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as to non-residents, in all its parts; although The judgment in the Circuit Court was enthe language of the repealing, clause does not tered in 1821, so that seven years of the ten include the term "execution." It cannot be years' limitation of the Act of 1792 had run supposed that the Legislature would bar an when it was adopted by the Act of 1828. Now. action on a judgment, and still authorize an the question is, shall no effect be given to this execution to be issued on it.

Act of Congress in Virginia on judgments beThere is another view of this case which, fore its passage, because of the construction by though not much considered in the argument, the Virginia courts of the Act of 17921 is deemed important by the court.

*It must be recollected that this Act of (* 64 And this arises under the Process Act of 1828 is a national law, and was intended to 68*) 1828. The third section *of this act pro operate in the national courts in every State. vides, “that writs of execution and other inal As it regards some of the States, it may, at process issued on judgments and decrees, ren- first, bave operated legs beneficially in them dered in any of the courts of the United States, than in others. But its provisions took im. and the proceedings thereupon shall be the mediate effect in all the States. same, except their style, in each State, respect It is a sound principle, that where a statute ively, as are now used in the courts of such of limitations prescribes the time within which State:" "Provided, however, that it shall be suit shall be brought or an act done, and a in the power of the courts, if they see fit in part of the time has elapsed, effect may be their discretion, by rules of court, so far to given to the act; and the time yet to run, being alter the final process in said courts as to con à reasonable part of the whole time, will be form the same to any change which may be considered the limitation in the mind of the adopted by the Legislature of the respective Legislature, in such cases. States for the State courts."

There may be some seemingly contradictory This act adopts, in specific terms, the execu- decisions on this point, in some of the States, tion laws of the State; and if the limitation which have been influenced by local consideralaw of 1792 could be considered, so far as its tions, and the peculiar language or policy of provisions embrace executions, a process act, certain acts of limitations. But the rule is this Act of 1828 adopts it; and the plaintiffs believed to be founded on principle and auin the original judgment were bound to conform thority. to its provisions.

The Act of 1828 was passed shortly after the To this it is objected that the courts of Vir decision of the cases of Wayman v. Southard ginia have uniformly construed the Act of and The United States Bank v. Halsted, and 1792 as not effecting judgments entered before was intended as a legislative sanction to the its passage, and that as the law of 1828 adopts opinions of the court in those cases. this statute, by the same rule of construction, This act is more explicit than the previous it cannot operate on judgments rendered prior acts on the same subject, as to the power of to that time. The answer to this argument the courts of the United States to adopt rules is, in the first place, if the Act of 1792, or any to regulate final process. And it is well repart of it, is to be considered as a process act marked, by Mr. Justice Story, in giving the merely, and not an act of limitations, the Act opinion of the court in the case of Beers et al. of 1828 makes it the law of Congress for the v. Haughton, 9 Peters, 363, that under this law State of Virginia, and gives immediate effect “the Circuit Court had authority to make such to it. If it be viewed as an act of limitations a rule, as a regulation of the proceedings upon merely, and not for the regulation of process, final process, so as to conform the same to it then takes effect, as before remarked, as a those of the State laws on the same subject." rule of property; and is a rule of decision in | And this power to adopt rules, so as to conform the courts of the United States, under the to the State laws, extends to the future legis34th section of the Judiciary Act. In either lation of the States; and as well to the modes case, effect is given to the Act of 1792, and of proceeding on executions, as to the forms it is decisive of the present controversy.

of the writs. But if it be considered, as contended, an act

From the above considerations the court are of limitations adopted by the Act of 1828, the of opinion, whether the proceedings in the answer is that the court are to give a construc- Circuit Court, in issuing the execution and tion to the Act of 1828. If this act be clear in giving a judgment on the forthcoming bond, be its provisions, we are bound to give effect to it, considered as regulated by the Process Acts of although it may, to some extent, vary the con 1789 and 1792, or by the Process Act of 1828, struction of the Act of 1792. And this is no there is error in the judgment, and that it must violation of the rule that this court will regard be reversed. the settled construction of a State statute as a rule of decision. For in this case the construc This cause came on to be heard on the trantion of the State law, in regard to the effect script of the record from the Circuit Court of it shall have, is controlled by the paramount the United States for the Eastern District of law of Congress.

