Texas State Gazette. (Austin, Tex.), Vol. 2, No. 27, Ed. 1, Monday, February 24, 1851 Page: 3 of 7
seven pages : illus. ; page 28 x 42 in. Digitized from 35 mm. microfilm.View a full description of this newspaper.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
-JSJPT
. ..i ' jiMMfPgfKKmWgWgtW9
W
B
Ll
lil
:
m
-T7iiiis i
r- i &
vVaBBMHpMl immplljlll 'mmajpwwHMHB . - -4- - .-.... .. t'S;-;'.-il..lriiMmiii iMim.
jwwww - . I1.'... ;. I. .I.--.... -i i i . ; . ... i .
TEIAS STATE GAZETTE.
FEBEUARY 24
OPINION OF WHE
SUPREME COURT OF TEXAS.
f '.-
ir"" I ---- '" ii - i.. ..
'fni
From Washington
County.
teffi
Jrli
mgfi
Hrv
'y
em SsNRY ft ANDREWS Administrator of
VTEDMUND ANDREWS Appellant.
X.vl&W0XIE Appellee
fVKsWiiinip a note is payablo at n particular placo it is not necessary in nn
ctibn anoTTityfor.tlio pluintiu to avcraproaontntion lor payment nt tnnt pinco.
2. Tim legal holder or ft promissory noto may maintain nn action upon n in
his own uame though ho may not lio tho real ownkr.
1 n. Where a noto is mado paynblo at n liouso in New Orleans held that this
trniTr nniiot iudieinliv know that it is in Now Orleans in Louisinna.
tiiAut a nontrndt executed in Toxns to bo performed in another conntry. nt a
tioiiii 0f htorost exceeding tho lawful rnto in Texas but allowed by the law of
Country whero it was to bo performed is not usurious. The-fact that tho
thrt ograot jg sought to bo onforcod in Toxaa docs not afloct tho question.
gf 1$ Although a controot on its faco should nppoar to bo freo irom tho taint of
3fsury by being payablo at n placo whoro tlio interest roservea was not loruid-
dorLby law; yet if it was so mado and intended asaoover for usurious ifltorest
nninttpr what its form or how framed it would bo no protection from tlio
tit'
I
t i
M
consequences of usurious agrcomont; and if tho fact bo established it must bo
dealt with lit tho samo manner ns if tho usury was expressly contracted for in
tho instrument itself. This being n question of intention is exclusively for tho
decision of a jury.
0. If parties stipulato for a highor rnto of interest than is nllowed by tho law
nrtlinnWnivliorotha noto was mado. or payable under tho" mistaken belief
jjtlmt tho law would not regard it in that shapo us usurious their mistako in that
Q4pcct would not alter tho character of tho transaction.
JtCA usurious contract concerned nmuer uio prcicnco 01 ocmg ponarmuu in
anotheXiQuntry or under any other form or namo when tho fuot is so found
must bo govWrfcTTol'lho law of tho placo whoro tho contruct was made' or tho
ni&friiniont executed. .... .
8. It items that if a rate of interest bo stipulated m a contract and it is nccord-
ing'to tho law of tho placo whoro tho contract was mode though that rato bo
liwJlmr iJmn is lawful bv tho law of tho placo whoro payment was toHjo mado
'.tho specified rato of interest at the placo of tho contract may bo recovered in
r 0. That a promissory noto bears interest from a timo anterior to its date does
Hot mako it on its luco usurious nor uoos it caii suspicion on mo icganiy 01
fW f ho consideration.
W m T.. .I. 1nw1a nCiin Innnonnt nnilnrrn. for vnlnniiln eoiiHiilorntion. llin nnn.
fljldoration of a bill or noto may bo impeached for usury both by tho Spanish
illiHnd English law
' II. interest IS govornuu UJ mu mw in luitu ui mu muo ui i-uiiniiwiiiiy uuu
cannot bo varied oy any subsequent change in tho law.
19. An ncrreomont to nav interest on interest is noi usurious.
45pinion3eHvcretl by Wheeler J.
