
    Taylor Adm’r of Holloway v. Bruce.
    June, 1820.
    Accommodation Paper — Sale of — Usury—Case at Bar.— Negotiable notes made by fl. & H. indorsed by A. for the accommodation of II. & H. to be sold in market, purchased by B. from a broker who sells them for II. & H. at a greater discount than 6 per cent, are not usurious in the hands of B.. without proof that B. knew the facts. Qusere.
    George Keith Taylor adm’r of Holloway, brought a bill in the Chancery court of .Richmond setting forth, that Holloway and one Hanserd were merchants and partners in Petersburg-. That they had fallen into peculiar difficulties and had become the prey of usurers. That on 14th April 1811, being greatly pressed for money, they applied to the defendant James Bruce, who was apprized of their situation, for the loan of $3603 78-100 which they obtained at the rate of one and a half per cent, per month. To coyer principal and interest, they executed three notes for $14000 each, negotiable at the Bank of Virginia, with John Allison indorser, payable in six, nine, and twelve months. In October 1811, Holloway and Hanserd being in still greater distress (as Bruce knew) applied to him for another loan, which they obtained at an unknown rate, from 20 to 25 per cent, per ‘annum. To cover this loan, they executed two other notes of the last date, negotiable at bank, with Thomas Atkinson indorser ; payable in nine and ten months, &c. &c. The bill demands a discovery of Bruce of the sums actually lent, and of the interest reserved, and generally, that he might set forth all he knew concerning the premises. That the notes be declared usurious, &c.
    Bruce’s answer denied his having ever had pecuniary transactions with Holloway or Hanserd : and that no communication for a loan ever passed between them.- — The notes in question he purchased from J. B. Mertens, who offered them for sale. For the three notes of $1400 each, he gave $3628 80 cents. For the other two of $1250 each, he gave $2143 75. That it was a purchase and not a loan. That he had no particular information as to the pecuniary situation of Holloway and Hanserd. The business was conducted with Mertens, and whether he was their agent or not, is a question with which the defendant supposes, he has nothing to do.
    This answer was excepted to, because it neither admitted nor denied a knowledge of Mertens’ agency, which was very material, and the exception required the defendant to state, whether Mertens was the agent of Holloway and Hanserd, and whether he bargained with him for the notes in that character. The answer was amended by a supplement, and Bruce said, that he did not recollect or believe, that Mertens informed him that he was the agent of H. & H. or acting for them in the business, nor did the defendant receive any such information from any other quarter.
    The deposition of Mertens, proved he had for some time been a broker in Petersburg, and had been much engaged in raising money for others, by the sale of their notes. That Holloway brought the notes in question to him to raise money on. The general impression in Petersburg was, that H. & H. were pressed for money. — -He sold the notes to Bruce, who had often purchased *such paper of him, both before and after the negotiation. Believes Bruce was well acquainted with Holloway in his life-time, and is acquainted with the town of Petersburg generally. Mr. Atkinson, the indorser of the last notes is very rich, and it is said is a money lender. — Mertens did not indorse either of the notes.
    The deposition of William Haxall, proved Bruce to be well acquainted with Peters-burg, and with Holloway particularly.
    There are several other depositions and documents in the cause, but the evidence is so fully examined in the opinions of the Judges, that it is unnecessary to state the case farther, than to make the arguments which follow intelligible.
    This case was first argued by Call for the appellant, and Wickham for the appellee.
    The court consisting of ROANE, BROOKE, and COALTER affirmed the Chancellor’s decree dismissing the bill. ROANE dissenting, and being of opinion, to reverse the whole decree, and grant the prayer of the bill.
    The court on the suggestion, that decisions had taken place in New-York on the question, in- which the court there, differed from the opinion of the two Judges who were for affirming the decree, and on several precedents cited by Call, agreed to reconsider the case, and heard a new argument. In which Call and Gilmer were for the appellant, and Wickham, Stanard, and Bouldin for the appellee.
    Gilmer for the appellant.
    Usury is to be inferred from circumstances, or it could never be proved. Courts must be more astute in detecting usurers as they become more cunning in evading the statute. Where a particular badge of usury is sought to be avoided by a new artifice, that artifice must stand in place of the badge. Thus when men endeavour to avoid the suspicion resulting from a communication for *a loan, by the interposition of an agent, the communication with the agent shall stand for a communication with the principal. So when they endeavour to escape the inference resulting from employing a special known agent, by contracting thro’ a notorious general agent or broker, who publicly negotiates such usurious contracts, that too, must stand in the place of a direct communication for a loan with the party. But Bruce must have known in this transaction, that Mertens acted as the special agent of Holloway and Hanserd. Such notes exist for but two purposes. 1st, for real debts. 2d, for accommodation. Bruce could not hesitate in deciding which they were in this case. In the 1st case he was either to suppose H. & H. in debt to Allison: Allison a thrifty lawyer, and not a borrower, to pass notes to Mertens in a fair course of trade, and Mertens a professed broker to be dealing for himself, when he did not pretend the notes were his, and never indorsed them; or 2d, he was to suppose, that the notes were made for sale, and that Mertens acted in his notorious vocation in selling them. Bruce too knew, that H. & H. were embarrassed, and that they were borrowers, no other party to the notes was in either condition.
    It is said not to be enough to shew that Bruce suspected this was a cover to a usurious transaction; that we must prove he actually knew it. We never can prove what B. knew, nor even what he actually suspected. But we prove circumstances which must from necessity have been known to him, and being known, he must have suspected the loan was for H. & H.
    But whatever may have been Bruce’s knowledge or suspicion, it is certain, that in point of fact,’these notes were made for the purpose of raising money, and were actually appropriated to that purpose, without any value having been paid for them, before they came to the hands of Bruce, who gave 18 and 25 per cent, less, than their value for them; and this I say is usury per se.
    *1 shall insist the less on the English cases, because they are already before the court, and because there is an important distinction between the English statute and ours, which has been overlooked, and which materially affects this question. I shall mention it hereafter. The case of Young v. Wright () is conclusive to shew, that a bill usurious in its first real negotiation, is void in every stage of its assignment. That was a bill drawn by Thomas Wright on Charles Wright at 3 months.— Charles got it discounted at more than 5 per cent, and Lord Ellen borough held it usurious throughout. So in Kent v. Lowen.()
    But the cases from New-York apply with more force, because they are on a statute similar to ours,* and not *affected by the particular enactments of England. They shew, that where a note is made for the purpose of raising *money, no matter how many hands it may pass thro’ without being negotiated, if the first actual negotiation of it be at a usurious discount, the note will be infected with usury, in the hands of such a holder, whether he knew the purpose for which it was made or not. ()
    This doctrine has been called absurd, because it invalidates notes obtained by the holder without knowledge of the illegal purpose for which they were made. But the same thing is done wherever an innocent person takes a note originally void, because for a gaming or usurious consideration ; for in such cases his innocence will not entitle him to recover. But there is a difference between voluntarily making such illegal contracts, and without knowledge that they are illegal, receiving the paper which they have produced. In one case the person incurs the penalties of the act, in the other the contract only is made void; but it is equally void in both cases. It is like the case of a forged bank note, which is not good in payment of a debt; and when it has been received the knowledge of the forgery is no part of the inquiry to be made; but if there be a prosecution for passing it the .scienter must be proved.
    There is a difference between the civil and the penal part of our statute, which has not been remarked, and which distinguishes our law from that of England. The penal clause () enacts, that if any one shall by any corrupt bargain, covin, &c. receive more than six per cent, he shall forfeit, double, &c. The civil clause () declares, that no one shall take directly or indirectly, for loan of money, &c. more than six per cent, and all bonds, assurances, &c. by which higher interest is reserved, shall be void. The penal clause then, requires that there *'should be a corrupt bargain, or agreement, and covine in the party, before he can incur the penalty of the act. — Corrupt, refers to the will, for nothing can be corrupt which is done with a fair and honest intention. And covin Lord Coke tells us, can be only by two or more, () This is unquestionably the meaning of the penal clause of our statute, and an opinion has prevailed without ever being considered, that there must be the same corrupt agreement and covin to avoid a contract as usurious; when in fact the civil clause of our statute has no such words, but renders all contracts void where more than six per cent, is reserved on loan, without reference to the intention of the parties. That a corrupt agreement is necessary to avoid a contract, is a construction derived from the English statutes. It is said in Murray v. Harding, () “that the corrupt agreement is the foundation of all usurious contracts,” to prove it Croke James() is cited. All the cases in Croke James, were before the statute of 21 Jac. 1. They were of coarse on the statute 13 Eliis. c. 8, which only re-enacted the statute of 37 Hen. 8, c. 9, which had been repealed in Edw. 6, now the statute of Hen. 8, had no clause like ours, avoiding contracts; it only forbade taking more than 10 per cent, by corrupt bargain, loan, covin, chevisance” &c., nearly in the words of our penal act; accordingly, in England to this day, the corrupt agreement and covin must be charged in the plea ;() for tho’ the statutes of James and Charles, have avoided contracts where illegal interest is directly or indirectly reserved, all their acts are in construction, taken together, like the bankrupt laws, () and the statute of Henry 8th, has governed the interpretation of all, and by that statute as well as that of Elis;, the corrupt agreement was indispensable. In Virginia then, I maintain, that where the question is, whether a ^contract be usurious or not, the quo animo with which it is made is not material; the only enquiry is, is the contract a loan, and has more than six per cent, been reserved?
    What is a loan, is a question of law. The word loan embraces three species of bailment; commodatum, as lending a horse, &c. in which the same horse is to be returned: mutuum as lending wine, &c., where an equal quantity of the like kind is to be returned: usura as where wine, money, &c. are lent, and something more is to be returned than was received, for the use. If I give an order on a wine merchant-who has my wine in his cellar, and agree to take an equal quantity of wine at a future day in return, it is a loan of wine. In this case it is not the paper on which the order is written which I exchange; it is the wine. So if I give my bond to pay money hereafter for money advanced now, it is a loan of money; but if I give another’s bond instead of my own, is it not the money in his hands, as it is the wine in the merchant’s cellar, that I exchange? Technically then, it is a loan ; money payable hereafter is exchanged for money advanced now. And the reason why such a contract has not been held to be usurious where illegal interest is reserved, is not that the contract is a sale as is commonly said, but because it is not within the policy of the law: as in England, greater discount than 5 per cent, by country bankers tho’ within the words, has been held not to be within the prohibition of the act. () The assignment of a bona fide note of another, at any discount is not within the policy of the law; but such notes are strikingly contrasted with mere accommodation paper, made to be discounted at an illegal rate. If you make a fair and full consideration necessary in the first negotiation, none but good notes can come into the market; but if accommodation paper may be sold at any discount, notes not worth a cent in the dollar, will be sold, and ^persons in distress, will pledge in anticipation, the labours of years for a trifle; the very mischief designed to be prevented by the act: the bond of another may have been given for property not worth half its amount; but one’s own bond to pay money hereafter for less money now, never can be: a bond may even have been given without any consideration at all, so all the obligee gets for it, is clear gain: and if the obligor gets full consideration it is not for him to deny its validity in the hands of an indorsee; and when the indorser is sued, he pays only what he received. These are the reasons, why the transfer of another’s bond, fairly obtained, at any discount, is not usurious; and why, the transfer of one’s own bond payable hereafter, for a smaller consideration than a deduction of six per cent, from the principal received, is usurious.
    In the case before the court, the contract is technically a loan; and it is not within any one of the exceptions, which take it out of the law of loan. Indeed, if the whole force of the statute can be evaded by taking notes made to procure money, at any discount, under the pretext that it is a sale and not a loan, the statute will be rendered nugatory.
    The doctrine now contended for on the other side, is so palpable an evasion of the statute, that it could never obtain, if it were now a fresh question. It has been suggested however in the nrevious argument of this question, that the case of Hansborough v. Baylor () has closed this case, on the point upon which, we principally rest it. I was struck in reading the record of that case, with the totally different moral aspect of the cases; and found they were in many very material respects unlike. Hansborough’s answer so far from being ambiguous and snuffing, is candid and fair. He swears, that he did not even suspect Rootes was Baylor’s agent; that if he had, he would not have bought the bond. Hansborough *bought of Rootes, a Lawyer; the bond was offered him by Rootes the obligee; Rootes himself was the only indorser, Rootes assured him it was bona fide; that if Baylor did not pay it, he would. Bruce on the other hand bought the notes in question, of Mertens a public broker; he knew H. & H. were pressed for money and were borrowers. The notes were indorsed not by Mertens, nor payable to him, nor did Mertens guaranty their fairness, or payment; Hans-borough bought Baylor’s bond where he could not inquire of B. about it. Bruce bought these notes in Petersburg, in the very teeth of all the parties, and yet he made no inquiry. In Hansborough’s case, there is not a single suspicious circumstance; in Bruce’s, not one is wanting. Hansborough and Baylor then, decides nothing in this case. It shews, that there may be circumstances in which one who holds another’s bond without having given value for it, may transfer it at an illegal discount, and yet it shall not be infected with usury. But Hansborough had done every thing which a fair dealer could be required to do, before he took the bond ; he had every reason to believe the bond was realty the property of Rootes. To have rescinded the bond would have been to enable Rootes and Baylor to practise a fraud upon Hansborough. Here Mertens did nothing to deceive Bruce; he is voluntarily blind, if blind at all, to the true nature of the transaction.
    It has been argued, that our doctrine will destroy the negotiability of such paper. It can have that effect, only on usurious notes, which ought to be proscribed.
    It is said too, that it is now a universal practice to buy such notes in market. But no usage can repeal a statute. The more general the practice, the more loudly does it call for the interposition of this court. If men will falsely interpret laws, that they may practise extortion and rapine, thej should pay for their temerity. To conclude: Bruce knew that Mertens sold these notes for H. & H.: whether he knew it or not, the transaction is *a loan; for the property in the notes was never changed until they came to his hands, so it was a promise to pay money hereafter for money now, by H. & H. to Bruce, tho’ conducted by a broker. It is therefore within the words and meaning of the act. Hansborough v. Baylor has not decided that every transfer of a note made to be sold is lawful, but that it was so in that case: and not a mitigating circumstance which existed in that case, exists in this: without such a construction of the law, it is nugatory ; since men have only to contract loans by the hands of others, and call them sales, to evade the statute.
    Call on the same side.
    The first question I make in this cause is, what amount shall Bruce recover supposing these notes not to be usurious. At law the defendant could have gone into proof of the actual consideration given for them, for a bill must be for value, otherwise it is nudum pactum and void. And though it be prima facie evidence of good consideration, that is a privilege granted them for the benefit of trade, and to be entitled to it, they must be confined to purposes of trade, ()
    The act of Assembly establishing the blanks prohibits the discount of bills at more than 6 per cent, interest. The legislature then could not intend, that others should discount them at a greater rate.
    If a bill is given without consideration,the indorsee cannot recover if he give nothing •for it. () He will, to be sure, be presumed to have given value, until it be proved, that he gave none, () The holder then, cannot recover more than he or some prior holder gave for the bill. Thus if A, give a note to B. without value, who passes it to C. without value, who passes it usuriously to D. who sells it for full value toE.— E. shall recover. 'x'But if he does not give full value for it, he can recover only what he paid for it, for that is all he is damnified. 1 Esp. 261. So in an accommodation note, where the fact is known, the holder recovers only what he gave. Thus() a bill drawn under duress, was not held to be void in the hands of an indorsee for value, but the plaintiff was required to prove a good consideration given, he could not do so and was nonsuited. So () a bill for accommodation, though that fact be known, is good in the hands of a holder, if he give good consideration. The reason is, that the act of the agent is the act of the principal, consequently, the principal is bound by it; Bruce then is bound by the act of Mertens, who did not pretend to sell these notes as his own. It is like the case of professed horse-sellers in London, where the principal is bound by the agent’s warranty. Here Mertens was a professed agent, for principals in such transactions.
    Whenever suspicion attaches to a bill, inquiry must be made to remove it. () A note was indorsed after due; it was held a suspicious circumstance and the defendant let in to prove fraud. And putting a note into the hands of a broker at this day, when they have become instruments for evading the statute, and having it publickly sold in market, is a suspicious circumstance.
    Besides, the indorsement here was in blank, and if suit were brought on it, the holder could recover, only by proving he gave value for it, and that he came fairly by it: () and selling such paper at an undervalue is a fraud upon the indorsers, for the maker is not so able to indemnify the indorsers, as if he received full value. Upon the case as made out by the appellee himself then, he is entitled to recover only the value actually given for these notes.
    *But he is entitled to nothing for the notes are usurious.
    I admit there is no difference in the principles of evidence in usury and in every other case. Assumpsit must be as clearly established by legal evidence as a felony. But the first question in every case is, what is to be proved, to make out the case. By the statute, bargaining for more than 6 per cent, on a loan, directly or indirectly is usury. The mode and form of the loan is immaterial, if the intention be to take more than legal interest, no device can take it out of the statute. In Marsh v. Martin-dale, () it was clear the lender did not intend usury — but the substance of the contract being itself usurious, it was held tobe infected and void, without the concurrence of his will. But these notes were made to be discounted at an illegal rate, and are within the principles settled by the English cases. There is a difference between notes made to be sold for as much as they will bring, and notes made to be sold at illegal discount, as these were. ■ The first may nevertheless be sold at a legal rate, these could not be, as was admitted when they were made. When the bill is made expressly to be sold at illegal discount, and is actually so sold, there is the concurrence of both parties to the illegal contract, the usury is consummated, and a sale by the broker of the maker, is a sale by the maker, and the purchaser cannot deny the agency —for buying of an agent, under such circumstance, he must inquire into the fact. A note made for sale is of no force until sold, and if sold for less than legal discount, it is tainted in its origin, and nothing can make it good, () From these cases it is clear, that if none of the previous parties can maintain an action on it, and the plaintiff had illegal discount, it is usurious in his hands.,
    But suspicion stands for proof until it be removed, Ord. 84; Camp. 375, 554. The broker is notoriously *the mere agent for a concealed principal. The fact, that brokers in such capacity was of itself enough, to render any note suspected, offered by a broker: but these were the notes of embarrassed and borrowing merchants, indorsed by affluent men, not borrowers, and offered for sale by a broker, who did not pretend to have any interest in them. Here were circumstances surely suspicious enough, to put Bruce on inquiry. And usury my be proved by circumstances like every thing else, () If the sale be out and out, there can be no usury, because there is no obligation to refund — but when the note is indorsed, the principal and interest are safe at all events, for the risk of insolvency is colourable only.
    If the lender take an order on the debtor, of the borrower it is usury*, 1 East, 195. This is denied because notes and bonds are assignable bona fide without being tainted with usury. But in that case there must be a suit against the maker, and due diligence used, before there can be a recovery against the assignor; and then, the recovery is only for the consideration actually given. But for a negotiable note, the in-dorsee recovers the whole amount with charges of protest &c.; and that, without suit, for demand and refusal entitle him to sue the indorser.
    But the evidence in this cause proves the notes were the property of H. & H. when offered to Bruce. So Bruce coming by the bills by an illegal transaction, could not recover at law. () The case of Rucker v. Smith cited on the other side, was of a fraud on the assignee, and in Baylor v. Hansboro’, there was no proof, that the bond was made for sale. And even if that case were an authority directly against us, the court decided in Pollard v. Baylor, that where the decision was recent, this court would re-examine and if proper, reverse it. *Such a decision, could here do no injury, for the indorsee would receive the amount actually paid by him.
    The argument on the other side was to this effect.
    Eirst, as to the point of usury. Usury by the law of Virginia is a crime. Purchasing bonds and notes like these has already been decided to be lawful, Gibson v. Pristoe. () Hansborough & Baylor. Yet here is an attempt, to convict Bruce of a crime in purchasing these notes, without proof of knowledge on his part, that he was, in purchasing them, committing such crime. There can be no crime without the concurrence of the will — there can be no usury without the intention of a loan ; yet here, where no loan was intended, and consequently no concurrence of the will to the commission of the crime, a man is to be punished briminaliter, and to forfeit his claim. Several cases from New-York have been cited to prove this position. But they do not support it. The case of Bennet v. Smith,(
      
