Case Name: Richards and others vs. The Globe Bank
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1860-06
Citations: 12 Wis. 692
Docket Number: 
Parties: Richards and others vs. The Globe Bank.
Judges: 
Reporter: Wisconsin Reports
Volume: 12
Pages: 692–698

Head Matter:
June Term, 1860.
Richards and others vs. The Globe Bank.
A judgment was entered upon a note, under a warrant of attorney, which was a separate instrument, but upon the same sheet of paper as the note, and described the note correctly, except that it referred to the same as bearing even date with the warrant, while the warrant itself (which was filled up from a printed blank), was without a, date: Held, that the judgment ought not to be vacated on the ground that the warrant did not sufficiently identify said note as the one on which judgment was authorized to be entered, it appearing that said note was the one intended to be described in the warrant.
A note made in this state, payable in New York, with interest at a rate allowed by the laws of this state, but not by those of New York, is not usurious, when the contract is made in good faith and not for the purpose of avoiding the usury laws.
Where a note made in this state by residents thereof, payable in New York, with interest at 10 per cent., was negotiated for money to be used in this state, and was purchased by a bank in this state, and sold by it in New York, and A, one of the makers of said note, when it was about maturing, made an arrangement in New York, with the president of said bank, (both being temporarily in that city), in pursuance of which the other makers of said note executed in this state, to said bank, a new note for the same amount, with interest at the same rate, payable also in New York, and the bank thereupon forwarded said new note to New York to be signed by A, (who accordingly signed it in that city), and also forwarded its draft on New York to take up the old note, charging the makers of said note the current rate of exchange on said draft: Held, that the new note thus given was governed by the law of this state, and was not usurious because it provided for the payment of a higher rate of interest than was allowed by the law of New York.
Held, also, that inasmuch as said bank had ceased to be the owner of the first note, its charge of exchange upon the draft which was used to take up the same, did not render the transaction usurious.
APPEAL from tbe Circuit Court for Milwaukee County.
This was an action by Richards, Smith, Garret Vliet, Jasper Vliet, to vacate a judgment entered against them the circuit court for Milwaukee county, on the 10th of Octo-her, 1857, in favor of the Globe Bank. The following is the statement of the facts, as found by the judge of the circuit court: “ First. The judgment complained of was for $5,000 and costs, and was entered upon a warrant of attorney to confess judgment. The note for the amount of which it was entered, is dated on the 7th of August, 1857, at Milwaukee, Wis., where it was actually executed’ by Richards and the two Vliets. It was delivered to the defendant at Milwaukee, Wis., by one Mason, the agent of the plaintiffs, executed as aforesaid, and then forwarded to New York (where it was made payable at the office of Wm. J. Bell & Co.) for the signature of Smith. . The warrant of attorney which accompanied said note, was executed and delivered in precisely the same manner, and contains a correct description of said note — referring, however, to it as being of even date therewith, when its date is left blank, the same never having been filled up. They are both on the same piece of paper, but in different instruments, and are mostly printed blanks, the note for which judgment was confessed being the one intended to be described in the said warrant of attorney.
Second. The pleadings and testimony, I think, establish the following facts as to the origin of this note: The plaintiffs were the directors of the Milwaukee & Horicon Bailroad Company, a Wisconsin corporation, operating a railroad extending from Milwaukee into the interior of the state. The plaintiff Smith was the president. The defendant is a banking institution, organized under the banking law of this state, and having its place of business in this city. On the 10th day of June, 1857, the plaintiffs made their promissory note for the same amount as the one in question, payable at the same place, to the order of said Smith, in sixty days. They negotiated it to one Clark, who sold it to one Asahel Finch, and from him the defendant purchased it. The bank sold it to W. J. Bell & Co., of New York, and at the time it was a^011^ rnatur^n& Bell & ^0- Bad pledged, it as collateral in some bank in that city.
