
    Bartlett versus Williams.
    L. gave a bill of sale of a vessA to B., and B. promised in writing to reconvey upon the payment of a promissory note due from L. B., however, did not take pas session until eight months after the delivery of the bill of sale. Held, nevertheless, that B.’s title was good against an attachment made by a creditor of L. after such possession taken.
    B. having advanced money on the vessel, took a note on interest for the sum advanced, with two and a halfper cent, on such sum as a commission for selling the vessel. Although the vessel was not sold, such note was held not to be usurious, the jury having found that the commisson was not intended as a cover for usury.
    The fact of discounting the interest at the time of making a loan is not conclusive evidence of usury. See note, p. 225.
    This was an action of replevin for a brigantine, called the Nancy, with the appurtenances. The defendant pleaded in bar, that the property was in one Long, and not in the plaintiff ; and issue was tendered on that traverse and joined.
    On the trial, before Jackson J., it appeared that the vessel had been owned by Long, and that he gave a bill of sale of it to the plaintiff on the 27th of October, 1819, but made no formal delivery of the vessel. The plaintiff, at the same time, gave a memorandum in writing to Long, acknowledging the receipt of the bill of sale as security for the payment of 2699 dollars and 44 cents, for which he held Long’s note, and agreeing to give up the bill of sale on payment of that sum with interest. About the 10th of June, 1820, the plaintiff demanded payment of the note, and Long, not being then able to pay it, the plaintiff took possession of the vessel, as was found by the jury upon a variety of evidence, on the 26th of the same month. On the 3d of July, one Donnels caused the vessel to be attached by the defendant, a deputy sheriff, as the property of Long. The plaintiff, on the 11th, brought tins action of replevin, and afterwards sold the vessel for 4000 dollars.
    From the time of the bill of sale until the 26th of June, Long alone appeared to be owner of the vessel.
    The demand of Donnels arose from labor and articles furnished by him for this vessel in 1819. The plaintiff’s demand also arose from money advanced by him to enable Long to rig her and fit her for sea, in 1818. She was launched in that year, and first sailed with an enrolment as a coaster. Before she first sailed, Long gave the plaintiff a bill of sale of her, taking back a memorandum like the one before mentioned. She afterwards took a register, and then this first bill of sale was cancelled, and a new one made, which is the same on which the plaintiff" now claims.
    The defendant objected, among other things, that the transaction between the plaintiff and Long was usurious. As to this point, Long testified, that, before he began to rig the vessel, ne attempted to sell her, and offered to allow the defendant a commission of two and a half per cent, if he could effect a sale ; that finding he could not sell her, he determined, by the plaintiff’s advice and with his assistance, to fit her for sea ; and then agreed to give the plaintiff a bill of sale, as security, and to allow him two and a half per cent, on the amount advanced for the sale of the vessel; that he never agreed to give more than six per cent, interest, and the plaintiff never asked any more ; and 67 dollars and 48 cents were added to the sum lent by the plaintiff, and were included in the note before mentioned, for the two and a half per cent. Another witness testified, that it is customary with commission merchants, when they advance money on goods consigned for sale, if the goods are taken back by the owner and the money repaid, to rece've the interest, and also the same commission on the sum advanced that they would have received in case of a sale.
    The jury were instructed that the bill of sale, unless void for usury, was effectual as between the plaintiff and Long, and that, if it was agreed that the plaintiff should take possession of the vessel on the 26th of June, under the subsisting agree ment and bill of sale, and if he did so, he would hold the vessel against a subsequent attachment.
    As to the question of usury, they were instructed, that if the contract between the plaintiff and Long was usurious, it was void as against Donnels ; (the judge intending to reserve this point for the consideration of the whole Court, if the jury should find the contract usurious ;) that if there was an agreement between the plaintiff and Long, that more than six per cent, interest should be paid, the contract was usurious, without regard to their calling the excess by the name of commission ; but if they did not intend to contract for more than six per cent., and did not so understand the agreement, but honestly intended the commission as a compensation to the plaintiff, thinking it reasonable or according to the usual course of business, that then it was not usurious, although the jury might think them mistaken in this particular.
