Freeman adsm. Brittin. which concern the commerce of the Union. I presume the judiciary of no state, will set up cases from a foreign court, to overthrow the adjudications of this tribunal, which is the only one that can assure to the Union, a uniform rule. They guided me on the trial of this cause; and I still consider them paramount evidence of the common law. They are of high authority; and the reasons they stand upon, are public policy, the safety of trade, the security of mercantile paper, and the prevention of fraud, conspiring to shew that an indorser is not a competent witness to invalidate an indorsement put into circulation by himself, on the credit of his name; that his testimony was properly rejected; and that a new trial ought not to be granted. But I cannot close my remarks in this case, without noticing the disastrous effects of Lord Kenyon's decision, on the business paper of England, nor the tremendous means for its security, to which the British parliament was compelled to resort. Usury is a secret agreement between the parties, never appearing upon the face of the note or its indorsements, and so long as the parties are not competent witnesses to invalidate the paper, by swearing to the usury, third persons receiving it bona fide in trade, were exposed to little or no danger. But when the parties became competent witnesses of their own illegalities, under this great innovation, it was easy to connect a few shillings of usury with a note, and put it in circulation by indorsement as a good one. If either of them was sued on it at maturity, he had only to call the other for a witness, and he would blow it up in the hands of the holder, for usury. As Buller, Justice said, it enabled any two men, by conspiring together, to cheat the world. And as no confidence could be placed in business paper, after this innovation, the British parliament had to repeal the statute of usury, so far as to enact, that no note or bill of exchange should be void for usury, in the hands of an innocent holder. And now the most merciless usurer, lending money at the rate of fifty per cent per annum, and taking a note for it, can legalize that note immediately, by indorsing it away and receiving full value for it. This statute may be called an act to legalize usury in England, and is the unblest fruit there, of Lord Kenyon's innovation. The fruit it produced in the state of New York is well known. Freeman adsm. Brittin. Cash is very seldom paid down in the transactions of commerce : the universal substitutes for it, are bills, notes and acceptances at 30, 60 and 90 days, which are afterward indorsed from hand to hand in trade, until they become due, the more names being on them the greater their credit. A general distrust of its validity, occasions a disturbance of trade, that excites universal sensation and alarm. The judiciary of New York, soon perceived how easily the general holders of this paper might be defrauded, if the very parties after putting it in circulation and making it subserve all their own purposes, could then turn round and become witnesses of some latent fact, to destroy it in the hands of others; therefore they soon, and very wisely, returned back to the conservative rule in Walton v. Shelley; not indeed by refusing to let parties become witnesses, but by making their testimony of no avail; for they decided that a valid business-note might be bought, sold, and transferred by indorsement, at a greater discount than seven per cent for the time it had to run, and the agreement, though proved, would not be usurious. And this doctrine has since, and is now, fully supported and maintained in the Supreme Court of New York, Braman v. Hess, 13 Johns. 52; Munn v. The Commission Co. 15 John's. Rep. 44; Powel v. Waters, 17 Johns. 176; Kent v. Walton, 7 Wend. 256; and in the Supreme Court of the United States, Nichols v. Fearson, 7 Peter's Rep. 103. Possibly it may not accord with some ultra decisions in the English courts, but that is of little moment, if it neither disturbs the statute of usury, nor any principle of the common law; and I conceive it does neither. By the statute of usury, no person shall take above the rate of six per cent per annum "for loan of any money." It does not define what shall be a loan of money; it leaves the law to determine that. Some English cases seem to hold that buying a valid note in market and paying for it one hundred dollars for example, taking the seller's indorsement on it, is a loan to him of the hundred dollars; whereas, according to the decisions in New York, and in the Supreme Court of the United States, it is not money loaned, it is purchase money paid for the note; the indorsement only transferring to the purchaser, that right of calling on the other parties for payment, which the seller himself had. It is true that the indorsement amounts to the draw Freeman adsm. Brittin. ing of a new bill, and subjects the indorser to liabilities; but he can be liable to the purchaser for no more than the purchaser gave him for the note, and may shew the consideration, because he and the purchaser are the original parties to this newly drawn bill, and all that the purchaser can recover from him, on an implied promise, is a return of the purchase money with lawful interest. So that there is not a shadow of usury between them, to taint the sale of the note. That the consideration of a note or indorsement may be shown in an action between the original parties to it, is so familiar as not to need citation of cases; yet I refer to Livingston v. Hastie, 2 Caines, 248; 13 Johns. 