ERROR to the Circuit Court for the Southern District of New York; the case as found by the court having been thus: On the 4th of August, 1869, W. T. Pelton, a resident of Chicago, Illinois, and doing business there, drew a draft on Tilden & Co., residents of New Lebanon in the State of New York, payable to his own order, for $5000 at sixty days, dating it at Chicago. This draft Pelton sent to Tilden & Co., to the members of which firm he was nearly related, and they accepted it, 'payable at the Bank of North America, New York,' for his accommodation and in order to aid him in raising funds for carrying on his business, and without any consideration or security therefor, and without any funds in their hands to protect it; the understanding being that the draft was to be discounted at a certain bank in Chicago, and that Pelton should take it up at maturity. Having accepted the draft, Tilden & Co. sent it back to Pelton, for the purpose of being negotiated in Illinois, and in order that the proceeds might be used in his business in that State and in Michigan. Pelton having indorsed the draft delivered it to one A. C. Coventry for the purpose of having him negotiate it for the benefit of him, Pelton; and Conventry, having indorsed it also, sold it through a note-broker to one Blair at Chicago for $4825, and no more, Blair, at the time when he discounted the draft, having no knowledge whatever of the understanding between Tilden & Co. and Pelton, or that the draft was accommodation paper and accepted without any funds in the hands of Tilden & Co. The draft when it went into Blair's hands appeared, of course, in this form: $5000. CHICAGO, August 4th, 1869.
The opinion of the court was delivered by: Mr. Justice Strong delivered the opinion of the court.
Sixty days after date pay to the order of myself five thousand dollars, value received, with exchange, and charge to account of
Accepted, payable at the Bank of North America, New York.
Indorsed: W. T. PELTON, A. C. COVENTRY.
By statute of New York, the exacting of greater interest than seven per cent. renders a contract illegal and void.
By the statutes of Illinois ten per cent. interest is lawful. Any agreement for a higher rate forfeits all the interest. But the contract is not void and the principal may be recovered.
And an act of Illinois (that of February 12th, 1857), enacts as follows:
'Where any contract or loan shall be made in this State, or between citizens of this State and any other State or country, bearing interest at any rate which was or shall be lawful according to any law of the State of Illinois, it shall and may be lawful to make the amount of principal and interest of such contract or loan payable in any other State or Territory of the United States, or in the city of London in England; and in all such cases such contract or loan shall be deemed and considered as governed by the laws of the State of Illinois, and shall not be affected by the laws of the State or country where the same shall be made payable.'
The draft matured, of course, on the 6th of October, 1869; and the acceptors refusing to pay it, Blair sued them in assumpsit ...