
    GOOLD HOYT v. THE BRIDGEWATER COPPER MINING COMPANY AND OTHERS.
    1. A bond and mortgage given in fulfillment of a prior written agreement for the sale and purchase of property, at a price stipulated, to be paid in a stipulated manner, with interest, the interest to be paid half yearly, in advance — held not to be usurious.
    2. A new bond and mortgage were substituted for the first, dispensing with the payment of interest in advance. The Chancellor said that if he could think the first usurious, he should hold that such a contract might, by subsequent agreement of the parties, be freed from the vice.
    3. Acts of a subsequent board of directors of a corporation, which were held to be a recognition and sanction of a mortgage given by a former board.
    On the 13th January, 1840, Goold Hoyt filed his bill, stating that, on the 15th December, 1836, “ The President and Directors of the Bridgewater Copper Mining Company,” being indebted £0 him in $86,378, for stock in the Bridgewater copper mines, together with certain lands and premises in the township of Bridgewater, in the county of Somerset, before then sold, assigned and conveyed to the said “The President and Directors of the Bridgewater Copper Mining Company,” being the same premises described in the mortgage set forth in the bill, for securing the payment of the said sum, with interest, to the complainant, did, on the day and year aforesaid, make and execute, under their corporate seal, to the complainant, their bond of that date, conditioned for the payment of the said sum on or before the 15th December, 1838, with interest from the date thereof, to be paid semi-annually, and, at the same time, for the better securing the payment of the said sum according to the condition of the said bond, did make and execute, under their corporate seal, their mortgage, dated the said 15th' December, 1836, by which, in consideration of the said sum, they conveyed to the complainant, in mortgage, the premises in the bill described.
    That the execution of the said mortgage was, on the said 15th December, 1836, duly acknowledged by the said company, by their president, Peter I. Stryker, before James Taylor, Esq., a judge, &e., and that the said mortgage was duly recorded on -the 12th of April, 1837.
    
