amount is afterwards reduced upon a renewal, and brought within the limits of the law, the defense, if available against the original note, could not be set up against the renewal thus purged."**

Usury in Original Bill.

744

746

§ 1585. The renewal of a note will not remove the taint of usury from the original instrument,745 even though a temporary novation has intervened, and is followed by a renewal of the original note. So, a note given for the balance due on other usurious notes is tainted with usury; 747 and the original usury is not cured by giving a renewal with additional parties.748 Where, however, a note is given to a guardian, and afterwards assigned to the ward, and a renewal given direct to the ward, the maker cannot set up the original usury.749 But where the original note is made to A., and by him transferred to B., and a new note is given for it, and made payable to B., the original usury will remain, although the maker would be estopped from setting it up against a bona fide purchaser.750 And although on the renewal of a usurious note the unlawful excess is indorsed as paid

744 Allen v. Bank, 23 Ohio St. 97.

King v. Trust Co., 57 Ala. Harris v. Bressler, 119 III. Jacks v. Nichols, 3 Sandf.

745 Knapp v. Briggs, 2 Allen (Mass.) 551; National Bank of Auburn v. Lewis, 75 N. Y. 516; reversing 10 Hun (N. Y.) 468; Bank of Cadiz v. Slemmons, 34 Ohio St. 142; House v. Davis, 60 Ill. 367; 118; McGee v. Long, 83 Ga. 156, 9 S. E. 1107; 471, 10 N. E. 188; Jones v. Rider, 60 N. H. 452; Ch. (N. Y.) 313, reversed in 5 Barb. (N. Y.) 38, affirmed in 5 N. Y. 178; Fulton Bank v. Phoenix Bank, 1 Hall (N. Y.) 619; Cake v. Bank, 86 Pa. St. 303; Overholt v. Bank, 82 Pa. St. 490; National Bank v. Eyre, 52 Iowa, 114, 2 N. W. 995; although the form of the note is changed, Mathews' Adm'r v. Bank (Va.) 27 S. E. 609. And such renewal is therefore not a valid payment to bar the statute of limitations, Rudd v. Bank, 78 Ky. 513; and the excess paid on the original debt can be deducted upon the renewal, Miller v. Irwin, 85 Pa. St. 376.

746 Archer v. McCray, 59 Ga. 547.

747 Cottrell v. Southwick, 71 Iowa, 50, 32 N. W. 22.

748 Riegel's Appeal (Pa.) 21 Cent. Law J. 137, 16 W. N. C. 221; or with two of the three original parties, Siesel v. Harris, 48 Ga. 652.

749 Stone v. McConnell, 1 Duv. (Ky.) 54.

750 Treadwell v. Archer, 76 N. Y. 196, reversing Sherwood v. Archer, 10 Hun (N. Y.) 73.

without the maker's consent, and for the purpose of purging the note from usury, it will still be bad.751

753

If, however, a bill tainted with usury is renewed after repeal of the usury law, it will be a valid instrument.752 So, a note which is executed to raise money to take up a former note is not a renewal, although the parties may be the same, and will not be affected by usury in the original note." So, where the note of a third party is given in consideration of usury already paid on a former note, it will not be affected by the taint in the original note.75 And it has been held that the parties to a usurious note may reform their contract, and remove the original taint by giving a renewal for that purpose bearing lawful interest.755 And an accommodation indorser may take up a note which the maker had discounted without his knowledge at a usurious rate of interest, and take from the maker a valid note in consideration of such payment.756 So, the surety on a usurious note may give his own note in renewal, for a valuable consideration received from the principal.757

181 National Bank v. Eyre, 52 Iowa, 114, 2 N. W. 995.

782 Flight v. Reed, 1 Hurl. & C. 703; Story v. Kimbrough, 33 Ga. 21. 153 Dewey v. Bell, 5 Allen (Mass.) 165. So, if the usurious note is paid off, and a new security given. Smith v. Stoddard, 10 Mich. 148.

154 Smith v. Young, 11 Bush (Ky.) 393.

165 Gerlaugh v. Bassett, 20 Wis. 671.

1 Cassebeer v. Kalbfleisch, 11 Hun (N. Y.) 119. 757 Tenny v. Porter, 61 Ark. 329, 33 S. W. 211.

(2261)

Action before Maturity-On Day of Maturity.

§ 1586. Before a bill matures, no action can, in general, be brought upon it. And this applies to an attachment against an absconding debtor,1 or to a common-law action against a party who had declared himself insolvent, or to a bill in equity to set aside a fraudulent conveyance. But an indorser may take up a note before maturity, and sue the maker at once for fraud in inducing him to sign it. And, in general, a plea to the merits is a waiver of the objection that the suit was brought too soon. And a judgment rendered on a note cannot, a fortiori, be questioned collaterally on that ground."

