Case Name: P. Coulon against Green and Lovett
Court: New York Supreme Court of Judicature
Jurisdiction: New York
Decision Date: 1804-08
Citations: 2 Cai. 153
Docket Number: 
Parties: P. Coulon against Green and Lovett.
Judges: 
Reporter: Caines' Reports
Volume: 2
Pages: 153–154

Head Matter:
P. Coulon against Green and Lovett.
If the agent of an insured give his own note with an endorser for the amount of the premium on a policy, and the assured pay to the agent the amount, deducting one per cent, per month for the time it has to run, and after this assign the policy, the assignee, after settling a total los3 witli the insurer, and paying the amount of the note thereout, cannot maintain an action on the money counts against the endorser, nor is the note impeachable on the score of usury. ,
This was an action of assumpsit on tbe usual money counts.
A verdict was taken for the plaintiff, subject to the opinion of the court, on the following facts:
Joseph Coulon, being owner of goods shipped on board the ship Little Martha, on a voyage from Charleston to St. Sebastini, made application to Ealph B. Forbes, his agent at New York, to effect insurance thereon. The terms being agreed on, Joseph Coulon, without the knowledge of tbe defendants, paid to Forbes the amount of the premium, deducting therefrom at the rate of one per cent, per month for the time of credit given by the insurer for the premium, and the insurance was accordingly effected by Forbes, who instead of paying the premium in cash, gave bis note for .the amount, dated 6th October, 1800, payable nine months after date, and endorsed by the defendants in these words: “ Pay the Manhattan Company for the Columbian Insurance Company.” This endorsement was made for the accommodation of Forbes gratuitously, and with a kno wl edge in the defendants of the use intended to be made of the note, in securing the premium, and also without any Knowledge on the part of the plaintiff. The policy wás afterwards assigned by Joseph Coulon to the plaintiff. A loss of the goods insured happened, but the payment of it being contested, a suit was instituted, pending which the note became payable, was protested for non-payment, and due notice given to the defendants. Forbes was discharged under the bankrupt law.
The policy contained the usual clause, that in ease of loss, the amount of the note for the premium, if unpaid; should be first deducted. The insurer agreed to pay the loss, but retained the amount of the premium, and paid *to the plaintiff the balance. The attorney for the plaintiff then gave the insurers a receipt in these words: “ Received, 1st April, 1802, of the Columbian Insurance Company, 19,600 dollars, in full, for a total loss on 20,000 dollars, cargo, &c., and I consent that the policy be cancelled.” The note given for the premium was then delivered by the insurers to the plaintiff, with this receipt: li Received of the plaintiff, assignee of Joseph Coulon, being deducted from loss of cargo,” &c.
The insurers refusing to endorse the note to the plaintiff, the suit was brought to recover of the defendants the amount of the note.
To create usury, there must be a loan and forbearance. The per cent-age taken in the text was not for forbearing, but for making an anticipated payment. Therefore, taking fifteen percent, for paying an acceptance before due, is not usury. Barclay v. Walmsley, 4 East, 55.
Three things are necessary to create usury: a loan, taking more than lawful interest, a corrupt agreement Barth of Utica v Wager, 2 Cow. 712; Bank of Utica v. Smalley, 2 Cow. 770. See the eases as to what constitute» usury in New York Digest, vol. 4, p. 1333, et seq.

Opinion:
Kent, Ch. J.
delivered the opinion of the court. The plaintiff sues on the ground of being assignee of Joseph Coulon's policy, and we are therefore to consider the case as if Joseph Coulon was the plaintiff. If Joseph Coulon had made no payment to Forbes, there would then be no difficulty in the case, as the deduction made to the company of tjie premium, would have been what Joseph Cou*. fon was bound to do, for the premium was his proper debt. jj^"e do not think that the payment of Joseph Coulon to jforbes ought to alter the case, it being without the privity o;r knowledge of the defendants. All that the defendants intended to respond for, and all that in equity they ought tp be answerable for, was the premium due the insurers ; and they, knowing the object of the note, were presumed tp know that in case of loss, the fund coming to Joseph Coulon would, in the first instance, be liable for that pre? mium. Here was with them a fair calculation of eventual safety in one event, and, under that calculation, they endorse to accommodate the agent of Joseph. -They ought not, then, in justice, to be put in a worse situation by an arrangement between Forbes and Coulon, to which they were strangers. As, therefore, the suit is not upon the pote, in which as endorsers they might have been held to strict legal obligation by their endorsement, and in which the technical rules of law; would have prevailed, but as they are sued in a form of action in which the broad equity of the transaction is unfolded, we are of opinion they ought not to be liable.. "We put out of view the payment of Joseph Coulon to Forbes, and consider the dectaction *of the premium as a payment by Forbes of bis proper debt, and which was a just satisfaction of the note.
Postea to the defendants.
See Ely v. Hallett, p. 58, note, and cases cited; and see N. T, Dig. val 3, p. 141.