The appellant's iutestntc brought suit against the appellee and one
Edward Bailey upon a promissory noto made by the appellee and
said Bailey and endorsed to thp plaintiff; which note is as follows:
''Washington 8th January 1810 $0028 75. Twelve months
nftpr date. wo. or either of us promise to pay John A. Merle & Co.
MJlvMuMltpir office in tho city of New Orleans six thousand and twenty-
ihj dollars seventy-uvp cents wmi interest m me nuu oi tun per
zJl ir ntinuni. from first of September last value received.
"E. BAILEY
" ASA IIOXIE."
ho note appears to have been endorsed first by John A. Merle Sc
(in to Nathaniel Goddard ; second by Goddard to John A. Merle for
Account of Goddard ; third by Merle to Andrews thc appellant's in
state in whoso name the suit was Lrougntv
The defendant excepted to mo pennon ior me want oi an averment
omce ot Jolm A.
proper aVer-
lV lnitt T MUntf n tl. cntnn rimn nlnntlnil
mj . u i.tf inrr tiiiii ill iibi- 11 111111.111. iiiv iil liii niiini: li iiii- lit -11 j rri i
.tftnems eiiuwinsi -i- i y ... -- t
'"sehat the note sued on was-obiamed from them by fraud ; and further
ble t that after the making of the note aiid before the assignment and
f transfer X)f the some by the said John A Mcile & Co. to the said
"Goddard and by him to the plaintiff and whilst the same was -the
' "Iproportyand in the possession of the said Jolm A. Merle & Co. he
'the said John A Merle at New Orleans in tho State of Louisiana
in the district cojirt of the "United States for the district of Louisiana
1 filed his petition in bankruptcy whiph was duly adjudged and he
the said Jchn . Merle became thereby bankrupt ;" and that in the
i ' proceedings in .bankruptcy certain commissioners were appointed who
took posscssionof tho effects of said bankrupt and of said note by
...cQinmentandltmnsfer from the said Merle & Co. by which they
became the legal holders and owners of tho note for the use of the
ie
M
hi
mm
Wffl
.awM
" iliftlin presentation of tho note lor poyment at tne
subjciMijv NowJlrleans and for the want also of
iitet-wv' -: s rrrrr7.. ;
UlJOll
1U!
creditors of the said John A. Merle "& Co. ; and that whilst the note
(wm so in
the
A
M.
Mi
vli
nnRRGssion and ownership of the commissioners the
Vwl Merle assigned and transferred it to Goddard who transferred it
t7f?frriiitCai.of all which tho plaintiff had notice. The answer
(contains alsq a gencial denial.
f '(die plaintiff ameudeajus pennon py specially suiting anu ucscrio-
in'tho several eudorsemewts by which he. appeared to be the legal
owner pf hq note which lii'Mis original petition Jio iiad omitted.
r'rniintii nftlm dnfendant liailev was sussrested : and the defend-
Wlxi ant dismissed as to him. y
.(CXlClie defendant lloxio amended his answer pleading 1st that the
.tnte sued on is not the property of the plaintiff but of one Goddard ;
V.k Tim emirt overruled the exception to the petition and the cause
wa? tried at the fall term 1817
Tim plaintiff nave in evideuce the note sued on and the answers of
f Jiishitostate E. Andrews to interrogatories propounded to him res-
X pecUnc tho ownership of the note the alleged bankruptcy of John A.
Merle; and the timo and circumstance of the assignment ot the note.
Tho. auswors of tho intestato wcro m substance: mat tlio note was
rfWnwl hv John A. Merle & Co. to Goddard before its .maturity
and before tho filing by John A. Merlo Sc Co of their petition for a
ViischarTC in bankruptcy and that it was suoscquenuy irunsierrejiDy
Goddard to him (Andrews) for collection.
The plaintiff also proved the law of interest of Louisiana as con-
tn'.upd in nrtiolo 2895 of the civil code approved' on. the 12th day
W of April 1824 and an act of tho legislature of that Stato approved
wCaatUa 19th day of February 1814. Article 2895 of the civil code is
us louows r-Mnterest js eitner icgai vi uuiivuiuumum. xjujj.u uuorgat i
.Ixed at the following rates to wit : nt fivo per cent."on all sums
which are the object of a judicial demand whence this is called judi
uial interest; and all sums discounted by banks at the rato established
by their charters. The 'amount of conventional interest cannot ex-
ceed tea per cent the same must be fixed by writing and testimonial
proof of it is not admittted in any case." Tho act given in evidence
$& an act to amend this article of the code and does so amend it that
" tho amount of conventional interest shall not thereafter exceed eight
per cent.
