Archer v. Shea

The action was prosecuted against the defendant as the indorser of a promissory note, alleged to have been made by a married woman. That circumstance was relied upon as one which would render the indorsement made, inoperative as a legal agreement. But such clearly is not the law; for it is part of the contract of indorsement that the paper indorsed has been made by a person competent to contract in that form. And consequently, the fact that the maker may not have become legally bound, affords no defense to the action brought upon the paper against the indorser. (Erwin v. Downs, 15 N. Y., 575.)

The next fact alleged, by way of defense, is that the defendant indorsed the note for the accommodation of Henry Henright, to whom it was delivered, and that the plaintiff received it knowing that to be the fact. It was not alleged that Henright was in any form restricted in the use which he might make of the defendant’s indorsement. For that reason, he was at liberty to use it in any way that might prove beneficial to himself. (Seneca Co. Bank v. Neass, 3 Comst., 443.)

*495In the further defense stated, it was not averred that the plaintiff received the note from Ilenriglit, but simply that he purchased. it at a' greater rate of discount than the legal interest due, or to become due upon it. ' If, as the plaintiff alleged, he received the note from some person to whom it had been previously transferred, he could very well purchase it at a greater rate of discount than seven per cent, without rendering it usurious in his- hands. If that were not the fact, the answer should have shown it; for, in the absence of a different allegation, the court is required to presume in favor of the legality of the transaction through which the plaintiff received the note.

All that the defendant has stated in his answer may very well be true, and still the purchase of the note at a rate of discount exceeding seven per cent, by the plaintiff may not have been-usurious. It is entirely consistent with all that has been stated, that Henright negotiated the note in a perfectly legal manner to some person, under whom the plaintiff afterwards acquired his title to it. And if he did, the purchase of it by the latter, at the rate of discount stated, would not be usurious; for a person who may have become the owner of the note upon an adequate consideration could afterwards sell it on any terms he might deem it judicious to accept. The answer in this and in other respects was entirely insufficient to present the defense of usury. (Manning v. Tyler, 21 N. Y., 567.) And as nothing but the matters already considered was contained in it, the order adjuding it to be frivolous was plainly proper. The judgment should, therefore, be affirmed.

Judgment affirmed.