Lloyd v. Pace , 12 Ala. 637 ( 1847 )

ORMOND, J.

The plaintiff, as assignee of certain notes, •seeks in this action to recover from.the defendant as assignor, .a portion of the amount which the notes called for, which he failed to recover from the makers. There can be no doubt that the indorsement of a note by the payee, is in law an assertion that the amount it calls for is due from the ma-her, and if he succeeds in making a just defence to the recovery, of either the whole or a part, the assignor would be-liable to the assignee for the amount.

This question was considered in Hagerthy v. Bradford, 9 Ala. 567, and it was there held, that if the assignee gave the assignor notice of the defence set up by the maker, the judgment would be conclusive against him, in an action by the assignee. If notice was not given, it would be prima, facie evidence only, casting on him the burthen of proving, that the defence set up by the maker was invalid.

The defence which it appears was made to the recovery by the maker, was the plea of usury, whicfy, under our statute, if made out by the proof, would entitle the defendants, to a reduction for the amount of the usury, and restrict the recovery to the principal only of the debt. This would doubtless go to the merits, and ordinarily would entitle the assignee to recover of the assignor. But in this case, it appears, the plaintiff was a party to the usurious contract, and that the notes of Carlisle and Robertson, which were made for the purpose of being substituted for the notes which the-plaintiff previously held on the defendant and Simonds,-were by an agreement between him and the defendant, made-to carry interest at the rate of sixteen per cent, for the year they had to run to maturity. The usurious contract was-made at his instance, and was for his benefit. To permit him after a successful defence by the maker, on the plea of usury,, to turn round and recover of the defendant, would be to give effect to the usurious contract — to do that by indirection* which the law forbids to be done directly. As it respects the usurious interest, it is very clear he could not recover of the defendant.

It also appears, that the makers of the notes, when sued' by the plaintiff, succeeded in reducing the recovery of the plaintiff $70, in addition to the amount of usury included in the notes, and if the defendant had been notified of the de-fence, and required to prosecute the suits, the recovery would have been conclusive against him. But as it appears that, this reduction beyond the usury was not a valid defence to the notes, the assignor was not responsible for the error committed by the justice of the peace. The case was properly left to the jury by the court, upon that hypothesis, and its judgment must be affirmed.