
    Jacks et al. v. Nichols.
    
      Responsive answer.— Usury. — Conflict of Laws.
    
    A responsive denial in the answer may he overcome by the testimony of a single witness, supported by corroborating circumstances ; especially, where the answer itself is evasive.
    An agreement, that the borrower, in addition to legal interest, shall pay part of the ditference of exchange, previously paid by the lender, on a remittance of the money from a distant state, renders the contract usurious.
    Interest is payable according to the law of the state where the contract is made and to be performed, though the security he delivered in another state; the laws of the former state govern on the question of usury. •
    Jacks v. Kichols, 5 Barb. 38, reversed ; and s. o. 3 Sandf. Ch. 313, affirmed.
    * Appeal from the general term of the Supreme Court, in the first district, where the decree of assistant vice-chancellor Sandpoed, in the former court of chancery, had been reversed, and the bill dismissed. (Reported below, 5 Barb. 38, and in chancery, 3 Sandf. Ch. 313.)
    This was a bill in equity filed by Pulaski Jacks and Hamlet Jacks, late copartners, under the firm name of P. & PI. Jacks, and Jesse D. Price, their assignee, under a general assignment for the benefit of creditors, to compel David B. Nichols, the defendant, to deliver up to be cancelled certain promissory notes of P. & H. Jacks, alleged to be usurious, and to surrender the collateral securities held by him for the payment of the same.
    The cause was heard before assistant- vice-chancellor Sandeoed, upon the pleadings and proofs, by which the following facts appeared:
    P. & II. Jacks were engaged in importing and mam ufacturing watches and jewelry, in the city of New York. Nichols, who resided in Savannah, being in New York, on tlie 30th May 1840, agreed to loan P. & H. Jacks $4000 or $5000, for which they were to pay him interest at seven per cent, per annum, five per cent, of the exchange from- Savannah, and two and a half per cent, on sales of watch-movements, imported by them, with the money loaned. In pursuance of such agreement, Nichols, on the 1st June 1840, advanced to P. & H. Jacks, $2000, and received their note for that sum, payable twelve months after date, and also their note for $240, payable nine months after date; the note for $2000 was payable to, and indorsed by William H. Jaques; the money was advanced by an order on Young, Smith & Co., of New York.' On the 17th June 1840, Nichols advanced to them, on a like order, the sum of $1792.36, and received their three notes: one for $1250, at twelve months, indorsed by George P. Shipman; one for $542.36, at twelve months, indorsed by Jesse D. Price; and one for $215.08, at six months, without indorsement.
    P. & PI. Jacks paid the notes for $240, and $215.08, respectively, when they became due; these notes were given for the interest, and difference of exchange; and on the 27th May 1841, they also paid Nichols $61.73, for commissions on their sales of watch-movements.
    The moneys advanced by Nichols in June 1840, had been remitted by him from Savannah, in March and April preceding, at which time, exchange between New York and Savannah, was from six to eight and one-fourth per cent, against the latter city. Nichols stated in his answer that the agreement for the five per cent, and the commissions was to cover a part of his expenses in procuring exchange, and remitting his funds to New York, which had cost him nine per cent.
    
