JONES v. RIDER

J. S. H. Frink, for the plaintiff. I. The note in suit was written and dated at Boston, and delivered to the plaintiff there by mail, and will be deemed in law to be a note of that place. Orcutt v. Hough, 54 N.H. 472; Townsend v. Riley, 46 N.H. 311.

II. The maker resided in New Hampshire, and the payee in Boston. Even if this was a New Hampshire contract, still it was lawful for the parties to stipulate as to the place of payment, and for the rate of interest of either the place of contract or payment. Townsend v. Riley, supra, and cases there cited; Senter v. Bowman, 5 Heisk. 14. Their contract that it should bear the rate of interest lawful in Massachusetts was the legal right of the plaintiff, and was not an attempt to evade this usury laws of the state.

III. The note was delivered in Boston, and hence it did not become operative until received and accepted there. Hiatt v. Griswold, 5 Fed. Rep. 573; Lawrence v. Bassett, 5 Allen 140. The last case cited presents facts closely resembling those in the case at bar. As an authority, it is decisive of this part of the case; and it is entirely in harmony with the views presented upon a somewhat different state of facts in the cases referred to in our own state. Whatever, then, should be the amount of the note in suit, interest should be cast upon it at the conventional rate of ten per cent.

IV. The next inquiry is, Should there be any reduction of the amount of the note in suit because interest was cast in excess of the statutory rate upon the original notes? The first renewal is of the date of May 20, 1870, and more than six years prior to the date of the plaintiff's writ. The giving and acceptance of the new notes was in effect a payment of the old ones, so far as the statute of limitations is concerned. The defendants cannot stand any better than if they had paid the notes with interest at ten per cent. Their right then would have been to bring a suit for money had and received, or for a forfeiture of three times the amount of usurious interest, under our laws. The right to correct the former rate is lost by the lapse of time. If they had brought suit, the plaintiff could have pleaded successfully the statute of limitations. It may be said that the new note is not a payment, and hence no right of action accrued until the usurious interest was paid. But we submit that the defendants had it in their power at any time within six years to protect themselves against this so-called oppression, by payment and suit to recover back any illegal interest, if the plaintiff denied them an abatement. There is every reason why the statute of limitations should apply to a claim of this character, that a settlement which the parties at the time deemed just and final may become legalized, and conflicting claims quieted.

A. R. Hatch, for the defendants. The debt, of which the note in suit is evidence, was contracted in this state, and the several notes described in the case have been merely renewals of the original promise. We may inquire, therefore, into the consideration for which this note was given, and deduct from the face of the note so much as appears not to be founded on good or lawful consideration. G. L., c. 220, s. 13; Drew v. Towle, 27 N.H. 424; Daniell v. Sinclair, 6 L. R. App. 181. A calculation of the first three notes, dated December 5, 1867, January 9, 1868, and April 22, 1868, will show that on May 20, 1870, there was lawfully due upon them the sum of $3,864.95, and no more. The note, therefore, of $4,028.86, dated May 20, 1870, was $163.11 too large. Cast interest upon this sum of $3,864.95 from May 20, 1870, to the date of the note in suit (deducting the payments endorsed on the note), and there will be found due, February 24, 1874, the date of the note in suit, $3,242.30, which sum the plaintiff is entitled to recover, with lawful interest, deducting subsequent payments. All the excess of the note in suit above $3,242.30 is plainly usurious, and to that extent the note is without lawful consideration. And the excess may be deducted in the action on this note. G. L., c. 232, s. 3. None of these notes have been given or accepted in payment of the preceding: each was simply a renewal: and the original debt has remained the same, except so far as it has been affected by interest and partial payments.

The statute of limitations has no application. It never has, unless pleaded (1 Chit. Pl. 479); and the plaintiff would be puzzled to frame a plea under that statute applicable to this case. But there is nothing in the reason of the statute which applies. The plaintiff seeks to recover a debt not due to him: the defendants avail themselves of the first opportunity to resist the demand. It is immaterial that the defendants have promised to pay the excess. Such a promise is without consideration; and it is against such promise that the statute of usury was designed to protect unfortunate debtors. A stronger illustration of the wisdom of that statute than this case affords could hardly be selected. On a debt contracted in the exuberant times of 1867, the debtor is, in 1874, allowed the alternative of promising to pay ten per cent. interest, or ruin. In many countries the whole debt would be forfeited by the attempt of the creditor to make such hard use of his advantage.

But it is said that the note in suit is to be regarded as made in Massachusetts, and that interest upon the amount found due on it is to be allowed according to the laws of that state. What the laws of Massachusetts are on this subject is a fact not found by the referee. It appears, however, that both the defendants resided in South Newmarket, and signed all the notes in this state. If the intention of the parties was to avoid the usury laws of this state, the device was plainly ineffectual. Townsend v. Riley, 46 N.H. 310. Upon the facts stated by the referee, this intention must be inferred (ib. 312). The note was not made in Boston in any stronger sense than if a printed blank had been sent from Boston for signature. It is not payable in Boston, either expressly or by implication. The negotiations in regard to it were in this state, in part, at least; and it being agreed that the defendants should sign the note and send it by mail to Boston, the delivery was complete when it was put into the mail at South Newmarket. Currier v. Ins. Co., 53 N.H. 538, 545, 546. The control of the defendants over the note ceased at the posting in South Newmarket, and the right of the plaintiff to it there became perfect. The cases cited by the plaintiff on this point are not applicable: thus, in Townsend v. Riley, supra, the contract was made in — New York, where the defendant resided, and where both parties then were. In Lawrence v. Bassett, supra, the note was delivered in Massachusetts, by the party to whom the money was advanced; but in the present case the debt was contracted in New Hampshire, and the note in suit was simply a renewal, with a device to obtain usury.