    The jury having returned a verdict for the plaintiff, the defendant moved for a new trial, on account of the directions the judge, and because the verdict was against law and against the weight of the evidence.
    The cause was argued and determined at March term 1822.
    Rand, in suppport of the motion,
    contended, that the bill of sale and memorandum in writing could not be deemed a mortgage, but must be considered either as an absolute sale, or as a pledge ; there being no stipulation that the plaintiff’s interest should become absolute at any fixed time. Ryall v. Rolle, 1 Atk. 167; S. C. 1 Ves. sen. 348; Jones v. Smith, 2 Ves. jr. 378; Cortelyou v. Lansing, 2 Caines’s Cas. in Er. 202. Delivery at the time was therefore essential. 2 Ves. jr. ubi sup.; Ryall v. Rolle, 1 Wils. 260; Tucker v. Buffington, 15 Mass. Rep. 477.
    As the possession did not accompany and follow the bill of sale, it was inoperative as to creditors. Edwards v. Harben, 2 D. & E. 587; Stone v. Grubham, 2 Bulst. 225; Twyne's case, 3 Co. 80; 1 Wils. ubi sup.; Steel v. Brown, 1 Taunt. 381; Armstrong v. Baldock, 1 Gow, 33, and note; Woodham v. Baldock, 3 Moore, 11; Jezeph v. Ingram, 1 Moore, 189; Reid v. Blades, 5 Taunt. 212; Hamilton v. Russell, Cranch, 309; Sturtevant v. Ballard, 9 Johns. Rep. 339; Hildreth v. Sands, 2 Johns. C. C. 46; Dawes v. Cope, 4 Binn. 258. It will be said that this case is an exception to the general rule, both because the property was conveyed as security only, and because possession was taken before the attachment; but the books will not warrant any such distinction. The case of Edwards v. Harben cannot be distinguished from that now before the Court; and see Twyne's case; Steel v Brown; and particularly the opinion of Bayley J. in Mair v Glennie, 4 M. & S. 240; Darby v. Smith, 8 D. & E. 82; Baker v. Lloyd, Bull. N. P. 258. In regard to ships, possession must be taken within a reasonable time. Putnam v. Dutch, 8 Mass. Rep. 287; Portland Bank v. Stacey, 4 Mass. Rep. 661; Lamb v. Durant, 12 Mass. Rep. 54; Portland Bank v. Stubbs, 6 Mass. Rep. 423.
    The reason of this rule of law, in respect to taking possession, is given by Eyre C. J. in Lingam v. Briggs, 1 B. & P. 87; “ The debtor must clearly derive a credit from appearances, and consequently, if the owner allows him to retain the property, however fair that may be between himself and the owner, it must be a fraud upon the creditors.” On this principle, it has been decided, that where the sale has been notorious, or notice has been given to the creditor before he gave the credit, the transfer is valid as against the person having notice. Woodham v. Baldock; Steel v. Brown; Robinson v. M’Donnell, 2 B. & A. 134; Gow, ubi sup.; Leonard v. Baker, 1 M. & S. 151. Here the sale was secretly made, and the credit given many months before possession was taken. The circumstance that possession was taken before the attachment does not remedy the injury sustained by the false credit given to Long. Will it be said that Donnels is not injured, if possession under the old deed is held to avail as much as possession under a new deed which might have been given ? With as much propriety may it be said, that he would not be injured by a possession without any deed, since a deed might have.been made. Further, if the plaintiff had refused to permit Long to retain the possession, Long would not have conveyed to him an amount of property so much beyond the debt. The plaintiff would then have attached the vessel, and so Donneis would have had notice, and might have secured his demand. The suffering Long to keep possession can be explained only on the supposition of a secret trust existing between the parties ; and no gift, though for a valuable consideration, shall be deemed to be bona fide within the St. Eliz which is accompanied with a trust. 3 Co. 80; Cadogan v. Kennett, Cowp. 434; 9 Johns. Rep. 339; 1 Atk. 165; 1 Ves. sen. 359; 2 D. & E. 587; Hungerford v. Earle, 2 Vern. 261; 2 Johns. C. C. 48.
    The bill of sale was void by reason of usury, and creditors may take advantage of this circumstance. Ex parte Thompson, 1 Atk. 125; Ex parte Skip, 2 Ves. sen. 489; Bearce v. Barstow, 9 Mass. Rep. 48; Winchcombe v. Bp. of Winchester, Hob. 167; Noy’s Rep. 129; Ord on Usury, 105; Green v. Kemp, 13 Mass. Rep. 518; Hills v. Eliot, 12 Mass. Rep. 32. From the facts, there being a stipulation for the payment of a certain sum in the name of commissions at all events, when there had been no trouble nor expense, and when it was not certain that there would be any, and none being shown to have been incurred, the legal inference of usury was irresistible, and the jury should have been so instructed ; Carstairs v. Stein, 4 M. & S. 192; Scott v. Brest, 2 D. & E. 238; Davis v. Hardacre, 2 Campb. 375; Coombe v. Miles, 2 Campb. 553; Brooke v. Middleton, 1 Campb. 448; S. C. 10 East, 268; Kent v. Lowen, 1 Campb. 177; Dunham v Dey, 13 Johns. Rep. 40; Dunham v. Gould, 16 Johns. Rep. 367; and the evidence of usage was improperly admitted. 13 Johns. Rep. ubi sup. The jury were misled by the instruction, that if the parties labored under a mistake, the contract could not be deemed usurious ; there being no pretence of any mistake, except a mistake of the law. Maine Bank v. Butts, 9 Mass. Rep. 49.
    
