Andrews v. Hoxie

• Decision Date: 31 December 1849
• Citation: 5 Tex. 171
• Parties: ANDREWS v. HOXIE.
• Court: Texas Supreme Court

5 Tex. 171

ANDREWS

v.HOXIE.

Supreme Court of Texas.

December Term, 1849.

Where a note is payable at a particular place, it is not necessary to aver presentation for payment at that place. (Note 27.)

The person who appears to be the legal holder of a promissory note may maintain an action upon it in his own name; consequently it is no defense, either in bar or abatement, to plead that the note was indorsed to the plaintiff for the purpose of collection merely. (Note 28.)

The division of any other State or country than Texas into counties, or the known towns and cities of any other State or country, cannot be recognized judicially by our courts. Therefore, where the petition described a note as payable at a house in the city of New Orleans, it was held that the court could not judicially know that the city of New Orleans was in Louisiana; and this too notwithstanding there may be public acts which recognize a city of New Orleans in the State of Louisiana, for it does not appear that the New Orleans recognized in the public acts is the New Orleans indicated in the notes and petition. (Note 29.)

Where a note was described by the petition as payable at the office of John A. Merle & Co., in the city of New Orleans, and the answer alleged that “the said John A. Merle, of New Orleans, in the State of Louisiana, in the District Court of the United States for the district of Louisiana, filed his petition,” &c.; and where the plaintiff was permitted to prove the law of Louisiana in the court below without objection; and where the court instructed the jury in reference to the law of that State; and where the parties appeared to have conducted the trial below upon the assumption that the note was payable at the city of New Orleans, in the State of Louisiana: Held, That the defendant could not take advantage of the neglect of the plaintiff to allege and prove that the city of New Orleans referred to by the note and the petition was in the State of Louisiana. (Note 30.)

The general rule is that interest is to be paid according to the place where the contract was made, unless the payment was to be made elsewhere, and then it is to be according to the law of the place where the contract was to be performed. (Note 31.)

A bona fide contract to pay interest at a rate allowed by the law of the place where the contract is to be performed, although the interest reserved exceed the lawful rate of interest of the place where the contract is made, is not usurious, and may be enforced; and it makes no difference in what forum the action is brought.

But although a contract, on its face, appear to be free from the taint of usury by being payable where the interest reserved was forbidden by law, yet, if it was so made and intended as a cover for usurious interest, the form in which it was executed and the aspect in which it was framed would afford it no protection from the consequences of usurious agreements. In this class of cases it is a question of intention, to be decided by the jury.

It seems that if the rate of interest be stipulated in the contract, and it be according to the law of the place where the contract was made, though that rate be higher than is lawful by the law of the place where payment was to be made, the specified rate of interest may be recovered in the courts of the place where the contract was made.

That a promissory note stipulates for interest anterior to its date, or, being payable at a place where a higher rate of interest is allowed than is lawful at the place where it is made, stipulates for the interest of the former place, does not put the indorsee upon inquiry whether the form of the note may note be a cover for usury. (Note 32.)

Where the statutes against usury declare all usurious contracts void, a promissory note given for a usurious consideration is void, even in the hands of an innocent indorsee for value. Such seems to have been the law of this country prior to the adoption of the common law.

Where the statute law of another State was proved, the court referred, for its construction, to the reports of the decisions of that State.

That an agreement to pay interest upon interest is not usurious is well settled. (Note 33.)

Where an issue is raised as to the law of another State or country, the practice seems to be for the judge to hear the testimony, and then to give his opinion in charge to the jury.

Appeal from Washington. The appellant's intestate brought suit against the appellee and one Edward Bailey upon a promissory note made by the appellee and said Bailey, and indorsed to the plaintiff, which note is as follows:

“WASHINGTON, 8 th January, 1840.

Twelve months after date we or either of us promise to pay John A. Merle & Co., at their office in the city of New Orleans, six thousand and twenty-eight dollars seventy-five cents, with interest at the rate of ten per cent. per annum from the first of September last, value received.

E. BAILEY.

ASA HOXIE.”

