Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1869-07-21
SUPREME COURT.
Condensed Decisions, Reported for
the Memphis Appeal by H.
Clay King, Esq.

the Memphis Appeal by H.
Clay King, Esq.
No. ~. John Overton VS.. w. F.
Hardin. From Memphis Law Court.
Ellet, special Judge, delivered the
opinion of the Court.
Hardin sued OvertOn as endOrser of
a note made by w. A. Blythe, paya-
BILE to and endorsed by OvertOn, dated
June l, 1860, for s149O, payable twelve
months after date. On the trial it was
proved that the note endorsed was
sold by the maker to Hardin in the
latter part of March, 1861, before ma
turity, for twenty-five bales of cotton,
which were sold by Blythe at the same
time for $771; and that Hardin, the
plaintiff, was a professional note shaw
er. OvertOn was of large fortune, and
first rate credit, and the note could
have been readily discounted in bank
at the usual banking rates. One
Johnson held the note of Blythe for
$685., due in 1858, on which Overton
and three others were sureties. About
June, 1860, Blythe proposed to take it
up by giving johnson four new notes,
each endorsed by one of the sureties.
Blythe sent the notes, on n of which
OvertOn was endorser, but Johnson
declined to take them. Two letters of
Blythe's were read in evidence. The
first, dated June IL, 1860, explained
the arrangement, and enclosed one of
the new notes to OvertOn. The
other letter was dated August
20, 1860, returned this note to OvertOn
and enclosed another for him to en-
dorse, saying that Johnson requests
that the notes be endorsed instead of
being signed by the sureties on their
face. and that the time of maturity is
changed from six to twelve months,
interest added for the additional six
months. The note returned to Over
ton was dated June l, 1860, for s1430,
payable six months after date, signed
by Blythe & OvertOn, payable to
Johnson. Blythe died in February,
1868, and the defendant offered to
prove that after he sold the note to
plaintiff, and before It's maturity,
Blythe declared to a witness that
OvertOn was accommodation endOrser
for him on the note in question, that
the note was made to enable him to
take up the Johnson note, and that he
had no right to use it for any other
purpose, but that he had misapplied
it, and let Hardin have it. Their evil
dence was objected to and excluded by
the Court, Possession by the maker
of an endorsed note is presumptive
evidence that it was endorsed for his
accommodation. Edwards on Bills,
BIZ, 31S and notes; Brown vs.. TabeF,
| : Won zee. Eru-fn ~ Shnfar = Ohio
43.
1t is equally clear that an accom-
mediation note is invalid in the
hands of the person for whose
benefit it was made; and that
if it be sold or discounted by him at a
greater loss than legal interest, such
transaction is usuriOus and unlawful.
Edwards on Bills, 352, 372; Chit. on
Con-, GIL; 3 Pars. on Con, 14j; ,
Yer, 464; , Hum, 102, SO; 4 Hum,
pa; 7 Hum, $50; 10 John, %; 3
Camp, l1S,
Then, when Hardin purchased the
note, he not only had notice that
! OvertOn was accommodation endOr5eF,
but he actually purchased it for an
unlawful and usurious consideration.
The most hackneyed device to cOn-
I ceal the nature of a uSuriOus tranSac-
I ton is to give it the form of a sale of
property, which the borrower takes
at an GYQrbitant price. The simulta-
peous sale Of the cotton received by
Blythe from Hardin at a price but lit
tie exceeding One-half OF the face CT
the note, leaves no doubt a. to the
character of the transaction. In this
view of the case alone it is difficult to
see how the plaintiff could have re-
covered more than the value of the
cotton with interest. But the pur-
chase of a note under the circumstan-
ces, is not a purchase in due course Of
trade, and cannot invest the plaintiff
with the rights of a bona tide holder,
but he takes it subject to all the equi-
ties existing against if.
The proof Shows the note vas made
for a specific purpose, viz: In taking
up the large note held by Johnson,
and that it was fraUdulently misap-
| prOpriated by Blythe when he sold it
| to Hardin. This constitutes a full
and complete defense to the action.
As to the declarations of Blythe
made to Waddell after the sale and
delivery of the note to Hardin:
II oCClAAo ~ DC Wei SClllCu llldl lllt
declarations of a party having cOmpe-
tent knowledge of the facts, and at
variance with his own interest, are
admissible after the death of the de-
cisrant as original evidence, without
reference re TIE time when they were
made, or to the question Ehether the
party, if alive, would be 4 competent
witness, Such declarations are adj
mitted on the ground Of their intrih-
sic credibllity, and the extreme i'm
probability that a party under such
circumstances would state anything
but the truth. lGreenl. Ev. secs. 147,
149, 152, 153.
blythe was interested against Over
ton as TO the casts Sf suit, on the rule
that an accommodation endorseT rsv
recover from the maker the costs in
Cured in resisting in good faIth-R re-
Coyery against him on his endorse
meDt. lP9Fs on Con. 80; Sedgwick
on Dam. 295, 1856.
,1-YSo avf ra.rorsaI ond moan ,z-~I