      ) is but a dictum of»the court: for the notes were made to be discounted on a previous agreement: there was knowledge in the party of the usurious purpose. So in all the other cases relied on, it was proved, that there was a knowledge in both parties of the illegal and vicious purpose. The same answer applies to the case of Young v. Wright, 1 Camp. The corrupt agreement existed when the note was drawn, that it should be discounted at a usurious rate. The case of Kent v. Eowen from 1 Campbell, was also usurious between the original parties to the note.
    It has been said that the fact of the purchase of these notes being made from a broker was of itself suspicious, and held the buyer to inquire. The cases do not support the principle. That from Maulé & Selwyn proves only, that the factor cannot pledge the goods of his principal, which no one disputes. In that from 1 East, 335, it was clear from the manner of insurance, that the agent was *a mere agent, and such information would equally have applied to any one else, as to a broker. The case from 2 Cam.p. 33, was one of a vendee’s being informed while buying the goods, that they did not belong to the factor, and without this information, he would have succeeded, although he made no inquiry. The result of all the cases then is, that wherever the subject of contract is vendible, whatever may be the price, there can be no usury, unless the sale be a pretext for eluding the statute — both parties must intend a loan, and that must be proved.
    On the second point as to the true measure of Bruce’s claim it was insisted, that if there was no usury in the case — a court of equity should dismiss the bill, that being the only ground on which its interposition was asked. If Bruce was entitled to no more than he paid, it was a good defence at law, as to the excess claimed.
    