      The bill prays foreclosure, &e.
    To this bill the company put in their answer, on the 14th .August, 1840, by which they say that said bond and mortgage were not given by the said company, nor by any person authorized to give and execute them on their behalf, or to affix the seal of the said corporation thereto ; that the persons calling themselves the board of directors, by whose order the same were given, were not lawfully elected directors, nor had they, at the time, any power to execute the same; that the same were given by the order of Peter I. Stryker, James S. Nevius, James S. Green, and William Thompson, alleging themselves to be a board of directors of the said company, when they were not, at Ihe time, duly elected directors; that there had been no election by the stockholders for three years and upwards, and that part of said pretended directors had never been elected by the stockholders, pursuant to the charter, but had been appointed by other directors, whose terms of office had long before expired.
    They further say that, even if the said persons had been duly chosen directors, and as such, were authorized to bind the company, yet ihat it could only be done in the manner prescribed by the charter and by-laws of the company.
    That the charter provides that a majority of the directors, for the time being, shall form a board or quorum for business, and have power to make such by-laws as to them shall appear needful and proper, touching the management and disposition of the stock and effects of the corporation ; that certain by-laws were made, by which it is ordained, among other things, that there shall be a regular meeting of the board, at Somerville, on the first Tuesday of January, and at such place and in such state as may be designated by the president for the occasion, on the first Tuesday of April, July, and October, in every year ;• extra meetings may be held, at such place as may be designated by the president, whenever, in his judgment, the same may be deemed necessary, or whenever a requisition shall be made on him by any two of the directors to call the same. And that by the said by-laws, it is further ordained that it shall be the duty of the secretary to issue written summons for, and to attend all regular meetings of the board, and to keep a minute of the proceedings' of the same, to be by him recorded in a book to be by him provided for the purpose.
    And the defendants say that on the said 13th December, 1836, four persons claiming to be directors, viz., the said Stryker, Nevius, Green and Thompson, casually met in New Brunswick, and after pretending to make a certain compromise or arrangement with the complainant of a suit then pending in this court, agreed to make, and did make to the complainant, the said bond and mortgage; that said meeting was not a regular meeting of the board, according to the charter and by-laws, nor an extra meeting on the call of the president, or designated by him on a requisition of any two of the directors. That no written notice was ever given of said meeting to the other members of the board; but that'the proceedings were had in the absence of three of the directors, and without their knowledge or consent; and the defendants insist that the corporation is not bound by the unauthorized proceedings of'four persons, styling themselves a board of directors, and acting without notice to others equally interested and clothed with equal rights and privileges; that though by the charter, four directors, being a majority, form a quorum, yet that the power to act as a board is confined to such times as they shall be lawfully convened for business, either at a stated meeting, or at an extra meeting lawfully convened by the president, either on his own judgment, or on a requisition of two of the directors, and on written notice given to all the members of the board; and they insist that the said bond and mortgage, given as aforesaid, are void. And they say that the complainant, who was present at the giving thereof, was well acquainted with the charter, by-laws and situation of the company, having formerly been president of the board; and that the whole transaction was without authority, and a fraud on the company.
    The defendants further say that the intent and meaning of the charter is, that, the directors shall be stockholders; that at the time when the bond and mortgage were given, two of the persons present, claiming to be directors, were not stockholders, but were strangers, and had never been elected by the stockholders.
    Tb«y deny that at the time of the execution of the said bond and mortgage, the company were indebted to the complainant, in any such sum, for stock in the Bridgewater copper mines and for certain lands in Somerset before then sold, assigned and conveyed to the company; and they deny that said stock and property constitute the consideration for which the said bond and mortgage were given ; but they say that the immediate consideration thereof was á certain other mortgage on the same property, given by the company to the complainant, on the 10th October, 1830, for $65,000, which they say was usurious and void ; that at the time of the giving thereof, the complainant demanded and coi’ruptly and usuriously received, on the whole sum mentioned therein, the interest for six months in advance, at 6 per cent.; by reason whereof the said mortgage and contract were void in law.
    And the defendants say that after the said mortgage became payable, the complainant instituted a suit in this court, to foreclose the said mortgage; and that the defendants, in bar of that suit, set up and- insisted that the said mortgage was void for the reasons aforesaid; and that while the matter was pending, the complainant, under various plausible pretences, induced the said four persons claiming to be directors to settle and compromise the said suit; and that thereupon, the said Stryker, Nevius, Green and Thompson, without any meeting of the board having been lawfully convened, in the absence of the other directors or the persons claiming to be such, and without consultation with or direction from the company or stockholders, did,. on said December 13th, 1836, make a settlement of the said suit, and on that settlement did execute to the complainant the said bond and mortgage mentioned in his bill, in fraud of the rights of the stockholders of the company.
    And the defendants say that the last bond and mortgage were given for the principal and interest of the former bond and mortgage, and that the object of the complainant in staying said suit and compromising the same was to obtain a new security, in the expectation and hope thereby to avoid the legal defence of . the defendants. But the defendants insist that the last bond and mortgage, being given in lieu of the former, and founded on the same illegal consideration, are void; and they nray that they may have the same benefit from the answer, in their behalf, as if the said matter had been specially pleaded in bar.
    And they say that when the said bond and mortgage of October, 1830, were given to the complainant, he was a member of the company and president of the board; that it was agreed by the board to raise money by loan to carry on the mining operations of the company, and that for that purpose they gave the bond and mortgage to the complainant for $65,000; and he, instead of advancing the money or any part thereof, gave to the company a promissory note of Peter I. Stryker, to the said amount, payable on demand. And they say they are informed, and they allege, that there was no such sum of money due from said Stryker to the complainant; that no part of said money was paid or raised on said note, and that the said note was, afterwards, in July of the following year, given up and restored to the said Stryker. And they say that the whole proceeding was an artifice and contrivance on the part of the complainant, the real object of which was, under pretence of aiding the company by a loan of money, to speculate on the necessities of the company, and obtain a large and productive lien on the property. And the defendants submit that, independently of the fact of usury in the first contract or mortgage, the same was inequitable, without just consideration, a fraud on the company, and especially on those who then were, or might thereafter be interested in the said company; and that the mortgage on which the present suit is founded, being a mere substitute for the former one, and having no other or better consideration, stands in the same condition, and ought not, in equity, to be enforced.
    On the 15th October, 1840, Hoyt filed an amended bill, making Peter I. Stryker a party, in which, after setting out the giving of the mortgage for $86,378, as stated in the first bill, he states that he, the said complainant, with Stephen Hoyt, Russel H. Nevius and Elisha Townsend, on the 12th August, 1830, owned stock to the amount of $80,000 in the Bridgewater copper mines, and that they were, or one of them was, the owner of the lands then possessed by the president and directors of the ,said Bridgewater Copper Mining Co.
