
    *Hansbrough v. Baylor.
    Tuesday, March 12, 1811.
    a. Bonds — No Consideration — Rights of Bona Fide Purchaser. — If a bona be given, without any consideration, but to be used as an article of traffic to raise money, the bona fide purchaser (tho’ at a large discount) of such bond, without notice of the purpose for which it was executed, is entitled to recover the full amount.
    2. Same — Purchase at Discount — Usury.—A fair purchase of a bond, at any discount, is not usurious. See, accordant, Kenner v. Hord, 2 H. & M. 14, Mus-grove v. Gibbs, 1 Dali. 21?, and Wycoff v. Long-head, 2 Dali. 92.
    A bill of injunction was exhibited by John Baylor against Peter Hansbrough, to stay proceedings on two judgments at law, on the ground of usury; alleging that “the complainant, through his agent authorized for that purpose, received of the defendant the sum of 1,0701. for which it was usu-riously agreed, that he should be paid at a future day the sum of 1,4201. with six per cent, interest on the same until fully discharged; but, by way of device to bar the effect of the statute against usury, the complainant executed two bonds, each for the sum of 7101. made payable to a third person, and by him to be assigned over to the said Hansbrough, which was accordingly done, through the assistance of Thomas R. Rootes, Esq. who was made the payee and assignor; that each of the said bonds was drawn payable with interest from the date, but, whether on demand, or at a nominal period to come, the complainant did not positively recollect; but he certainly understood that a reasonable time was to be given, in which arrangements might be made for payment; as the sum then received was to be appropriated in satisfaction of urgent demands against him: but the said Hansbrough, notwithstanding, by the loan aforesaid, he had acquired to himself a net gain of 3501. with an additional profit thereon after the rate of six per centum per annum, (exclusive of lawful interest on the 1,0701.) further to harass and aggrieve the complainant, and without giving that indulgence, either verbally expressed, or mutually understood between them, (and which most cogently induced the complainant to make the sacrifice,) soon after instituted suits on the bonds, and obtained judgments, &c. ; that the complainant could not be relieved against the said usurious contract, but from the discovery on *oath by the said Hansbrough, which he therefore prayed,” &c.
    The defendant filed his answer, setting forth “that Thomas R. Rootes came to his house, about the latter end of 1801, and proposed to sell two bonds, (without at first naming the obligors.) at a discount of 25 per cent, that he afterwards showed the bonds; when they appeared to be executed by Baylor; the one for 7001. dated 20th of September, 1801, payable on demand, the other for 7271. payable the 10th of December following; and not such bonds as were in the bill mentioned; that these bonds were regularly, to appearance, executed by the complainant to the said Rootes, who, of course, had a property in them, as the defendant supposed ; that, considering bonds as a 1 proper subject of traffic, and knowing that the best men in the country had not scrupled to purchase them at less than their nominal amount, (holding it, as they seem to do, more fair to appreciate, and deduct for, the risks of insolvency, the trouble, the expenses, and hazards of lawsuits and collections, than to purchase at an under value any other property capable of immediate enjoyment,) he neither felt or expressed any reluctance at treating with the said Rootes for the purchase of the bonds; yet that treaty was not of his own seeking: the defendant purchased the said bonds from the said Rootes for the sum of 1,0701. 5s. which he settled with the said Rootes: he could not say what the understanding of the complainant was about time, as he knew him not, as a contracting party, or as interested in the contract made by the said Rootes with the defendant; but the defendant knew that he gave no promise that he did not perform ; he denied that Rootes treated or contracted in the character of agent for the complainant, or that Rootes, or any other person, gave the defendant the least reason to believe that he was not a bona fide obligee of the bonds', until some time after the contract had been completed ; when the defendant was ^informed that the complainant had issued these bonds to be sent into market, for the purpose of raising what money they would bring, and that, in the sale, Mr. Rootes was a mere private agent of the complainant; and the defendant solemnly declared that, if he had known of that circumstance before the completion of his contract, he would not have been concerned in the purchase: he utterly denied the usury charged upon him; averring that the contract was not a device to evade the statute against usury, or intended to cover, or conceal any other- transaction ; that there never was any loan from him to the said Bavlor, or any contract between them, directly or indirectly, further, or otherwise, than as declared in this answer ; and that he had not the most distant suspicion that his purchase was morally, legally, or equitably exceptionable.”
    This answer was supported, in all its material parts, by several depositions, and contradicted by none.
    The late chancellor for the Richmond district being of opinion “that the bonds were usurious, against the form of the act of the general assembly, to amend the act against usury, and a shift, past between the parties, relative to the loan,” .adjudged and decreed that the injunction, awarded, &c. be perpetual, except as to 1,0701. ; from which decree the defendant appealed to this court.
    Wickham, for the appellant.
    The Attorney-General, for the appellee.
    