      
      Accommodation Paper — Sale of — Usury.—in Whit-worth v. Adams. 5 Rand. 333, 389, 409, it is said that, as the principal case was decided by a divided court •consisting oí three judges, it cannot be considered as binding authority. But, in this case (Whitworth v. Adams), the decision in Taylor v. Bruce was reviewed and the principle which it lays down confirmed; the court holding that, where a note is made and indorsed for the accommodation of the payee, and afterwards put in the hands of a broker by the payee to be sold in market and is purchased by a third person, having no knowledge that it is an accommodation paper nor for whose benefit it is •■sold, the transaction is not usurious. In this case .all five judges delivered opinions and each of them referred to the principal case. See Whitworth v. Adams, 5 Rand. 349, 353. 365, 380. 389, 404, 409, 411. 419. 420, 422. 426.
      In G-imini v. Cullen, 20 Gratt. 4?9, 447, the plaintiff applied for an injunction to restrain the defendant and others from proceeding to sell certain real estate under a deed of trust executed by the plaintiff to secure a negotiable note made by him and held by the defendant. The bill charged that the note was usurious having been discounted at 16 per cent, per year. The de fendant answered the bill denying that he had any knowledge of the usury in the note and alleging that he purchased it of certain brokers without knowing for what purpose it was made or to whom it belonged. On trial the defendant moved the court to instruct the jury as follows; “If the jury shall be satisfied, from the evidence, that the note on which this suit is brought was drawn and indorsed by the maker and indorser to raise money on a sale of it, and was placed by them in the hands of Lancaster & Co., Brokers, to be sold by them for that purpose; and Lancaster & Co. sold it to the defendant at a discount of more than legal interest, but neither indorsed the note nor made themselves in any way responsible for its payment, nor at any time owned it. or ’any part of it; and that the defendant purchased it without notice of the purpose for which it was made, or of its character, more than the note and indorsement import, the jury must find for the defendant” Jovnbs, J., delivering the opinion of the court said in reference to this instruction: “The court did not err in gi\ ing the instruction moved by the defendant. It was in accordance with the doctrine by a majority of the whole court, in Whitworth v. v. Adams, 5 Rand. 333, following Taylor c. Bruce, (Him. 42, and recognized as the settled law of the state in Bruinmel & Co. v. Énders, Sutton & Co., 18 ■Gratt. 873.”
      And in Gordon v. Dooley, 10 Fed. Cas. 785, the court, citing as its authority the principal case, Ilansbrough v. Baylor, 2 Munf. 36, and Whitworth v. Adams, 6 Rand. 333, lays down the rule that a man 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.
      In accord with these decisions, see Moseley v. Brown, 76 Va. 421; Brummel v. finders, 18 Gratt. 873, 885, 887, 888, 883, 891, 895, and foot-note, both citing- the principal case.
      See further./ooi-raofe toGibson v.Fristoe, 1 Oall62; monographic note on “Usury” appended to Coffman y. Miller, 26 Gratt. 698; monographic note on “Bills, Notes and Checks” appended to Archer v. Ward, 9 Gratt. 622.
      The principal case is also cited in Greenhow v. Harris, 6 Munf. 483; Smith v. Nicholas, 8 Leigh 360.
      Same — Value Must Be Paid. — The principle has long been settled that an accommodation note, until value Is paid for it, is a blank. May v. Bois-seau, 8 Leigh 212, citing the principal case.
    
    
      
      (a) Camp. 1S9.
    
    
      
      Cb) Camp. 177.
    
    
      
      (o) See Bennet v. Smith, 15 John. Rep. 855: Munn v. Commission Company, 15 John. Rep. 44; Jones v. Hake, 2 John. Ca. 60; Wilkie v. Roosevelt, 3 John. Ca. 68.
    
    
      
      la) 1 Rev. 374, § 2, cl?.. 102.
    
    
      
      (e) Gil. 10.2, § 1.
    
    
      
      (f) Co. Lit. 357.1).
    
    
      
      (g-) 2 Bl. Rep. 865.
    
    
      
      (h) 258, 508, 678.
    
    
      
      (i) 3 Bos. & P. 145; 1 Saunde. 295, b.
    
    
      
      
        Or) 3 Wills. 264.
    
    
      
      (l) 2T. Rep. 52; Peak. Rep. 200.
    
    
      
      (m) 2 Munf. 36.
    
    
      
      (n) 1 Font). 33:3; 2 Fonb. 490; Chit, on bills 86.
    
    
      
      (o) Chit. 88, 86.
    
    
      
      (p) 1 Marsh. 210.
    
    
      
      (<l) 1 Camp. 100, and Mam 69.
    
    
      
      (r) 3 Jflsp. 47.
    
    
      
      <s) 3T. Rep. 80, 4: Mass Rep. 370.
    
    
      
      (1) 3 Burr. 1523; Chit. 87; 2 Show. 235; 4 JSsp. 56.
    
    
      
      (u) 3 Boa. &p. 161.
    
    
      
      (v) 15 John. Rep. cases cited by Gilmer.
    
    
      
      (w) 1 Call, 73; ST. Rep. 52; lAtk. 151; 1 Bay. 446.
    
    
      
      (x) Burr. 1523 ; 7 Ves. 473; 1 Bast 961; 3 Ves. 373.
    
    
      
      (y) 1 Call 62.
    
    
      
      (z) 15 John. Rep. 355.
    
   COAETER, Judge.

Seeing no reason to change the opinion I formerly gave in this case, I shall only add to it some few remarks on the broad ground taken in the second argument, and on the cases referred to for its support.

The objection made to the jurisdiction of the court in this case I am of opinion cannot be sustained. The assets in the hands of the appellant might be affected by his failure to take the course he has done; for if the court shall be of opinion that usury has been practised, the assets must be increased by half the amount at least of the usurious interest. Being then interested in this amount, and finding that the surviving partner, fearful of jeoparding his own credit, and that of his indorser’s, declines to take a measure calculated to benefit the estate, the appellant represents; and as it might be unjust and unreasonable, at a future day, to throw this loss on the surviving partner, because he failed to do an act tending perhaps to an immediate and greater injury, *even to the partnership itself; or an act which from his knowledge of the transaction, he.might have thought he could not in honor or in conscience do; the appellant was right not to risk this remote and more doubtful chance of doing justice to his intestate’s estate, and was therefore justified in pursuing the most effectual, and probably the only certain mode of securing it. The great question then is whether usury was practised or not.

The bill charges that on the 14th April 1811, Holloway & Hanserd, being greatly pressed for money, applied to the appellee Bruce for the loan of S3603 78, informing him of their distress; which they obtained at the unconscionable interest of 1 Yz per cent, per month, apd that in October of the same year, being as was known to the said Bruce, in increased distress, they applied for a loan of a further sum, which they obtained ata heavier rate, to wit, from 20 to 25 per cent, per annum.

The, defendant in his answer, denies that he ever had any money transactions with Holloway and Hanserd, or either of them, and that no communication for a loan ever passed between them or either of them and him. He admits he purchased five notes made by Holloway and Hanserd, three of them bearing date the 14th April 1811, payable in six, nine, and twelve months, without interest, and indorsed in blank by John Allison; and the other two bearing date the 7th October, in the same year, without interest, in nine and ten months, indorsed in like manner, by Thomas Atkinson. They were all negotiable at the branch bank of Petersburg.

For the first three of 1400 dollars each, he gave 83628 80, and for the last two of 81205 each, he paid §2143 75.

The defendant further admits that he has occasionally purchased negotiable paper in market; believing that he violated no rule of law or morality thereby, and avers, that so far as he was concerned or acquainted with this '^transaction, it was a fair purchase of the notes and not a loan: and that with regard to the circumstances of Holloway and Hanserd, he had no jJarticular information. He expected the notes would be duly honored or he would not have bought them. He says he purchased them of John I/. Mertens, but whether he was the agent of Holloway and H. or not, and on what terms, he presumes are questions with which he has nothing to do.

The answer in this last particular was excepted to, “because under the charge of usury made in the bill, the plaintiff considers it highly important to ascertain, by the defendant’s answer, whether Mertens was the agent of H. & H., and whether the defendant made the bargain with him for the said notes in that character.”

The defendant amends his answer and says he doth not recollect or believe, that Mertens informed him that he was the broker or agent of H. & H. or either of them, or acting for them in the business; neither did he receive such information from any other quarter.

Thus stands the case upon the bill and answer. Every material allegation of the former, being denied in the latter, and consequently that must stand as true unless contradicted by the requisite countervailing proofs. It is true the defendant admits in his answer, that he received the notes at a discount which would be usury, if the transaction had taken place in consequence of a personal interview between him and the makers, as is alleged in the bill, whether a loan of money had been mentioned or not; there being no difference between the execution of a note before the money is advanced, and the pretended sale of that note by the maker at an usurious discount; and the execution of such note afterwards, in order to secure the money advanced with usurious interest. The former would be clearly a shift to evade the statute: it would be no answer for the party to say, *that there being nothing said about a loan he considered it a fair purchase of a note in market. He must know in the case supposed, that the note was given for no other consideration but that of the money so advanced: so too if the transaction had been between the known agent of the makers of the notes, acting for them in the negotiation, the same result must follow; but in this latter case, the knowledge in the purchaser of the agency must be acknowledged or proved, in order to put the case on the same ground of decision with one of an immediate communication between the parties :„and it was to extract an acknowledgment of this important fact, if it existed, that the exception to the answer was taken. I think it would have been more proper unless an immediate communication between the parties was still intended to be insisted upon, to have amended the bill charging this knowledge, and also charging the knowledge of facts, which might have led the defendant to suspect it, if the plaintiff supposed proof of a knowledge of suspicious circumstances was enough.

That there was a known agency in this case is denied ; and therefore had the case stood on bill and answer it must have been decided not to be an usurious transaction; unless the purchase of a negotiable bill, indorsed in blank, as this was, (the purchaser being ignorant that it was sold by the maker) at a discount greater than legal interest, be usury.

