Case ID: wis_23/html/0383-01.html
Source: Caselaw Access Project
Author: {"author": "Cole, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hull vs. Augustine and others.
    
      Usury and Lex Loci — Presumption as to laws of other states. — Verdict: when not to le set aside.
    
    1. A note given in Illinois by a firm doing business in this state (place of payment not expressed), to take up a previous note executed in tbis state by tbe same firm, held to be governed by the laws of Illinois in respect to usury.
    2. The makers can avail themselves of the defense of usury only by pleading and proving the law of Illinois on that subject.
    3. There is no presumption that the usury laws of another state are the same as our own; especially when the latter are of a penal character.
    4. This court will not reverse a judgment on the ground that the verdict was contrary to the weight of evidence, if there was some evidence to support it.
    APPEAL from the Circuit Court for Grant County.
    Action against Augustine, McKenzie and Ga/mieJe, upon a promissory note, dated November 3,1855, arid executed on that day, in the state of Illinois, by McKenzie, under the firm name of “ McKenzie, Augustine <& Co.” It appeared that said firm, consisting of the three defendants, did business in this state and not in Elinois; hut that it had dissolved and ceased to do business, August 1, 1855. There was some evidence to charge the plaintiff with knowledge of this fact at the time he took the note; but he testified in his own behalf that he had no such knowledge.' About a month before its dissolution, the firm was indebted to the plaintiff ■ on a note executed to him, it would seem, in this state, and the amount then’ due thereon was never paid to the plaintiff, but was drawn from the partnership funds by McKenzie and GarnicJc, who agreed with Augustine to assume the payment of the same. The note in suit was given for the amount so due, and the old note was at the same time surrendered or canceled. The defendant Augustine also set up the defense of usury, on grounds stated in the opinion; but the court withheld that question from the jury.
    Yerdict for the plaintiff; new trial denied; and judgment upon the verdict; from which the defendants appealed.
    
      Pwme da Garter, for appellants:
    The agreement, executed contemporaneously with the note, to pay fifteen per cent thereon, contaminates the note with usury, and under the laws of this state would render it void. Lee v. PecJcham, 17 Wis. 386; Martin v. Rutherford, 18 id. 307. This court has already held, that in the absence of direct proof it would presume the laws of other states to be the same as our own {Rape v. Heaton, 9 Wis. 341); and the cases in New York to the effect that every man is presumed innocent until the contrary is proved, do not apply here. The question here is not one of guilt or innocence, but whether a certain contract is valid or void. “ Two consequences attach to a usurious oontract. One is the avoidance of the agreement, the other is the penalty fixed by law.” 3 Pars, on Con. 122. Only the former of these consequences is involved in this case.
    
      Charles Dunn, with S. TJ. Pinn&y, of counsel, for respondent, to the point that this court would not review the finding of the jury,
    cited Knowlton v. Culver, 1 Chand. 214; 10 Wis. 86, 426. Nothing to the contrary appearing on the record it must be presumed that the agreement was not usurious, but valid under the laws of Illinois. The laws of a foreign state on this subject will not be presumed to be like our own. Story on Conflict of Laws, 93; Connor v. Bellamont, 2 Atk. 382; Hos-
      
      ford v. Niohóls, 1 Paige, 220; Pomeroy v. Ainsworth, 22 Barb. .118; Oity Savings Bank v. Bidwell, 29 id. 325; St. John v. American life Ins. Go., 2 Duer, 419; Garr v. Davis, 2 Seld. 224; Greenwade v. Greenwade, 3 Dana, 495; Thompson v. Keicham, 8 Johns. 189; Blydenburgh on Usury, 110.
   Cole, J.

Whether the defendant Augustine was bound by the note sued on, depended upon the question whether the plaintiff had notice, at the time it was given, of the previous dissolution of the partnership of McKenzie, Augustine & Co., or had knowledge of facts from which he ought to have inferred a dissolution. This was a question of fact, fairly submitted to the jury upon the evidence. To our minds, the preponderance of testimony is in favor of the supposition that the plaintiff knew, when he took the new note, that the firm was dissolved. But he testified that he had no notice thereof, and the jury seem to have credited this statement in opposition to the clear weight of evidence. We cannot, however, set the verdict aside because the jury arrived at a conclusion quite different from what we should have' done upon that question.

The only remaining point arises upon the defense of usury. The note was given in the state of Illinois, and is to be governed by the laws of that state in respect to usury. According to the testimony of Mr. McKenzie, there was a written agreement to pay interest at the rate of fifteen per cent per annum, although the note upon its face bears interest at only ten per cent. A contract to pay interest at the rate of fifteen per cent, for a loan of money or a forbearance of a debt previously existing, would have been usurious by the laws of this state when the note was given. Now, although in the amended answer of Augustine it is alleged, that the note and contract sued upon were void for usury, yet there is no allegation that the contract was usurious by the law of Illinois; nor was there any proof given on the trial as to what the laws of Illinois were upon tbe subject of usui'y. In tbis state of tbe pleading and proof, tbe question arises, wbetber tbe defense of usury is available. On tbe part of tbe defendant Augustme, it is contended that it is — that since tbe contract is usurious by'tbe laws of tbis state, in tbe absence of all proof to tbe contrary, we must presume tbat tbe law of Illinois is tbe same as our own upon tbe subject of usury. But the law seems to be settled tbe other way' — tbat a defendant seeking to avail himself of tbe defense of usury to a foreign contract is bound to set up in bis answer tbe foreign law which renders the contract void, and sustain tbe allegation by proof on tbe trial; and tbat no presumption will be indulged in bis favor. Cutler v. Wright, 22 N. Y. 472; Brackenridge v. Baxton, 5 Ind. 501; Wilson v. Clark, 11 id. 385; Davis v. Rogers, 14 id. 424; Thatcher v. Morris, 11 N. Y. 437; and Jewell v. Wright, 30 id. 259. In many cases tbe courts will presume tbat tbe laws of a foreign state, nothing being shown to tbe contrary, correspond with their own (Rape v. Heaton, 9 Wis. 341; Walsh v. Dart, 12 id. 635); but tbis presumption is not indulged in when tbe foreign law imposes a penalty or works a forfeiture, as in tbe case of usury. Our statute of usury is highly penal. It forfeits tbe entire debt, and did when tbe note sued upon was given. We are not, therefore, to assume tbat tbe law of Illinois corresponds with our own, and visits tbe transaction with the same penal consequences. On tbe contrary, if tbe defendant intended to avail himself of the defense of usury, be should have alleged in bis answer tbat tbe contract was usurious by tbe laws of Illinois, and should have sustained tbis averment by proof on tbe trial. As the case now stands, we must assume tbat the agreement to pay interest at tbe rate of fifteen per cent, was unobjectionable by tbe law of tbat state.

Tbis disposes of all tbe material questions in the case.

By the Court. — Tbe judgment of tbe circuit court is affirmed.