tiff's agent of the opinion that the legal effect of the .utlW agreement would be to release the sureties on the bond, did not (especially if ri,ot acted upon by the sureties so as to change their legal rights) amount to a release. There was, therefore, no evidence upon which a verdict for the defendf!.nts could have been sustained. In such a case an instruction to the jury to find for the plaintiff is proper. Pleasant v. Faut,22 Wall. 116. The motion for a new trial is overruled. KREKEL, D. J., concurs.
VARY.< v. NORTON and others.
(Circuit (Jourt, W. D. Michigan, 8. D. January 15,1881.
PROMISSORY NOTE-PRINCIPAL AND SURETY.
Where A., B., and C. are joint and several makers of a promissory note, and after its execution and delivery A. agrees with B. ann C. to pay the note, the relation of principal and surety arises between the parties.
Parol evidence of such agreement' is admissible, and does not tend to contradict the written contract, but shows the changed relation between the makers.
TIME OF PAYMENT. If the holder, with notice of such agreement, for a valuable con-
sideration, extend the time of payment of the note for a definite period, the sureties, B. and C., are thereby discharged.
SAME-SAME-SAME-PAYMENT OF USURIOUS CoNSIDERATION.
The payment of a certain sum of money for the extension of time, though regarded as a payment of usurious interest, constitutes a valuable consideration under the statute of Michigan.
Assumpsit. Trial before the Court. Simonds d; Fletcher, for plaintiff. G. Ohase Godwin, for defendants Norton and Lee. R. W. Butterfield and J. W. Ohamplin, for defendant King. WITHEY, D. J. The suit is upon a promissory note. Defendants Norton, Lee, and King defend. Judgment by default against all the other defendants. King pleads sepa·
VARY V. NORTON.
rately that the consideration of the note is in part usurious j that payments of interest have been usurious, and that he is the surety of Norton, and has been discharged from liability by the time of payment having been extended by plaintiff without his knowledge or consent. Norton and Lee join in their defence, which is the same in substance as set up by King. The note was made by all the defendants, at Lowell, in this state, March 27, 1871, by which they jointly and severally promised to pay to William Vary or order, five years after date, $2,000, with interest at the rate of 10 per cent. per annum, payable semi-annually. All the interest that matured prior to September 14, 1873, was paid to the payee j at or soon after which date the note passed to plaintiff, and he, as holder thereof, has since received the interest to March 27, 1876. All payments of interest have been at the rate of 10 per cent. on the face of the note. Defendant Norton has, since this suit was commenced, made two payments-one of $200, June 19th, and the same amount October 8, 1877. The consideration of the note was only $1,790, money loaned to all the defendants, while $210 included in the note was usury, to which extent the consideration fails. Plaintiff is chargeable with notice of all the facts. A computation based upon the actual consideration of the note, with interest at 10 per cent. thereon, less payments made by way of interest, shows that the amount remaining unpaid at the date of this opinion is $1,994.54. On the seventeenth of November, 1873, after the note came into the hands of plaintiff, defendant Norton agreed, for a valuableconsideration, with defendants Lee and King, to pay the note. Of this arrangement the plaintiff had seasonable notice. On the fourth of April, 1876, plaintiff and defendant Norton made an agreement by which Norton paid to plaintiff $460, which met all interest due on the face of the note to that. time, the taxable costs of a suit pending against all the de·· fendants on the note, and an excess of about $15. This lat· ter sum was paid and received as consideration for the agree· ment of plaintiff then made with Norton to extend the time"or the payment of the principal Bum to March 27, 1877,
without the knowledge of defendants Lee and King. Defendant Lee had, on the sixteenth of March, 1876, written to plaintiff a. letter in which he says: "Mr. Norton's prospects are very good, and-just as soon as he can get the money out of his logs he will pay you. I hope you will not make any expense, as it is about impossible to get money here The presumption that Norton was pecuniarily responsible and good for this debt in the spring of 1876 has not been rebutted by proof, but that he became insolvent in 1877 appears.
THE LEGAL QUESTIONS.