      Prescott and F. Dexter, for the plaintiff.
    The bill of sale made a good title to the plaintiff against Long and his creditors, at the time, subject to be avoided by the creditors, if the plaintiff should be negligent in taking possession. If an attachment had been made before reasonable opportunity to take possession, the sale would hold ; Portland Bank v. Stacey, 4 Mass. Rep. 661; Putnam v. Dutch, 8 Mass. Rep. 287; but if there had been an unreasonable delay m taking possession, the. attachment would defeat it. The principle is, that the neglect to take possession creates a presumption of fraud ; a presumption that the grantee did not intend to take possession, and that the conveyance was in trust for the benefit of the vendor. If an attachment is made during such neglect, this presumption cannot be explained ; but possession taken before the attachment rebuts the presumption. The creditor here did not interfere until the presumption was removed.
    The defendant seems to consider the want of possession as rendering the bill of sale a nullity. It is not so. Where con veyances are made void by statute, it is only in case the parties prejudiced are disposed to take advantage of the statute, and then it must be pleaded. Bull. N. P. 224. Even a void deed may be made good by the subsequent act of the grantee. Harrison v. Phillips Academy, 12 Mass. Rep. 456. Possession is so far from being a necessary part of a conveyance, that the want of it has always been allowed to be explained. Brooks v. Powers, 15 Mass. Rep. 244. This bill of sale was intended as a security, and it was consistent with the con veyance, that the vendor should retain the possession. Here the plaintiff was not a previous creditor of Long ; which distinguishes this case from Twyne’s case, and brings it within Kidd v. Rawlinson, 2 B. & P. 59, and Meggot v. Mills, 1 Ld. Raym. 286. This distinction is also taken by Kent C. J. in Sturtevant v. Ballard. But there is not a case to be found, where a creditor, who did not interfere before possession was taken, has been permitted to avoid the deed.
    Suppose there had been no bill of sale. As the vessel was actually delivered to the plaintiff to hold as security, it was a pledge, and the creditor of Long could not take it without first paying the debt due to the plaintiff. Fitzroy v. Gwillim, 1 D. & E. 153.
    On the question of usury, the instruction of the judge was right. In Maine Bank v. Butts, where more than six pet cent, was reserved, the Court say the party shall not excuse himself by alleging ignorance of the law ; but there the agreement was for interest. Here the jury have found that the sum was reserved as a commission, and not as interest. Cutler v. 
      How, 8 Mass. Rep. 257; Benson v. Parry, cited in 2 D. & E. 52; Winch v. Fenn, ibid, in note; Ord on Usury, 55 to 60; Carstairs v. Stein, 4 M. & S. 192; Masterman v. Cowrie, 3 Campb. 488. Such commission was according to the usage of trade, and usage is good evidence of the intention of the parties. Floyer v. Edwards, Cowp. 115.
    If usurious interest had been reserved, it would not authorize this creditor to avoid an executed contract. Boardman v. Roe, 13 Mass. Rep. 104; Flint v. Sheldon, ibid. 443. The conveyance was absolute. The memorandum in writing was not a defeasance ; the remedy on it was personal only. Tucker v. Buffington, 15 Mass. Rep. 477. The bill of sale was at most only a deed in trust. Flint v. Sheldon. But an absolute deed in trust to pay a usurious debt is not void. Denn v. Dodds, 1 Johns. Cas. 158.
   Putnam J.

