Whitney. Martine.

upon bonds and mortgages. The parties did not stand upon an equal footing. The plaintiff is a woman not usually accustomed to dealings of this kind, and the whole case shows her implicit trust in her agent, known to be skilled in all such matters.

It is quite apparent that the attorney to whom he delegated the execution of the trust, was then engaged in assisting other parties in raising the loan of the two first mortgages of $10,000 each on these premises, and that these mortgages and the two mortgages in suit were being negotiated at the same time.

The exhibit in the case furnished by the attorney, conclusively shows that the loan for the first mortgages was obtained only at a ruinous discount-and the funds furnished by the plaintiff for the second mortgages were used for the purpose of paying this discount and discharging other heavy liens on the property before the first mortgages could be executed. Both transactions were finally closed together, and the expenses were charged to both parties, but the money obtained on the second mortgages was in reality the fund from which it was taken.

These are facts known to the defendant, or what is the same thing, he must be presumed to have known. them. His office was that of his son, and his son was the attorney who did the business at that office. The defendant was employed by the plaintiff as her trustee, to invest her money. It is not necessary that the agent should be charged with actual fraud to subject him to an action for neglecting to perform a duty he has undertaken. An agent is bound not only to good faith, but to reasonable diligence, and to such care and skill as is ordinarily possessed by persons of common capacity engaged in the same business (Story on Agency, §§ 183, 184; Opinion of RAPALLO, J., in Heinemann v. Heard, 50 N. Y. 35). The Lord Chancellor, in the case of Thomson v. Christie (1 MacQueen's

Wayne County Savings Bank . Low.

App. Cas. 236), strongly disapproves the right of an agent to advance funds on the security of houses and lots already actually mortgaged.

The plaintiff must have judgment with costs.

WAYNE COUNTY SAVINGS BANK v. LOW. N. Y. Common Pleas; General Term, December, 1878.

STARE DECISIS.-BILLS AND NOTES.-LAW OF PLACE.-DELIVERY OF NOTE BY DEPOSIT IN POST-OFFICE.-USURY.CONFLICT OF LAWS.

On the question of the conflict of laws there is a distinction between cases arising on the validity of contracts, and those arising on the interpretation.

An exceptional, ill-considered and clearly erroneous decision of the court of last resort does not, as a precedent, necessarily control the subsequent determination of a subordinate court of general jurisdiction.

A note payable to the order of A. B., cashier, although the bank of which he is cashier is not named, is in judgment of law payable to the bank.

A cashier, as agent of his bank, sent such a note by post to the maker, to be signed and returned; the maker signed it and deposited in the post-office, the letter containing it addressed to the cashier of the bank. Held, that this was a delivery to the bank. But, nevertheless, the note was valid if legal under the law of the place of the bank, though not legal by the law of the place of mailing.

A note made by a resident of this State, payable here, but first discounted by a bank in another State in the regular course of business, at a rate of interest allowed by the usury laws of that State, is valid, though the rate of interest be greater than that permitted by the law of this State.*

* Compare Towne v. Rice, 3 L. & Eq. 470, with Dickinson v. Edwards, 2 Abb. New Cas. 300, which latter, however, was reversed in 13 Hun, 405. Compare also Heidenheimer v. Meyer, 42 Super. Ct. (J. & S.) 506; Merchants' Bank v. Griswold, 9 Hun, 561; Croninger

Wayne County Savings Bank v. Low.

Where the law regulating the rate of interest is different in different States, the law of the State where the interest was reserved and taken, upon discounting a note, should govern in determining whether the rate of interest taken was usurious or not.

Jewell . Wright, 30 N. Y. 259, criticised.

Where a resident of this State made a note to the order of another resident, payable to a national bank here, and the payee indorsed it to another resident, who had it discounted at a bank in Pennsylvania, at a rate of interest allowed by the law of Pennsylvania, but greater than is allowed in this State, and the note was renewed by other notes, some of which were paid and others renewed, until finally a note was given in renewal of one which represented the final balance due, which last renewal note was written out by the cashier of the Pennsylvania bank, at the request of the maker, and made payable at a bank here, and sent to him in this State by mail, which the maker upon receiving signed and sent back by mail to the cashier, who also by mail returned to the maker the prior note; -Held, that there was no violation of the usury laws of this State. Appeal by defendant from a judgment entered upon the report of a referee.