The case presents, first, the question whether one or more joint and several makers of a note, all of whom are at the making of the debt principal debtors, can change their relation without consent of the creditor, so as to deprive him of the right he had to treat all of them as principal debtors in any transaction touching the debt. This does not involve the question whether parol evidence is admissible to show that one who signed as a joint and several maker was only a surety for his co-maker. On that question the authorities are far from uniform. They are cited in Parsons on Bills and Notes, (2d Ed.) 233-4. See, also, 64 N. Y. 457; 5 Dillon,140. The relation of principal debtor and surety arose in this case subsequent to the execution and delivery of the note, and after the plaintiff became the holder of it. The evidence which has been introduced does not, therefore, tend to contradict the written contract, but to show the changed relation between the makers Lee and King, and Norton. The question as to the effect produced upon the rights of the parties under such circumstances has arisen most frequently in reference to partnership indebtedness, when one partner retires and the other retains the business and agrees to pay the firm debts. In this state it is held that if a creditor, after bejng informed of the new arrangement between the partners, enters int0 a valid agreement by which the time of payment'is extended without consent of the retiring member,
-the latter is discharged, on the ground that he had become a surety, ahd Wfl,S entitled to the beueflt of a surety's rights. Smith v. Sheldon, 35 Mich. 42. The same view was held in Millerd v. Thurn, 56 N. Y. 402. See cases cited in the opinions. But in Swire v. Redman, Law R. 1 Q. B. 536, it was held quite the other way. By it the previous case of Oakley v. Pasheller, 4 Cl. & Fin. 207, decided in the house of lords, and cited by Judge Cooley in Smith v. Sheldon, and by defendants' counsel in this case, to support the rule that an agreement to forbear discharges such retired partner on the ground that he is a surety, is quite explained away, and denied to be an authority for such view. I have not at hand the case of Oakley v. Pa8heller. It seems to me that when Norton agreed with Lee and King to pay the'note there was created between them the relation of principal debtor and surety, by virtua of which Lee and King became entitled to indemnity from Norton, if pay.. ment should be made by them on account of his default, and that they had the right to pay at any time after the debt matured, and bring suit at once against Norton for indemnity. The relation of principal and surety is fixed by the debtorfl without any action of the creditor. They have a right to arrange such relation between themselves at any time. No change is thereby produced on the contract rights of the creditor; all the makers continue jointly and severally liablE! as when the note was signed. But when the creditor has notice that, by an arrangement between the makers, one or more of them has become entitled to the rights of a surety, he is as much bound, upon principles of justice, to regard those rights, and to do no act to abridge them, as if such makers had originally signed as sureties. In either case the discharge of the surety is always brought about by the act of the creditor, and not by a change of his contract rights under the note. In reference to accommodation makers, indorsers, etc., the law is too well settled to allow of discussion, that a valid agreement by the creditor to extend the day of payment without their consent discharges them. The reason upon which such
rule rests, and its application to sureties to whom no injury has resulted, might not, at this day, bear the test of justice and common sense; but it is a doctrine too long sanctioned to be questioned in the courts. I cannot regard Swire v. Redman as resting upon reasons that ought to control this case. The other question is as to the validity of the agreement to forbear, viz.: whether the payment of usurious interest constitutes a valuable consideration to uphold the agreement of plaintiff to give time. It is claimed that the $15 paid for the ,extension of time was interest for the use of the money represented by the note, and was so much in excess of the highest rate allowed by law. Treating it as a sum paid for it is interest. In Michigan, whenever parties so agree, 10 per cent. is collectible; there is no positive prohipitionagainst taking a higher rate, and a higher rate paid be recovered back from the c.reditor. The statute ,tpat no contract whereby a .greaier rate of interest is1,0.., di,rectly or indirectly re'servE)d I or, received. than is allowed ' , ' . · . b;yJaW, thereby be rendeJ;ed in ana,otiQ,o. t;eHpver,l;lp0o. suqh usurious the; pl!tintiff, subjtlct to exceptions, shall h,ave ju:dgmept for the principftl