If a note of this kind is made and sent into market, say for the express purpose of being sold, and it is sold to A. at a discount not exceeding lawful interest, it is a good note in the hands of A. whether he purchase from a stranger, from the makers, or from their known agent. This is the situation of the most numerous class of notes negotiated at our banks, being made not on real transactions between maker and indorser, but for the accommodation of one or both of them. But suppose that A. af-terwards, being under the necessity of raising money, sends *this note into market again, still remaining indorsed in blank, and it is sold at a discount beyond lawful interest, this sale is not usury in the purchaser either as to the maker or holder. Or suppose A. sells his tobacco to his merchant B. on a credit, and receives in payment the note of B. given to C. and indorsed by him in blank, in payment. Say even that B. has such note in his possession, amounting only to the price agreed on for the tobacco, but made for the purpose of being sent into market, and finding he can purchase this crop of tobacco and would rather send that into market, delivers the note to A., such note executed after sale of the tobacco would surely be good in the hands of A. and so would that executed before, especially if the pHce of the tobacco had been fairly agreed on without reference to that note in particular, so as to shew that there was no usurious shift in relation to it. And if A. in either case sends such note into market, (indorsed in blank by C.) a purchaser of it, even from A. himself, at a discount greater than legal interest could not be deemed guilty of usury, even as to A. according to what I understand to be the uniform course of decision in this court, much less as to the maker and indorser.

Notes of this kind then, in the form which those in question bear, may be sold in market at a discount beyond legal interest, without subjecting the purchaser either to the odium or to the pains and penalties of usury. Had these notes been passed off by H. & H. dollar for dollar in payment of a debt contracted before or after their execution ; or discounted at 6 per cent, as before stated, they would have been good and binding on the makers. They were then not usurious and void when made, for if so' nothing afterwards can make them good. But like every thing else they were capable of being the subject of an usurious contract made concerning them. Whether they have been the subject of such *contract is the question before us, and that must be proved as in all other contracts and cases of that nature.

Sales of property of this kind, to wit, notes, bonds, stock, or other money securities are generally effected, in large towns, by brokers. Persons who are not the owners and known not to be the owners of the property sold, but who act for the owner, and whose name from a prudential motive, is frequently withheld, and the transaction is perfectly fair and legal; and X can neither find any ^ase nor principle which would justify me in placing a sale made by such public agent, if he may be so called, on a ground different from one made by a private agent. All the sales above supposed might have been lawfully made by the public known broker, and under a direction too, to conceal the name of his principal.

There must be something then, beyond a bare purchase of a note of this kind, at a discount above legal interest, to stamp the transaction with the stain of usury, and in the case before us, according to the answer, the exception thereto, and the amended answer, (for the bill makes no specific charge on the subject,) the inquiry raised is, whether-these notes were or were not procured from the makers through the agency of a known agent, acting for them in the negotiation? The answer denies a knowledge of this agency; and to my mind there is no proof of such knowledge, which could have weighed a moment in a trial at law, much less to overthrow the defendant’s answer which until disproved must stand as testimony in the cause on the other side. If the answer was not sufficiently responsive it ought to have been excepted to. — In fact the bill makes no charge on this subject requiring a response, the exception puts the question on the ground of a known agency; the answer denies information of this agency, by the agent himself, and also that it was received from any other quarter, and nothing is charged or alleged from which such knowledge might be *inferred; if it was competent for the court to infer any thing so as to support the charge of the crime of usury.

If the plaintiff had other grounds than those resting on the knowledge of the agency whereon he could establish the charge of usury, he ought to have amended his bill, and charged those grounds, so that issue might have been taken thereon, and the party have the benefit of his answer or of his demurrer if he was not bound to answer. At present the case must rest on that point only; unless indeed as is above stated, the purchase however fairly made, was per se, usurious, being at a greater discount than legal interest.

It has been urged in argument, that the defendant under the circumstances disclosed in the testimony, had good grounds to suspect that he was in reality purchasing the notes from the makers, and not from a bona fide holder, and that if he was even ignorant, it was wilful ignorance, and he shall be as much criminated thereby as with actual knowledge.

By this, I understand is meant to be affirmed in the first place, that these grounds of suspicion, as they are called, amount to sufficient proof that he knew the fact in question; and secondly that if he did not know, he ought to have inquired, and not doing' so he is guilty of usury.

First, what are these circumstances, and are they sufficient to overthrow the" answer; or to establish the fact if the answer had been silent on the subject, and not excepted to?

The notes had on them the names of undoubted men, who probably would not themselves send them into market to be sold at a sacrifice. Agreed. But if they had been given by the merchants to planters for tobacco, and sent by the latter, or by any persons to whom the latter might have passed them into market, they would have remained in the same form in which they now are, if the seller did not wish to make himself responsible, and the purchaser *would have been satisfied, as in this case, with the indorsers. But the more the credit and caution is raised the greater would be the impression that the transaction was real. Would cautious men indorse for merchants whose circumstances were known to be such as described in the bill? Traders involved in pecuniary difficulties, who had become a prey to usurers.

The very standing of these indorsers was enough to satisfy any one not in the secrets of the leger, that this house was in good credit, and I have seen no proof in this cause, even now, to satisfy me as to their real condition, or whether they have wound up rich or poor. But merchants, since examined, say, that at that time, they were pressed for money, and because they knew it, Bruce, who responding to that part of the bill denies any particular information on that point, also knew it. A. purchases property to which B. has an equitable claim, it is proved that this equity was known to a great many of the neighbours of the seller and B. ; and it is also proved that A. residing at a distance, is well acquainted in that neighbourhood: will this charge A. with actual knowledge, especially when he denies it? Again, a house may be pressed for money and yet be able to purchase on credit, and give notes such as these in payment — at least as long as they can procure such indorsers as those on these notes. How then a-knowledge in Bruce of every thing that any witness (except Mer-tens who made no disclosure), says he knew, can effect this case I know not.

All the cases prove, that to constitute usury two wills must concur. It is not enough to prove circumstances known to one of the parties only, and which if known to both would show an assent in both to an usurious transaction. No one could with safety purchase property if he could be thus circumstanced, his money taken from him, heavy penalties and great odium incurred, when he, so far as he knew, was doing an act, not reprobated by the *law, but sanctioned by the uniform decisions of this'court.

In Hansborough v. Baylor, () the Judges who gave opinions said, that the nature and substance of the transaction must be got at ■ — the views of the parties must be ascertained — an intention to borrow is not enough; there must also be an intention to lend, and if the purchaser of such paper be ignorant of the intention to borrow he cannot be considered a lender: both must agree to the usurious transaction. So in Gibson v. Fristoe, Judge Pendleton says, if it be a mere sale of property, and bonds are as much propert3' in this respect as an3 thing else, altho’ at an under value, it is not usury; but if the bargain proceeds from, or is connected with, a treaty for a loan it is.

Second. — But there were sufficient grounds of suspicion to excite inquiry, and therefore he is guilty. I see no reported case, or principle of decision to justify this doctrine. The general position is, that the will must concur; but for will we substitute ignorance, ignorance I will for the present admit, arising from negligence or fault, but still ignorance.

The party then is punished not for actual known usury, but for his culpable ignorance of facts, which if known, would have made him guilty of usury. It will not do to say that this wilful or culpable ignorance is knowledge of the fact. If the circumstances prove knowledge, then it is not ignorance of any kind. But the proposition is that culpable ignorance is to be considered equal to actual knowledge and punished accordingly. — This is dangerous ground to tread upon when we are about to inculpate a fellow-citizen.

By the wise humanity of our laws, every man is presumed to be innocent until the contrary appears. But who can say here what were the grounds of suspicion known to Bruce? There is a total absence of proof as to him of any knowledge of such facts — others knew facts and *we in the first place impute their knowledge to him, and then because that is sufficient to raise suspicion in our minds, we say he must have suspected also; for if he did not suspect tho’ others might, he is not guilty of a fault, be may be unfortunate in being unsuspicious but not criminal, I think we cannot convict of crime on such grounds as these.

But if suspicion in the party is to inculpate him as much as knowledge, ought not the bill to charge that fact, that the party might answer to it, as he has done as to his knowledge? And is not testimony to this point out of the issue? But what is this fault arising from a failure to inquire? If A. is about to purchase propert3 and has received such information of a prior equity in B. as would make an inquiry proper, he is bound to make it: why? because the other party is interested in asserting his claim and preventing the purchase. The reverse is the fact in the sale of notes. The seller is interested in concealing a fact which would exclude fair purchasers from the market, and would leave him a prey to usurers; and therefore a true state of the case could not be expected. Why then require such course to be pursued, unless some good will grow out of the establishment of the rule? And what good could result from establishing such a rule, when the party would be interested in withholding the truth, and might, by getting a friend as the holder, to take the note into market, or by a thousand other ways, elude the most diligent inquiry?

Nothing of this kind was held necessary in the case of Hansborough v. Baylor, in which case it appears the bond was made for sale, and not on a real transaction, but the purchaser there, as in this case, was ignorant of that fact.

Suppose we establish the rule that inquiry shall be made, and it shall turn out on inquiry, that the purchaser is told that the note is for a real transaction, and a fair *subject of purchase but in the trial the reverse is proved, would it be usury, unless it was proved that the purchaser knew this, and that the inquiry was a mere device and shift? To my mind such inquiry, unless made necessary, by this court, when the inevitable result would be, that the truth would be concealed, would be a strong circumstance to prove a device. But suppose the party believes the note is sold by the maker, when it is not, but is in fact a legal transaction, will this mistaken belief make it usury? That was not held to be enough in the case of Price v. Campbell.

I am therefore opposed to any rule which is to operate retrospectively, unless I can see that such rule is so well founded in reason and propriety, that its existence, as a rule of’correct conduct, may be supposed to exist previously in the minds of correct men, in regulating their transactions in life. I am the less disposed to do so, because this court in the above case has not hinted at such a necessity: and finally-, because unless we are now to exclude money securities from the market, because a bad1, use may frequently be made of them, I can-, see no good, no security, against the evil, which is likely to result from its adoption.

Any course which the legislature in its. wisdom may adopt, to exclude paper of this, kind from market, will only operate prospectively, and I therefore prefer leaving the subject to them.

Taking it at present, that paper of this, kind is a fair subject of traffic, but one which may be much abused, for the purpose-of eluding the statute against usury, I shall be ready on all fit occasions to lend my aid in preventing this abuse — farther I cannot go. I must take care, that in weeding the-tares, I do not destroy the wheat also.

For these reasons I was, formerly, for-affirming the decree; but a new argument has taken place, of which I shall take a brief notice.

*The broad ground now taken is, that where a note is indorsed for the-accommodation of the maker, in which case, the indorser having given no consideration for the note, could not maintain a suit against the maker, that such note can in no way be sold at a discount beyond legal interest, without subjecting the purchaser • to the penalties of usury, although he may have believed himself a fair purchaser of a note available in market — and it is alleged that some cases in New-York, and also some: reported in Campbell, go this far, and that they have correctly settled the doctrine.

