Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1867-06-12
CONDENSED DECISIONS
SUPREME COURT OF TENNESSEE.
JACKSON: JUNE TERN, 1867.
REPORTED FOR TIE APPEAL
BY H. CLAY KING, Esq.


No. Is -Brinkley Ys. Read. From Memphis
Chancery.
A. Street drew his bill Of exchange for
$500 on the bank OF the Republic, New
| York, payable twelve months after date
to the order of DogOugherty, and by him
and Brinkley indorsed for the accom-
mediation Of Street. Read, a few days
after its date, bought the bill from Street
for 1850. The bill not being paid at
maturity, Read sued on il in the Shelby
eireuit court, and recovered Judgment for
the amount Of the bill thereupOn this
bill was filed 10 enioin the judgment at
law, alleging that BTinkiey and Borough
erty were only accommodation iudorsers
for Street; that the bill was indorsed to
enable him to raise money, but at the
legal rate Of interest only; that the bill
was, in violation Of the understandings sold
to Read at therate Of two aud a half per
cent. per month discount; that said pur-
chase by Read was Illegal, ususurious
and void; that the indOrsers had ne
knowledge of the iIlegality Of the pur-
chase when the judgment at law was
rendered and were thereby prevented
from making the defenses. Read an
swered admitting the discount, and the
fact that he knew Brinkley and Borough
erty were accommodation indorsers, but
denying any knowledge of any agree
ment or equities between the parties to
the bill Of exchange. l. The defendant
Read having waived the benefit Of q
demurrer and elected to answer under
section 1921, code, a court Of chsncery is l
compelled to take jurisdiction, and to de-
ta~mins between theparties on the merits. /
2 Was the transaction Illegal and
void for usury The object Of the bill and
the Endorsements was to enable the !
drawer to raise money. If the usury /
complained Of had been included in the 1
bill itself, the holder could recover the /
amount actually loaned with the legal I
interest, and only the excess could be /
avoided under section 1880, code. This |
case does not fall within the prin- /
eiple Of Whitm0re vs.. Bradley, 3 1
Head, 723 There a note was made and I
discounted in one of the free banks Of /
the state at q greater rate than six per I
cent, in violation Of q positive statute |
declaring all such transactions to be I
void. But that statute is distinct /
from and independent Of the general |
laws regulating interest and usury. /
8. When the bill was made and indorsed |
to be discounted at the legal rates,
was the discOunting It to Read at greater |
rate, a fraud upon the rights Of the in 1
dorsers from which they can be heard in /
equity? Read being no party to the eOp- |
tract as to the rate of discount, and having 4
no notice thereof, and being purchaserfOr /
value, be. cannot be affected by the con- |
tract between the drawer and indOrsers. /
The case in 6 Duer's n. Y. Reports, 275, /
has no application to this class of cases.
1t applies where the party who loans the /
money and the principal and surety are
parties to the contract by which the
money is advanced. Any departure,
in that case, from the contract
without the assent of the surety
would be in violation of his rights, and
would be regarded as fraud upon him,
which would operate as his discharge.
This case is entirely different. Read was
no party to the agreement; and this case
falls within the principle laid down 10
Kimkro IS. Lytle, 10 YeFger, All, where
it Is held that where an Endorsement in
blank is left with A. generally and with
out restriction, il is an assent by the in
dorser that A. may pledge it as a security
for an existing liability or he may-seu
it, or use it in any lawful way for his ac-
or credit. I. Read having
knowledge that the bill was made to raise
money, and that the indorsers were such
for accommodation, his purchase Of the
bill will be held and treated as a loan to
the extent Of the money he actually paid
for the bill-CamPbeIl Us. Cox, Z Hum.s (
$50. 5. The drawee, the Bank Of the
Republic, being q non resident, sEd the
bill being payable cut Of this state, this
case is different from Cox vs. Bank Of
Tennessee, 3 Sueed, and is a foreign
bill, upon which three per cent. dam
ages are allowed. 5. The contract Of in
dorsement being made in this state, and
the contract Of Endorsement being en-
drely distinct from the contract Of the
aecepter Of the bill, the Tennessee rate
Of interest is allowed snd not the New
York rate. The oeGree Ggetnst the in
d0rsers viii be for the amount Reed paid
for the bill, with three per cent. damage,
and six per cent. interest thereon.