Hemery v. Marksberry

• Citation: 57 Mo. 399
• Parties: JAMES HEMERY, Respondent, v. LYNN B. MARKSBERRY, DANIEL SMOOTE and IRA BACON, Appellants.
• Decision Date: 31 August 1874
• Court: United States State Supreme Court of Missouri

57 Mo. 399

JAMES HEMERY, Respondent,

v.LYNN B. MARKSBERRY, DANIEL SMOOTE and IRA BACON, Appellants.

Supreme Court of Missouri.

August Term, 1874.

Appeal from Daviess Circuit Court.

W. M. Rush, for Appellants.

I. Where a promissory note is given upon a consideration that is illegal, or is prohibited by statute in whole or in part, such note is void in the hands of the payee thereof. (Pars. Notes & Bills, 212-217; Pars. Contr., 456; Chitty Bills, 92, 93, 99; 8 Cow., 19, 20; Johns., 1.)

II. If the payee, with knowledge of the suretyship, make any contract with the principal without the consent of the surety, which varies the terms of the original contract for the performance of which he became responsible, and is prejudicial to him, he is discharged. (1 Pars. Notes & Bills, 238; Ibid, Vol. II, p. 8, note s.; 17 Johns., 384; 2 Pick., 223; 3 Pick., 5.)

III. As between the original parties an usurious contract, or a contract founded upon an usurious consideration, is void, and the taint of usury is carried forward through all subsequent securities taken for the same debt. (8 Cow., 670; 9 Cow., 647; 24 Wend., 230; 15 Johns. 353; 17 Johns., 176; 19 Johns., 1; 20 Johns., 286; 1 Kern., 386.)Hargis & Hincklin, for Respondent.

I. It is well settled that to release sureties on account of an extension, the contract extending the time of payment must be such as to suspend the right of action of the payee or holder. (Edw. Bills & Notes, 538, § 572; Reynolds vs. Ward, 4 Wend., 501.)

II. Our statute does not render usurious contracts void except as to the amount charged in excess of ten per cent. as interest; and unless it does so declare, the usurious contract is no more void as to one party than another. (1st Nat. Bank of Columbus vs. Garlinghouse, 26 Ohio St., 492; Selser vs. Brock, 3 Ohio St., 302.)

VORIES, Judge, delivered the opinion of the court.

This action was brought to recover on a promissory note the sum of six hundred dollars with interest.

The defendants, Smoote and Bacon, by their answer set up several defenses; 1st--that they were only the sureties of their co-defendant, Marksberry, for whose accommodation they executed the note sued on, and that plaintiff knew at the time that they were such sureties, and after the maturity of the note, the plaintiff, without the knowledge or consent of said defendants, made an agreement with the principal in the note to extend the time of payment of said note for about six months, and did so extend the time, in which time the principal became insolvent; 2nd--that plaintiff, before the execution of the note sued on, had agreed with the principal in the note to loan him six hundred dollars on condition that he would procure two solvent sureties to execute a note with him for said amount; and that after the execution of said note and without the consent of the sureties, the agreement was so changed that the amount of the loan was reduced to the sum of $570; that said fact was concealed from the said sureties, and that $570 was the sum reallyloaned to said Marksberry, whereby the note became void as to the said sureties; 3rd--that the note was executed in pursuance of an usurious contract made between plaintiff and defendant, Marksberry, without the knowledge or consent of said defendants, whereby the plaintiff secured to himself, and the said Marksberry agreed to pay plaintiff for the loan of said sum of money, a greater sum than interest at the rate of ten per cent. per annum, that is to say, the sum of twenty per cent. per annum; that the sum of thirty dollars was deducted and reserved from the amount named in said note, and the balance only advanced to said Marksberry, and the whole amount of six hundred dollars for which the note was executed was made to bear interest at the rate of ten per cent. per annum, and the note payable in six months from date. Wherefore it is prayed that said note be cancelled as to said defendant, and that they have judgment for their costs, etc.

The plaintiff filed a replication to the answer, putting in issue the affirmative allegations therein. Defendant Marksberry filed no answer. A jury was waived by the parties and the case tried by the court.

After the evidence was heard, the issues made by the two first defenses set forth in the answer of said defendants were found in favor of the plaintiff, and the issue of usury set up in the third defense in the answer was found for the defendants, and a judgment was rendered against the defendants in conformity to the statute of this State concerning usury. (Wagn. Stat., 782.)

The defendants in due time filed their motion for a new trial which was overruled by the court, and the defendants excepted and appealed to this court.

It should have been stated that the defendants asked the court to make eleven declarations of law at the close of the evidence, which were refused by the court and they excepted.

Some of these declarations of law contained correct abstract propositions of law; but as there is nothing in them or in the case that cannot as well be decided without any reference being made to them, they will not be further noticed.

In reference to the first defense set up in the answer of the defendant it need only be said, that an agreement between the principal in a promissory note and the payee thereof, made at or after the maturity thereof, to extend the time for the payment thereof, in order to have the effect of discharging the sureties on the note, must be a valid and binding agreement, by which the payee in the note would deprive himself of the...