
    Jonathan Odell v. George Greenly.
    When two persons exchange promissory notes, each note, in judgment of law, is founded on a valuable consideration, and is therefore valid at its inception, and from its first delivery.
    Hence, in an action against the maker of one of the notes, the defence of usury cannot be admitted to defeat the title of a holder to whom the note was transferred for value upon its maturity.
    The transaction is not altered, nor the defence rendered available by the fact that the person who exchanged notes with the defendant promised to protect that of the defendant at its maturity.
    Nor is the right of the plaintiff to maintain his action upon the note, at all affected by the circumstance that he holds collateral securities for its payment.
    Judgment for plaintiff affirmed, with costs.
    (Before Oakley, Ch. J., Duke, and Slosson, J.J.)
    Feb. 14; Feb. 24, 1855.
    Appeal by the defendant from a judgment in favor of the plaintiff, for $732.16, with interest and costs.
    The action was against the defendant as the maker of a promissory note for $625, dated ISTov. 26, 1853, payable, with interest, four months after date, to the order of H. Woodruff, and endorsed by him to the plaintiff. The only defence set up in the answer was usury. On the trial before Slosson, J., and a jury, on the 23d October, 1854, the plaintiff had the note in evidence and rested.
    The defendant then called as a witness, Hampton Woodruff, who testified as follows: “ I know the parties to this action; I am the payee of the note in evidence; I borrowed it from the defendant Greenly; I exchanged notes with him; he receiving my note in chan "e ⅛! I borrowed his note, with the understanding that I was io protel^ ^ j I received the money on the defendant’s note from the plaintiff, less a discount of one per cent, a month. Previous to the maturity of said note, I failed; I stated to the plaintiff that I could not pay it; I went to see the defendant, the maker; the note was in the “Butchers and Drovers’ Bank” for collection. The plaintiff agreed to renew the note he held, if the defendant would give a new note, bearing simple interest; the defendant did so; the note was withdrawn from the bank, and the present note — the one in evidence — substituted.
    On being cross-examined, the witness said: I gave my own note in exchange for the first note: when I returned the first note to the defendant Greenly, he returned to me the note I gave to him in exchange therefor: my note I gave to him, was to his order, and a counterpart of the one he gave me; I had not failed at the time of the first exchange; my credit in the market, was, at the time, unimpaired.
    The direct examination being resumed, the witness said: The consideration of the first note, was my note in exchange; that was all; the note was made solely for my accommodation; I was unable to respond, if compelled to, when the first note was given, for over twenty cents on the dollar; the last note, (the one in evidence,) was for the full amount of the first note, with interest from date.
    The defendant’s counsel then offered to prove, by this witness, that the witness put securities in the plaintiff’s hands, which, by a written memorandum, the plaintiff agreed should stand as collateral, in case the note was not paid.
    To which evidence the plaintiff’s counsel objected, and the court sustained the objection, and ruled out the said evidence, and to which ruling the defendant’s counsel duly excepted. .
    The case was then submitted to the juiy. And the court instructed the jury, that giving one note in exchange for another, gives consideration, and that there was nothing in the evidence to vary the legal effect of this rule, in the present case.
    To which charge of the court, the defendant’s counsel duly excepted.
    The jury then found a verdict for the plaintiff, for six hundred and fifty-one dollars and eighty-eight cents, (.ffiolyw-)
    From the judgment on this verdict, the defendant appealed.
    
      
      S. P. Allen for the defendant,
    insisted that the case was not within the general rule as to the exchange of notes, and that the judgment ought to be reversed.
    
      G. D. Newman, for the plaintiff contra.
    
   By the Co'ttbt.

Slosson, J.

The court instructed the jury that giving one note in exchange for another gives consideration,, and that there was nothing in the evidence to vary the legal effect of the rule in the present case.

In other words the court withdrew from the consideration of the jury, the question of “ whether the notes were, in fact, exchange notes ?” There was but one witness, (Woodruff,) and the only part of his testimony, which could raise a question of doubt, was that in which he stated that he was to protect the first note.

The first note was discounted by the plaintiff, at a rate exceeding seven per cent. This was not disputed.

We think the Judge was right in withdrawing the case from the jury.

The evidence of Woodruff was explicit, that he gave his own note in exchange for the first note, and that it was made negotiable by being made payable to the defendant’s order.

There is nothing to show that the defendant was placed under restriction as to its use.

Had he negotiated it to a third party, there could have been no defence to it, for the. defendant’s own note in Woodruff’s hands, was a good consideration for it.

True, Woodruff promised to protect the defendant’s note, but this he would have done, had he paid his own note in the hands of the defendant, or of an assignee of it. The promise to protect, was but a promise to indemnify, which he was legally bound to do without a promise, if the transaction was for his accommodation, But’this imposed no restraint upon the negotiability of his note in defendant’s hands, and though in fact, the defendant did not negotiate Woodruff’s note, but retained it and returned it to him on receiving his own note (the first one) back again, this is no evidence that he might not have done so.

It is not credible that Woodruff’s note was considered or received as a mere memorandum note, as is contended. If the abject had been a receipt merely, for the defendant’s note, by Woodruff, the latter would- have either given a receipt in terms, or a note to defendant, without words of negotiability. Can there be a doubt that if Woodruff, (supposing there had been no renewal,) had not taken up defendant’s first note, the defendant might have sued him upon his note; or, that the defendant might have provided himself with funds, for the purpose of taking up his own note, by procuring a discount of Woodruff’s note; or, that he might have so provided himself in anticipation, and without waiting for Woodruff to fail in his promise to protect his (defendant’s) note ? Had he done so, it would' have, in effect, accomplished the very thing which Woodruff promised, to wit, to protect defendant’s note, and without any detriment to Wood-ruff.

I cannot see in what light the two notes can be regarded, other than that of available exchange notes in each others’ hands; and though the transaction was not for the defendant’s accommodation, mutually with that of Woodruff, that would not affect the character of the paper which he received, as the consideration for his own.

If this view be correct, then there was nothing to go to the jury, and the defence of usury is not admissible. (Rice v. Mather, 3 Wend. 62; Dowe v. Schutt, 2 Denio, 621; Mum v. Cumipin Co., 15 J. R. 44.)

The offer to prove that the plaintiff had received securities, which he agreed to hold as collateral, in case the first note was not paid, was properly overruled — since, if true, it would not have affected his right to sue upon the note.

Judgment affirmed, with coste.  