Case Name: GUMP VS. HAMAKER
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1883-05-21
Citations: 4 Walk. 157
Docket Number: No. 6
Parties: GUMP VS. HAMAKER.
Judges: 
Reporter: Reports of cases decided by the supreme court of pennsylvania which have been omitted from the regular reports
Volume: 4
Pages: 157–160

Head Matter:
GUMP VS. HAMAKER.
Where a party gives an obligation m payment of usury agreed to be-paid by another, he cannot defend on the ground of usury.
Error to Common Pleas of Bedford County. No. 6, July Term, 1883.
Duncan McVicker held two judgments against Geo. W. Gump amounting to $3,563.55, and threatened to issue execution thereon. Defendant promised to pay him four per cent, additional if he would not do so. McVicker agreed to this,, and G. W. Gump executed a judgment note to McVicker for $142.54. - On February 20, 1874, McVicker assigned this n<Ste to Samuel Gump, and took in exchange a judgment note for $142.50 from Samuel and his brother, Simon H. Gump. The original judgments for $3,563.55 were paid afterwards in full, leaving the note for $142.50 upon which judgment had’ been entered, still open. A rule to open this judgment was taken, and the above facts agreed upon for the Court, who discharged the rule in the following opinion:
Per Curiam.
Upon the facts agreed on the Defendants allege that they have made a case to defeat recovery and that therefore the Judg ment should be opened. They maintain that the entire consideration of the note is usurious and therefore the note is void.
The act of 28th of May, '58, P Laws 622, relating to the Rate of Interest in Excess of the Legal Rate, provides “that it shall be unlawful for the borrower or debtor at his option to retain and deduct such excess from the amount of any such debt, &c. * * * *”
It seems plain enough that if G. W. Gump had paid the note he gave for usery he could have retained so much out of the Judgments which McVicker held against him when he came to satisfy them.
But Gump having made an assignment for the benefit of creditors, his assignee, after a distribution of the proceeds of sale of real estate, and in accordance with an Auditor’s report, paid these Judgments.
Then already the note given by G. W. Gump to McVicker had been assigned to S. S. Gump, who in discharge of it to Mc-Vicker gave his individual note for the same, with his brother, S. H. Gump, as bail, and then, already credit could have been claimed.
But this was not done. Gump did not elect to enforce the right he had under the statute, and the Judgments were in 1876 paid.
Can these Defendants now make defence to this note in suit ? We are of the opinion if G. W. Gump were party to it they clearly could.
But the note in suit is a clear substitute of a new, in the place of the old or original note of G. W. Gump. On sufficient consideration, in this, that it brought in a new security and withdrew the old debtor by consent of the creditor (Plaintiff) and the parties to the old as well as the new note.
They, the Defendants, gave their note and lifted the note of G. W. Gump, which they still hold against Gump.
This in our opinion was a novation.
It is urged on the one hand that any security given in payment or discharge of an usurious security is void, and that the taint attaches to all the securities growing out of the original transaction and that none, however remote, can be free if the decent be traced.
Campbell vs. Sloan, 12 S. 481.
This is undoubtedly the law.
But on the other hand it is maintained that the rule that the vicious element in an usurious contract survives in all its transactions, applies only to cases in which the obligator or promisor remains the same. Bank vs. Hottenstein, 8 Norris 328.
In this case the Plaintiff surrendered the note — by transfer to one of the Defendants, and in extinguishment of it he took a new note from the Defendants, to which G. W. Gump is not a party. This new note to McVicker was not a mere security for the former note — he no longer held the original — and the vicious element did not survive and enter into this new note, for G. W. Gump is no party to it.
We see nothing in the case arising from the transfer of the note to warrant us in opening the judgment on the ground of failure of consideration in the note assigned. It was taken with notice — and the note at most' was voidable and not void, at the election of the maker.
Upon the whole case we see nothing to be gained by a trial by jury and hence discharge the rule.
John Cessna, Esq., for plaintiff in error,
cited Campbell vs. Sloan, 62 Pa. 481; Dunnings vs. Merrill, 1 Clarke C. R. 252; Lucas vs. Bank, 78 Pa. 228; Miller vs. Irwin, 85 Pa. 376; Parker vs. Sulouff, 94 Pa. 527; Overholt vs. Bank, 82 Pa. 490; Cake vs. Bank, 86 Pa. 303; Walter vs. Breisch, 86 Pa. 457; Greene vs. Tyler, 39 Pa. 361; Bachdell’s Appeal, 56 Pa. 386.
John P. Reed, Esq., contra,
relied on Macungie Savings Bank vs. Hottenstein, 89 Pa. 328; Bly vs. Bank, 79 Pa. 453; Appeal of Bank of Titusville, 85 Pa. 528.

Opinion:
The Supreme Court affirmed the judgment of the Common Pleas on May 21, 1883, in the following opinion:
Per Curiam.
This complaint is to the action of the Court in refusing to-open a judgment entered by confession on warrant of attorney. These plaintiffs in error did not give the note on which this judgment was entered on any agreement between them and the payee for usurious interest. One George Gump had given to the payee a note founded on a usurious consideration; but he never repudiated it, or sought to recover the amount thereof within six months after that note was paid. The note now in question was given by other parties, and was clearly a novation. The original note was not void; but only voidable at the will of the maker. As he did not elect to avoid it, he recognized his moral obligation to pay it. It was therefore a sufficient consideration to support the express obligation of the plaintiffs in-error to pay the note which they gave for the amount thereof. The learned judge was correct in refusing to open the judgment for the cause shown. If, however, he had erred, his action therein could not be reviewed on this writ of error. The only remedy under the Act of 4th of April, 1877, P. Laws 53, is by, an Appeal as in Equity.
Writ of error quashed.