    That the said P. I. Stryker, on or about that day, came to New York and offered to buy of the complainant and the said Stephen, Russel and Elisha, their right, title and interest in the said stock, lands, funds and property of the said company, and in satisfaction therefor, proposed to pay them $15,000, on the 15th September then next, and to secure the payment of $65,000, the residue of the purchase money, by a bond and mortgage on the said mines and real estate, and to pay the interest thereon semi-annually in advance, which proposition was accepted; and thereupon an agreement in writing was entered into by them,, with said Stryker, for the sale of their said stock, lands and interest, for $80,000 — $15,000 to be paid on the 15th September then next, and the balance, $65,000, to be secured by a bond and mortgage on the said mines and real estate, payable in four equal yearly payments, with lawful interest, payable half-yearly in advance. And that afterwards, on or about October 11th, 1830, in execution of the said agreement, the complainant and said Stephen, Russel and Elihu conveyed and assigned all their, and each of their said stock, lands, funds and property to the said Stryker, or to the said company, or for their use and benefit.; and thereupon, in pursuance of said agreement, the said Stryker, with one Henry Vanderveer, made and executed to the complainant and the said Stephen, Russel and Elihu, a bond for the said $15,000, and for the balance, viz., $65,000, which belonged exclusively to the complainant. “The President and Directors of the Bridgewater Copper Mining Co.” executed to the complainant four bonds, dated the day and year last aforesaid, conditioned for the payment of $16,250 each, the first payable September 15th, 1832, the second, Séptember 15th, 1833, the. third, September 15th, 1834, and the fourth,September 15th, 1835, with the lawful interest thereon from October 11, 1880, payable half-yearly in advance, according to the terms of the purchase aforesaid,, and the said “ The President and Directors of said Copper Mining Co.” beiug then seized in fee of the lands and premises described in the mortgage first mentioned, in further pursuance of the said agreement, executed to the complainant, under their corporate seal, their certain mortgage, dated October 15th, 1830, on the before-mentioned lands and premises, to secure to the complainant the payment of the said four bonds; which said mortgage was duly acknowledged by the said “The President and Directors of” &c., by the said Stryker as president of said company ; and that the seal of said company had been thereto affixed, pursuant to an order of the said corporation; and that, on the 12th October aforesaid, the said mortgage was duly recorded.
    That no part of the said sum, or of the interest thereof, being paid, the complainant filed a bill in this court to foreclose the said mortgage and for a sale of the mortgaged premises, to which bill the said company put in their answer, under their corporate seal, which answer was signed by said P. I. Stryker, as the president of said company.
    And the complainant says, there being difficulties and disputes between the complainant and the said company respecting the validity of the said first mortgage, on or about December 6th, 1886, a compromise and settlement were made and entered into by the said Stryker, as president of the company, as their agent, and acting by their authority, and assisted and attended by Jas. S. Green, Esq., counsel of the company, who represented themselves to be fully authorized by the company to make a settlement and compromise of all matters in difference between the company and the complainant.
    That, on said settlement and compromise, after correcting all errors and mistakes, and making all such deductions as the company claimed, there was found to be due the complainant, on account of the said purchases, $86,378.
    That on or about December 12th, 1836, the said Stryker produced and delivered to the complainants’ solicitor a certified copy of a resolution of the board of said company, as follows: (giving the resolution.) It states that at a meeting of the board at Stelle’s hotel, in New Brunswick, on the December, 1836, present Peter I. Stryker, James S. Nevius, James S. Green and William Thompson, the following preamble and resolutions were adopted. The preamble recites that a compromise and settlement had been made, and that, after correcting all errors and mistakes, and crediting all payments, and making such deductions as the company claimed a right to have made on account of the purchase for which the company had theretofore given their bonds and mortgage on their real estate, lands and property 'n Somerset, there was justly and legally due and owing him, from, the company, $86,378, for and on account of the said purchase; and that the company had agreed to give their bond and mortgage to secure the said sum; and the resolution is, that a bond and mortgage be given by the company to the complainant, for the payment of the said sum in two years from the 15th of that month, with legal interest thereon to be paid half-yearly from the date of the said bond and mortgage; and that the president be authorized to execute, under his hand and the corporate seal of the company, the said bond and mortgage on the lands and property theretofore mortgaged to him; and that, after said mortgage should be recorded, the said bond and mortgage should be delivered to the complainant or his attorney, on the canceling the former bond and mortgage. This preamble and resolution are signed “ W. Thomson, Sec. B. C. Mining Co.”
    And the complainant says that, in confidence of the good faith, <&c., and of the authority of the said board, and not having the least suspicion that the validity of the said bond and mortgage of December 15th, 1846, would or could be questioned, the said original mortgage was delivered to the said Stryker, at his request.
    And the complainant says he is informed and believes that said Stryker, as president of the company, and by the direction of the board of directors of said company, after a considerable lapse of time, caused the said original mortgage to be canceled. of record, in order that the company might be able to procure a certificate that there was no mortgage on the said property but the last one so given to the complainant as aforesaid ; and that they did procure such certificate, and have repeatedly used it, in Europe and in the United States; and that the said company have always, until a few months past, recognized the validity of .the said last-mentioned mortgage, and acquiesced in the said settlement and compromise, and have, from time to tipie, applied to the complainant not to put said last-mentioned mortgage in suit; and have obtained time by assurances that they were in. hopes of selling the premises, and that the whole debt due from, the company to the complainant should be paid.
    That wh< n said compromise and settlement was made, the said Stryker was president of the board, and had been, for several years, a large stockholder, and the principal and most active man in the management of the affairs of the company, and also as the duly authorized agent of the company in the transaction of their business; and that, when he executed and delivered the said second mortgage, and when he obtained the first, and caused it to be canceled, he represented himself as acting in the name and behalf of the company, and as duly authorized by them to execute and deliver the said second mortgage to the complainant ; and that it was on the faith of his said representation, and of the said resolution, and the complainant’s and his solicitor’s perfect confidence of the probity of the gentlemen whose names are mentioned in it, that said Stryker obtained the said original mortgage from the complainant’s solicitor ; and that, if the said second mortgage is invalid from any cause, the said first mortgage ought to be considered in full force, the same having been obtained from the complainant by fraud and imposition, or delivered to the said Stryker under the influence of mistake and full faith in the supposed goodness of said second mortgage.
    That the defendants pretend that the said first mortgage was usurious, for that, at the time of giving the same, the complainant corruptly agreed for and received, on the whole, §65,000, the interest for six months in advance, at the rate of 6 per cent, per annum, and thereby corruptly and illegally agreed for and received more interest than at the rate of 6 per cent, per annum; but the complainant charges that the said contract and mortgage was not usurious, and that it was not corrupt or illegal, on a bona fide contract for the sale of property, as that was, to agree for and receive interest in advance on the purchase money.
    That the said contract was a bona fide one for the sale of stock and other property, and not for the loan of money; and that he sold the said property upon the express terms of payment that, as §65,000 of the consideration money was to be paid by installments at distant days, the interest should be paid semiannually in advance, as expressed in the said first mortgage; and he denies that the said sale, or the said stipulation, was a shift or device to cover or conceal usury, or that the said first mortgage was tainted with usury, or void in law.
    