The action was brought by the Wayne County Savings Bank, situated at Honesdale, Pennsylvania, against Henry R. Low, of Middletown, New York, to recover upon a promissory note of which the following is a copy:

"$2,000.

MIDDLETOWN, N. Y. Jan'y 20, 1875.

Six months after date for value received, I promise to pay H. C. Hand, cashier or order, at the First National Bank of Middletown, N. Y., two thousand dollars, without defalcation.

"H. R. Low."

This note was a balance due upon a former note for $10,000, dated July 24, 1872, made by the defendant to the order of Martin A. Smith, and payable at the First

. Crocker, 62 N. Y. 151; Hackettstown Bank v. Rea, 6 Lans. 455; S. C., 64 Barb. 175; First National Bank of N. Y. v. Morris, 1 Hun, 680; S. C., 4 Sup'm Ct. (T. & C.) 680; Clayes v. Hooker, 4 Id. 231; Agricultural National Bank of Pittsfield v. Sheffield, 4 Id. 421.

Wayne County Savings Bank v. Low.

National Bank, Middletown, where the defendant resided. Smith indorsed the note to Samuel Miller, Smith and Miller being then residents of this State, and Miller had the note discounted at the plaintiff's bank at Honesdale, in Pennsylvania, at the rate of eight per cent. per annum, which interest was allowed in that State.

This note defendant failed to pay at maturity, but caused it to be renewed in three parts, represented by three notes, two of which were paid, but the third extended from to time, and part payments made thereon until about Jauuary 21, 1875, when there was a balance of $2,000 unpaid, evidenced by a note of that amount due that day.

Before the maturity of this note defendant, by letter both written and mailed by him to plaintiff, at Honesdale, Pennsylvania, and by plaintiff there received, requested plaintiff to extend the said note for six months, and if assented to, to send him a new note to be signed. Plaintiff did assent, and from Honesdale sent such new note by mail to defendant at Middletown, N. Y., for signature. Defendant signed the note and sent it by mail from Middletown properly addressed to plaintiff at Honesdale, by whom it was received in due course of mail. As soon as plaintiff received the new note (which is the note in suit) it surrendered the old note by deposit in the post-office at Honesdale, addressed to defendant at Middletown.

Plaintiff also received at Honesdale, by mail, a check of $80 from defendant as interest under such agreement of extension.

Plaintiff has the powers of other banks in Pennsylvania, which in turn are empowered to discount notes and loans and give forbearance of money, at eight or ten per cent., or at such rate as borrower may agree to, and there is no forfeiture of principal and legal interest,

Wayne County Savings Bank v. Low.

by the law of Pennsylvania, where more than legal rate is reserved.

The defendant claimed that the original $10,000 note was an accommodation note obtained from the defendant by Smith, who falsely and fraudulently represented to him that he would deliver to him $15,000 of the stock of the Bridge Company at Long Eddy, New York, as security for such loan, and that he would not use or negotiate the said note until he had delivered the stock, but that, although the stock had not been delivered, Smith had negotiated the note, not in the ordinary course of business, but pro tanto, in payment of an original indebtedness to plaintiff.

The case having been submitted to a referee, he reported in favor of the plaintiff, and judgment having been entered accordingly, the defendant appealed.

Benjamin Low, for defendant, appellant.-The $10,000 note being an accommodation note, the burden of proof is on the plaintiff to satisfy the court that it is a bona fide holder thereof (Woodhull v. Holmes, 10 Johns. 231, and cases cited). There was no consideration for the note in suit (Trader's Bank of Rochester v. Bradner, 43 Barb. 392; Schepp v. Carpenter, 51 N. Y. 602, and cases cited; Small v. Smith, 1 Den. 586). Where a part of a note is appropriated in payment of an antecedent debt, the purchaser thereof is only bona fide pro tanto, and not as to the amount applied in payment of the prior debt (Edwards v. Jones, 7 Carr. & Payne, 633; Stalker v. McDonald, 6 Hill, 96). The note in suit is a New York contract, and void for usury, and being a renewal note is equally void as if given for an original loan (Price v. Lyons Bank, 33 N. Y. 55; Jacks v. Nichols, 5 Id. 178; rev❜g 5 Barb. 38; and affi'g 3 Sandf. Ch. 313; 1 R. S. 772, § 2). When the defendant deposited the note and check, properly enclosed in an envelope, in the post