When the note was about falling due, Smith, and Pinch who was president of the bank, entered into an arrangement in the city of New York, where they both were at the time, by which the defendant was to take up the note, and the plaintiffs were to execute a new note for the same amount, and payable at the same place, together with a warrant of attorney to confess judgment thereon in case of non-payment This was actually carried out, when Pinch returned to Milwaukee shortly afterwards, by giving the note and warrant of attorney upon which the judgment complained of has been confessed. The bank discounted the new note as follows: Both note and warrant of attorney were delivered to defendant by said Mason, as the agent of the plaintiffs, at Milwaukee. They were executed when so delivered, by Richards and the two Vliets. The defendant then forwarded it to "Win. J. Bell, New York City, for the signature of Smith, together with a draft with which to take up the old note. The draft was then applied to the payment of the old note, which was can-celled and delivered to Smith, who, at the same time, signed the new one. The bank required and took current exchange on New York upon the draft, besides interest on the note at the rate of 10 per cent, per annum. That rate is allowed by the law of "Wisconsin, in favor of banks, while the rate of interest in New York is 7 per cent, per annum, and contracts for a higher rate are declared to be void.
Third. The money raised upon these notes by the plaintiff's was for the use of the Horicon Eailroad Company, and was actually used by that company about its business in "Wisconsin. All the plaintiffs were citizens and residents of this state, where they were all domiciled at the time of these transactions, and the same is the case with Mason and Pinch. Smith, at the time, had been several months in New York engaged in the business of the Horicon Eailroad Company, but had not lost his residence here. As soon as Smith had executed the note, it was returned to the bank.
Fourth. I think the letters and monthly statements of "Wm. J. Bell & Co. to the bank, taken in connection with the books of tke bank, and the testimony of Mr. Eincb, show tbat neither the bank nor Finch owned the first note, they had really disposed of it. The bank had therefore a legal right to receive exchange upon the draft. The note was beyond their control, and they could not renew it. They could only procure it by paying it, which they did with the draft.”
Upon these facts, the court found, as conclusions of law: 1. That the warrant of attorney was valid, notwithstanding the omission of the date thereof, and that the note on which judgment had been confessed, was sufficiently identified as the one therein described. 2. That a contract made bona fide in Wisconsin, but to be performed in New York, and stipulating for a rate of interest allowed by the law of this state, but not by that of New York, “is not usurious here or elsewhere, and ought to be enforced solely with reference to our law as to usury;” “that the laws of this state were the only 'laws to which reference was had” in the making of the note in question, “and are now the only laws which can apply;” and that the note was, therefore, not usurious. To these conclusions of law the plaintiffs excepted.
Judgment for the defendant.
S. Parle Goon and H. F. Prentiss, for appellants :
1. The note was usurious and void by the law of New York. Story on Conflict of Laws, §§ 298 et seq.; Smith vs. Smith, 2 John., 235; Thompson vs. Vuichan, id., 255 ; Hieles vs. Brownj 12 id., 142; Ludlow vs. Van Rensselaer, 1 id., 94; Jades vs. Nichols, 5 Barb., 38; Hyde vs. Goodnow, 3 Corns., 266; Commonwealth vs. Bassford, 6 Hill, 575 ; 3 Wheat, 184; 13 Peters, 65. 2. The warrant of attorney was void for uncertainty. Man. Bank vs. St. John, 5 Hill, 497; Gee vs. Lane, 15 East, 592; Billey vs. Van Wie, 6 Wis., 212. 3. The contract is one which the bank had no corporate power to make. Bank of Ohilicothe vs. Swayne, 8 Ohio, 257, and cases there cited.
Finches, Lynde & Miller, and 0. H. Waldo, for respondent.
1. The warrant of attorney was sufficient to authorize the entry of the judgment. Lee vs. Mass. Fire Lns. Go., 6 Mass., 208; Harrison vs. Trustees of Phillips Academy, 12 id., 456; -^a^y vs• 4 Eng. (Ark), 428 ; 6 Wis., 80. 2. The law of Wisconsin must govern the contract in determining the question of usury. Depau vs. Humphreys, 20 Martin (8 N. S.), 1; Ohapman vs. Robertson, 6 Paige, 627, 634; Peck vs. Mayo, 14 Yt., 33; Atwater vs. Rcelofson, 4 Am. Law Reg., 549; 2 Parsons on Oont, 94; Fisher vs. Otis, 3 Chand., 101-2; Harvey vs. Archbold, 21 E. 0. L., 412; Fitch vs. Re-mer — opinion by Judge McLean in U. S. circuit court, not yet published.
November 19.

Opinion:
By the Court,
Cole, J.