52; and the collection in 2 Wheeler, 216, A. 18. If it be true that the seller's indorsement may render him liable to the purchaser's indorsee, it will result from the law merchant, not from any usury between him and the purchaser: and if the contract between him and the purchaser be not usurious, how can it possibly affect a note which is in other respects pure? If a negotiation for a loan can be proved, and that the sale was only a cover for it, the transaction will be usurious, as where a note is made with accommodation indorsers, for the purpose of raising money, and this known to the purchaser, it is then no sale; it is a covered loan. So there is no incongruity between this doctrine and any principle of the common law, nor any thing in it to disturb the statute of usury. If an indorser is not competent, by his testimony, to invalidate a note put in circulation by himself, the verdict in this case is right or if every thing which was offered to be proved by him, admitting it to be all true, was not sufficient in law, to invalidate the note, the verdict is still right. Taking the case either way, there is no ground for a new trial, and the rule to shew cause ought to be discharged. New trial granted. CITED in Everson v. Heath, 2 Harr. 245; Den. Stewart v. Johnson, 3 Harr 97; Overruled in Durant v. Banta, 3 Dutch. 630. Heath adsm. Everson et al. HEATH ADSM. EVERSON ET AL. In Case. On Rule to show cause, &c. A disinterested indorser of a promissory note, is a competent witness to prove the usurious transfer of the note. Halsted, in support of rule. Frelinghuysen, contra. Opinion of the Court, delivered by HORNBLOWER, C. J. This was an action on a promissory note made by the defendant, payable to John Drake, and indorsed by him to Amos W. Condit and by him indorsed to the plaintiffs. On the trial of the cause, Drake was called by the defendant, as a witness, to prove that the note in question was indorsed by him, at the request and for the accommodation of the defendant, that it was made without any consideration, and for the express purpose of raising money upon it for the use of the defendant: and further that he, Drake, in pursuance of a previous arrangement to that effect, had indorsed the note to Amos W. Condit, at a discount exceeding the legal interest. The Judge rejected the witness, upon the ground that an indorser was not a competent witness to prove the facts proposed to be proved by him. It is conceded that if the transaction was, as the defendant offered to prove, it was usurious, and that no recovery could be had upon the note, by the plaintiffs, or by any other person claiming under the indorsement of Amos W. Condit, against the defendant. The only question therefore, is whether Drake, the payee and first indorser of the note, was a legal and competent witness? The decision of this Court in the case of Freeman adsm. Brittin, (ante 191) settles this point. A majority of the Court in that case, after a full and elaborate argument, ruled that an indorser or other party to a negotiable instrument, not interested in the event of the suit, is a competent witness to prove usury or any other matter of defence to the action. The verdict in this case, must therefore be set aside, and the rule to show cause be made absolute. The costs to abide the event of the suit. Verdict set aside. Rule for new trial absolute. MARY WOODRUFF WIDOW OF SILAS WOODRUFF v. BENJAMIN BROWN. In Dower for Lands in Essex. On Demurrer. Per Ch. Tout temps prist may be pled in this action, under the Statute of New Jersey, relative to dower, by the heir, but not by his alienee or feoffee. J. White, J. and Dayton, J. Ford, J. and Nevius, J. contra. That the demandant received compensation for the annual value of her dower, during the heir's possession of the freehold, is not pleadable, but should be given in evidence in mitigation of damages, upon the writ of inquiry. This case was submitted without argument, upon the following state of the case, and briefs by A. Whitehead, for Demandant, and S. Scudder, for Defendant. STATE OF THE CASE. The declaration is in the usual form. The defendant has pleaded two pleas. 246 |