      That, if the said agreement for the payment of the interest in advance was usurious or illegal, there was no corrupt intention on his part to agree for or take illegal interest; and that, notwithstanding he was advised by his counsel that the said mortgage was not tainted with usury, yet, as the defendants complained that the said agreement for the payment of interest semiannually in advance was illegal, he consented to reform the original contract in that particular ; and it was mutually agreed, at the time of the said settlement and compromise, that the said stipulation in the said first mortgage and bonds should be rescinded and waived, and that any excess of interest which the complainant had received, on the said original contract and mortgage, beyond the rate of 6 per cent., should be deducted and allowed for in ascertaining the amount for which the new mortgage and bond were to be given; and that a calculation was made accordingly by the said Stryker, and the excess of interest which it was alleged had been received, in consequence of the •said stipulation for the payment of interest in advance, was deducted and allowed for to the company; and that no usurious interest on the original contract or, mortgage was included in the said second mortgage.
    The complainant insists that, if there was anything objectionable in the original contract and mortgage, yet, as that was ■one of the matters in difference between the complainant and the company, and one of the errors and mistakes complained of by the company, and was corrected and allowed for by mutual •consent and agreement, before the giving of said second mortgage, and no usurious interest was included therein, the said second mortgage is entirely free from the objection of usury.
    That the said Stryker, ever since the organization of the company, has acted as their authorized agent in transacting its business and in entering into contracts for said company ; and that his acts as such agent are binding on the company ; and that the •said Stryker, Nevius, Green, and Thompson, for a long time, both before and after the passing of said resolution, claimed to •be, and acted as directors, as by the book of minutes of the board will appear; and that they were assembled in the usual way in which the said board have been accustomed to assemble; and, therefore, as directors de fado, their acts, being done under color of right, are binding on said corporation, and cannot be vacated for irregularity in the election of some of them, or for any want of formality in the assembling of the board, if any such irregularity or informality existed, of which the complainant had no knowledge or notice, and which he does not admit; that the proceedings of the said board in passing said resolution, and the validity of said second mortgage, were acquiesced in for years by the company, and until the complainant could no longer be put off by promises, &c., when a change of president and directors was contrived, as a plan to defraud the complainant out of his debt; and the complainant insists, that if the said second mortgage shall be deemed void on any such pretences as last aforesaid, the first mortgage ought to be considered in force, as having been obtained from the complainant and wrongfully canceled, either by fraud or mistake.
    This bill prays that the said company and Peter I. Stryker may answer, &c., and that the said Stryker, who is made a party to this bill for the purpose of discovery, may further set forth and discover whether he was not, in December, 1836, president of said company, and when he was first appointed president, and when he ceased to be such, &c., and whether he did not act in behalf of said company in making said settlement and compromise, and whether he was not assisted therein by Jas. S. Green, the counsel of the company in that business, &o., and whether the said certificate did not state the existence of the said second mortgage as an encumbrance, and whether the said certificate was not produced to the board of directors, and when and how often, and what they ordered to be done with it, and that the said company may be decreed to pay said second mortgage, or, if it shall appear that the said second mortgage is invalid, the said first mortgage may be decreed to be in force, and to have been obtained and canceled by fraud or mistake, and that the company may be decreed to pay the same.
    Stryker’s answer to this bill was filed in June, 1842. In it, after admitting that the complainants are possessed of said second mortgage, he admits that about August 12th, 1830, an agreement was entered into between him and Stephen Hoyt, acting for himself, and representing himself as acting for the complainant and Nevius and Townsend, whereby the said Hoyts and Nevius and Townsend agreed to sell to him, Stryker, all their interest in the stock of the Bridgewater Copper Mining Company, for $80,000; and he agreed to buy the saíne at that sum, and to pay $15,000 on the 15th September,-then next, and the residue in five years, with interest, payable half-yearly, in advance; the principal of which to be satisfactorily secured, as will appear by a certain article of agreement in writing between said parties.
    That by a subsequent agreement, also in writing, and which was made a part of the original agreement, it was agreed that the said sum should be paid in four equal annual payments, instead of five, and that the interest thereon should be paid semiannually, in advance.
    That, in compliance, &c., he, on the 15th September, 1830, gave to Stephen Hoyt, acting for himself and his associates, a bond executed by him and one Henry "Vanderveer, for $15,000, payable September 15th, 1831, in part fulfillment, &c.; and that at or about the same time, in further compliance, &c., he gave his own note for $65,000.
    That it was agreed by and between the said parties, at the time of making the said agreement, that not only the stock of the Hoyts and Nevius and Townsend should be transferred, but that the possession of the mines and real estate of the said company, of which the said Goold Hoyt was president, should be delivered up to him, Stryker, so that he might have the benefit of his purchase.
    That said G. Hoyt, and his said associates put off the consummation of the contract, on their part, till about October 11th, 1830; and that between said September 15th and October lltli, 1830, the said G. Hoyt and his said associates, or some or one of them, surrendered all their possession and right of possession of said mines and property to a third person, thereby disabling themselves from honestly and fairly executing their said contract; that he had no knowledge of said surrender ; that he relied.implicitly that said Hoyt, &c., would fairly carry out the said agreement, arid thus enable him to carry on the mining operations, either by himself or by others, which was his object and intention at the time of entering into the said contract.
    That the possession of said mines and real estate has not been delivered to him, or to any other person in his behalf, or for his use and benefit, according to the understanding of him, said Stryker, and the true construction and intent of the said agreement ; but the mines and real estate were delivered into the hands of another person, in consequence of which and by whom, he was deprived of that control of the property which he expected to enjoy and ought to have had.
    That, about this time, a negotiation for a loan was had and carried on between the Bridgewater Copper Mining Company and the said G. Hoyt, the particulars of which he cannot state from memory, but for which he refers to the minutes of said company as referred to by complainant. That the compauy agreed to give said G. Hoyt four bonds, for $16,250 each, payable on the 15th of September, 1832, and on the same day in each of the three succeeding years, with lawful interest from October 11th, 1830, payable half yearly iu advance, secured by a mortgage on the mines and property of the said company, and thereupon to take up and receive the said note for $65,000 so given by this defendant on his contract above set forth ; and thereupon, on the 11th October, 1830, the company executed such bonds and mortgage to said G. Hoyt, and the said note was thereupon delivered over to the said company • and that these are the bonds and mortgage described in the complainant’s bill as having been given and received for the balance of tiie purchase of said property.
    And the defendant submits that the said bonds and mortgage, whether founded on an agreement for a loan, or given in part for (he purchase money of the said property, being founded on a corrupt and usurious agreement, to take from him more than legal interest, were void. That in pursuance of such agreement, the said G. Hoyt actually received $1950, one-half year’s interest, in advance, on said $65,000.
    He admits that the answer of the company to the complainant’s foreclosure bill on this $65,000 mortgage, was signed by him as president of the company, and he presumes lie made the usual affidavit that he was president.
    
