
    HENRY WHITMAN, Plaintiff and Respondent, v. WILLIAM C. CONNER, Sheriff, etc., Defendant and Appellant.
    I. LEX-LOCI AND LEX-EORI.
    1. Usury.
    (1). A contract or obligation valid by the law of the state where it was made and was to be performed, can not, when sought to be enforced in another state, be held invalid as contravening the usury law of that state.
    
      {a) The fact that such contract or obligation is secured by a chattel mortgage executed in the state where the contract or obligation was thus made and to be performed, upon property in such other state, does not alter the rule.
    
    -(2) Security for such contract or obligation upon property in such other state, not invalid.
    
    (a) As the principal debt is not invalid, although usurious according to the laws of such other state, so the security therefor is not invalid, notwithstanding it is on property in such other state, and the party holding it is obliged to come in to the courts of such other state to enforce it.
    (b) So held where one basing his right on such security brings an action to recover the possession of the property from the sheriff who had taken it under an execution against a third person.
    S. Transfers of personal property, what law governs.
    
      The law oj the state in which the property is at the time of the transfer as to the steps necessary to be taken to give it validity as against creditors or subsequent purchasers or encumbrancers, governs when the transfer is relied on in the courts of that state as the basis of an action or a defense, although the transfer may have been executed in another state, and for the purpose of securing an obligation made and to be performed in such other state.
    Before Curtis and Sedgwick, JJ.
    
      Decided February 7, 1876.
    In this action there was a verdict rendered for the plaintiff. The court directed the exceptions to be heard: in the first instance at the general term.
    The suit was upon a claim for the delivery of per^ sonal property.
    The property in question, which consisted of horses and coaches belonging to a,livery stable in Eleventh . street, was levied upon by the sheriff, defendant, about December 26, 1874, under an execution against Sterry Fry. The judgment upon which the execution was obtained was for feed sold to Sterry Fry, the proprietor of the stable, between January 24 and July 6, 1874.
    On December 1,1874, the plaintiff, who did business at Providence, in the state of Rhode Island, under the name of Henry Whitman & Co., was the holder and owner of a chattel mortgage, executed to him at Providence, Hovember 17, 1873, by one Sterry Fry, of Hew York, to secure a then present indebtedness of one thousand four hundred and forty-one dollars and sixty cents; also all sums which should thereafter become due for advances, endorsements, or guarantees to the amount of forty thousand dollars, upon certain horses, harnesses, robes, carriages, &c., then in the city of Hew York.
    The mortgage was filed in the office of the register of the city and county of Hew York, Hovember 18, 3873, and was, with proof of filing, received and read in evidence upon the trial of the action. A copy of the mortgage, with a statement of the plaintiff’s interest, was filed in renewal of the mortgage in the office of the Register, Hovember 12, 1874.
    At the time of the renewal, there was claimed to'be'due and owing upon the mortgage between thirty-three and thirty-four thousand dollars, and a detailed statement of the account for the alleged advances and endorsements made by plaintiff to Fry, under the security of the mortgage, was put in evidence. The amount due upon the mortgage was demanded by plaintiff from Fry, in the fall of 1874, both previous to and after the renewal. ¡No part of the mortgage was paid.
    All of the transactions, upon the security of. the mortgage, between the plaintiff and Fry took-place at Providence.
    Fry having made default in the payment of the mortgage, the plaintiff took possession of the mortgaged property thereunder prior to December 5, 1874.
    A portion of the property embraced in the mortgage was the property in controversy, and which was about December 26, 1874, levied upon and taken and sold by the defendant, under the execution issued upon the judgment against Fry, which was for one thousand six hundred and twenty-four dollars and ninety-seven cents. A demand for the property was duly made upon the defendant. The value of the property taken and sold was claimed to be two thousand six hundred dollars. The defendant read in evidence the judgment roll in the action above referred to, the execution thereon, issued December 1, 1874, the statutes of Rhode Island as to the rate of interest, and the case of Pierce v. Hennessy (10 It. 1. 223). The Rhode Island statute regulating the rate of interest is as follows:
    Section 1.—Interest in the rendition ot judgments, and in all business transactions where interest is secured or paid, shall be computed at the rate of six dollars on a hundred dollars for one year, unless a different rate is expressly stipulated (chapter 128, General Laws of' Rhode Island, ed. 1872, sec. 1).
    At the close of the proofs, the defendant’s counse moved to dismiss the complaint on the grounds:
    
