Campbell v. Hunt

Opinion by

Tkexlek, J.,

This was a suit upon a promissory note. The defendant called Levine as a witness in order to show that William O. Campbell, who obtained the note of Mulholland the payee therein mentioned before maturity, had notice of an infirmity in the note. The court after hearing his testimony struck it out, holding that he was not a competent witness and barred by Sec. 5 of Act of May 23, 1887, P. L. 158. Wm. O. Campbell-having died, and his right having passed to the plaintiff, the court found that Levine was interested and that such interest was adverse to the right of Campbell-..

We think the ruling was correct and quote a portion of the opinion of the court below which we think justifies its action. “Mulholland and Levine were partners in the very transactions which brought about the negotiation of defendant’s note. Levine testified that certain *336elevators were transferred to Campbell as security for the note. These elevators were partnership assets, although the evidence was dubious as to whether or not they had ever been paid for. If the note in suit, though drawn to Mulholland individually, was given in connection with partnership activities and the proceeds were misappropriated by Mulholland and never reached defendant,.it is plain, if defendant pays the note or a judgment as a result of a suit upon it, he might hold Levine for the loss sustained. Again, Levine’s testimony also tended to show that the note was discharged by the sale of the elevators. The discharge of the note in this way would be in relief of Levine.”

. Levine’s competency was a preliminary question to be determined by the court on the law and facts: Semple v. Callery, 184 Pa. 95. He sought to prove his right to testify by asserting that he had no interest in the result of the suit, but his testimony in this regard was far front satisfactory. He stated that, a certain suit between Campbell and Mulholland involving the elevators above referred to, he thought had been settled, but admitted that it was still undisposed of on the record. The good faith of the witness and the genuineness of his disclaimer of interest was for the court.

The next point raised is the defense of usury. It appears by the testimony of a witness that Campbell stated that he had paid $1,100 for the note, the face of the note being $1,200 and that under the laws of New York, the taking of more than the legal rate of interest rendered the entire transaction void and therefore a complete bar to the plaintiff’s recovery. Do the laws of New York or of Pennsylvania govern? The note was made in Pennsylvania and was payable in Philadelphia. It is reasonable to believe that being made in Pennsylvania and payable in the same State, it was the intention of the parties that it was to be regarded as a Pennsylvania contract and subject to Pennsylvania laws. “Every presumption is against an intention to violate *337the law, therefore, if the several elements of a contract have their situs in different states, if by the laws of one of the states the contract would be legal, but illegal by the laws of another then the parties would be presumed to have contracted with reference to the laws of the place wherein the transaction would be valid”: 39 Cyc. 898.

Although the note was payable to Mulholland, we assume for the purpose of the present discussion, that he merely was the agent of the maker. We see that two of the important elements of the transaction occurred in Pennsylvania. The consideration for the note is supposed to have passed in New York, although there is no positive testimony as to that, but it is a fair inference that the note having been sent to New York and Mulholland having negotiated it in New York, that the consideration also passed in the latter state. However that may be, applying the rule above quoted, the court was right in deciding upon the admitted facts that the transaction was subject to Pennsylvania laws.

When a promissory note is made payable at a particular place, interest is allowed according to the law of the place appointed for payment: Wood v. Kelso, 27 Pa. 241. The rule is, that interest is. to be paid according to the law of the place where the contract is made unless the payment is to be elsewhere: Clark v. Searight, 135 Pa. 173.

It seems , that the law of the place where the, note is given will govern as to the legal consequence of usury, when it is usurious by the law of that place and by the law of the place of payment also: 1 Daniels on Negotiable Instruments 703.

Having come to the conclusion that Levine was not a competent witness, and that the note was not void by reason of the defense of usury interposed by the defendant, there is nothing left in the case to overcome the prima facie of the note, and the verdict necessarily had to. bé for the plaintiff.

*338All the assignments of error are overruled. Judgment affirmed.