      That, about the same time, the said G. Hoyt sued him and Vanderveer on the said bond for $15,000, in the Supreme Court, and also brought an ejectment, in said court, against Augustus F. Cam man and others, to recover possession of said mortgaged premises.
    That to the foreclosure suit the company set up usury as a defence.
    That the same defence was set up in the said suit on the said $15,000 bond.
    That the said suits remained a long time pending, till, at length, the said G. Hoyt agreed to abandon and discontinue all the said suits, on condition that the costs thereof should be paid; and, thereupon, he, the defendant, paid to the attorney and solicitor of said G. Hoyt $150, the costs agreed to be paid on the discontinuance of the said causes.
    That, shortly after, to his surprise, he, the said Vanderveer, was sued on said bond for $15,000, in the Circuit Court of the United States, and that he employed an attorney to make the same defence as had been made in the former suit; that the plea was prepared and filed, but pwing to some misapprehension of his attorney as to the practice of that court, the plea was not filed in season, and judgment by default was entered, and execution issued and placed in the hands of the marshal, and by him levied on the property of this defendant.
    That application was made at the. next stated term of said court to open the said judgment and permit the defendants to plead, or that the plea they had filed should be received.
    That the court did not grant the said application, but doubted and took time to advise. That this defendant, alarmed, &c., was advised, by way of relief, to submit to these terms, to wit, that the execution should be withdrawn, and one year’s indulgence given to him, on condition that he would withdraw the plea of usury, and cause a new mortgage to be given for the said sum of $65,000, and the interest thereon, in place of the said mortgage for that sum given in October, 1830.
    That he reluctantly complied with this advice. That the complainant thereby escaped a legal defence, and this defendant was placed in his power, with a judgment against him for $15,000, for which he had received no just or valuable consideration, such as he had reason to expect when the said bond was given.
    That some time after the expiration of the said year, the said G. Hoyt, on scire facias, obtained and issued execution on the said judgment, and the property of this defendant was sold under the said execution.
    That it was under the pressure of this judgment that the compromise set forth in complainant’s bill took place.
    That the complainant, feeling he had power over this defendant, who was then president of the said company, (a mere nominal office, there being no business carried on by the company,) pressed to obtain a new mortgage at the hands of the company, in place of the old one which he knew was usurious and void.
    He admits that the said second mortgage was executed by him, as president of. the board o-f directors of said company, and under the corporate seal of said company; but he denies that he was, at the time, acting as the agent of the company, any further than such agency may be implied from his acting on that occasion as president of the board, or that he had any special authority for that purpose.
    That, satisfied as he was, he acted, probably, without due consideration in the matter, and intended faithfully to carry out his agreement, and supposed that the company would ratify the act.
    That, without access to the minutes of the board, he cannot state when the last election for directors, prior to the giving the last bond and mortgage, took place, but remembers that from about October, 1830, no mining was done by the company. Annual elections were not regularly held according to the charter, and there was little or no business to be done, the company not being in possession of the mining premises.
    That on or about December, 1836, this defendant and J. S. Nevius, J. S. Green, and William Thompson, all of whom this defendant believes had been elected directors of the company at some previous time, but when, he cannot say from recollection, met in New Brunswick, and the resolution set forth in complainant’s bill was then and there passed and adopted.
    That the meeting was informal and irregular ; the notice required by the charter and by-laws not having been given, and the directors who were absent not having been in any way notified of the meeting.
    That the said G. Hoyt was present, either personally or by the agency of his son, and must have known from the circumstances, as this defendant supposes, that the said meeting was not convened according to the charter and by-laws.
    That he does not know whether said Green or Nevius was a-stockholder at the time. He believes that said Green had met with the board on one former occasion, but thinks said Nevius never had.
    That he don’t recollect any previous instance in which business was transacted by the board in such an irregular way, and denies that it was usual for the board to assemble in this irregalar way for business; and that it was done so at this time owing, principally, if not entirely, to the urgency of the complainant to have the mortgage given and the convenience of getting said Nevius, Green and Thompson together, at that time, at New Brunswick, it being court time there.
    That he don’t recollect of any deductions being then made, except for payments and for excess of interest; yet it is possible other deductions may have been made, but what they were he does not remember, and cannot state. His impression is that the said mortgage was given as a substitute for the first, deducting the payments and excess of interest.
    That he. was elected president of the company in 1830, and again in 1838. That he ceased to be president the following year, and is now a director.
    That in 1830 he usually attended the meetings of the board, which were few, but he took little part in their business, as the company had not possession of the said mines or mining premises at that time, or at any other time previous to the new organization of the board in 1838.
    That the charge in complainant’s bill that this defendant, ever since the first organization of the board, has acted as the authorized agent of the company in the management of its affairs and the making of contracts, is not true.
    That, though this defendant owned considerable stock in the company, he does not recollect of any agency in which he was employed by the company or under its authority previous to 1838.
    That he, as president of the company, caused the said first mortgage to be canceled of record, and that a certificate was thereupon procured from the county clerk that there were no other mortgages on the said mining property but the said mortgage of 1836, and such certificate may have been used in Europe and in this country, to enable the company to procure a loan or sell the property; but whether the said company have, from time to time, or at any time, recognized the validity of said mortgage, or have applied to the complainant not to put the same in suit, and have thereby obtained time, he has no personal knowledge, and therefore leaves the complainant to his proofs.
    That, by the resolution set out in the complainant’s bill, the said second mortgage was to be delivered to the complainant on canceling the said first mortgage and bond; vet, though the second mortgage was delivered to the complainant soon after it was registered, the complainant neglected and refused to deliver rap the first mortgage and bond for a long time, and, as he believes, for 18 months, during which time both appeared as encumbrances, to the great detriment of the company.
    That he has no knowledge of any device to change the president and directors of the company to cheat and defraud the complainant out of a just and honest debt; the change of officers was a natural consequence, as he supposes, of a change in the ownership of stock which took place prior to the organization of the board in 1838.
    Replications were filed, and testimony was taken.
    