      First. That plaintiff, by his evidence, has failed to establish any cause of action against the defendant;
    
      S.cond. That the amount set forth in the statement, upon the re-filing of the mortgage, as due from Sterry Fry to the plaintiff, is fictitious, and that it is made up largely of an illegal amount of interest, and of an amount not covered by the mortgage ; and that whether the transaction is to be tested by the laws of Rhode Island or of the state of New York, the mortgage is void. The court refused to dismiss the complaint, and the defendant excepted.
    The jury rendered a verdict for the plaintiff, assessing the value of the property at two thousand two hundred dollars, and damages for the detention at thirty-three dollars.
    The questions argued arose upon the refusal of the court to dismiss the complaint, and defendant’s exception thereto.
    
      Vanderpool, Green & Cuming, attorneys, and A. J. Vanderpoel, of counsel, for appellant, urged:
    I. The transaction relied upon as furnishing the foundation for the chattel mortgage was usurious, and the' mortgage itself null and void. (1.) The knowingly and voluntarily taking or reserving a greater interest or compensation for a loan than that allowed by law is per se usurious. The offense is not condoned by want of intent to violate the statute, or by giving to the transaction another name than that of loan (Fiedler v. Darrin, 50 N. Y. 437). (2.) The defendant here can take advantage of the usury to defeat the mortgage. Any party having a lien on a chattel may avoid for usury a mortgage claiming priority (Thompson v. Van Vechten, 6 Bosw. 373, 27 N. Y. 568, 585 ; Schroepel v. Corning, 5 Denio, 236 ; Carow v. Kelly, 59 Barb. 239; Dix v. Van Wick, 2 Hill, 522). (3.) Where any part of a contract is tainted with usury, the whole contract is void (Matthews v. Coe, 56 Barb. 430; Cope v. Wheeler, 41 N. Y. 309; Giblet v. Averill, 5 Denio, 88; Price v. Lyons, 33 Id. 55; Jackson v. Packard, 6 Wend. 415; Fulton Bank v. Benedict, 1 Hall, 480).
    II. The transaction is to be governed by the laws of New York, where the subject-matter of the contract was situated, where it was to be performed, and where is the forum in which it is sought to be enforced. The plaintiff seeks here to enforce the lien of a chattel mortgage, executed upon property within the state and under the laws of the state. It is in legal effect a sale of property situated in this state, and the presumption is that the transaction is to be carried out here. The mortgage covered leases and fixtures, as well as horses and carriages. It could only be executed here. The entire transaction was one for the purpose of carrying on a business within this, state, upon the security of that business, and the plaintiff can not, because of his non-residence, have greater rights than a resident. The law of the place where a contract is to be performed governs as to its construction and validity (Jewell v. Wright, 30 N. Y., and cases cited).
    III. The statement filed by the plaintiff, in order to renew the mortgage, was fatally defective. The law requires the utmost accuracy, as well as good faith, in the statement which is to be filed. A mere clerical error in the amount is sufficient to defeat the security (Ely v. Carnley, 19 N. Y. 496 ; Id., 3 E. D. Smith, 489). The statement in this case was not the “ true statement” demanded by the statute. (1.) It included usurious items of interest. (2.) On a large number of these notes, the plaintiff had not been charged as endorser. A creditor existing or prospective of Fry would be utterly unable to find out how much had actually been advanced by the plaintiff, and how much of the sum mentioned was a contingent liability. (3.) After the assignment by Fry, on July 10, 1874, no lien could be created by him on the property, and it could not be charged with any new debt of his. Notwithstanding this, there are included in this statement advances made by the plaintiff subsequent to the assignment, and prior to the re-filing, and this although the plaintiff was aware of the assignment. (4.) It also includes large sums which became due before the mortgage was given, and which are not covered by it.. The mortgage by its terms was to cover future advances, not past.
    
