Stanley v. Kempton , 30 Me. 118 ( 1849 )

Shefley, C. J.

— When a security for the payment of money is usurious, and the debtor procures a third person, having no connexion with it, to give his note, which is free from usury, in payment, such third person cannot avoid payment of his own debt on account of the usury between the other parties. Bearce v. Barstow, 9 Mass. 45; Lowell v. Johnson, 14 Maine, 240; Little v. White, 8 N. H. 276; Reading v. Weston, 7 Conn. 409; Green v. Morse, 4 Barb. 332.

When the note of the third person is given not in payment but for renewal or as a substitute for the original security, the note may be under our law in part or in whole avoided by proof of usury in the first contract. Bridge v. Hubbard, 15 Mass. 96; Warren v. Crabtree, 1 Greenl. 167; Lowell v. Johnson, 14 Maine, 240.

The importance and justice of this distinction will be perceived, when one considers, that the maker of the usurious contract has upon payment of it a right to recover back the usurious interest, which he has paid; and if the maker of the second contract used to pay it were allowed to avoid the payment of his contract, the creditor might be compelled to account to two different persons for the same excessive interest. When the second contract is not received in payment, but as a substitute or for renewal of the first, no such result can occur, for the first debtor can have no claim upon his creditor on account of the usurious contract, and the last may take advantage of the usury secured by his own contract.

The testimony presented in this case proves a payment of the three usurious contracts first named, and not a substitution of this note for them. It was a negotiable note, and by our law, such a note is prima facie evidence of payment of the debt for which it was given. The testimony, instead of rebutting the legal presumption, confirms it. The case states, “ Bangs being called upon by Butler for payment of these first named notes, procured the defendant to give his said note in payment for and discharge of the same, and said three notes were thus paid and discharged and thereupon given up to said Bangs.”

The statute of limitations is no bar to an action brought in íhe name of an indorsee upon a negotiable promissory note, which was signed in the presence of an attesting witness. Act of March 23, 1838; R. S. c. 146, § 7; Quimby v. Buzzell, 16 Maine, 470.

The consideration of this note is sufficient, it having been given to pay three other notes, which Bangs might lawfully pay, if he pleased to do so, and to procure his discharge from all trouble respecting them. Defendant defaulted.