    principal loan was renewed- in June 1841, the borrowers allowing two per cent, for difference of exchange, and interest at seven, per cent., for which they gave new notes, one, dated 1st June 1841, for $2000, at twelve months, indorsed by S. Jacks and W. A. Woodruff; one, dated 19th June 1841, for at twelve months, indorsed by Jesse D. Price; and one for $792.32, of the like date and time, indorsed by S. Jacks. They also gave their firm notes for $180 and $161.31, without indorsement, at nine months, for the interest and difference of exchange. The original notes were thereupon given up to the makers.
    Just before the renewed notes fell due, a further renewal of the same was negotiated with Nichols, who was then staying at Bridgeport, in Connecticut, and agreed to by him; the borrowers paying seven per cent, interest and one per cent, for difference of exchange. *P. & II. Jacks, thereupon, made their notes, and sent and delivered them to Nichols, at Bridgeport, as follows: one, dated 1st June 1842, for $1000, at six months, indorsed by Jesse D. Price; one, dated 18th June 1842, for $792.36, at nine months, indorsed by S. Jacks; and one, of the same date, for $2000, at one year, indorsed by S. Jacks and W. A. Woodruff; and for the interest, P. & H. Jacks gave their firm note, dated 4th June 1842, for $264.60, at four months. They also indorsed to Nichols, as collateral security, a note of Tyler & Jacks, of New Orleans, dated the 9th February 1842, in favor of P. Jacks & Co. for $5300, at two years. The notes of 1841 were then surrendered.
    The last-mentioned note for $1000 was renewed on the 30th December 1842, by a new note for $1006.33, at thirty days; and this was again renewed for thirty days on the 5th January 1843, by a note for .$1012.71. The bill charged that the indorsers had not been charged on any of the outstanding notes; but this was denied by the answer.
    *In April 1841, Hamlet Jacks sold all his in- r „ „ terest in the partnership to Pulaski Jacks; and, L on the 9th May 1843, the latter made an assignment of all his estate, real and personal, including the note of Tyler & Jacks for $5300, to Jesse D. White, the complainant, in trust for the benefit of his creditors.
    The answer of Nichols stated the rate of exchange between New York and Savannah, and the expense of remitting his funds from the latter city; and that the allowances in 1840 were made to cover in part that expense. He alleged that, in 1841, he transmitted the whole loan-then made (by renewing the notes) from Savannah to New York, for the purpose, and actually paid three per cent, exchange thereon; and that he made a like transfer of funds, in June 1842, at an expense of two per cent, for exchange; and on the loan then made, he was allowed for his expenses of a journey to complete it, and one per cent, towards such exchange. He also insisted that the transactions in June 1842, were all done at Bridgeport, in Connecticut, and were not affected by the statute laws of this state.
    The assistant vice-chancellor made a decree in accordance with the prayer of the bill. (3 Sandf. Ch. 313.) The defendant, thereupon, appealed to the chancellor, and the same having been transferred by the constitution *of 1847, to the supreme court, the decree was there reversed, on the ground that it was a Connecticut contract, and that it did not appear that the notes were usurious by the laws of that state. (5 Barb. 38.) The plaintiffs, thereupon, appealed to this court.
    
      Bwloclc, for the appellants.
    
      Bonney, for the respondent.
   Gkay, J.

The answer of the defendant under oath was asked for by the complainant, and is, therefore, of itself, equal to the evidence of one witness in favor of the defendant. This answer the defendant insists has not been overthrown by the evidence of Young, by whose testimony it is shown, that the funds upon which the defendant drew were, in fact, in New York, at the date of the written proposition of the plaintiffs, which was acceded to by the defendant, and which fixes the terms of the loan, except as to time and security. The defendant and Young stand before us as two witnesses called by the complainants, and their evidence must, when in conflict with each other, balance the one against the other, unless, from the circumstances of the case as detailed, the unreasonable or evasive statements of the one give a preponderance to those of the other. The complainants allege that at the time of negotiating the loan, the defendant said, “his money had cost him five per cent, exchange to get it on from Savannah, and that he had been offered twelve per cent, interest by other persons.” This allegation is not denied. It is true, that the defendant, in his answer, said, that his funds were principally in Savannah, and that at the time of making the loan, *the sums of money lent by him were actually brought on or transferred to the city of New York, for the purpose of making the loan. All this may be true, and not one cent of it there, when the written proposition, acceded to by the defendant, was made. Tie might, and probably did, from previous negotiations, contemplate this loan when he transferred his funds,- but when the loan was, in fact, made, there is nothing to 'contradict the statement of Young, that the funds loaned were then in New York. The defendant’s statement that it had cost him five per cent, to get them there, and that he had been offered twelve per cent, interest by others, doubtless, induced the offer, accepted by him, of the commissions on sales, in addition to what had been offered, to render sure his acceptance of their proposition. The facts, therefore, independently of the evidence furnished by the accepted proposition, on its face, exhibit what the vice-chancellor very properly characterized as “ a case of unmitigated usury which was increased by the loan in 1841.