5

But in some states suit may be brought on the very day a bill falls due, after refusal of payment and close of business hours. And in Massachusetts it has been held that a writ may be issued against the maker on that day, if it is not delivered to the sheriff until the next day. An accommodation acceptor may begin an action against the

1 Wiesinger v. Bank, 106 Mich. 291, 64 N. W. 59; Gordon v. Parmelee, 15 Gray, 413; Altmeyer v. Caulfield, 37 W. Va. 847, 17 S. E. 409; Jones v. Brown, 167 Pa. St. 395, 31 Atl. 647.

2 Douglas v. Bank, 97 Tenn. 133, 36 S. W. 874.

3 McGhee v. Bank, 93 Ala. 192, 9 South. 734; Freider v. Lieukauff, 92 Ala. 169, 8 South. 758; Evans v. Thornburg, 77 Ind. 106.

Davison v. Farr, 18 Misc. Rep. 124, 41 N. Y. Supp. 170.

Fiore v. Ladd, 29 Or. 528, 46 Pac. 144.

Robertson v. Huffman, 92 Ind. 247.

72 Daniel, Neg. Inst. 239; 2 Pars. Notes & B. 461. And see Story, Prom. Notes, §225; Veazie Bank v. Paulk, 40 Me. 109; Coleman v. Ewing, 4 Humph. (Tenn.) 241; Wilson v. Williman, 1 Nott & McC. (S. C.) 440; McKenzie v. Durant, 9 Rich. Law (S. C.) 61; Heise v. Bumpass, 40 Ark. 545. So, after refusal at 3 p. m., when there was no bank in the place. Ammidown v. Woodman, 31 Me. 580.

Butler v. Kimball, 5 Metc. 94; although it would be premature to serve

drawer on that day, although the bill was taken up by him before it matured; since the drawer's liability arises at once upon payment by such acceptor at any hour on the day of maturity." If a demand note is not entitled to grace, the holder may bring suit at once without further demand. 10 But if a note is entitled to grace, an action brought on the day it is due, without such allowance of grace, will be premature. 11 If the action is brought on the day the note becomes due, with grace, it must appear that a demand of payment had been already made at a reasonable hour, or that the action was not begun until after the close of banking hours.12 And where a note is payable before the end of banking hours, as has been held to be the case with post notes of a bank, suit may be brought after the close of such hours.13 But if the note is not shown to be payable at bank or within bank hours, and if no prior demand and refusal is shown, a suit begun at 3:30 p. m. on the last day of grace will be clearly premature.1

In New York, as well as in other states, an action cannot be begun on the last day of grace, even after bank hours, and although the note is payable at bank and payment has been refused.15 Where an action was brought at 12:01 a. m. on the last day of grace on a note payable at bank, and not due until the close of banking hours, nor pre

such writ even after dusk on the last day of grace, Estes v. Tower 102 Mass. 65.

9 Whitwell v. Brigham, 19 Pick. 117.

10 Cammer v. Harrison, 2 McCord (S. C.) 246; so, too, a duebill, Dews v. Eastham, 2 Yerg. (Tenn.) 463; 2 Daniel, Neg. Inst. 243.

11 Hinton v. Duff, 11 C. B. (N. S.) 724; Hogan v. Cuyler, 8 Cow. (N. Y.) 203; Seaton v. Hinneman, 50 Iowa, 395; Cox v. Reinhardt, 41 Tex. 591; or on the second day of grace, Thomas v. Shoemaker, 6 Watts & S. (Pa.) 179; but in Texas it is sufficient if the note matures pendente lite, Dignowitty v. Alexander, 25 Tex. Supp. 162; Culbertson v. Cabeen, 29 Tex. 247.

12 Veazie Bank v. Winn, 40 Me. 62.

13 Staples v. Bank, 1 Metc. (Mass.) 43.

14 Vandesande v. Chapman, 48 Me. 262.

15 Smith v. Aylesworth, 40 Barb. (N. Y.) 104; Oothout v. Ballard, 41 Barb. (N. Y.) 33; Bevan v. Eldridge, 2 Miles (Pa.) 353; Farmers' Nat. Bank v. Salina Paper Mfg. Co., 58 Kan. 207, 48 Pac. 863; Estes v. Tower, 102 Mass. 65; Wiesinger v. Bank, 106 Mich. 291, 64 N. W. 59; Satcliffe v. Humphreys, 58 N. J. Law, 42, 32 Atl. 706; Hamilton Gin & Mill Co. v. Sinker, Davis & Co., 74 Tex. 51, 11 S. W. 1056. So, Kennedy v. Thomas [1894] 2 Q. B. 759; Wells v. Giles, 2 Gale, 209.