Jones v. Hake, is the hrst and leading case in New-York. There a note was sent by the maker to a money broker to raise money, after retaining it some time it was returned with a" declaration, that if the maker would get another name on it, to wit, that of P. S. he could get him the money at 2 per cent, per month. The name was obtained, and the note returned to Haskins the broker, who advanced part of the money, and afterwards the residue, but the agent of the maker in this transaction did not know whether Haskins was the owner of the money or acted as agent for another, but he knew no other person as the lender.

Haskins was offered as a witness to prove, that he as broker for the maker sold the note to Hermison at a discount not exceeding legal interest, and Hermison, who was released and not interested, was also offered to prove that he gave full value, and that there was no usury. They were both rejected — and the Judge directed the Jury, that they were to consider Haskins as the lender, and as illegal interest was taken by him, the note was void in its inception, and bad though in the hands of an innocent purchaser. The jury found, however, for the plaintiff and on a motion made for a new trial, two Judges were of opinion, that on the evidence admitted the instruction was correct; but that there was error in rejecting the witnesses, and that the case ought to be *tried on the whole evidence, considering Haskins as merely the agent of the maker and a competent witness.

The other two judges concurred that the witnesses were improperly rejected; but saw no ground for a new trial, for if Haskins was the agent of the maker, he was bound by his acts, and considering him in that relation only there is no proof of usury; the secret transactions between a principal and his agent, cannot influence the contract he makes for his principal with others. If all the Judges had concurred therefore, this case would only prove, that if the maker offers his note for discount, and it is discounted at usurious interest by the person to whom it is offered, it is usury — which is a principle I have admitted.

The case of Wilkie v. Roosevelt,() is precisely of this character. Marx & Co. the makers of the notes, were indebted to Goodrich the broker, and the note was taken from them by the latter, at a discount of 334 per cent, per month, and passed for full value to the plaintiff. It was there properly held, that Goodrich was the lender, and so the note being bad in its inception, could not be made good by being passed for full value to an innocent holder — a doctrine never disputed. However, even in this case, LEWIS, Chief Justice and LIVINGSTON dissented, though no opinion is reported as having been given by them.

The next case is that of Man v. the Commission Company. That case I understand to have been decided, on the point of usury in favour of the plaintiff. The Judges go on to lay down certain dicta, which seem broad in their character, it is true; but as they had no case before them to which those dicta coaid apply, and as the only authorities they refer to for them, were those of their own court above noticed, it is not to be presumed that they intended them to go beyond those cases, and if '*they did, I think those dicta are not only unsupported by, but contrary to all the leading doctrines here and elsewhere.

Indeed in this very case, they say, the principle is too well settled to be questioned, that a bill, free from usury in its concoction, may be sold at a discount below the legal rate of interest, and the reason is this: as the bill was free from usury between the immediate parties to it, no after transaction with another person, can as respects those parties invalidate it.

The case of Bennet v. Smith in the same book p. 3S7, was of this nature. There F. applied to H. to lend him money, he declined lending, but told him if he had any good notes he would buy. A few days after, F. brought notes executed by the defendants, which H. purchased at a discount of 21 per cent, but knew not as he said but that these notes were given to F. in the ordinary course of trade. A witness proved that F. applied to the defendants for a loan of their notes for $363: saying he had agreed with H. to sell notes to him at 21 per cent, discount.

This was held to be usury, and though broad doctrines are here also stated to have been settled in that court, yet this case might well be held to be one of usury. A loan was asked, it was shifted to a pretended purchase of paper, which the party had not then executed, the premium was agreed on and the paper soon after procured.

All the cases then in this court, were cases of usury in the inception, except one, and in that some broad dicta are thrown out, which, to the extent they are now said to go, are unsupported by any adjudged case.

The fallacy of the argument which goes to the full extent this case requires, it appears to me, must rest in this; not that a party fairly and innocently purchasing a note indorsed for the accommodation of the maker, is himself guilty of usury, and subject to the penalties of the statute, but that he is like the innocent purchaser of *a note — usurious in its inception between other parties. For how a man can be guilty of a crime, when his act may or may not be innocent according as facts shall turn out thereafter, and of which he is ignorant, I cannot imagine. For instance; suppose these notes, indorsed by Allison, were for accommodation, but those indorsed by Atkinson for full value, and both purchased at the same moment, and under the same circumstances; can it be possible that the transaction as to one shall turn out afterwards to be proper and legal, and that as to the other the penalties of the act shall be incurred?

But to avoid a note for usury the penalties of the act must be incurred by somebody : there is no avoiding it without guilt somewhere. In the case put, though Allison, the indorser, would not have subjected himself to those penalties, nor would Mer-tens, the broker,—'Bruce must have done so, otherwise the note cannot be void. Could a jury, on a plea of not guilty, and the answer must at least be equal to such plea, find him guilty, and subject him to those penalties, on the evidence exhibited in this cause?

I think they surely could not: but suppose they could find, on those facts, that he knew' he was in reality purchasing an accommodation note from the maker himself, still that will not satisfy the doctrine contended for. According to that doctrine, they must find him guilty, although he knew no such thing, but on the contrary-believed he was doing what has been repeatedly sanctioned by this court. In other words they must find him guilty although they believe him to be innocent.

I shall not take a minute view of the cases in Campbell and the other cases cited, being satisfied, that they all turn on the ground that some person, in the original concoction of the note, has been guilty of a crime, and offence against the law, and although various circumstances, tending to prove that, will strike different minds in different ways, yet guilt must appear in the concoction *of the business, and must be brought home, by full proof, to some one originally concerned in it.

As to the recovery being limited to the sum given for the notes, I consider it not necessary to decide what would be the case as between the holder and his immediate indorsee, this suit being by the maker against the holder. As to him the notes are either bad for usury, or good in toto as it at present appears to me. Besides, if this be a good defence it will be open at law, and not concluded by the dismission of this bill.

The decree must therefore be affirmed and this case put to rest, though from the division of the court, the law in this important point is not settled.

BROOKE, Judge.