Virginia, and was argued by counsel; on conThe words are, “that writs of execution and sideration whereof, it is ordered and adjudged other final process issued on judgments and by this court, that the judgment of the said decrees rendered;" not on judgments and de Circuit Court in this cause be, and the same is crees hereafter rendered. The law provides for hereby reversed with costs; and that this cause executions, not judgments. And it operates be, and the same is hereby remanded to the on all executions issued subsequent to its pas- said Circuit Court, for further proceedings to sage, without reference to the time when the be had therein, in conformity to law and judgment was rendered.

justice and the opinion of this court.


65°) •JOSEPH J. ANDREWS, Plaintiff instrument taken to secure its performance. A con

tract of this kind cannot stand on the same prinError.

clples with a bona fide agreement made in one place to be executed in another. In the last mentioned

cases the agreements were permitted by the lex loci LEWIS W. POND, Thomas M. Converse, and contractus, and will even be enforced there, it tho

But the Francis L. Wadsworth, Defendants in Error. same rule cannot be applied to contracts forbidden

by its laws, and designed to evade them. In such cases the legal consequences of such an agreement

must be decided by the law of the place where the Usury under name of exchange-question of contract was made. Ii void there, it is vold every. intent for jury-lex loci-transfer of bill where.

A person who takes a bill, which on the face of it after dishonor.

was dishonored, cannot be allowed to claim the privileges which belong to a bona fide holder with.

out notice. Il be chooses to receive it under such A bill of exchange, in payment of a debt due on belonging to it; and is in no better condition than

circumstances, he takes it with all the infirmitles a protested bill, was taken, in New York, from the person from whom he received it. There can one of the parties to the protested bill. The ex: be no distinction in principle

between a bill transcbange between Mobile, on which the bill was ferred after it is dishonored for non-acceptance. drawn, was stated to be ten per centum, and was and one transferred after it has been dishonored added to the bill, and the damages on the protested for nonpayment. bill, with interest, at the rate of interest in New

•It, in consideration of further forbear. (°66 York, from the time the first bill was protested, ance, a creditor receives a new security from hla were added to the bill. It was sent to Mobile and debtor for an existing debt, be cannot enlarge the was placed to the credit of the drawees by the in amount due by exacting anything, either by way of dorsee, who receive It before it came to maturity, interest or exchange, for the additional risk, which The bill was afterwards protested for nonpayment. he may suppose he runs by this extension of credit : An action was brought in Alabama against the indorsers of the bill, one of whom was in New York punctuality of payment, or the ultimate safety of

nor on the opinion he may entertain as to the when the bill was drawn, and who, being llable to his debt. suit on the protested bill, gave the second bill to prevent suit being brought against him. The detendants alleged usury in the second bill; the rate of exchange allowed on the bill, belng ten per N error to the Circuit Court of the United centum, was given, and it being alleged that the highest rate of exchange on Mobile did not exceed Ave per centum.

The plaintiff in error instituted a suit on a Although the transaction, as exhibited, appears, bill of exchange, dated at New York on the drawn, to be free from the taint of usury, yet ir ilth of March, 1837, drawn by D. Carpenter the ten per centum charged as exchange, or any on Sayre, Converse & Company, Mobile, Alapart of it, was intended as a cover for usurious in- bama, for $7,287.78 in favor of the defendants, terest, the form in which it was done, and the Pond, Converse & Company; payable and the bill from the consequences of 'usury; and if the negotiable at the Bank of Mobile sixty days fact be established, it must be dealt with in the after date. same manner as if the usury had been expressly mentioned in the bill itself. But whether the

The plaintiff in error was a citizen of New charge of ten per centum for exchange between New York, and the drawers and indorsers of the York and Mobile was intended as a cover for usury bill were citizens of Alexandria, Alabama or not, is a question exclusively for the jury. It

The evidence in the Circuit Court proved is & question of intention.

in order to enable the jury to decide whether that Lewis W. Pond, one of the defendants, the usury was concealed under the name of ex- was in New York in March, 1837, and being change,

evidence on both sides ought to have been indebted to the plaintiff in the sum of six admitted, which tended to show the usual rate of exchange between New York and Mobile when thousand dollars on a bill which had been rethe bill was negotiated. There is no rule of law axing the rate which may suit was about to be brought by the plaintiff,

turned protested from Mobile, and on which be charged for exchange. the cost of transporting specie from one place to agreed to pay ten per cent, the legal damages another : although the price of exchange 18 no doubt on the bill, and ten per cent, in addition, with Infuenced by it.