In this_ respect, the supreme court did not differ in their conclusions from the vice-chancellor, but reversed his decree, upon the ground that the release in 1842 of the whole principal sum loaned, was in Bridgeport, Connecticut, where, for aught that appears, any contract made for the use of money, past or present, not in violation of the principles of natural justice, is valid. This conclusion was arrived at from statements made in the defendant’s answer under oath called out by the complainants. In order to justify such a conclusion from the defendant’s own statement, it should appear clearly, that the new contract was made in Connecticut, and that the parties designedly contracted there rather than in New York. (Story on Conflict of Laws, § 294.)

The answer states, that shortly before the maturity of the notes given in June 1841, Jacks applied to the defendant, who was then staying at Bridgeport, Connecticut, for the further loan of the several sums about to become due, and offered to deliver to him the note of Tyler & Jacks for $5300; and that the defendant, thereupon, consented to reloan *the several sums, for a further time. The fact that the defendant was then staying in Connecticut, by no means proves that he was there, at the time of this application. Connecticut was not his residence, he was there temporarily, and if, in the time, he had visited New York, and been asked where he was staying, a natural and truthful answer would have been, in Bridgeport. The answer, therefore, does not show affirmatively that the application was made to him in Bridgeport. It shows him in New York, at the request of the Messrs. Jacks, previously to the maturity of the notes, and that, in their renewal, he was. allowed $10 for his expenses in travelling from Bridgeport to and from New York. The fact that the expenses of the journey were included in the renewal of the loan, affords a fair presumption that it was upon the business of the reloan that he visited New York, and that the renewal of the loan was there agreed upon. But it is said, that the particular terms were not fixed, until the several notes were sent to the defendant at Bridgeport, on the 6th of June following. The loan itself was agreed upon, but the period for payment and rate of compensation were not agreed upon, until the defendant received the notes from the plaintiffs, accompanied by a statement of the purposes for which they were given.

But concede that the last contract was made in Connecticut, if it was to be performed in New York, it must primd facie be regarded as having been made with reference to the laws of New York. (2 Kent’s Com. 460, note a.) Upon this single last occurrence, the consummation of what had been previously partially agreed upon, depends the question, whether the renewal of the loan was made with reference to the laws of Connecticut, or those of New York, where the original loan was made and once renewed. Every circumstance shows that it was with reference, to the laws of the latter state. Neither party resided in Connecticut; the defendant was there temporarily, having no place of business there; the plaintiffs resided in this state. The contract renewed was a New York contract; the note of Tyler & * Jacks was payable in New York; the notes of the Messrs. Jacks were dated in New York, and the portion of the note of $264.60, set apart for interest, was, if the defendant is to be believed, intended to secure seven per cent, interest, the legal rate of this state. The fact that the note was dated in New York is alone presumptive evidence that the maker not only resided at the place of its date, but contemplated payment there. (3 Kent’s Com. 96.) And, for the purpose of charging the indorsers upon the notes, the makers must have been sought at their residence or place of business in this state. In doing'that, reference must have been had to the days of grace given by the laws of this state. (2 Kent’s Com. 459; 3 Id. 96; Bank of Orange v. Colby, 13 N. H. 520.)

It is, therefore, manifest, that the continuance of the loan, made here upon substituted securities, partially agreed upon in this state, and consummated in Connecticut, was all done with reference to the laws of this state, and that it was but the continuance of an original usurious loan, aggravated by each renewal, and void by our laws. The judgment of the supreme court must, therefore, be reversed, and that of the vice-chancellor affirmed.

Judgment reversed, and that of the vice-chancellor affirmed. 
      
       The equity rule, which requires more than the testimony of a single witness to overcome a responsive answer, does not apply to pleadings under the code. Stilwell v. Carpenter, 2 Abb. N. C. 238.
     
      
       A note made, dated and payable in this state, though negotiated in a foreign country, is governed hy the latvs of New York, as to the defence of usury. Dickinson v. Edwards, 7" N. Y. 573; s. c. 13 Hun 405; Clayes v. Hooker, 4 Ibid. 231.
     