When this case was before decided I gave a silent assent to the decree of the Chancellor, because I did not perceive that there was any difference of opinion in the court on the principles, which were to govern it; from the very able opinion of the dissenting Judge, I have not been able to deduce a different conclusion. After the utmost attention to the argument, which has since been submitted to the court, and the most deliberate reflection on the cases adduced, I have not seen cause, in any material degree, to change my first impressions. The facts charged in the bill are as follows: it is alleged that Holloway and Hanserd, being much pressed for money applied to the defendant Bruce for a loan of §3603 78 which they obtained at the usurious interest of 2j4 per cent, per month, and executed their notes for $1400 each, negotiable *at the Bank of Virginia, with John Allison as indorser—the first note payable in six months, the second in nine months, and the third in twelve months after date; that the first and second notes were paid at maturity; and the third lodged in the bank; that afterward, the said Holloway and Hanserd, being in increased distress applied for a second loan which they obtained at more exorbitant interest, from 20 to 25 per cent, and executed two other notes, with Thomas Atkinson as indorser, payable at nine and ten months, negotiable at bank, which are also deposited in bank for payment: that Hanserd, the surviving partner of the firm, will not avail himself of the act against usury lest it should injure his credit, and that if the notes are paid out of the company subject, it will be ruinous to the estate of Holloway and prejudical to his creditors. To these allegations the defendant Bruce answered ; he denies any knowledge of any communication for a loan, admits that he purchased the notes of Mer-tens the broker, at the discount stated, insists that it was a fair purchase without any particular knowledge of the circumstances of Holloway and Hanserd, or that the broker was their agent; that notes of persons of unquestionable solidit3' might have been purchased at a greater discount. To this answer an exception was taken, on the ground, that it was not sufficiently explicit as to the defendant Bruce’s knowledge of the agency of Mertens the broker. In his second answer, he avers, that he did not recollect or believe that Mertens informed him, that he was the broker or agent of Holloway and Hanserd, or of either of them, or that he had received information to that effect from any other person. Whether this last answer was sufficient or not, it is not material to discuss, as no exception is taken to it; there is certainly an appearance of caution in it which deducts from it somewhat, the credit, that otherwise would have been due to it; had the plaintiff insisted on a discovery in his bill, he ought to have excepted, and he might have extorted *from the defendant a more direct and full answer; in the shape which he has given to it he might, if not satisfied, have again excepted; and the defendant would have then had the opportunity of shewing if he could, that in effect his answer was as full as a more elaborate statement of the circumstances could have made it: but the plaintiff took issue on it and relies on the evidence of Mertens, the broker, and of Haxall and others, which last is not material, to support the charges in his bill: if they are proved there can be no doubt of the usury. The objection by the counsel for the defendant, that the al-legata in the bill do not agree with the probata, will be found upon examination, not to be of importance: the difference between a direct communication between Holloway and Hanserd and the defendant Bruce, and an indirect one through Mertens, if proved to be their agent, will not be material ; Mertens’ testimony is most essential, and if it is not as full as it might have been, the plaintiff had the power to make it so by a more minute and precise examination of him. He proves, I think, that he was a general broker in Petersburg, in which place the parties, except the defendant, Bruce, resided; that he was in the practice, as broker, of selling for those pressed for money, bills, notes, &c. and that he had frequently sold notes for H. & H., and that knowing the defendant Bruce purchased paper, he applied to him to purchase the first notes, described in the bill of the complainant, for the purpose of seeing whether he would give more for them than had been offered by others; that he purchased them at the price stated; that afterward he applied to him to purchase the second set of notes mentioned, and that he also purchased them at the discount stated in the bill, a discount not greater than was given for as good paper as any in the town : paying by a draft on Marx & Co. of Richmond; that he considered these transactions as sales commonly, made of bonds and notes at a discount, and not as transactions between a broker *and a person leaving money in his hands to share with; that he made it a rule to make no communications to a person purchasing; that it was generally supposed, that the drawers were in distress for money, but did not know that Bruce had any particular knowledge of it; that the in-dorsers of the notes were considered to be in good credit, &c. Haxall says it was generallj' understood in Petersburg, that the drawers were distressed for money, that the defendant Bruce was well acquainted with them. The other testimony adds same particular instances in which he had purchased or discounted paper at a premium. The first question upon the testimony, I think, is, was the defendant Bruce informed that he was dealing with H. & H. for the notes in question, or had he such knowledge of the real transaction, as to subject him to the charge of a corrupt intention to violate the act against usury?. My own impression is, that though he may have known the fact, that the notes were the property of the drawers, yet it is not so proved as to convict him of the charge. Upon the evidence, the notes might have belonged to others who had received them for value, and preferred selling them, and waiting until they came to maturity. Direct proof, I admit, is not required in these cases, but the inference ought to be as strong, as would be required to convict a party of the breach of a penal law in other cases. His knowledge that the drawers were pressed for money, if directly proved, does not produce the necessary inference that the notes were known to be their property; his knowledge of the high credit of the indorsers, if it had been fixed on him by the testimony, would repel the idea that the notes were sold for their benefit; but, yet, the testimony of Mertens shews, that he often sold notes and bills for the benefit of persons, whose names were not on them; it would be, I think, hazardous to pronounce, that the defendant Bruce knew that the notes in question were not notes of that description, that ought at least to be satisfactorily shewn. If it *were proved that he knew the in-dorsers were not pressed for money, the inference would be a more direct one, that he knew they belonged to the drawers, and that in dealing with Mertens the broker, he was dealing with their agent: If I could come to this conclusion, I should have no doubt of the usury, but not being able to fix upon the defendant Bruce the intention to commit usurjq I shall proceed to consider the cases that have been relied on, some of which have been supposed to subject him to the consequences of committing usury. In the absence of testimony that he intends to do so, the case from 1 Raymond cited by Mr. Call shews, that a bill may be sold without indorsement, and that the doctrine sanctioned in this court is. not new in the case of Gibson and Rristoe. Mr. Pendleton said that in a mere sale of property, and bonds are, in this respect, as much property as any thing else, altho’ at an under value, it is not usury here, because price is a thing unfixt, and depends upon the convenience of the contracting parties; that bills and notes are as much so I presume will not be disputed. Judge Roane in the case of Price v. Campbell, said, that in cases of this kind we are at liberty to infer usury from the circumstances of the transaction; but in making this inference, we are confined to the inquiry whether there is a corrupt contract or agreement for usurious interest. No inference can be drawn from these cases, that an opinion was entertained by the Judges, that usury might be committed without proof of a corrupt agreement or contract in violation of the statute. These cases upon authority legalise a bona fide sale of bonds and bills —and notes stand on the same footing, nor are any of the cases cited to the contrary- — - whether contracts for the purchase of bills, bonds, or notes are a colour or pretence for an usurious loan, or a fair and honest transaction, is always to be decided by their circumstances. See Cowper’s Rep. 12 and ?70; Doug. *708 and 3 Term Rep. () If a fair purchase, no matter what the discount, it is not usury. All the cases seem to proceed on this idea, and upon examination, I think it will be found, that there is no case in which a party, not participating in the corrupt concoction of the contract, has been deemed a usurer: that the statute against usury will protect a party to an usurious contract though ignorant of the usury is not denied; but that under such circumstances it will subject the party to the consequences of committing usury is no where decided. In the case of Ackland v. Pierce, 2 Camp. 559, He Blanck, Judge, said, it was not material that the drawer of the bill, Prince, was ignorant of the usury which was between Waine the acceptor, and one White who discounted it. In that case, if I understand it, had the bill been a perfect bill before the usurious agreement between Waine and White to discount it, it would have been a valid bill; it was the corrupt agreement to discount it at a greater than legal interest, in the inception of the contract itself, that made it usurious; it was a shift to evade the statute. Thus Lord Kenyon held in the case of Parke v. JBleason and others, () that a bill legal in its inception, indorsed by A. to B. for an usurious consideration, and by B. to C. without notice of the usury, and afterwards paid by C. to the assignees of B. who was bankrupt, though void as between A. and B. was valid in the hands of the assignees, who were clothed with the rights of C. the innocent indorsee Whether the notes in the present case were legal in the inception will be noticed hereafter; a contract usurious in its inception cannot be rendered valid altho’ in the hands of an innocent indorsee without notice :() but on the contrary if it be originally fair and not usurious, no intermediate usury can affect it in the hands of a bona fide holder, () These last cases are referred to not *as authorities, but because they were cited by the counsel, and conform to the English decisions. The principle seems to be settled, that whether on the one hand, even a, bona fide holder of a bill must lose his remedy if there be usury in the concoction or inception of the bill except as against the party to whom he paid value, on the other if the contract be fair between the original parties to it and no usury in that contract, it will be valid in the hands of a bona fide purchaser, though at a greater than legal interest. The latter conclusion follows, from the settled law that a note may be sold. If the notes in the present case were tainted with the usury in their inception; if there was a corrupt agreement between H. and H. and the in-dorsers, Bruce must lose his debt as against the drawers; and if also, he had participated in that agreement, or had knowledge of it, he would be condemned as a usurer. None of the cases cited go farther: in the case in 1 Camp. 141, much relied on, King, the broker agreed with the acceptor to get the bills discounted at 40 per cent, the arrangement was made before the bills were accepted, it was a device to evade the statute: if Bruce had discounted the notes at legal interest, there could have been no pretence that they were usurious; was he a party to any agreement that they should be discounted at a higher rate; was he apprised that they were made so to be discounted, or that they were the bills of the drawers, from which to have inferred that fact. In the case of Hamilton v. Le Grange, () it is said by Justice Eyre, that in construing any particular circumstances in order to found a conclusion of fact, especially in cases in which usury is alleged, we ought to deal with those circumstances according to the common sense of mankind. Pursuing the rule, the circumstances detailed by the broker, cannot lead us to any certain conclusion, that Bruce knew the notes to have been made for sale and ^certainly not to the conclusion, that he was a party to the making of the notes for that object. As before remarked, Mertens expressly states, that he was in the practice of selling notes also of a different description; notes as I understand not made for sale, but real business notes which were not indorsed by the owner. Bruce was in the trade of buying paper, and it appears, gave for the notes in question, what the best paper free from the taint of usury sold for. It is impossible to infer from these circumstances, that he meant to practice usury in this case. However careless about the violation of law, he would not without an adequate motive hazard the loss of his money. In the case of Hansborough v. Baylor, though not fully reported, it must, I think, be admitted that the ignorance of the latter of the transaction between the former and Rootes, was the real ground on which it was decided, that the purchase of the bond by Hansborough was not usurious; the bond was made to be sold at usurious interest. Judge Tucker says, that whatever even Baylor’s intentions were, Hansborough was ignorant of them; and though the former might even have intended to borrow upon usury, the latter seems only to have intended to make a fair purchase. The case in 3 Johnson (Wilkie v. Roosevelt) is not in conflict with this case; the purchaser was apprised of the object for which the bill was made, and though Wilkie was a bona fide holder, he could not recover as against the makers. There was usury in the concoction of the note, in which those under whom he claimed participated. — ■ Marx & Co. made a note to the defendant which he indorsed- — the Company then sent it to Goodrich a broker, who received it at 334 per cent, discount, and in discharge of a debt due by the drawers to him and indorsed it to the plaintiff. The case in 2 Johns. Jones v. Hake is of the same character; the general remark by one of the Judges that a note made to be discounted at illegal interest, is usurious, in the hands of a bona fide holder, is ~to be taken in relation to the actual case before the court. It applies to cases in which, as in the preceding, the purchaser of the bill was a party to the agreement or knew of the purpose for which the bill was made. In IS Johns. Mun v. the commission company, it was decided that a bill valid in its inception is valid in the hands of an innocent indorsee though discounted at a higher rate than the legal interest. In Bennet v. Smith and Phelps, it was said that a bill was waste paper until discounted, if nothing was due from the drawer to the payee, but I understand it to be law, that a party who indorses a bill for another makes him his debtor to the amount, because of his responsibility to pay. In the present case it could not be insisted on by the drawers that they were not indebted to the indorsers. If the notes had been discounted in bank, or Bruce had discounted them at legal interest, such a pretence could not have been set up. The want of actual consideration between the drawers and indorsers is not material, after the bill has gone into the hands of one who has paid value for it, even though a fraud be committed by the indorser in the bill: yet this court held in the case of Williamson v. Robertson that the drawer was liable upon the principle, that he who trusts most, must be the loser in a controversy with a party who gave value lor the bill without any knowledge of the fraud.

I have not noticed Mr. Call’s second point, because I am of opinion it does not arise here; whether Bruce can recover more than he paid for the notes is a question which may be decided at law, and it is not alleged in the bill that Hanserd the surviving partner will not avail himself of any other de-fence, except the plea of usury; upon the whole, I am still of opinion, that the Chancellor’s decree is correct and ought to be affirmed.

ROANE, Judge.

This is a bill brought by the appellant, as administrator of E. B. Holloway deceased, *against the appellee and others. It charges, that the late house of Holloway and Hanserd, of which the appellant’s intestate was a member, being greatly pressed for money, became a prey to usurers and that, among others, they applied, on the 14th April 1811, to the appellee, who was apprised of their situation, for the loan of $3603 78, which they obtained from him, at the usurious and unconscionable interest of 1%, per cent, per month, and to cover which loan, they executed three notes for 1400 dollars each, with John Allison Esqr. as indorser, payable at six, nine and twelve months, respectively, as by a memorandum in the hand writing of the said intestate, and referred to as part of the bill, appeared. The bill makes a precisely similar charge in relation to another sum obtained on the 10th October 1811, at the still.- more exorbitant interest, as is alleged, of from 20 to 25 per cent, per annum: the said house, as is further charged being then in increased difficulties, and that this was known to the appellee; and to cover which loan, notes were given, with Thomas Atkinson Esqr. as indorser, payable at nine and ten months respectively after date.

The bill prays “that the appellees may full answer make to the premises;” and again, it prays generally that the appellee may set forth “all that he knows respecting the premises.”

To the important allegations of the bill respecting the pecuniary distresses of the house in question, the appellee makes no other answer, than that he had no particular information as to their circumstances. By this form of expression he endeavoured to evade the interrogatories aforesaid; although it is proved in the cause, that he must have been conusant of the general notoriety which prevailed, in relation to those distresses. To so much of the bill as charges in substance, by (referring to the memorandum above mentioned), that Mer-tens, who is therein named, was the agent of Holloway and Hanserd, *in the transaction aforesaid, the appellee only responds, in his original answer, after admitting that the negotiation was effected with him; that the question, whether he was their agent or not, was one with which he had nothing to do. And when pressed by the exception of the appellant for a more explicit answer on this point, he still only states, in his amended answer, that he does hot recollect or believe, that Mertens informed him, that he was their agent, nor that he received information from any other quarter: all of which may be strictly true, and yet the appellee may have undoubtedly considered Mertens as their agent in that transaction: he must have so considered him from the combined circumstances hereafter more particularly stated, and, especially, from the facts that Mertens was the known agent or broker for others, and seldom or never traded in paper of his own. To so much of the bill, as charges the transaction to have been a loan, covered by the notes in question, the appel-lee, after using the common slang (if I may use so common an expression), respecting the legality and even morality of purchasing notes, at ever so enormous a rate of discount, only says, that it was a fair purchase of the notes, and not a loan; whereas the receipt from a man of his own notes, payable at a future day, in consideration of monej' advanced, is only a loan evidenced by a note and not a purchase; and whether it is a .loan or a purchase, is, besides, an inference of law, which the party is not competent to swear to. Again: the appellee says in his answer, that no communication for a loan ever passed between H. & H. and him. This may be true, and yet such communication may 'have passed from their agent: and, also, this assertion may be bottomed upon the erroneous supposition first ‘Stated, that the obtaining from a man his own note, for money advanced to him, is a purchase of the note and not a loan of money. Besides, there may well be a loan, without any formal communication therefor. A *receipt by one man of 101. and a promise to pay 201. therefor, at the end of the year, without more being said, or passing between the parties, is to all intents and purposes, a loan. Words in this case are not necessary: in the language of the books res ipsa loquitur. A formal communication for a loan is only necessary to be shewn, when a transaction has the form of a sale or the like, and the device is to be detected by shewing the real cause which brought the parties together. (Ord on Usury, 74; 1 Call 62, Gibson and Eristoe.)