      B. Williamson, for the complainant,
    He cited Saxton’s Ch. 541, 550; 1 Hoff. Ch. Pr. 553; 3 Paige 407; 1 Ib. 430, 3; Cro. El. 25, 104; 4 John. Ch. Rep. 332; 8 Wheat. 354; 3 Peters 40, 2; 2 Comen 664, 678, 704, 763; 15 John. Rep. 168 ; 4 Wend. 655; 4 Yates 220, 3; 9 Mass. Rep. 49 ; 3 Bos. and Pul. 158; Cro. J. 26; 2 Pen. Rep. 908; 1 Halst. Rep. 116 ; 8 John. Rep. 85 ; 4 Tenn. Rep. 613 ; 3 Comen 284, 290 ; Cooper’s Ch. 231; 3 Eng. Com. Law Rep. 109; Comyn on Usury 36, 95.
    
      P. D. Vroom, for the defendants.
    He cited Angell & Ames on Corp. 278, § 5; Ib. 76 ; Comyn on Usury 183, 4, 190; Cro. El 20.
   The Chancellor.

On the 12th August, 1830, an agreement was made between G. Hoyt, Stephen Hoyt and Nevius and Townsend, of the one part, and Peter I. Stryker, of the other part, to be completed on or before 15th September, then next, by which the parties of the first part agreed to sell to said Stryker all their interest in the stock of “ The Bridgewater Copper Mining Company,” for $80,000, and the said Stryker agreed to "Vuy the same at that price, and to pay $15,000 thereof on or before the said 15th September, the residue, $65,000, to be paid in five years from that date, with interest on the same, payable half-yearly, in advance; the payment of the principal to be satisfactorily secured, either by a mortgage on the real estate of the said company, if that can legally be done, or in some other satisfactory manner. And the said Stryker agreed that he would, on or before the said 15th September, agree with them that in case the said interest' on the said $65,000 should not be paid when it should become payable as above mentioned, or within one month thereafter, he, the said Stryker, would give up to them, on demand, quiet possession of all the property, real and personal, belonging to the said company, and reconvey to them all their interest in the stock of the company, in full discharge and satisfaction of the said $65,000; and that said Stryker was not to be held personally responsible, in his private property, for the said sum of $65,000; that on said Stryker’s paying the said $15,000, and executing the said mortgage, or giving other satisfactory security, the said Hoyts and Nevius and Townsend would convey to him, by a transfer on the books of the said company, or otherwise, all their interest in the stock of said company ; that if the said $15,000 should not be paid on or before the said 15th September, the payment thereof should be satisfactorily secured, and that no stock was to be transferred till the same was paid; and that the said $65,000 was to be paid in four equal yearly payments, on the 15th September, in the years 1832, 1833, 1834 and 1835, respectively. '

At the foot of this agreement appears, of the date of September 15th, 1830, a receipt as follows: Received on the within agreement, a bond executed by P. I. Stryker and Henry V'andervoer, of this date, for the jvithin mentioned sum of $15,000, payable September 15th, 1831, in part fulfillment of the within-mentioned agreement.

