Opinion
Argued September 22, 1874
Decided January term, 1875
Amasa J. Parker for the appellant. S.W. Fullerton for the respondent.
The original loan and the note given therefor were not tainted with usury, and they were neither of them affected by the usury which the court found to have been taken by the plaintiff on the renewal of that note, or the substitution of the one in suit therefor. Such usury invalidated the last-mentioned note, and therefore did not pay or extinguish the original indebtedness, nor the first note given therefor. The defendant was, therefore, clearly liable upon well-settled principles, not disputed by his counsel, for the amount of the recovery against him — being the amount of the first note, with interest thereon, after the substituted or renewal note fell due, unless the manner of giving the notice of the presentment and non-payment of that note precluded such recovery. I think it did not. Assuming the last note was invalid and of no legal obligation, the defendant's liability as indorser on the first note continued, and was never discharged. No question was made as to his liability as such indorser on the ground of a want of due notice of demand and non-payment thereof, either in the answer or on the trial. None can, therefore, be raised on this appeal, and the point of the learned counsel in reference to it, claiming that "the first note was no evidence of a debt due from the defendant to the plaintiff because such note was not presented for payment at the place of payment," etc., is not based on any fact to sustain it. He properly says, in discussing the effect of usury in the last note, that "the law restores the usurer to his rights under the previous valid security," and, in support of the position, cites Cook v. Barnes ( 36 N.Y., 520). That concession shows that the want of due protest, etc., of the usurious note was immaterial. It is, consequently, unnecessary to consider whether what was done in reference to that matter was sufficient or not. The restoration of the plaintiff to his original rights obviated the necessity of doing any thing on that subject.
There is nothing in the findings of the judge to show that the defendant was not liable as indorser on the surrendered note. If it be conceded, as now claimed, that it had not been protested for non-payment, that fact alone was not sufficient to discharge him. The circumstances attendant on the giving of the renewal note (which, it is reasonable to presume, was given before that for which it was substituted was dishonered), operated as a waiver of a formal demand of payment, protest, and notice of non-payment. The transaction itself, which took place on the day the first note fell due, in its very nature, was a notice to him that the note was not paid, and the giving of the substituted or renewal note must have been understood by all parties (assuming that no actual demand of payment had been previously made) to dispense with a subsequent demand. Indeed, such demand became impracticable by the surrender of the note. The fact that the renewal note was usurious does not, in any manner, affect the question of waiver. The plaintiff forebore, in consequence of the receipt of that note, to take the necessary proceedings to charge the defendant as indorser; and he, after assenting or being instrumental to such forbearance, cannot avail himself of the omission of what presumably would otherwise have been done as a discharge of his liability. While the new note is ineffectual to charge him with liability thereon on account of usury, of which he appears, by his own testimony, to have been cognizant at the time it was given, he must be estopped from claiming that such usury shall also absolve him from the consequences of his assent to an omission to protest the original note. That would, in its effect, operate as a fraud on the plaintiff.
It follows, from the views above expressed, that the judgment appealed from should be affirmed, with costs.
All concur.
Judgment affirmed.