By these and such like equivocations, prevarications, and mental reservations, the appellee has sought to shelter himself, from the consequences of a full and frank answer to the charges contained in the bill. While I do not say that these equivocations operate an admission of the truth of the facts to which they relate, they on the contrary oppose no certain and positive denial to those facts. They give a character also to the answer which is very unfavorable to it, even in relation to such parts as would, otherwise be free from objection. The spirit of the maxim “falsum in uno, falsum in omnibus,” forcibly applies to it, and disparages the whole answer. At the same time, I must claim the right to say, that if this answer were one of the purest model, I do not know that its matter would at all v?.ry my Conclusion upon the subject.

The case made by the bill, is, that of an usurious loan of money, covered by the notes in question: and the ground taken by the answer, is, only, that the transaction was a purchase of the notes. The answer however does not state, that the appellee purchased them from Mertens, (the broker,) from the respective indorsers of them, or from any other person, being the actual owner of the said notes. The answer could not have taken this ground, as is abundantly shewn by the testimony. The question we are called upon to decide is, therefore, whether a note which has never been consummated in favor *of another person, for a valuable consideration, nor is purchased from that other, but receives its existence for the first time, in consequence of a usurious transaction, of which it forms a part, and which is only given by the drawer at the time of that transaction, and as an evidence of the contract, is free from the objection of usury? The question more particularly is, whether a contract which is manifestly usurious in itself, ceases to be so, in consequence of the borrower’s putting in the hands of the lender, for the more easy proof of the promise, a writing, evidencing the existence of that promise?

This is the true question before us, upon this record. I shall therefore steer entirely clear of the question, whether a man owning the bona fide note of another, has a right to sell the same, at an usurious rate of discount. This question has been affirmatively settled, and I do not mean to go into it, at this time: but I am authorised to say, that even a transaction having the form of the sale of such a note, may be set aside, as a device to elude the act of usury by showing, that the purpose of borrowing and lending brought the parties together. This was decided in the aforesaid case of ■Gibson and Pristoe: and ths doctrine applies a fortiori to the case of a transfer of a man’s own note.

That the notes in question in this case were of the latter character and not of the former, is undoubtedly inferable from the circumstances, and is positively proved by the testimony. Of this fact the appellee could not have been ignorant: but it is entirely unimportant whether he were so or not, if in fact, such was the nature of the transaction. I will first shew what are the circumstances which go to establish this fact, and then refer to the positive testimony.

In considering the circumstances which warranted a presumption that these were the notes of H. & H., and of none other, and therefore, were neither consummated before this transaction, nor free from the objection of *usury> it is objected in the present place, that usury is not to be presumed, ■ I admit that there is no testimony: but, it is most clear, that usury may be presumed from the circumstances, where they are sufficiently strong; and it would be strange indeed if it were not so, when even the crime of treason or murder may be inferred from circumstances. We are told in Ord on usury, () that circumstances are to be relied on to prove a contract to be merely a shift to evade the provision of the statute: Again, it is said, () that many circumstance weigh in questions of usury, and that the courts formed their decisions upon all the circumstances of each case, without saying what weight any single circumstance would have. This is not only the established doctrine on this subject, but the same author has given us an enumeration of the circumstances most usually relied on in such cases: as for example the slightness of the hazard, the inadequacy of the price, and the distresses of the party, () Their distresses are proved to have existed in this case, and are always important in giving a character to the transaction. They compel the borrower to enter into the usurious contract: he is no longer considered particeps crim-inis in the transaction ;() he is scarcely a free agent, and is held to be in the emphatical language of the books, “a slave to the lender.”()

That circumstances are to be resorted to in cases of this description results from necessity, and from the fact that they are often the only evidence to be expected. In 4 Hening’s Statutes at large () it is said, “that usurious contracts are always made in secret, and with such caution, that they can seldom be detected in the ordinary course of evidence;” and hence a bill for their discovery has been provided. In the case before us we cannot expect positive evidence. We cannot expect the ap-pellee *'to say that he was informed, that the notes were the property of the makers, and not of the broker or in-dorsers ; for that vi'as a fact about which he asked no question, lest it might be affirmatively discovered, and afterwards rise up in judgment against him. We cannot expect to show that the borrower obtruded this testimony upon him, because, for the same reason that would have broken up the treaty. We cannot expect the broker will volunteer this information to the usurer: he knew his interest too well, and he now tells us that it was his practice never to let the lender know who the borrower was. Nor are we to expect this information from other witnesses: they are sedulously kept out of the way in such transactions. Unless, therefore, we resort to circumstances, we may get no testimonj' whatever, and had as well, at once repeal the statute.

If circumstances are permitted to operate, those existing in this case abundantly shew, that H. .& H. were the borrowers, and neither Mertens, (the broker,) nor neither of the endorsers of the notes in question; and that this must have been known, without the possibility of doubt to the appellee. It is proved in the cause, that the appellee was well acquainted with the circumstances of the mercantile houses in Petersburg, and that he must have known that H. & H. were much distressed for money. On the contrary, it is ghewn, that both of the indorsers were in easy circumstances, and one of them, at least, very wealthy, and even himself, a money lender: and as for Mertens, he not only acted as a broker, but he tells us, expressly, that as he acted as a broker, the appellee could not welt suppose, that the notes were sold on his own account. Is it possible from these facts, from others for which I refer, particularly, to the record, and from the relation, circumstances and situation of the parties, that the appellee could have doubted, for a moment, that it was H. & H., and not the other parties who were making this ruinous sacrifice? It is not; nor *is it even pretended by the appellee himself. The notes, in question, so far from being shewn to have been the property of the in-dorsers, are not shown to have been even in their possession: and as to Mertens, when they were in his possession, it was as agent for H. & H., and for the single purpose of being discounted for an illegal premium.

But we are not compelled to rely on circumstances, only, as to the ownership of the notes in question. Mertens, himself, proves (and he is both a competent witness, and his deposition is made evidencé in the cause, by. consent), that all these notes were put into his hands by Holloway. No ownership by any other person is even pretended. H. & H. were, therefore, the owners of the notes, or rather of the blank paper, at the time and this was well known to the appellee. This knowledge, however, is quite unimportant, if the fact be so, as the cases to be presently cited unquestionably prove. Every argument which goes to shew that an innocent indorsee of a note given on an usurious consideration, without his knowledge of the usury, will be bound thereby, holds a fortiori as to a party to the transaction. We cannot in general suppose him ignorant of the real character of the transaction. The proof of such knowledge would be, in most cases, impossible; and to require it would operate a repeal, pro tanto of the act of usury.

If then it is settled,, in this case, that H. & H. were the real owners of these notes, or of this paper, at the time of the negotiation, and no other person; and, much more, if that fact was known, as it unquestionably was, to the appellee, the case is brought to a simple point. In that view it was not a consummated and bona fide note of another, which was sold by the owner, and which in its origin and consummation was free from the taint of usury, but it was a blank piece of paper, which as an effective note, was coeval with, and only ushered into existence by the usurious contract, and was only delivered *to the appellee as an evidence of that contract. In that view, also, it was, in relation to the indorsers, only an accommodation note. Although their names were on them, they paid no consideration therefor, had no interest therein, nor possession thereof, and could bring no suit upon them. The first person who paid a consideration therefor, was the appellee, and he is the first person who, but for the usurious consideration, could have maintained an action upon them. The names of the indor,sers being only added thereto, as a further security, they could neither bring any suit upon them, independently of the usury, nor assign them to any person having notice of their real character. All this was decided by this court in the case of Norvel v. Hudgins, () In that case it was decided, that the existence of the indorser’s-name, upon the note, was no conclusive, evidence of ownership; and that is the only ground on which the appellee’s counsel, argued, contrary to the facts proved in the cause, that these notes may have been the property of the in-dorsers, or of some person other than the makers. Notwithstanding the existence of these names, on the notes, before us, the makers might, (upon the testimony,) have thrown them into the fire.

The difference, as to this particular, between an inchoate note standing under these circumstances, and a real bona fide note, of one man held and sold by another, is so clearly settled by adjudged cases, that I will now only proceed to cite them.

I will first rely on some cases decided in-the Supreme court of the State of New-York. They are equally entitled to credit, from the highly commercial character of' that State, and the ability of the judges, who decided them. I quote them, also, for the further reason, that they entirely accord with my opinion. These decisions depend upon the statute of usury of the State: of New-York, *which one of the counsel said he had examined, and found' to be, substantially, the same with our act.

In the case of Mun v. the Commission company, &c. () it was decided, that the true test in cases upon bills and notes, was-whether the bill or note was perfected, before it was discounted at usurious interest: that as it is settled, that a bill or note which is free from usury, in its concoction, may be sold at an usurious discount, for that as. it was free from usury between the original, parties, no after transaction can, as to these parties, invalidate it; so, it is equally clear,, that if a bill or note which is made for the-purpose of raising money on it, is discounted at an usurious rate of interest, and where none of the parties whose names are on it, can, when it becomes mature, bring a suit upon it, provided it had not been discounted, in that case such discounting would be usurious, and the bill void: and that if a bill or note in which the indorser has no interest, but merely lent his name for accommodation, ' is discounted at an usurious rate of interest, the purchase thereof is void, because until the time of the purchase, it remained a mere blank piece of paper. This is, precisely, the predicament of the notes before us.

In the case of Bennet v. Smith, () the principle of the foregoing decision is entirely recognised and ratified; because a note made for the purpose of being discounted, at a usurious rate, and indorsed for the accommodation of the maker, was void in its original formation, and it was held that it was quite immaterial whether the purchaser knew of the manner in which the notes were made or not. I infer, therefore, that it is the criterion before mentioned, and not his knowledge, which decides the fate of the transaction.

In the case of Jones v. Hake () where A. made his note payable to B.; which was indorsed by him, and C. *and D., and sent by A. to a broker to raise money upon, and E. bought it at an usurious rate of discount, in an action by G. this note was held to be usurious and void. It was held by the court, that this note was indorsed for the accommodation of A. alone; that no money was paid therefor by any of the indorsers; that it was a contract between A. by his agent, (the broker,) and E. who lent the money, and took the note as his security; that the lender E. was in reality the first holder of the note, for value, or who could sue upon it; and that this pretended sale was, therefore, a shift to evade the provisions of the statute.