A special meeting, called by order of the president, was held October 10th, 1830; present, G. Hoyt, Townsend, Hardenburgh and S. Hoyt. The president presented the resignation of J. I. Hoyt as a director, which was accepted, and T. A. Hartwell was elected by the board to fill the vacancy. Mr. Townsend presented the resignation of Mr. Nevius, which was accepted, and Peter I. Stryker was elected by the board to fill the vacancy. G. Hoyt tendered his resignation as a director, which was accepted, and P. I. Stryker was then elected president of the board, and George Wood was elected a director in the place of G. Hoyt. Mr. Townsend then offered his resignation as a director, which was accepted. It was then resolved that the company consider it expedient to raise funds on bond and mortgage, to put the works in operation, and carry on the same;” and a committee was appointed “ to endeavor to effect a loan for tha<~ purpose, and report to the board forthwith;” and the minutes say the committee retired, and soon returned and reported “ that they can effect a loan for that purpose by taking a note of P. I. Stryker, payable on demand, with interest, for $65,000, and recommend that the company receive the same as cash, and execute to Goold Hoyt the company’s bonds and mortgage for that sum, payable in four equal payments; one quarter part thereof on the 11th October in the several years of 1832, 3, 4 and 5.” Tiie board accepted the report, and ordered the bonds and mortgage to be executed accordingly. They then elected William Thompson a director, in the place of E. Townsend, who had resigned, as before stated. Stephen Hoyt then resigned as secretary, and William Thompson was elected secretary. It was then resolved that Stephen Hoyt (the late secretary) give an order on Jeremiah Parsell to deliver into the possession of the new secretary of the company all the property in his possession belonging to the company; and that, he deliver to the secretary all the books and papers belonging to the said company.

There is endorsed on the agreement before set forth, of the date of October 11th, 1830, a writing signed by G. Hoyt, by which he acknowledges to have received from the said company their bonds and mortgage for $65,000, and the bond mentioned in said agreement for $15,000, in full of P. I. Stryker’s note for $65,000, and also in full satisfaction and discharge of P. I. Stryker from all the stipulations and conditions of the said agreement.

At a meeting of the board, held the first Tuesday of July, 1831 — present, Stryker, Cam man, Green, Gaston and Thompson — it was resolved, “ That the promissory note given by Peter [. Stryker to the company be given up to him.”

At a meeting of the board, on the 13th December, 1836, a preamble and resolution were adopted, stating that a compromise and settlement between G. Hoyt and the board had been made, and that after correcting all errors, and crediting all payments, and making such deductions “as the company claim a right to have made, on account of the purchase for which this company heretofore gave their bonds and mortgage on their real estale, lands and property, there is legally due and owing him from this company, $86,378, for and on account of said purchase, and to secure the payment of which sum, with interest, this company have agreed to give their bond and mortgage;” and resolving that a bond and mortgage be given by the company to said Hoyt, accordingly, payable in two years from December 15th, 1836, with interest half yearly, and that the president be authorized to sign and execute the same under the corporate seal of the company, on the lands and property theretofore mortgaged to said Hoyt; and that after the said mortgage shall be recorded, the said bond and mortgage be delivered to said Hoyt, or his attorney, on the cancellation of the said former mortgage, and the bonds accompanying the same.

At a meeting held on the 20th February, 1838, a supplement to the charter was passed, authorizing the company to increase their capital stock in any sum not exceeding $500,000; and that any stockholder may be eligible as director ; that a share shall be $50 instead of $500; and that the number of shares shall be increased in the same proportion as the amount of a share therein is lessened by the supplement.

At a meeting held October 16th, 1838, it was, among other things, resolved that “Professor Pattison and J. W. Odenheim (directors) be a committee to negotiate with Goold Hoyt respecting the claim he professes to have on the company’s mines, and a certain bond given by P. I. Stryker and Henry Vandervecr, for $15,000, to said Hoyt, as part of the consideration of said mines; and the said committee are instructed to obtain, as far as may be, such indulgence in the payment of the above sums as the convenience of the company seems to require.

From this history, it is manifest that the transaction out of which the first mortgage arose, was not a loan, but a contract of sale and purchase; and one of the terms of the contract vras, that the interest should be paid half yearly, in advauce. Is this usury ?

I am not aware that this question has ever been presented to our courts, and I have found no case in which the distinct question has ever been decided. It is settled that banks, in loaning money, may take interest in advance, on discounting notes in their usual course of business; and it is held in New York and Massachusetts that this may be done by others, as well as banks, on negotiable paper, unless the time it has to run is so long as to afford a presumption that usury was intended.