The general principle in relation to contracts the legal interest of New York on the bill for made at one place to be executed at another, is the time of its return, being eighteen days, and well settled. They are to be governed by the laws the charges of protest and postage, by a bill of allowed by the laws of the place of performance exchange on Mobile. The bill was drawn in be greater than that permitted at the place of the New York, being for the sum of $7,287.78, contract, the parties may stipulate for the bigband was indorsed by Mr. Pond, in the name of er in terest, without incurring the penalties of the firm, the defendants in error. usury.

The bill When a contract bas been made without refer- was indorsed by the plaintiff in error, and was ence to the laws of the State where it was made, or remitted by the plaintiff to S. Andrews, at Mo of interest was reserved forbidden by the laws of bile, and was by him set to the credit of H. A. the place where the contract wos made, which was Andrews & Company, of New York. It was concealed under the name of exchange, in order

to received by S. Andrews, with the indorsement which law is to govern in executing the contract: of the defendants, before its maturity; and it unquestionably It must be the law of the State was a cash credit in the account current bewhere the agreement was entered into, and the in-tween H. M. Andrews & Company, and S.

Andrews. The defendant offered evidence NOTE.—As to usury, see note to 2 L. ed. 0. 8. under the issue, the statute of New York 404.

As to les locl, as to defences of usury, see note against usury, and certain depositions, to provo to 3 L. ed. U. 8. 205.

Conflict of laws as to usury, see note to 62 L.R. that the bill of exchange was usurious. A. 33.

One of the witnesses stated that the consid. That taking interest la advance is not usury, see eration for this bill was made up by the followAs to who may set up ugury, see note to 8 L. ed. ing account; E. Hendrick's draft on Daniel 0. 8. 343.

Carpenter, Montgomery, Alabama, protested, dated at New York, December 20th, 1836, at The plaintiff next requested the court to sixty days for

$6,000 charge the jury, that if they believed S. An. Damages at 10 per cent.,. .600.00

drews received the bill before maturity, for a Interest 18 days at 7 per cent., 21.00

vaiuable consideration, without any notice of Protest and postage...


usury, and that the plaintiff received it from

625.25 S. Andrews without notice of usury, and beExchange 10 per cent., being dif

fore maturity, that the plaintiff might recover; ference of exchange between Mobile notwithstanding plaintiff offered no proof of and New York on the 11th March,

the consideration he gave for it. The plaintiff 1837,

662.53 excepted to this refusal of the court.

The plaintiff next moved the court to charge

$7,287.78 that the variance between the bill declared on, John Delafield, President of the Phænix and the one set up as the same bill by defendBank, examined on the part of the defendant, ant's deposition, was fatal in a plea of usury; stated that the exchange between New York to which the court refused, and the plaintiff and Mobile on the ilth of March, 1837, was excepted. 67*] from three to five per *cent. This knowl- *It appeared that before the bill was [*68 edge of exchange was acquired from having delivered by S. Andrews to plaintiff, it had dealt in exchange during the period, for the been, whire in the hands of S. Andrews, proPhænix Bank.

tested for non-acceptance, which appeared on Robert White, cashier of the Manhattan the face of the bill. There was no evidence of Company, stated that, by a reference to the any settled account between H. M. Andrews books of the company, the exchange between & Co., and S. Andrews, or which was creditor New York and Mobile was, during the month or debtor upon the statement of accounts. It of March, 1837, from five to seven per cent.; was also proved that the expense of transportand Morris Robinson, agent for the Bank of ing specie from New York to Mobile, including the United States in the city of New York, insurance and interest, would not exceed ono said, that during the month of March, 1837, and one half per centum on the sum transhe found by a reference to the books, the deal. ported. ers with the bank were charged from three to Upon the whole case, and the several points five per cent.; three for short, and five for stated, the court charged the jury, that if they long paper.