The note appeared to have been indorsed, first, by John A. Merle & Co. to Nathaniel Goddard; second, by Goddard to John A. Merle, for account of Goddard; third, by Merle to Andrews, the appellant's intestate, in whose name the suit was brought.

The defendant excepted to the petition for the want of an averment of the presentation of the note for payment at the office of John A. Merle & Co., in New Orleans, and for the want also of proper averments showing title in the plaintiff. They at the same time pleaded that the note sued on was obtained from them by fraud; and further, “that after the making of the note, and before the assignment and transfer of the same by the said John A. Merle & Co. to the said Goddard and by him to the plaintiff, and whilst the same was the property and in the possession of the said John A. Merle & Co., he, the said John A. Merle, at New Orleans, in the State of Louisiana, in the District Court of the United States for the district of Louisiana, filed his petition in bankruptcy, which was duly adjudged, and he, the said John A. Merle, became thereby bankrupt;” and that in the proceedings in bankruptcy certain commissioners were appointed, who took possession of the effects of said bankrupt and of said note by assignment and transfer from the said Merle & Co., by which they became the legal holders and owners of the note, for the use of the creditors of the said John A. Merle & Co., and that whilst the note was so in the possession and ownership of the commissioners, the said Merle assigned and transferred it to Goddard, who transferred it to the plaintiff, of all which the plaintiff had notice. The answer contained also a general denial.

The plaintiff amended his petition by specially stating and describing the several indorsements by which he appeared to be the legal owner of the note, which in his original petition he had omitted.

The death of the defendant Bailey being suggested, the plaintiff dismissed ss to him.

The defendant Hoxie amended his answer, pleading, 1st, that the note sued on is not the property of the plaintiff, but of one Goddard; 2d, that it was usurious and void.

The court overruled the exception to the petition, and the cause was tried at the Fall Term, 1847.

The plaintiff gave in evidence the note sued on and the answers of his intestate, E. Andrews, to interrogatories propounded to him respecting the ownership of the note, the alleged bankruptcy of John A. Merle, and the time and circumstances of the assignment of the note. The answers of the intestate were in substance that the note was transferred by John A. Merle & Co. to Goddard before its maturity and before the filing by John A. Merle & Co. of their petition for a discharge in bankruptcy, and that it was subsequently transferred by Goddard to him (Andrews) for collection. The plaintiff also proved the law of interest of Louisiana as contained in article 2895 of the Civil Code, approved on the 12th day of April, 1824, and in an act of the Legislature of that State approved on the 19th day of February, 1844. Article 2895 of the Civil Code is as follows: “Interest is either legal or conventional. Legal interest is fixed at the following rates, to wit, at five per cent. on all sums which are the object of a judicial demand, whence this is called judicial interest, and all sums discounted by banks at the rate established by their charters. The amount of conventional interest cannot exceed ten per cent. The same must be fixed by writing, and testimonial proof of it is not admitted in any case.” The act given in evidence is an act to amend this article of the code, and does so amend it that the amount of conventional interest shall not thereafter exceed eight per cent. The plaintiff offered to read in evidence a paper purporting to have been made by a notary public in the city of New Orleans, stating the presentment, demand, and protest for non-payment of the note at the office of John A. Merle & Co. in that city; but to the admission of this evidence the defendant objected, and the court sustained the objection, upon the ground that there was no corresponding averment in the petition.

The defendant proposed to prove by a witness (Crosby) the consideration and circumstances under which the note was given, to which the plaintiff objected, because the note was transferred to the plaintiff before maturity and without notice of any defect in the consideration, but the court overruled the objection; and the witness testified that the note in suit and another for the same amount were given by Edward Bailey and the defendant Hoxie, as surviving partners of the firm of Bailey, Gay & Hoxie in the settlement of certain accounts, which were made a part of the statement of facts; that the settlement was made by the intestate, Andrews, as agent and attorney for the payees, John A. Merle & Co. and himself (the witness) as the attorney of Bailey & Hoxie; that in settling the accounts usurious and compound interest were both computed in...