First National Bank of Rochester v. Bentley

• Decision Date: 04 August 1880
• Citation: 6 N.W. 422,27 Minn. 87
• Parties: First National Bank of Rochester v. A. L. Bentley and another
• Court: Minnesota Supreme Court

6 N.W. 422

27 Minn. 87

First National Bank of Rochester v. A. L. Bentley and another

Supreme Court of Minnesota

August 4, 1880

Appeal by defendant from an order of the district court for Olmsted county, refusing a new trial after trial by Mitchell, J., a jury being waived.

Order affirmed.

Chas C. Willson, for appellant.

Start & Gove, for respondent.

OPINION

Gilfillan, C. J.

Laws 1877, c. 15, (Gen. St. 1878, c. 23,) limits to 12 per cent. the rate of interest which parties may contract for. Section 3 (Gen. St. 1878, c. 23 § 4) declares all contracts and transactions wherein a greater rate is received shall be void, "except as to bona-fide purchasers of negotiable paper, as hereinafter provided, in good faith, for a valuable consideration, before maturity: * * * provided further, that nothing herein shall be construed to prevent the purchase of negotiable mercantile paper, usurious or otherwise, for a valuable consideration, by an innocent purchaser, free from all equities, at any price, before the maturity of the same, where there has been no intent to evade the provisions of this act, or where said purchase has not been part of the original usurious transaction. In any case, however, where the original holder of an usurious note sells the same to an innocent purchaser, the maker of said note, or his representatives, shall have the right to recover back from the said original holder the amount of principal and interest paid by him on said note."

One Stow held two notes of these defendants, and in July, 1878 endorsed and transferred one of them, with other notes, to plaintiff, as collateral security for a loan then made by plaintiff to him. In October, 1878, these two notes having become due, the defendants, supposing that Stow still held them, applied to him for a renewal and extension for a year, which he agreed to give if they would pay interest at the rate of 18 per cent. per annum. This they agreed to, and executed a new note for each of the old notes, taking for the principal of each of the new notes the principal and interest then due on the old note for which it was given, and also a third note for the excess of interest agreed on over 12 per cent. per annum on the other two notes. Each of the three notes, by its terms, bore interest at the rate of 12 per cent. per annum. Stow then exchanged with plaintiff, for the note it held as collateral, the note which defendants had...