If the statute of usury provides that a usurious contract is void, then no subsequent circumstances can make the original contract good; and, consequently, a promissory negotiable note, void at its inception for usury, is equally void in the hands of innocent indorsees, (x)l

* Whether a note, valid in its inception, but usuriously transferred by the payee or indorsee, is valid against the maker, has been variously decided, (y) But the weight of American authority is in favor of the validity of the note against the maker, in the hands of a holder in good faith, although it had been usuriously indorsed; and this we regard as the law of this country. And the authorities differ also on the question whether such a note is valid as against the maker in the hands of the usurious indorsee himself, the objection being, that no rights can grow out of an illegal, and therefore invalid transaction, (z) There are, however, cases of high authority, which hold that the maker is liable to the indorsee, even if the indorser be not so liable, on the ground that the indorsement operates as an executed transfer of the property in the note, and does not remain executory, like the indorser's general liability to pay the note, on the maker's default (a) In the section on the sale of notes, we shall consider this question, and give our reasons for holding, that where such a transaction is a bond fide sale of the note, both maker and indorser are held for the whole face of the paper.

(x) Lowe v. Waller, Dong. 786, supra, 108, n. (a); Acklaod v. Pearce, 3 Camp. 599; Young v. Wright, 1 Camp. 139; Wilkie v. Roosevelt, 3 Johns. Cas. 66; Hackley v.Sprague, 10 Wend. 113; Lloyd v. Scott, 4 Pet. 228; Bridge v. Hubbard, 15 Mass. 96; Sanerwein v. Bunner, 1 Harris & G. 477; Faris v. King, 1 Stewart, 255; Sewall, J., Chadbonrn p. Watts, 10 Mass. 121; Payne v. Trezevant, 2, Bay, 23; Gaillard p. Le Seigneur, 1 McMullan, S25; Solomons v. Jones, 3 Brer. 54; Townsend v. Bush, 1 Conn. 260. See also Shober v. Hauser, 4 Dev. & B. 97. It is otherwise where the statute of usury does not declare the contract void. Story, J., Fleckner v. U. S. Bank, 8 Wheat. 354; Young v. Berkley, 2 N. H. 410; Creed v. Stevens, 4 Whart. 223; Conkling v. Under-hill, 3 Scam. 388; Wells v. Porter, 5 B. Mon. 424; McGill v. Ware, 4 Scam. 21; Tucker v. Wilamouicz, 3 Eng. 157. See also Turner v. Calvert, 12 S. & R. 66; Fenno v. Sayre, 3 Ala. 458.

(y) Lord Kenyan originally held that such holder would be entitled to recover. Daniel v. Cartony, 1 Esp. 274; Parr v. Eliason, 1 East, 92. In Lowes v. Maz-zaredo, 1 Stark. 385, however, the court decided, that usury on the part of the payee of a note was a bar to an action by a bond fide holder, because he could not bring himself in connection with the maker, except through the medium of usurious indorsement; and this case was approved in Chapman v. Black, 2 B. & Ald. 589. But Bush v. Livingston, 2 Caines, Cas. 66; Foltz v. Mey, 1 Bay, 486; Campbell v. Read, Martin & Y. 392, decided, that a note thus usuriously indorsed is valid against the maker, in the hands of a holder in good faith.

(z) See Lloyd v. Reach, 2 Conn. 175; Gaither v. Farmers and Mechanics Bank, 1 Pet. 44; Nichols v. Fearson, 7 Pet. 107, and Freeman v. Brittin, 2 Harrison, 191.

1 An assignor, who has made specific provision for the payment of a debt in an assignment for the benefit of creditors, cannot defeat its terms because the debt was usurious. Chapin v. Thompson, 89 N. T. 270. - K.

To remedy the. hardship imposed upon innocent holders of negotiable paper, under the English construction of the rule that usurious instruments are absolutely void, the statute of 58 Geo. III. c 93, was passed, declaring, that no bill or note should be invalidated in the hands of a holder for value without notice. And exceptions to the same effect may be found in some of the statutes of usury in this country. (b) But * where the statute contains such a provision, and also provides, as the penalty for usury, the deduction, in an action against the debtor, of the excessive interest secured, and the indorsee takes it after it becomes due, the deduction, it is said, may be made against him. (c)

But if such note, or any securities for a usurious debt, be given up and cancelled, on the promise of the debtor to pay the original debt, with lawful interest, this promise is valid, being founded on a good consideration, (d)1 So also, it is true in general, that any security given in payment or discharge of a usurious security, is equally void with that (e) 1 But when a * new and innocent party is introduced into the substituted security the weight of authority would lead to the conclusion that such security is valid as to him.(f) And if the borrower allows

(a) Mann v. Commission Co. 15 Johns. 44; Collier v. Nevill, 3 Dev. 30; Knights v. Putnam, 3 Pick. 184. See also Littell v. Hord, Hardin, 81.

(b) See Chapman v. Black, 2 B. & Ald. 589, and Hackley v. Sprague, 10 Wend. 113.

(c) Wing v. Dunn, 24 Me. 128.

(d) Barnes v. Headley, 2 Taunt. 184. In this case an agreement was made between Webb and Harrie & Suthmier, by which Webb was to advance them money to purchase sugars with, from time to time, for which he was to receive five per cent. interest, and also a commission of five per cent. upon all sugars purchased. To secure the repayment of the principal, interest, and commissions, certain deeds and securities were executed to Webb. Under this agreement Webb made out four successive half-yearly accounts, charging, according to the agreement, for the money advanced; and various sums were, from time to time, paid on this account. The sugars were not purchased or procured by Webb, but by Harrie & Suthmier, in their own names. Upon the parties being informed, and realizing, that this transaction was usurious, and that Webb was in danger of losing the whole of his money, Webb, in accordance with an arrangement then made, drew up fresh accounts, deducting all charges for commission, and charging five per cent. interest only, on the money actually advanced. This account was acknowledged by the debtors to be correct, and they promised to pay it; whereupon the original securities were given up, and the original agreement cancelled and burned. This action was brought upon the last account against the assignees of Harrie & Suthmier; and the court held that it was maintainable. See Wicks v. Gogerly, 1 Ryan AM. 123.