believed from the evidence, that by the usages The plaintiff excepted to the reading of the of trade between New York and Mobile, there statute and laws of New York against usury; was an established rate of exchange between and in order to disprove the allegation of usury those places, the drawers and drawees of the in the transaction, as the contract was not bill of exchange here sued on had a right to made subject to the statute laws of New contract for such rates of exchange; and that York, and the contract was subject only to the even a higher rate to a small amount, if under laws of Alabama as to its obligatory form and the circumstances it did not appear to have solidity; and was or was not usurious accord been intended to evade the statute against ing to these laws. The plaintiff then offered usury, might be allowed by them; but if they to prove by Joseph Wood that the banks pur. believed that no such usage existed, the parties chased bills at a far less exchange than others; had no right to contract for more than the that they never bought any other than un actual expense of transportation of specie from doubted paper; that from the facility of col- one place to the other, including interest, insurlecting, remitting, etc., they had many advan- ance, and such reasonable variations therefrom tages over the citizens at large; and that the as above stated: and further, if they believed exchange of the banks was therefore much from the evidence that the drawers of the bill lower than that of the community at large; of exchange contracted with the drawers in that there was no fixed rate of exchange be- the State of New York, at the time the bill was tween Mobile and New York; that it varied drawn, for a greater rate of interest than seven from one to twenty per cent. according to the per centum per annum, for the forbearance of solvency, punctuality, risk, etc., of the parties; the payment of the sum of money specified in that exchange was ever fluctuating, and was the bill, although it may have been taken in high or low as the risk was great or small. The the name of exchange, the contract is usuricourt refused to admit this testimony, and the ous; and unless they believe from the evidence plaintiff excepted.

that the plaintiff took the bill in the regular The plaintiffs asked the court to instruct the course of business, and upon a fair and valuajury, that if they were satisfied that the excess ble consideration bona fide paid by him, and over legal interest retained in this bill was without notice of the usury, they ought to find taken and contracted for innocently by the for the defendant; otherwise for the plaintiff; parties, without intending to violate the laws to which opinion and charge of the court the against usury, they might find for the plain plaintiff, by his counsel, excepted. The jury tiff. The court refused to give this instruction, found a verdict for the defendants; and the and the plaintiff excepted.

plaintiff prosecuted this writ of error. The plaintiff moved the court to instruct the The case was argued by Mr. Webster and jury that the contract expressed in this bill of Mr. D. F. Webster for the plaintiff in error, exchange, if to be executed in Alabama, was and by Mr. Ogden for the defendants. subject alone to the laws of Alabama against For the plaintiff it was insisted, by Mr. D. F. usury; and that the usury laws of New York Webster: had no force or anything to do with this inves- 1. That the contract, in all that relates to in tigation; this was refused by the court, and terest, was to be governed by the law of Alaplaintiff excepted.


2. That in the court, sitting in Alabama, the there has been a bona fide holder of the bill, or defense of usury could not be set up under the an indorser thereof, without actual notice that general issue.

the bill has been originally given for an usuri. 3. That certain evidence offered by the ous consideration. This is an action on a bill of plaintiff on the question of usury, was improp- exchange brought by the indorsee, and no erly rejected.

proof was given on the trial that he was not an 4. That the rulings and direction of the court innocent holder, ignorant of the consideration on the points of law, as stated in the bill of given for this negotiable instrument. It does exceptions, were erroneous.

not anywhere appear to the contrary, but on The provisions of the laws of New York, 1 the contrary the proof was clear and explicit Revised Stat. 772, on the subject of usury, that the bill had been regularly transferred to declare the contựact, on which usury shall be him before its maturity, *and had beeen (*70 69*] *taken or received, absolutely void; with placed as a credit in the accounts between him a saving from the influence of the statute as to and the house in New York. Nor did it ap. bills of exchange, or promissory notes payable pear that the plaintiff had any knowledge of to order or to bearer in the hands of an in the asserted usury of the transaction. Suppos. dorsee; who shall have received the same in ing, then, that the law of New York must good faith and for a valuable consideration, and regulate the contract; yet, on the proof subwho had not at the time of discounting the mitted on the trial in the Circuit Court, the bill actual notice that the bill had been origin- plaintiff ought to have recovered the amount ally given upon a usurious consideration, etc. of the bill. By the laws of Alabama, the interest alone is 3. The plaintiff in error contends that cerforfeited.