ltlld exclusiye ,of usury. The courts are nea-rty' in their judgments" that fit .nromise to pay interest will notllphold an agreement to the promise cannot be enforced, though it was held otherwiSe in Wheat v. Kendall, 6 N. H. 504. But when the usurious sum has been paid, ltlarned judges differ whether there is a consideration to uphold the agreement or not. In New York and Vermont the statute declares contracts tainted with usury to be void; and if usury has been paid, it can be recovered back, with a penalty against the taker. In the former state it was held by two judges, without dissent from thE) other two, that payment of usury does not afford a consideration" Vilas v. Jones, 1 N. Y. 274. In Vermont, on the other hand, a united court has repeatedly held the other way. T'urrill v. Boynton, 23 Vt. 142: Burgess v. Dewey, 33 Vt. 618. In South Carolina and Missouri such contracts are not void by statute. and in both it
has been held that usury paid will not uphold an agreement to forbear. Cornwall v. Holly, 5 Richardson, (S. C.) 47; Bank v. Harrison, 57 Mo. 503. Plaintiff's brief also cites 1 J. B. Lee, (Tenn.) 360; 48 Me. 35; 12 Kan. 500. In Wisconsin it was decided, in Meswinkle v. Jung, 30. Wis. 361, that usurious interest paid was not a sufficient consideration; but in a recent case the earlier decision has been overruled. Hamilton v. Prouty, 7 N. W. Rep. 659, 3 Wis. 291. In Kentucky, Indiana, Illinois, and Ohio, the statute, like that of Michigan, does not make the contract void, and:the decisions are uniform that usurious interest paid is a valuable consideration and· upholds the agreement to forbear. Kunningham v. B1'adford, 1 B. Monroe, 325; 8 B. Monroe; 382; Cross v.Wood, 30 Ind. 378;3 1nd.. 346; 15 Ind. 11'5; l1Ind. 202; Whittf,11Wre v. Ellison, 72 IlL 301 ;73 Ill. 170; ·18 In. 257; McCombv. Kitteridge, 14 Ohio, - . See 1 P8li'S.' on . Notes and Bills, (2d Ed.) 240. It is not believed that courts of justice, where the statute declares that usury shall not render a contract void, ought to allow the usurer to plead successfully want of consideration 'to defeat his agreement, when he ha!'l. received and appropriated the money of Chis 'debtor. It' is manifest that the money paid by Norton cannot, under the law of this state, be recovered back by him, and none of the other defendants have any claim upon it. USll!Y is a personal defence, to be interposed by the debtor, or by those who, by reason of interest acquired in the subject.matter, are entitled to employ his defences. 1 Mich. 84; 11 Mich. 59. I agree with opinions in som.e of the cases that he who accepts usury as consideration for his agreement is estopped from claiming want of consideration. It is no offence, and is not wrong per 8e, to take usury, and there is no justice in saying that money, because received as usury, has no legal value. Usury laws are designed as a protection to the debtor class, and not as a shield for the usurer. After Lee and King have pleaded the validity of the agreement to forbea.., their right to have the $15 applied as a payment on the note is
waiyed, if such right ever ensted. But the right exists only when the payment is usury, and I do not see why the $15 may not be regarded as so much paid by way of interest in advance, rather than have the agreement fail for want of consideration, though I have treated the payment as usury, as was claimed and argued on both sides. Lee's letter to plaintiff, expressing a hope that he would "not make any expense," does not appear to have been acted on by plaintiff; but, I infer from facts in the case, he did make expense by suit subsequent to the date of' LEle's letter, which suit was discontinued aftel' the agreement extend the payment However that may be, the letter is not consent to an agreement to extend the day of pa,yment for a year, and does not prevent Lee from insisting on the defence that he is discharged. JudgDlent of no cause o( action will be entered in favor of defendants Lee and King, and in favor of plaintiff, and against all other defendants, for $1,994.64 damages, and for costs of suit, to be taxed.
WILBUR fl. ABBOT.
(atrcuit. O'ourt, D.
HampaAir6, October 12, 1880.
DENT DEFENDAliTS AliD TE1W8 011' CoNTRACT.
In a declaration on a judgment against A. and B., rendered in the fifth district court of the city of New Orleans, a court of general jUrisdiction, it was held: (1) That A. and 13. being residents of New Hampshire when the judgment was rendered, failure of the plainti1f to allege that they were duly served with notice of the suit, or that they appeared and answered thereto, made the declaration demurrable. (2) That failure to set forth, the terms, nature, or date of the contract on which such judgment was founded, or the place of making such judgment, was no ground of demurrer.
Motion to. Amend Declaration. Sawyer et Sawyer, Jr., for S. C. for defendant.
WILBUR V. ABBOT·.