The plaintiff offered to read in evidence a paper purporting to have
been made by a notary public in tho city of Now Orleans; stating the
presentment demand nnd protest for non-payment of tho note at the
uflice of John A. Merlo & Co. in that city ; but to the admission of
this evidence the defendant objected and the court sustained the ob
jection upon the ground that there was no corresponding averment in
tuc peuuuii.
r Tlte defendant proposed to prove by a witness (Crosby) the. con-
lderation and circumstances under which the .noto was given to
'ijich tlQ plaintiff objected becauso the noto was transferred to the
plaintiff before maturity and without notice of any defect in the cou-
eration ; but the court overruled tho objection and the witness
;ificd that tho noto in suit and another for tho same amount were
eu by Edward Bailey and tho defendant lloxio as surviving part-
ot uie;iriu oi xjautsy uuy o& xioxio m mo seuiQincui oi certain
unta. wYilcU are made a part of the statement of facts : that the
tlemenv was made by tho intestate Andrews as agent and attorney
for tho payees" John A. Merlo & Co. nnd himself (the witness) as
tho attorney of Bailey Sc lloxio ; that in settling tho accounts usurious
and compound interest were both computed in tluun and thnt the
'"witness informed tho defendant lloxio that such was the fact but
that the parties being miaule to pay the account were compelled to
give the note with the interest embraced in the account urtd stipu-
lated in the note in ordcAo get the specified time.
Tho defendant introduced another Cvitncsfc (Shapard)'who testified
that ho had examined the account mentioned by the witness Crosby
aiid for which the note was riven ; that interest was charged in the
account on each item ; that he had made a calculation on several of
the itcni3 and found that the interest charged was at tlio rate of ten
per cent per annum ; he further testified that the 'same rate of interest
was allowed on tjio items of credit which the Secdmit contained as
uuu cunrgeu on tne items oi liuieutcuncss.
The plaintiff introduced several witnesses whotcstifiecTrespectinEr
the customs"' of this country in relation to ohnrgingand allowing
jiiiuiuat. juuviuua iu unu in. uiu iiiiiu ui liiu iuuiviii ui iiiu nuiu in ijucs
tioif which. tcMmonyit is itnnecessa"ry to recapitulate.
The court ihstFucted the" jiffy " that .if there was usury in the con-
tract it wotild avod the" whole of tho interest on tho contract but
tharthc plaintiff Avould still bo entitled to recover the principal" to
which tlfe defendant excepted. The court further instructed the jury
'-that if interest was computed on the accounts previous to giving
the notes and if upon the notes interest at ten per cent was required
both taken together being higher than allowed by.Iaw where the note
was payable would be usurious." And after the jury had retired to
consider of their verdict they returned and inquired of the court whe-
ther compound interest was usurious to which the court replied and
instructed them " that it was so.decided by the courts of Louisiana"
to all which the plaintiff excepted.
The jury returned averdict for the plaintiff for six thousand and
twenty-four dollars ninety-eight cents the amount of the principal
sum supposed to Ue duo without interest. "
The plaintiff moved for a hew trial which the court refused and
gave judgment upon the verdict.
The plaintiff appealed ; the defendant also appealed but the case
has been argued aiid considered upon the record 'brought up by the
plaintiff he being treated as appellant and the defendant as appellee
for the sake of convenience in considering the questions presented by
tho record.
As both plaintiff aiid defendant have appealed from the' judgment
of the district court the more convenient order of treating the objec-
tions to the judgment urged by the parties respectively will be to
consider first those urged bv tho defendant below (who is treated as
appellee in this record)?hich go to defeat the entire action; and if
these shall he lound untenable secondly those urged by the plaintiff
below (and appellant) which go only to the reversal of the present
judgment for the purrjose. of havius it remanded for a new trial with
u result more favorable to the plaintiff. And it is insisted on behalf
of the defendant
1st. That the court erred in overruling the exceptions to the peti-
tion and in holding it sufficient without an averment of the present-
ment of the no'te for payment nt the house of John A.Merle & Co.
