If the question in this case was an open one, I should have no difficulty in arriving at the conclusion that the transaction was tainted with usury.
The leading case of Cram v. Hendricks (7 Wend. 569) was based upon assumed principles that I never was able to comprehend. If the court had held, simply, that the sale of a valid pre-existing note or bill, although indorsed or guarantied by the seller, was not essentially a loan of money to him, hut rather the sale of a chattel and therefore not usurious, the proposition would at least have been intelligible. But the court went further, and held that the indorsement or guaranty was not the undertaking it purported to be, hut was simply a guaranty for the repayment of the amount received.
There have always appeared to me to he at least two palpable difficulties in regard to this decision. In the first place, if the transaction was the simple sale and transfer of a chattel, it is difficult to see upon what legal principles a guaranty of the payment or collection of it should not be treated the same as the warranty of the goodness or quality of any other chattel, and the party contracting held to respond in damages to the entire extent of his contract. The man who upon the sale of a horse warrants him to be good and sound, is, upon default, liable to respond in damages to the amount of the difference between the value of the horse as he actually was and as the vendor contracted him to be. The damages would not be affected at all by the price received for him upon the sale. But in the second place, if it he assumed that it is not an absolute sale of a chattel when the personal responsibility of the vendor is required, but that to the extent of the money received he is a borrower, and simply agrees, so far as he undertakes personally, to repay the amount received with legal interest, then, within every principle of law applicable to the statutes of usury, the transaction would be usurious. It would *256be an absolute undertaking on the part of the borrower, that the lender should at all events be repaid his money with legal interest, with the chance of receiving an additional sum depending on the responsibility of the maker of the transferred note. The lender would therefore be receiving for the use of his money more than the legal rate of interest. But the error in that case, if there be any, must be deemed in this state ineradicable except through the action of the legislature. The case at bar is different from that of Cram v. Hendricks, and pushes the doctrine upon which the decision in that case was based to a still farther extreme.- In this case there is not an indefinite indorsement or guaranty, but a specific undertaking to pay the whole amount, in so many words. As a case, therefore, unaffected by the decision in that and subsequent cases, I should have no difficulty in holding the rulings at the circuit erroneous.
1st. If the signing of the note by Goodwin, as maker with Wilcox, was without the consent of the latter, he would be discharged. It would be an alteration of it in its legal effect. (11 Coke, 27. 4 Cranch, 60. 9 id, 28. 32 Eng. L. and Eq. 162.) The note therefore, so far as it had any validity at the time of the guaranty and transfer to the plaintiff, was simply the note of Goodwin alone. As Goodwin received the money he must be deemed the borrower, and the transaction was usurious within all the cases.
2d. Assuming that Wilcox was not discharged, the note, as a joint and several undertaking, was not completed, and therefore did not have its inception until it was signed by Goodwin and transferred to the plaintiff. It was long ago held by Holt, Oh. J. that when a party signed a note as security, with the assent of the maker, after it was executed and delivered, it became a new contract, and required a new stamp, under the stamp act. (Holt’s N. P. 474.) It was guarantied as a joint and several note, and no other. The claim that it might be treated as a several note is, at all events, as against the defendant, untenable. Upon this note, thus signed at the time, *257one of the joint and several makers received, at the time of its inception, as a complete and valid instrument for the payment of $500, the sum of $425 only. It seems to me that it was as plainly a loan of that amount to Goodwin, as if the name of Wilcox had not been on the note.
3d. But assuming that the undertaking of Goodwin was several and not joint, then it must be deemed equivalent to a new note for $500. Suppose Goodwin had in fact, at the time of receiving the $425, given his note for $500, at one year, guarantied by the defendant, and at the same time transferred the note signed by Wilcox, could there be any doubt that Goodwin’s note would be void for usury ? It would be in legal effect a loan of the amount, to him, with a direct, specific undertaking to repay the amount and $75 as a usurious premium for the forbearance. In this aspect of the case it differs from that of Cram v. Hendricks, in its being, instead of a general indorsement of a valid pre-existing note, a direct undertaking to repay the whole amount, including the usurious premium. And the guaranty being collateral, this undertaking of course is invalid if the note itself is.
Examining the case, therefore, as a new one, and applying to it legal principles as old as the English statutes of usury, I would have no hesitation in holding the transaction usurious. But the case of Cobb v. Peters, (13 Barb. 45,) decided in this court and afterwards affirmed in the court of appeals, is directly in point to sustain the ruling at the circuit. The only difference is, that the action in that case was against the makers, and both were held liable, the last signer for the amount he actually received. But if an action can in this case be sustained against Goodwin, it will not be claimed that it cannot be sustained against the defendant. The case therefore is directly in point; and although it does not appear that any point was taken, in that case, that the first signer was discharged' by the second party signing, yet the point was clearly in the c ise, and the decision could not have been made except upon the assumption that he was not discharged.
*258[Oswego General Term, July 7, 1857.If an important consideration has been overlooked in the court of appeals, I think we should leave it to that court to correct the error. We should not assume that that court did overlook the point, but rather that all the points in the case, necessary to the decision, received the careful consideration of the court.
Motion for a new trial denied, with costs.
Hubbard, Pratt, Bacon and W. F. Allen, Justices.