      
       Bonds — Notes—Purchase at Discount — Usury.—An ordinary note or bond may be purchased at a greater discount than the legal interest, without imputations of usury, although such bond or note be given for accommodation, the purchaser being ignoran t of that fact. Judge Co alter in Whitworth v. Adams, 5 Rand. 385. In this same case, Judge Carr (at p. 358) distinguishes the principal case from the case at bar.
      In Grigsbyv. Weaver, 5 Leigh 212, the principal case is cited as authority for the proposition that a man may lawfully purchase a bona Me bond at a discount.
      And. in Gordon v. Dooley, 10 Fed. Cas. 785, it is said: “Aman may purchase bonds or negotiable paper in the market at any discount, whether they were manufactured for sale or not, and not be guilty of usury: Hansbrough v. Saylor, 2 Munf. 36; Taylor v. Bruce, Gilmer. 42; Whitworth v. Adams, 5 Rand. 333; and the same is held in many other cases. Nay, more, he may sell property greatly above its market value, knowing that the purchaser intends selling it again at its market value for the purpose of raising money, and the sale will not be usurious if it is a sale. Selby v. Morgan, 3 Leigh 577: and Brockenbrough v. Spindle, 17 Gratt. 21. But if such sale is accompanied by a loan of money as part of the transaction, the whole is usurious. Bank v. Stribling, 7 Leigh 26.”
      On this subject, the principal caséis also cited in Taylor v. Holloway, Gilm. 42,66, 67,93, a.nQ. foot-note-, foot-note to Brummel v- Enders, 18 Gratt. 873.
      For further information on this subj ect, see mono-graphic note on “Bonds” appended to Ward v. Churn, 18 Gratt. 801; monographic note on “Usury” appended to Coffman & Bruffy v. Miller, 26 Gratt. 698; monographic note on “Bills, Notes and Checks” appended to Archer v. Ward, 9 Gratt. 622.
      In regard to the liability of the assignor of a bond or other instrument not negotiable, the principal case was cited in Hopkins v. Richardson, 9 Gratt. 485.
    
   Thursday, March 14th.

By the whole Court, (consisting of JUDGES FLEMING, ROANE, TUCKER and BROOKE,) the decree was reversed, and bill dismissed, with costs.

The following opinions were pronounced by JUDGES TUCKER and FLEMING.

JUDGE TUCKER

(after stating the case) observed, this answer (which is rather supported by the testimonj-) *is not any where impugned or contradicted in the record. It, therefore, must prevail, being perfectly responsive to every allegation in the bill. Had those allegations been proved, I should have felt no doubt that the transaction was a shift to avoid the statute of usury, and, consequently, within the words, as well as the true intent and meaning thereof. For I concur with Lord Mansfield, that, “in all questions, in whatever respect repugnant to the statute, we must get at the nature and substance of the transaction; the view of the parties must be ascertained, to satisfy the court that there is a loan, and a borrowing; and that the substance was to borrow on the one hand, and to lend on the other; and where the real truth is a loan of money, the wit of man cannot find a shift to take it out of the statute. ”

If the bill and answer in this case be both true, (as is possible from the manner in which the transaction was conducted,) whatever might have been Baylor’s intention, Hansbrough was ignorant of it; and though the former might have intended to borrow, even upon usury, the latter seems only to have intended to make a fair purchase, instead of a loan. That the deposition of Mr. Rootes, the agent employed by Mr. Baylor on this occasion, was not taken in this cause, although upon the spot, is to me convincing proof that he could not have contradicted the answer of Hans-brough. I am therefore for reversing the chancellor’s decree, and dismissing the bill with costs.

JUDGE FLEMING.

Although I am strongly prepossessed against usurious contracts, in whatever form they may appear, it seems to me that this case is not within either of our acts of assembly against usury. The transaction appears, as well from sundry depositions, as from the answer of the appellant, which is in no instance contradicted, to have been fair and upright, without any knowledge, or suspicion in him, that the bonds were ^executed merely for the purpose of traffic. The contract was not of his own seeking, but pressed upon him by the friend and agent of Mr. Baylor; concealing, from him, for whose use the money was to be applied; and it is every day’s practice to purchase bonds at a discount, without blame or censure on the purchasers.

I am therefore of opinion that the decree is erroneous, and ought to be reversed, and the bill dismissed with costs. 
      
       Floyer v. Edwards, Cowp. 114.
     