2d. That Andrews being butithe agent and trustee of GoddanT for
the collection of the note 'could not maintain the action upon it in
his own name.
3d. .That the note itself was void in its inception for usury.
1. 2 The first and second objections hero presented may be dis-
posed of by a reference to former decisions'of this couit.
In Edwards vs. Ilasbook (2 Texa3'B') we" decided that wliero a
note is payable at a particular place it is not necessary in an action
upon it. for the plaintiff "to aver a Presentation for payment af that
place. And though it was formerly held oth6rwise in Louisiana it1
a tinrlnrcfiVrtVl 'Hin i Ktr n wnniit ilnnicirm enroll ic nnwr nhlrl tn lir. tlfr. lttr
irfthat State.
In Thompsom vs. Cartwrigh't'(l Texas E. 87)' tliis"" court decided
that the person who appears to be the legal holder of a promissory
note may maintain an action upon' it in lite own name though not
the real owner of the note. " Tho mere naked fact (it was said) of
the plaintut not being the real owner ot the note would not be matter
of defence either m bar or in abatement. And"seeMcMullen vs.
Croft 5 Texas It. ; Hays vs. Cage 2 Texas U. ; '2o Wend. It. 411.
3. Is the contract tainted with usury 'I
This is the principal question in the case ; and in.order. to its deci-
sion it becomes material to determine; 1st Whether the contract as
to interest is to be governed by the laws of this country or of Loui-
siana; 2d Whether it is obnoxious to the objection of usury by the
laws by which it is to bo governed.
The note it is to be observed wns made in this country but was
payable at the office of Jolm A. Merle Sc Co. in the city of New Or-
leans. And it is insisted on behalf of the plaintiff that the question
of the legality of the contract as to the interest is to be determined
by the laws of Louisiana. But is objected by the defendant 1st That
it is not uvcrrcu in iuu puutiun uiui unit inu cuuri uuiiuui. judicially
know that the-oflice of John A.JVlerle cc Co. in tin
XI
J"1
J.
pi
C r
i" . '
t. 5
ouiy v&
lUMJJMh
HnffW" mi
4KV7 P
ie citv of New Or.
leans is in theStato of Loiusiana'and 2d That if tho note was" 'pay
able in Louisiana as it is sought tobe enforced in this country the
law of this country where it was made and is sought to be qnforced
and not the law of Louisiana where it was to .jputformt must
govern as to the rate of interest foxvhich'it"Was lawful for the par-
ties to contract. Ths-first.ob junction here presented) is not wholly free
from difllciiltv. r'
In thfiJgfTglish courts it is held that the division of Ireland or any
cQUiitry other "than England'into counties or the known towns' or
cities of suoh country will not bo judicially known by the courts. rl
Chit. P C. 250. Irf the case of .Kearney vs. King (18 Eng.C6m.
Law R. 28) it was held that if a declaration upon a bill of exchange
state that a bill was drawn at 'Dublin for a certain sum of money
without averring that Dublin wa's in Ireland or that the bill was
given for Irish currency it must be taken to mean Jhat the bill was
drawn for English money. Abbot Ch. J. said " The framer of the
declaration lias not said that Dublin is in Ireland and we cannot as-
sume it whatever may be our belief upon the subject." And Bailey
J. said : "Unless we are informed that J)ublin is in Ireland we can-
not give the legal operation of the declaration which is contended for
because there may bo a Dublin in America or Scotland."
If the judges of an English court sitting in Westminster Hall
cannot judicially know that Dublin is in Ireland it may well bo ques
tioned whether this court can judicially take notice of the fact that
New Orleans io in Louisiana.
But it is said that thprc aro' various public acts Of the Congress of
uie jLvepuuuc oi xexus wiucu .speuic oi ixew uneans anu mat these
acts furnish judicial information of the local situation of that city.
aiut tins is no answer to the objection ; lor although we may know
as matter of historv or geography that there is a New Orleans in
Louisiana yet wo cannot know that it is the New Orleans in which
is the omce of John A. Mer'e & Co. where this note is payable.
