neel, 1 Strobhart's Reports, p. 461.
The forbearance of a pre-existing is a new loan, and upon this principle only, can excessive interest upon such forbearance be regarded as usury.-Ibid.
Whenever by acceptance of usurious interest, or an agreement for it once actually operating, a corrupt contract has been established concerning the debt contained in a security, originally untainted, the amount (both principal and interest,) really due on the day when that contract commences to operate, must be taken to be the principal sum, from which all subsequent payments must be deducted, to ascertain the balance which shall be recovered without interest and without costs.-Ibid.
Any corrupt agreement contemporaneous with the making of a security, will taint the security itself.—Ibid.
NEW LAW BOOK.
A Treatise on the Law of Bills of Exchange, Promissory Notes, Bank Notes, Bankers' Cash Notes, and Checks. By John Barnard Byles, Serjeant-at-Law Second American edition, from the fifth London edition, with references to American cases. Published by T. & J. W. Johnson, Philadelphia, 1848.
This is the latest work upon the subjects enumerated, and is well worth the attention of bank officers and others engaged in the purchase of negotiable paper.
Contingent Fund and Profit and Loss July 3, 1948,
$356,030 Deduct dividend 41 per cent. and exchange to Kentucky, Stockholders to equalize them with Eastern Stock holders,
101,289 Leaving a balance of surplus profits $254,741, July, 1848, equivalent to 11 per cent. on the capital.
1846 and 1849.
July, 1848. $1,080,000
3,616 883,150 238,763
47,962 75,000 154,410 89,271 70,592 510,341
59,800 75,000 220,310
$9,171 124,850 477,992
Not having received an official copy of the statement for July, 1849, we are compelled to rely upon a newspaper copy.