We fully concur in the views expressed by the circuit court upon the evidence in this case, and as to what facts are established by it. We also think the conclusions of law drawn from these facts are correct and sound legal propositions. The objection taken to the warrant of attorney, that it was not such an instrument as is contemplated by the statute to authorize an entry of judgment upon, appears to us entirely untenable. The warrant of attorney recites: " That whereas the subscribers are justly indebted to the Globe Bank, upon a certain promissory note, bearing even date herewith, payable sixty days after date thereof, to said bank or order, at the office of Wm. J. Bell & Co., in New York, the sum of five thousand dollars, with interest after due at the rate of ten per cent, per annum until paid. Now therefore," &c., making and appointing, in the usual manner, an attorney to appear and confess judgment in favor of the bank or its assigns, upon the note. Now the particular defect ascribed to this warrant of attorney is, that it describes the note upon which judgment was to be entered, as one "bearing even date herewith," while, in fact, the warrant of attorney was not dated at all. It appears that the warrant of attorney was a printed blank, and, undoubtedly through inadvertence, the date was not filled in when the instrument was executed. The warrant of attorney and the note were ujeon the same piece of paper, though in different instruments, and were mostly printed blanks. The note was properly dated, and there could be no doubt in respect to the note intended to accompany the warrant of attorney, and upon which the judgment was to be entered. And although the date was thus omitted from the warrant of attorney, we do not think we should be authorized in ing it void for that reason. Our statute requires that the authority for confessing a judgment shall be in some proper instrument distinct from that containing the bond or contract, and we can but think that the authority in this case was a sufficient warrant of attorney in all respects. Sec. 13, chap. 102, R. S., 1849.
Neither clo we think there is any ground for saying there was usury in the note in question. The note was dated at Milwaukee, and made payable in New York city, with interest after due at the rate of ten per cent, per annum. The makers of the note were directors of the Milwaukee & Hori-con R. R. Co., a corporation of this state, and were citizens of this state, and executed the note here, except Smith, who executed the same in New York city, being temporarily absent there on business of the company. The railroad, for whose use and benefit the loan was made, was a corporation organized under the laws of Wisconsin, having its principal office in Milwaukee, and operating its road here. The money was obtained of the bank in Milwaukee, also a corporation of this state, and, although the note was made payable in New York, at a rate of interest exceeding the legal rate of that state, still it was no more than the bank was authorized to contract for by the laws of this state, and hence would repel all presumption that the parties resorted 'to this expedient to avoid our laws upon usury. Had the note been made payable in Wisconsin, or generally, there would have been no ground for saying that it was usurious. It would have been a valid contract, and one which the courts of this state would have enforced. The interest agreed to be paid was the legal and ordinary rate charged by our banks on discounting paper and making loans. Why then should not the contract be governed by the laws of this state, instead of the usury laws of New York ? Is there any reason for saying that the parties contracted with reference to the laws of another state, and not this? We can see none. Does the circumstance that the note was made payable in New York, render it a New York contract, to be governed by the laws of that state in respect to usury ? Upon this point, the authorities cited by the counsel for the respondent, are too clear and emphatic to leave room for doubt. They certainly establish the proposition, that if the rate of interest be specified in the contract, and it be according to the law of the place where the contract was made, though that rate be higher than is lawful by the law of the place where payment is to be made, still the contract will be valid and binding. Depau vs. Humphreys, 4 Cond. La. R., 403; Chapman vs. Robertson, 6 Paige, 627; Pratt vs. Adams, 7 id., 615; 2 Kent's Com., p. 460; Pecks vs. Mayo, 14 Vt., 33; Fisher vs. Otis, 3 Chandler, 83; Atwater vs. Roelofson, 4 American Law Reg., 550. See also a recent opinion of this court, Newman vs. Kershaw, where this question is quite fully discussed. " The general doctrine is," saj's Chancellor Kent, "that the law of the place where the contract is made, is to determine the rate of interest where the contract specifically gives interest; and this will be the case though the loan be secured by a mortgage on land in another state, unless there be circumstances to show that the parties had in view the laws of the latter place in respect to interest." The rule thus laid down is adopted in Newman vs. Kershaw. We therefore think that under the facts of this case, the contract must be considered as a contract of this state, and that our laws are to control its validity in respect to the interest, though made payable in New York, where the rate of interest is less.
It follows, from these views, that the judgment of the circuit court, dismissing the appellants' complaint, must be affirmed.