There may alsd bo a New Orleans in Mississippi or Missouri. We
cannot suppose that tho courts in England might not know for some
purposes that there is a Dublin in Ireland but they held that they
could not judicially take notice that n'bill 'drawn at Dublin was drawn
at Dublin in Ireland for the purpose of its construction in reference
to tho currency in which it was payable.
In Missouri it has been decided tliatthe courts of that Stato-cannot
judiciallyjcuowthat New Orleans is in Louisiana. 6 Mis?. B. 6'G8.
And see 2 Porter (Ala.) E. 239; 42 Com. L. 11. 913; G Id. 413.
If then the question of fact must be determined by our judicial know
ledge we should perhaps bo constrained to hold that we cannot judi-
cially know that this note was payablo in the Stnte of Louisiana.
a j..i ir . . '.wm n iMimvlmlrrn of that fact from any source it mutt
be from the allegations of the parties or the evidence contained in tho
record
Tho petition contains no averment of the fact; but the answer
nllcres that " the said John A. Merle of New Orleans in the State of
Louisiana in the district court of the United States for the district of
Louisiana filed' his petition" Sec. This it is truo is not u direct
admission of the fact that the office of John A. Merle Sc Co. in New
Orleans is in the State of Louisiana. But taken in connexion with tho
fact that the plaintiff was 'permitted to prove the law of Louisiana
without objection that the court instructed tho jury in reference to the
law of that State and that the parties appear to have conducted the
trial below upon the assumption that this note was there payable it is
perhaps sufficient to authorize us to adopt that conclusion The fact
is not shown conclusively and hence the question is not freo from
difficulty. But we incline to this conclusion from a belief that it is
perhaps .the most rational one to be deduced from the record and from
a conviction that it is most in accordance with the very truth and
justice of the case. But it is further objected that though the note
Avas payablo in Louisiana yet as it was both made and fcought to be
enforced in this State the iaws of this State must govern n deter-
mining upon its construction and Validity.
It is believed to be the well-settled rule that interest is to be com-
puted according to the law of the place where the contract is to be per-
formed whero that is a place other than that of the lex loci contrac-
tus. Story on the Confl. of Laws sec. 291 n. 2 ib. sec. 296.
" The authorities says Chan. Kent are numerous to show the gen-
eral rule to be that interest is to bapaid according to the place where
the contract is made unless the payment was to be made elsewhere
and then it is to be according to the law of the place where the con-
tract was to be performed." 2 Kent Comm. 4G0 n. C 2 Wah. C
C. 11. 253 4 id. 296 4 Peters' It. Ill 17 Johns 11. 511 20 id. 102.
He also says that " according to the case of Thompson vs. Powles (2
Simon's B. 191) it is now the received doctrine in Westmibter Hail
that the rate of interest on loans was to be governed by tho law of the
place where' the moiiey was to bo used or paid or to which the loan
had reference ; and that a contract made at London to pay in America
at a rate exceeding the lawful .interest in England was not a usu-
rious contiact: for the stipulated interest was parcel of the contract.
This he adds is also the law of this country and it appears to be a
liberal relaxation of the former rille."
The principle here stated is strictly applicable to the present case
admitting that the rate of interest contracted for was greater than that
which was then allowed by our law. And the case cited in the text
of Thompson vs. Powles from the oriel statement ot its principles
appears to be precisely in point. That was upon a note both made and
enforced in England to pay in America at a stipulated rate of inter-
est exceeding the lawful rate in England : and the court held that tlio
contract was not usurious. The fact that the contract was enforced
in England does not appear to have been considered a circumstance af-
fecting the question.