tain evidence was refused by the court which It is contended that the contract is to be gov- ought to have been given. erned by the laws of the place where it was to To prove the contract to have been usurious, be executed. The contract on the face of this certain depositions were read by the defend. bill of exchange expresses that it was to be ex- ants; some going to show the original nature ecuted elsewhere than where it was made. The of the bill, and the circumstances under which parties entered into it with a view to its per- it was made; and other witnesses were ex. formance at another place. It is a foreign bill amined to show the rate of exchange between (2 Peters, 586), and of course is dated in one New York and Mobile. place, and in one State, and made payable, in The witness examined were all connected another State.

with banks; and they proved differences in the The lex loci is to govern, unless the parties / rates of exchange from three to five per cent., have had in view, by the contract, another and even seven per cent. Those institutions place of performance; that is to say, if the had great facilities in doing business in ex. parties have in view, by the terms of the con change, and they took undoubted and indorsed tract, the city of Mobile, for its performance, paper at short dates. If there was any fixed it is the law of the place of performance which rate of exchange between New York and Mobile is to govern and construe the terms of the it would have been known to these witnesses; agreement. 2 Burr. 1077; 8 Johns. 190; 4 and it would have been stated. A charge be Peters, 111: 7 Peters, 586. Alabama was not yond a fixed rate might be asserted to be only the place where the contract was to be ex. usurious. But no fixed rate existed. ecuted, but this action was instituted in Ala- When the Circuit Court allowed the defend. bama.

ants to give evidence as to the rates of ex. 2. As to the second point. Under the laws change between New York and Mobile, it would of Alabama, where on an usurious contract the seem no more than proper that the privilege interest only is forfeited, it was not allowable should be allowed to the plaintiff. The facts under a plea of non assumpsit, to put in evi. which would have been exhibited by such evi. dence of usury; because, although by the usury dence were essential to the full exhibition of the interest is lost, yet the amount of the bill, the plaintiff's case. Charges for exchange vary deducting the interest, may be recovered. The with the credit and position of the parties to lex loci is to be regarded, and the trial is to be the bills of exchange, and the length of time conducted according to it; and what might un. the bills have to run; with many other circum der the plea be offered in evidence in New stances; and among them the balances of trade, York, could not be admitted in Alabama. The influence the amount of such charges materially. plea was not sustained by the evidence, and There was no unreasonable charge made up. did not suit the case.

on this bill. It was taken to pay a protested Supposing the plaintiff to have been in that draft, and from a party who had been on the situation as to the bill, as to be liable to lose dishonored bill. The credit of such a bill must the interest on it, as upon an usurious contract, have been exceedingly doubtful; and the cir. yet it was not under such a plea as this that cumstances of the dishonor of its predecessor evidence to charge him with this liability having been known, it would not have comcould have been admitted. Supposing that by manded as much as was allowed on it in the the law of New York it was usury, yet it exchange market in New York, where it was was to be punished by the laws of Alabama received. only.

The plaintiff contends that the ruling and But if, contrary to these views of the law, direction of the court on the law were errothe statutes of New York on the subject of neous. this contract are to be applied to it, yet, be- The plaintiff asked the court to instruct the tween the parties to this suit the law has no jury that if they were satisfied the excess over force. The statute of New York declares that legal interest was taken by the parties, without its provisions shall have no application where intending to violate the law against usury, they

should find for the plaintiff. The court re- cash credit, does not affect this view of the fused to give the instruction.

case. It was no more than a mode of keeping The question was one of intention, Did the the account between the drawer and the perparties mean to violate the law against usury? son to whom the bill had been transmitted. It was incumbent on the defendants to prove The bill was taken in payment of "an (*72 that the original parties to the bill intended old debt, and that debt is yet due; and for it usury; and that it was not considered by them the creditor has a perfect right to proceed at a regular mercantile transaction. On the bill law. itself no usury appears. The parties giving the It matters not what was the intention of the 71“) bill *consented to allow a high rate of ex: parties; and if they had no view to a usurious change for the advantages which they obtained dealing, still the law operates on the contract, in the exemption of one of the defendants, then and makes it void if there actually was usury. in New York, from a suit, which was about to Where the months of a year are calculated to be be commenced on the protested bill.