CLARK, D. J. In this case the defendant demurred to the plaintiff's declaration, and assigned several distinct causes therefor, three of which apply to both counts in the declaration and two to the second count. Those which apply to both counts are-First, that it appears that the said Edward A. Abbot, at the time of the rendition of said supposed judgment, was, and ever since has been, a citizen and resident of the state of New Hampshire; 8econd, that it is not alleged, and it does not appear, that the said E. A. Abbot was duly cited to appear and answer to the said supposed suit, nor that any citation, or other legal process, was issued by or from said Fifth district court to the said 'Joseph'S. and Edward A. Abbot, or either of them, to appear and answer to said suppOsed suit, or that any process was served upon either of them, or that either of them did appear personally or by attorney;' and, third, that it is not set forth what are the terms, nature, or, date of the supposed contract upon which the supposed judgment was founded, or the place at which the said supposed COlitract was entered. Those which apply to the second count alone are, in sub· stance,-First,., that the second count contains several distinct causes of action; and, second, that it is so framed that the defendant is unable to take any single and sufficient issue upon it and in answer thereto. These last two causes of demurrer are substantially the same that were allowed upon a former demurrer in this cause.· The declaration has not been since amended in this particular, and as the court has not seen any reason to change' its opinion they must be allowed now. The demurrer must be sustained also, for that there is no allegation in the ration that either Edward A. Abbot or Joseph S. Abbot was served with any proper process,.citation, or notice olthe'suit in whi<lh,the judgment was rendered, or that they appeared or answered thereto. Edward A. Abbot is described SiB. Of, Concord, in the county of Merrimack, and district of New Hampshire. There is no averment that at the time of the rendition of the judgment, and ever since, he has been, Emd
now is, a citizen and a resident of said state of New Hampshire. Joseph S. Abbot is dea.d, and there is no distinct allegation of his residence anywhere, but he is described or alleged to be a partner of Edward, and if any presumption arises it is that he resided where Edward did, to-wit, at Concord. This being so, and there being no allegation of serviOe upon either of the defendants, or of an appearance by either of them, the presumption is that the judgment is a nullity, because the process of the court ca.nnot run beyond its territorial jurisdiction. It is contended that in a. court of general jurisdiction, as the court of the Fifth district of the city of New Orleans is alleged to bl:l, all things are presumed to be rightfully and legally done, and so if a judgment be rendered against a person it is presumed to be upon a proper. notice; and this is so as to all persons within the jurisdiction of the court, when the proceedings are according to the course of the common law. This was expressly decidec! in Galpin v. Page, 18 Wall. 351. But the same case holds that this presumption is limited to the jurisdiction over persons residing within their territorial limits, and over proceedings which are in accordance with the course of the common law. The Abbots residing in New Hampshire when the judgment was rendered, no presumption can arise that they were duly served with notice of the suit in which the judgment was rendered, or that they appeared and answered thereto, for the reason that the Fifth district court of the city of New Orleans is a court of general jurisdiction; nor are the proceedings of said court according to the course of the common law. The only remaining cause of demurrer must be overruled. If the Fifth district court of the city of New Orleans was a court of general jurisdiction, it would not be necessary to state the term, nature, or date of the contract, nor where it was entered into, in order to give the court jurisdiction. Being a personal action it would follow the person.
WILBUR V. ABBOT.
WILBUR V. ABBOT.
(Jourt, D. New Hampihire. December 21, 1880.)
AJmNDMENT OF DECLARATION.
Although two special demurrers to the plaintiff's declaration for matters of form have been sustained, the court will permit the plaintiff to amend upon terms, it appearing that the case is important and difficult, and that if the amendment was not allowed a part of the plaintiff's remedy would be cut 011 by an exercise of the discretioD from which there is no appeal.