delivered the opinion of the Court. [After stating the facts, he proceeded :]

It has been contended, that the bill of sale, under the circumstances of this case, was void as against' the attachment; and also that the transaction was usurious, and so void.

The question concerning the usury was submitted to the jury, and they have found for the plaintiff, and, as it seems to us, according to the evidence. Long, the vendor, testified expressly that there was no corrupt or usurious agreement. We are not in this case to determine whether the plaintiff was legally entitled to the . commission which he charged, and which Long allowed. It is sufficient that the jury have not believed that it was a cover for usury. There is a custom among merchants, that where goods, which have been put into the hands of one for sale, are withdrawn by the owner before any sale, he shall make some allowance to the commission merchant for his trouble. Whether the plaintiff was entitled to the allowance, which was in fact made to him on that account, or not, is not material in any other way, than as the jury might have inferred from the evidence that it was a mere color and cover; but they could not come to that conclusion without disbelieving Long, whose credibility was not questioned. We think the verdict was right upon that point.

The remaining question is, whether the delivery of a chattel eight months after a bona fide bill of sale of the same shall avail against a creditor who attaches it after the delivery.

For the defendant it is contended, that such a sale is void against creditors. It is certainly a general rule, that possession must follow and accompany the deed; and that the possession of the vendor after the bill of sale, unexplained, would render the conveyance void as against creditors. But such a possession may be explained, as in the case of Kidd v. Rawlinson, 2 B. & P. 59, and be perfectly consistent with justice. So if the creditor knew and assented to the sale; as in Steel v. Brown, 1 Taunt. 381. Such possession may also be consistent with the terms of the deed.

The doctrine in the case cited by the counsel for the defendant, of Edwards v. Harben, 2D. & E. 587, is unquestion ably sound. But there the vendee did not obtain possession under the bill of sale, before the right of the creditors of the vendor accrued. That case was shortly as follows. Mercer gave an absolute bill of sale of his goods to Harben, but the vendor, by a verbal agreement, was to remain in possession fourteen days, and if within that time the vendor should not pay a certain sum, the vendee might take the goods and sell them. The vendor died before the expiration of fourteen days. Then the property became liable to bis creditors, and the possession of the vendee, which was taken afterwards, was held tr be tortious.

The. same principle is recognized in the case of Mair et al. Ass of T. Mair v. Glennie et al. Ass. of Sharp & Co., 4 M. & S. 240, cited by the counsel for the defendant. That case was as follows. Mair made a bill of sale of a vessel to Sharp and Co. but they omitted to take possession until the vendor became a bankrupt. In consequence of the bankruptcy his property was transferred to his creditors. The as “ignees of the vendor recovered against the assignees of the -endee, because they had not taken possession under the bill of sale. The party claiming under the bill of sale, in that case, lost the property, because he did not what the plaintiff in the case at bar did, viz. get possession before the claim of the creditors of the vendor was interposed.