    
      J. F. Harrison, attorney and of counsel for respondent,urged :
    The plaintiff’s claim under the mortgage was neither fictitious, nor tested by the law governing the place of contract—is any portion of the amount made up of an illegal rate of interest. The law of the place of contract must govern, (a.) The contract was made, and all the transactions between the plaintiff and Fry took place at Providence, in the state of Rhode Island. There is no usury law in that state. The law governing the rate of interest there simply fixes the rate at six per cent., where no agreement is made, but allows an agreement for any rate, and such a contract is enforceable. By the plaintiff’s agreement with Fry, made in Rhode Island, he was to charge Fry whatever rate he had to pay. No more than seven per cent, was charged him, unless the plaintiff was obliged to pay more, and seven per cent, was charged by agreement between plaintiff and Fry.
   By the Court.—Curtis, J.

The chattel mortgage in question was given to the plaintiff to secure sundry loans and liabilities. The transactions in reference to these occurred at Providence, Rhode Island, where the plaintiff then and ever since has resided. The chattel mortgage was dated and executed there.

It is claimed that the obligations which the chattel mortgage was given to secure were usurious, and the mortgage consequently void, and that they are governed by the laws of the state of New York.

The statute of Rhode Island directs that interes shall be computed at six per cent., unless a different rate is expressly stipulated. In the transactions secured by the mortgage, where any rate other than six per cent, was charged, such rate was so charged by express agreement between the parties. The taking of a greater rate of interest than six per cent, in Rhode Island does not vitiate contracts, nor is it punishable as an offense. This fruitful source of litigation is closed, and even the courts, disregarding all theories of its heinousness, appear impressed with the material idea, that thus inviting an influx of capital promotes the public welfare. In a state where such laws and views prevail, it is evident that the plaintiff can not be deprived of debts justly due Mm, or of realizing upon the securities he may have taken as collateral to them, because he has charged, and the borrower has agreed to pay, the current rates of interest (Pierce v. Hennessy, 10 R. I. 223).

But it is urged that the laws of the state of New York govern. Obligations incurred, dated and to be fulfilled in Rhode Island, can not beheld usurious and void under the statutes of New York because they are secured by a chattel mortgage executed also in Rhode Island upon chattels that are in New York. The principle recognized in the comity that prevails among all civilized nations, that obligations if valid by the laws of the country where made and to be fulfilled, will bé sustained in the country where they are sought to be enforced, even though usurious under the laws of such latter country, was affirmed in Gruillander v. Howell (35 N. Y. 662).

Though the New York statutes respecting usury can not be successfully invoked against these transactions in Rhode Island, the same doctrine does not apply to those statutes which regulate the filing and renewal of ■chattel mortgages made there upon personal property in this state.

It is the right of a state in which personal property is conveyed subject to a condition, without a change of possession, to prescribe such mode of recording, and of public notice, as it deems best to protect its own citizens. This is a duty under such contingencies, that it, owes to itself, partaking of the nature of an internal police regulation. Consequently, the party who takes-a conveyance of personal property of this nature without taking possession of it, is bound, in order to protect the interest he so acquires, to conform strictly to the local law.

The plaintiff holding this chattel mortgage, executed in Rhode Island upon chattels in New York, in order to protect his lien and interest thereunder, was fully amenable to every provision of the New York statutes respecting the filing, the renewal, and the statement to-be filed in order to renew it.

The law requires accuracy and good faith in the-statement which is to be filed, in order to protect the security. It is a public notice to all dealers with the mortgagor, and upon which they are entitled to rely in business transactions. When the plaintiff .elected to leave these mortgaged chattels in the possession of the mortgagor, he was required to file a true statement of his interest in the property mortgaged.

The statement filed by the plaintiff, November 12,. 1874, on the renewal of the mortgage, shows that the amount due on, and his interest in, the mortgaged property was thirty-three thousand four hundred and sixty-one dollars and forty-two cents. The plaintiff' testified on the trial that there was this amount due to-him at the time of the renewal, and that he had demanded it from the mortgagor. There was other testimony corroborating his statement. On his cross-examination he -produced an account showing the details of his statement. It was claimed that this account was obscure and loose, and that there were items that conflicted with his evidence. An examination of these details, presented inartificially and not very clearly, fails to negative the effect of the testimony as to the accuracy of the renewal statement. No testimony was introduced on the defendant’s part. There is nothing to show that the jury found incorrectly upon any question of fact, nor do the exceptions afford ground for setting aside their verdict.

There should be a judgment for plaintiff upon the verdict, with costs.

Sedgwick, J., concurred.  