Sawyer tt Sawyer, Jr., and Mr. Morrison, for plaintiff. S. C. Eastman, for defendant. LOWELL, C. J. This action of debt has been pending several years, and has not yet reached an issue. Two sppcial demurrers to the declaration have been sustained, and delays have happened through other causes. The facts are complicated, and the plaintiff seems to find some embarrassment in setting them out in due form. Isaac L. Wilbur, the plaintiff, was one of the firm of Wilbur & Borge, of New Orleans, and also syndic for their creditors. Edward A. Abbot, the defendant, was one of the firm of J. S. & E. A. Abbot, of Concord, New Hampshire, and is now the surviving partner and administrator of his father. There were cross-demands between the Abbots and Wilbur &; Borge. Wilbur, as syndic, sued the Abbots in the fifth district court of the city of New Orleans, and procured service upon some one who was returned by the officer as J. S. Abbot. one of the partners. It is said that, in fact, it was another Abbot, not connected with the firm. Upon this service Wilbur recQvered judgments against both Abbots, by default, for $23,000 and more. About the same time the Abbots sued Wilbur & Borge for $3,200 in the third district court for the city of New Orleans. Wilbur appeared to this suit, and set up, by way of reconvention or set-off, the same debt for which the action was pending in the fifth district court. Thereupon, just after judgment had been obtained in that suit, the attorney for the Abbots objected to the reconventional demand that it was the same . v.6,no.8-·52
-debt already sued on by Wilbur, and for which judgment had been obtained in the fifth district court. The court held this a good objection, and disallowed the set-off. A few days later the Abbots brought a suit of nullity to set aside the judgments against them, on the ground that no service had been made on either of them. The plaintiff, Wilbur, objected that -they were estopped from setting up that the judgment was unauthorized, because they had treated it and relied upon it in the other suit as a valid judgment, and had thereupon obtained a. certain advantage in that suit. The estoppel was recognized by the court, and the suit for nullity was dismissed; and the dismissal was affirmed on appeal. Abbot v. Wilbur. 22 La. An. 368. The suit now pending here is on this judgment. While it has been pending, a case in the supreme court of New Hampshire by Wilbur against this same defendant, as administrator of his father, has been going on, and the full bench have once decided that -the estoppel does not exist, and that the judgment is void. There has been a rehearing of the case, however, and whether -this opinion will be changed cannot now be known. Special demurrers having been sustained to the plaintiff's declaration here, he now moves to amend. Upon the face of it, this is a case where two of the highest courts of the states have differed in opinion. I must assume, therefore, that there is much to be said on both sides, and not, as the defendant would persuade me, that it is a wholly groundless and vexatious suit. The special demurrers have been as all special demurrers are to matters of form. I do not feel at liberty to predude further hearing of a case of such apparent importance and difficulty by denying a motion to amend. Suppose the supreme court at Washington should be appealeCl to from the judgment of the New Hampshire court, if it is against the plaintiff, or suppose that court should change its opinion, and it should turn out that there is a valid judgment by way of estoppel, if I refuse to allow an amendment, I shall have cut off part of the plaintiff's remedy by an exercise of the discretion which is unappealahle, and he must be content to take judg'lIent 113,1in.,tthe aflministrl1toronly,and lose that against
UNITED STATES V. AMSDEN.
the surviving partner. It seems to be a case where the plaintiff should be permitted upon proper terms to state hiB side of it in his own way, not only once, but twice or thrice, or more.. But there should be terms, not only of costs, but the plaintiff should stipulate, if the defendant desires it, that service was not made upon either of the partners. This fact I understand to be conceded, but it may be difficult of proof hereafter. I do not know exactly how the first count stands after the two demurrers. Three proposed counts, purporting to be subsequent to the first, and counting on matters occurring after the original judgmerit, may be filed; and the plaintiff may file within six days such count on the original judgment as he may be advised: provided, that before either of these amendments are allowed as part of the record, th& plaintiff shall pay the defendant's costs to this time, and if the defendant requires it, the stipulation above mentioned..
STATES t7. ADDER
(DiIWid Ooti,t, D. Indiana.
ST. 140.) (1) The fifteenth amendment considered, and MId, that the power of congreB8 to legislate upon the right of voting at state election& rests upon this amendment, and is limited to prohibitions against 'discriminations on account of race, color, or previous condition or servitude; and it is further limited to prohibitions of such discrimi. nation by the United States, the states, and their officers, or others claiming to act under color of laws within the prohibition of the amendment. (2) . Section 5507, Rev. St., which is section II of the act of May 31. 1870, (16 St. 140,) known 88 the" Enforcement Act," is not authorized by the fifteenth amendment, because it is not so limited. The essen. tial element of discrimination on account of race, color, etc., is wanting. The phrase, "to whom the right of suffrage is guarantied by the fifteenth amendment," which distinguishes this section from cer, taiu other sections of the same act, does not save it from these Objections. That phrase is not the equivalent of a phrase limiting the prescribed acts to discriminations on account of race, color, etc> The.
AS TIm .. ENFORCEMENT ACT," (16