thirty days, and interest for a year charged on The plaintiff was altogether disconnected each month, it was held to be usury. with the circumstances under which this bill Mr. Webster, for the plaintiff in error. This was originally given. He received it as a re is an action by the indorsee of a bill of exmittance from New York; and before it came change residing in Alabama, and the suit is to maturity it was placed to the credit of the brought in that State. The bill was drawn in house in New York as a cash credit. When he New York, to be paid in Alabama; and there presented it for payment, it was refused, on the is nothing in the record to show that the inground of its having been made in fraud of the dorsee, the plaintiff, was in New York, or had law of New York against usury. Thus, ne- anything to do with the bill, until it came into gotiable paper, which had passed through dif- his hands in Alabama. The defendants are ferent hands, and which was obtained in good described as citizens of Alabama; and prefaith, was discredited by circumstances which sumption is that it was indorsed in Alabama, could not have been known to the subsequent and was an Alabama transaction. holders of it. A purchaser of a bill of exchange The true place of the contract is the place of may be made at any deduction from its its performance; and the law of Alabama opamount, and the contract of purchase is legal. erates upon this bill exclusively, as the con.

The judge of the Circuit Court charged the tract made by it was to be performed there. jury that if there was no established rate of ex- Story's Conflict of Laws, 252. A bill drawn change between New York and Mobile, the in New York, to pay eight per cent. interest in parties had no right to contract for more than Alabama, where the interest is eight per cent. the actual expense of transporting specie. But would not be void by the law of New York. by the evidence given on the part of the de. Where there is no actual and express agreefendants, it was fully shown that there was no ment to pay usurious interest, it is entirely fixed rate of exchange; and yet the contract question of intention; and the case to be made was to be made usurious, because more was out is, that there was a design, either open or taken than the cost of transporting specie from covered, to take more than the statute allows Mobile to New York. Such a position destroys as interest. all operations of exchange, and thus interrupts There can be no rule of law which prohibits the great means of commercial intercourse and the purchase of a bill of exchange at any rate dealing. Rates of exchange are fixed or regu- of discount, or which makes such a purchase, lated by other rules than those which would be if the discount is more than the legal interest, derived from the value of specie at the place on usury. The rates of exchange are always which the bill may be drawn, and the cost of various, and are sometimes uncertain. To apits carriage to the place from which the bill is ply the law of usury to such contracts would sent. The experience of every commercial be productive of the greatest injustice. man, and the value of exchange in every com: The law of New York protects all these in. mercial country, establish this position. struments from the prohibitions of usury, when

Mr. Ogden, for the defendant, contended they get into the hands of bona fide holders that the contract entered into by the bill of ex. without notice of their origin. Every one may change on which the suit was brought having buy a bill of exchange in the market at any been made in New York, was to be governed rate; but if the purchaser sells a bill, with his by the laws of New York. An indorser of a name upon it, at an illegal discount, it is usury, bill of exchange is liable only by the law of the and the bill is void. Everything in relation to place where the bill is made. 3 Mass. Rep. this bill should have been admitted in evi. 77; 6 East. 130; 1 East. 60; 8 Martin's Rep. dence; and the jury should have been enabled 34. The law of the contract is the law of New to form a judgment on the intention of the York, where the debt was due; and where it parties; and should have been allowed to know was settled by the bill of exchange on which everything as to the state of the exchange bethis suit was brought.

tween New York and Mobile, and the rate, as It is said that the evidence of usury could applied to bills of all descriptions. One of the not be given under the plea of non assumpsit; witnesses would have proved that twenty per but this is taking for granted that the law of cent. was not a greater rate of exchange than the case is that of Alabama, and not that of had been paid on doubtful bills. New York. Evidence to show a usurious con The party taking the bill had a right to resideration is proper evidence under the plea. cover from his debtor such an amount as would

There is no evidence of bona fide ownership have paid the amount due to him on the proof this bill in the plaintiff. The bill was re tested bill of exchange in New York. He bad mitted for collection, and the plaintiff was the a right, then, to the exchange on Mobile, and agent of the drawee. The entry of the bill as a the exchange from Mobile to New *York. (78

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