In the case of Marsh v. Martindale, 3 Bos. & Pul. 158, a bill at three years was discounted, and the interest for the whole period was taken in advance, or discounted.

In delivering the opinion of the court in that case, Lord Alvanley says: “ It was contended (by counsel) that the transaction was, to all intents, a purchase of an annuity; and this was ■certainly the strongest ground the plaintiff could take, for it has been determined, in all the cases on the subject, that a purchase of an annuity, however exorbitant the terms may be, can never .amount to usury. But if the transaction respecting the annuity be only a cover for the advancement of money by way of loan, it will not prevent the securities from being void.” In that case, his lordship said there was no idea between the parties of anything but a loan of money, and that it was impossible to wink so hard as not to see what the real transaction was.

In the case in hand, there is no room for the idea of a loan of money. The bonds and mortgage were given in fulfillment of a prior written agreement for the sale and purchase of property, at a price stipulated, to be paid, with interest, in a stipulated manner.

If the interest for the whole time these bonds had to run, was to have Been paid in advance, perhaps the court might consider that the parties made the transaction the subject or occasion of a contract between them for the loan or forbearance of money at an usurious rate of interest. But the contract was, that the interest should be paid half yearly, in advance. To constitute usury, there must be an unlawful or corrupt intent. 7 Johns. Ch. R. 77; 2 Call. 110; 1 Beat. 287, 289.

I am of opinion that the transaction furnishes no sufficient evidence of such intent. It is hardly possible to suppose that the seller thought the contract was tainted with a vice which would subject him to the loss of his whole property.

I am unwilling, therefore, to say that the first mortgage was void. But, if I could think it was, it strikes me it would be peculiarly a case for the application of the doctrine that such a contract may, by subsequent agreement of the parties, be freed-from the vice. 10 Wheat. 367.

The second mortgage given in this case was, I think, recognized and sanctioned by the board of directors after it had been given. The old mortgage was procured from Hoyt, and canceled ; a certificate was obtained from the clerk of the county, for the purposés of the company, after the cancellation of the first mortgage, to show that no other mortgage existed on the property of the company except the second mortgage, and, in October, 1838, a committee was appointed by the board to negotiate-with Hoyt, and obtain such indulgence in the payment of his-claims as the convenience of the company seemed to require This makes it unnecessary for me to examine several questions debated at the bar, touching the validity of the second mortgage.

One objection to it was, that one of the four directors by whom-it was ordered to be given, was not a stockholder. The original charter does not say that the directors shall be stockholders; and if none but stockholders could be directors, the company was not originally lawfully organized, inasmuch as two persons took the whole stock and proceeded to elect seven directors; and there is nothing in the cause to show that either of the other five directors elected were then stockholders. I am inclined to think that, under the original charter, it was not necessary that directors should be stockholders. The supplement was not passed till after the second mortgage was given.

The next objection to the validity of the second mortgage was, that there was no legal meeting of the board at the time it was directed to be given. It is certainly true that a mere accidenta; assembly of a majority of persons who are directors of a company does not make a board ° and if a lawful board had at once repudiated this second mortgage, perhaps the best ground that could have been taken to maintain its validity would have been the production of the minutes of the board, to show that, notwithstanding the requirements of the by-laws, extra meetings were constantly called without notice to all the directors. It seems to have been the uniform practice for four or five to get together .on the call of the president, and transact important business.

The next objection taken was, that no election for directors had been held for several years before the giving of the second mortgage. The charter says that the corporation shall not be deemed to be dissolved in consequence of an omission to elect directors at the time, &e.• but that it shall be lawful to bold such election on such other day as shall be prescribed by the bylaws and ordinances of the corporation.

Does the power to transact business remain in the old board ? If so, how long? The books are not entirely agreed on this subject, and, from the view I have taken of the case, it is not necessary to discuss the question.

The Chancellor intimated that in this ease, and under the circumstances attending it, it would be inequitable to allow the complainant to recover more than the $65,000, and interest thereon from the date of the first mortgage, deducting any interest that may have been paid.

The second mortgage was taken as a substitute for the first. and with a view of relieving it from an objection to its validity by reason of its requiring the interest to be paid Jialf yearly in advance; and was given, no doubt, principally for the purpose ■of obtaining the two years’ delay. If the first mortgage was void, the complainant would have lost the whole. If it was good, there was no occasion for taking a second mortgage; and if the complainant could have been assured that the first mortgage would be sustained, he would not have thought of asking a new one in the place of it. Should he, then, when taking a new mortgage, to relieve his first mortgage from objection, because by it he got the trifling advantage of the use of a half year’s interest, impose the terms or condition of converting the whole interest then due, twenty odd thousand dollars, into principal ? I can hardly suppose it was demanded by the complainant. It is more probable that the new mortgage was given in that shape without reflection, and under the idea that it could be paid within the two years mentioned therein.for its payment.

The solicitor and counsel for the complainant consented to-take a decree in accordance with this intimation.

Decree accordingly.

Affirmed, 2 Hal. Ch. 625.

Cited in Morris v. Taylor, 8 C. E. Green 443.  