In the case of Andrews vs. Pond (13 Peters 65) the Supreme Court
of the United States'ass'erted and maintained the samedoctiine. The
note was made in New York where the interest was seven per cent.
and was payable in Alabama where it was eight per cent. By
the laws of New York if more than the legal interest of that State
was reserved the contract was wholly and absolutely void. The
court said "The general principle in relation to contracts made in one
place to be executed in another is well settled. They are to be "w -emed
by the law of the place of peiformance and if the interc-t al-
lowed by tho laws of the place of peiformance is higher than that per-
mitted at t)ie place of contract the parties may stipulate for the high-
er interest without incurring the penalties of usury. In the case befoie
us if the defendants had given their note to H. M. Andrews Sc Co.
for the debt then due to them payable at Mobile in sixty days with
eight per cent interest suchTa contract would undoubtedly have been
valid; and would have been no violation of the laws of New York al-
though the lawful interest in that State is only seven per cent. And
if in tlin nnnnnnt ?iliiofsl .f flia tirvin t-liinliillnrn....l
i it wi. iiuiiu.uujuonu ui wn. umu una Uill ui CXUIHUlgC WHS "lVeil
it had appeared that Alabama interest of eight per cent was taken for
the forbearance'of sixty days given in the contract and the transaction
was in other respects free from usury such a reservation of inteiest
would have been valid and obligatory upon the defendants and would
have been no violation of the laws of New York." ib. 77-8. Tho
court appear to have attached no consequence to the fact that the ac-
tion was brought in the State of Alabama. Nor has the searchin"-
examination of the learned counsel who has argued this case on the
part of the defendant with so much ability enabled him to refer us to
any ease in which the place where the contract is sought to be en-
forced has been held to operate an exception or qualification to the
rule. It is not perceived that it can make any difference in what forum
the action is brought and the contract sought to be enforced. Unques-
tionably lQvulidity of tliecmitvwtviierever contested. musUjtuW
termined by tlie-laVofthe tplacc where the comnuTrATJuTde If
valid there it Is valid everywhere : but if void by the lex loci contrac-
tus it will carry witlwit no obligatory force elsewhere and cannot be
enforced innhe courts of any other country. But the question here
is not whether a contract void by the law of the country where it was
made can be enforced elsewhere but whether this contract was void
by the law of this country whore it was executed. And the authori-
ties cited clearly show that it was not; that being payable in another
country the parties will be deemed to have contracted in reference to
the laws of that country in which the contract was to be performed
and to have had those laws in view in making their contract ; and '
that it was lawful here thus to contract in reference to the laws of an-
other country. And the contract being lawful here will be held to be
mlid and obligatory everywhere and in whatever forum its validity
may be drawn in question.
But it is said that if it be permitted to parties to contract for a "real
er rate of interest than is allowed by our law by simply nnmin" apla'c'
of performance where the laws do not forbid such greater rate of
terest it will always be in their power to evade the laws of this Stan
against usury.
It would be difficult to state a case in which such attempted evasica
of our laws would not bo sufficiently manifest to enable a jury to n.1-
certain the real intention of the parties. And although the contract
on its face should appear to bo free from the taint of usury by being
payable where the interest reserved was not forbidden by law yet if it
was so made and intended as n cover for usurious interest the form in
which it was executed and the aspect in which it was framed would
afford it no protection from the consequences of usurious agreements;
' ond if the fact be established it must be dealt with in thoeame man-
ner as if the usury was expressly contracted for in the instrument it-
self." But whether it was so expressed and framed as a cover for usu-
ry or not whero it does not so appear on the faco of the contract is a
question exclusively for the decision of the jury. It is a question of
intention. -Ib. 76 4 Hill 221. If indeed the parties did reserve a high-
er rate of interest than that allowed by the law of the place whero tho
noto was made or payable under tho mistaken belief that the law
would not in that shape regard it as usurious their mistake in that res-
pect would not alter the character of the transaction. Ib. 79-80 9
Mass. R. 49 2 Cow. 712. But where tho contiact upon its face ap-
pears to bo legal it is for tho jury to decide whether usurious interest
was in fact reserved in the contiact and concealed under the form or
pretence of a contract to be performed in another country or under
uny other form or name ; and if it shall be so found by tho jury the
Ml.-:
""
NR(fc4S.
l-pgT'''Y yiiMrfiW
. r
fc "-skftssmtLm
S&iI 'sm
vyg " "m - -
m k ".
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Newspaper.
Brewster, H. P. & Hampton, J. W. Texas State Gazette. (Austin, Tex.), Vol. 2, No. 27, Ed. 1, Monday, February 24, 1851, newspaper, February 24, 1851; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth80967/m1/3/: accessed June 12, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting The Dolph Briscoe Center for American History.