There is another case, however, which was cited by the counsel for the defendant, where the vendees did what the vendee in the case at bar did, viz. obtain possession several montas after the bill of sale, and it was held that they should recover. That was the case of Robinson et al. Ass. of Bell and Clarkson v. Donell, Ass. of Sharp et al., 2 B. & A. 134. Bell and Clarkson gave a bill of sale of a vessel to Clarkson and Co. The vendors kept possession and used the vessel as their own until the vendees became bankrupts. Their assignees, as soon as they could conveniently, took possession, but it was six months after the bill of sale. After that time the vendors became bankrupts, and their assignees claimed the property, but failed to recover. And the reason is obvious. The title under the bill of sale was perfected by the taking possession before the right of the creditors of the vendor attached. A case in that respect like the one at bar. The opinion of Bayley J. is peculiarly applicable. He observed, that “ where there was a deed executed under which it is competent for a party to take possession immediately, and he does not do so, but omits it foi, six months, he was not aware of any case which decides that such omission would be fraudulent, so as to make the deed void under the statute of Elizabeth. If, indeed, the right of third persons had intervened, the deed might be void as against them.”

And it was not necessary that a new bill of sale should have been made on the 26th of June. That which the plaintiff had was good between the parties. The vessel was liable to the attachment of Long’s creditors, until the title of the plaintiff was completed by the possession. That was the only objection which a creditor of the vendor could have made ; and that objection was removed before the vessel was attached. “ Quod nullo interna vitio labor at, at objecta impedimenta cessat, remoto impedimenta per se emergit.,''

Upon the whole matter, we are all of opinion that the plaintiff shall recover. 
      
       In the case of Lyman v. Morse, argued and determined at March term 1823, in this country, W. Sullivan, for the defendant, contended that the mere feet of discounting the interest at the time of making a loan was in itself conclusive evidence of usury; and he cited and relied on Marsh v. Martindale, 3 B. & P. 154; Maine Bank v. Butts, 9 Mass. Rep. 49.
      
        Thacker and Warner, for the plaintiff, cited Grysil v. Whitchcott, Cro. Car. 283; Floyer v. Edwards, Cowp. 115; Barnes v. Worlich, Yelv. 30; Winch v. Fenn, 2 D. & E. 52, note; Matthews v. Griffiths, Peake, 200; Berkley v. Walmsley, 5 Esp. 11; Pratt v. Willey, 1 Esp. 40; Northampton Bank v. Allen, 10 Mass. Rep. 284; Hammett v. Yea, 1 B. & P. 151; Lloyd v. Williams, 2 W. Bl. 793.
      The Court held that merely discounting the interest was not necessarily usury.*  It might be evidence of a design to evade the statute, but that was a question for the jury, and they compared the case to Bartlett v. Williams, re ported in the text. — Reporter.
      
      1 See also Manhattan Co. v. Osgood, 15 Johns R. 162. The instrument discounted must be negotiable and payable at no very distant day. New York Ivremen's Ins. Co. v. Ely, 2 Cowen, 703. In Marsh v. Martindale, ubi sup., Lord Alvanley held the discounting to be usurious, principally on acco ir:t of the length of the date of the bill discounted, which was three years. The privilege of deducting interest by way of discount is, it seems, confined to bankers and those who deal in bills of exchange or promissory notes by way of trade. This is so, at least, ir England. Bank of Utica v. Wager, 3 Cowen, 712.
     
      
       See Badlam v. Tucker, post, 389; Shumway v. Rutter, 8 Pick. 443; Adams v. Wheeler, 10 Pick. 199; Haskell v. Greely, 3 Greenl. 425; Holbrook v. Baker, 4 Greenl. 209; Bissell v. Hopkins, 3 Cowon, 189, note; D'Wolf v. Harris 4 Mason, 533.
     