This case seems entirely in point with the case before us. I am unable to discover even a scintilla of difference between them.

Again; in the case of Wilkie v. Roosevelt () where A. made his note to B., who indorsed it for the accommodation of A. and A. passed it by means of a broker to C., at an usurious rate of discount, it was held, that although the note was indorsed by B. for the accommodation of A., it passed immediately from A. to C., and that the transaction was in its inception usurious, and the note consequently void. It was further held thatB. was merely a collateral security for the accommodation of A., that he, B. paid no consideration for it, but that it passed to the broker to be discounted at an usurious rate of interest, and when discounted, it passed immediately from A. to the purchaser. It was so held, I presume, on the further principle, that a note which is in possession of a man’s agent is still in his possession. This case is also full up to the very point before us.

If gentlemen are more fond of cases from Westminster-Hall, than of these northern lights, as one of the counsel was pleased to term them, I will now endeavour to gratify them.

*In the case of Young v. Wright in court of K. B. in England, () where A. drew a bill of exchange on B., payable In three months, to his (A.’s) order, and A. indorsed it to C., who indorsed it to the plaintiff; and A. having put it into B.’s hands for whose accommodation it was drawn, . and D. swore that he was in the habit of discounting bills for B. at an usurious rate of discount, and had agreed to get it discounted at 40 per cent, for B., and that, on these terms, it was passed to B., it was held by Lord Sllenborough, that at the time the bill was drawn there was a corrupt agreement that it should be discounted at usurious interest, by which it was vitiated, into whose hands, soever, it should come.

In principle there is no difference between this case, and those first cited, or the case at bar. There is no difference between the •issue of a note which is preceded by an usurious agreement, and one whose emanation is coeval with such agreement, and forms a part of the usurious transaction.

In the case reported 1 Marshall’s Rep. 210, in the C. B. in England, it was held that as the object of the makers of the note was to accommodate the payee, he (the payee) could not have sued them. This accords with all the cases before cited, and with the aforesaid case of Norvel v. Hudg-ins. It shews that a note indorsed for accommodation is not such a complete and perfected note, as would avoid the objection-of the statute, under the distinction I have taken.

In full accordance with the foregoing decisions in both their branches are the opinions of the elementary writers upon the subject. Thus in Ord() it is held, that where a note is originally good, no usurious transaction between the intermediate parties can affect the title thereto in the hands of a bona fide holder; and again, (p. 100) it is held that a security which is originally valid, cannot be avoided by a subsequent usurious contract. So on the *other hand it is held (ib. p. 92) that a contract which is usurious in its inception cannot be afterwards rendered valid, in the hands of a bona fide indorsee, without notice. Every thing therefore, depends upon the perfection and consummation of the note, anterior to the usurious transaction.

I have said that although the appellee, in the case before us, had full knowledge of the usurious nature of the transaction, that knowlcge was entirely unimportant. The case of Acklan v. Pearce () entirely proves that position. In that case a bill of exchange was held void in the hands of a bona fide assignee, it being drawn in consequence of a usurious agreement, although the drawer to whose use it was made payable, was ignorant of such agreement, and the court held that if the bill must be valid because the parties to it cannot^be shewn to have had notice of the usurious agreement, it would afford an easy recipe, to evade the provisions of the statute. The same doctrine is entirely held in the case of Lowe v. Waller, ()

Nothing now said by me conflicts, in the smallest degree, with the decision of this court in the case of Hansborough v. Baylor. I have the original record in that case, now before me. By that record It appears, to have been a fair and naked case, of a sale of bonds. Por any thing appearing in evidence, in that case, Rootes may have been, as Hansborough swears, he believed him to be, the bona fide owner of Baylor’s bonds. Rootes was a farmer, and not a broker, as Mertens was. He too assigned the bonds, which is generally done by the owner, and never by a broker; whereas Mertens did not assign the notes, in the case before us. Hansborough also swears (and his answer is corroborated by the testimony,) that he did not treat with Rootes, as the agent of Baylor. He denies that he treated with him for a loan, and asserted that his only object was to purchase the bonds; *and he expressly denied, that the transaction was a device, to elude the provisions of the act of usury. In all these important particulars, that case stands strongly contrasted with the case before tis. In that case Hansborough swore to facts whcli could not have been sworn to, by the present appellee. It is not shewn in that case, that Rootes was not the owner of the bonds; that they passed to him without consideration; or that the transaction was in its origin invalid. In these points also the two cases entirely differ. _ It is true that Hansborough admits, that he was informed that Rootes was not the owner of the bonds, after the time of his purchase: but this information may have been erro.neous: and it is not established to be correct, by the testimony. That case, therefore, being one of a simple sale of bonds, as far as appears in evidence, decides nothing as to the case before us.

The single circumstance of there being an excess of the legal interest received in this case, determines the contract to be usurious, () Again, it is said, that intentionally taking more than six per cent, for the use of money, alone, makes the contract usurious, (ib. 88.) This doctrine is more emphatically shewn by the decision, that where more than six per centum is reserved, by the mistake of the scrivener, and contrary to the intention of the party, the contract is not held to be usurious, (ib. 59.) In such case the exception proves the rule. It shews that although there must be a corrupt intent in the contracter to constitute usury,(ib.) that intent is inferred, from the single fact, that more than legal interest is reserved. Such a reservation, to say the least, throws the labouring oar on the adverse party; it throws the onus probandi upon the appellee, in the case before us.

Although, therefore, the form of the transaction, in the case before us, is that of a sale of notes, and although in the case of 'the perfected notes of one man bona fide *held by another, they may be sold by him, at any rate of discount, when considered as a fair and insulated transaction, the latter is not the case in the present instance, and the .form of its transaction will not elude the provisions of this statute. We are told by Lord Mansfield in the aforesaid case of Lowe v. Waller, that the real question in cases of this kind, is, what is the substance of the transaction, and not what is its form and colour. He also tells us that where the substance of it is a borrowing and lending, at an usurious interest, the wit of man is not capable of taking the case out of the operation of the statute. We cannot “wink so hard” to borrow another expression from this great judge, as not to see that the substance of this case (now before us) was to borrow money at an usurious interest, or to use the language of the broker (Mertens) “to raise money by shaving paper.”

In the time of Lord Mansfield the most usual form of usury, in England, was by a pretended sale of goods, () the most usual form here is, perhaps, by a pretended sale of notes. Formerly we are told by the same judge () when one mode of usury which was most common was prohibited by a statute, it put the usurers upon other contriv-anees to. evade the statute, and he adds that experience has taught the legislature in England, in their modern acts upon this subject, not to specify and prohibit particular modes of usury, because that only led to evasion, but the better way was, to enact generally, that no shift or device should enable men to get more than six per cent, on a loan. The same idea is kept up in Ord () and he adds, the English legislature were on this ground induced to use the more general terms “directly” or “indirectly” to prohibit the practice of usury. The words of our act are equally general and comprehensive. It requires only the attention of the courts, to decide what *is the substance of the transaction, to look beyond the mere form and to further the policy of the legislature. The courts ought to test each case by its particular circumstances, under that general criterion which the legislature has deemed it best to establish, instead of detailing and prohibiting particular modes of usury.

Acting upon this principle, I cannot, for a moment, doubt, but that this case is, emphatically, within the statute. The substance of the transaction is, most clearly, that the appellee was to lend to H. & H. the money in question, for a considerable time, which they promised, (by means of the notes before us) to repay him with an usurious and an exorbitant interest. The furnishing the appellee with explicit evidence of his right, under the contract, cannot cleanse that contract of its impurity. We have undoubtedly gone far enough in sanctioning the sales of the consummated notes of others, bona fide held by the seller, at an usurious rate of discount. This, it must be confessed, is a sufficiently fruitful source of usury. I again beg it may be distinctly understood, that I do not now mean to touch that question. That question is not new, and, perhaps, may not be considered open. I will not, however, go further and permit a man to sell, not his own note, for a note pre-supposes a real payee, as. well as a drawer, but his own blank paper at an illegal rate of discount. I will not, by this means, disrobe the consideration on which it is granted, of its usurious taint, and repeal pro tanto the act of usury. If an infamous transaction is not merged and purified by giving a bond upon it, which, generally, in itself, supports a good consideration, far less is it, when only a note is given as an evidence of that contract. In all cases of bills or notes, their consideration must be shewn to be good, save only, in the case of bills of exchange, when they have passed into hands other than those of *the original parties thereto." () As to the appellee, he must shew that the consideration on which the notes in question were founded, was not liable to objection: the converse of this is however, shewn, on the part of the appellant. Under the form of selling a man’s own notes, I will not legalise a contract, whereby in substance, for 101. now received, he is to pay 201. at the end of six months; and that too, out of his own coffers. The proposition is monstrous, and cannot for a moment be entertained, by those who disclaim the power to repeal an act of the legislature. There could be no objection to my granting my note for 201. for the 101. received as aforesaid, did not the grant carry with it, the right to receive the money; to receive more than the sum lent, with an interest at the rate of six per centum per annum. There would be no objection to the transfer, if it carried with it the paper and the paper only.

When I formerly gave an opinion in this case, I signified my willingness, in the spirit of accommodation to the other judges, to consent to an issue to try the question. That overture was not accepted by them, and I now, explicitly, withdraw it. I cannot now consent to such an issue; because it is proved to my conception, as clearly as human testimonj' can do it, that the transaction in question, both in its origin and consummation was founded in usury. It is equally clearly proved, that this was known to the appellee, the chief actor.and mover in the business: but it is wholly unimportant as aforesaid, whether he had that knowledge or not. My opinion therefore, is, to reverse the decree, and render one pursuant to the prayer of the bill. The appellee, in my judgment, should be made to disgorge his illegal and iniquitous gains, and receive only his principal money, which is secured to him by the express provisions of the statute. That, however, is not the opinion of the other judges. '::Their opnion is, that the decree dismissing the bill should be affirmed; and it is to be affirmed accordingly'. 
      
      CabtuIjIj absent.
     
      
      (a) 2 Munf. 86.
     
      
      (b) 3d Johnson 66.
     
      
      There is no clause in the law of New-York corresponding' with the penal section of our statute. It enacts that, “no person shall take directly or indirectly, for loan of monies, wares, &c. above the value of 71. for the forbearance of 1001. for one year, &c. ’ ’ adopting only part of the English statute, which was first enacted 21 Jac. 1, c. 17. The New-York statute, certainly does not in its terms involve the inquiry of the knowledge of either party that the statute is violated. And the particular provisions of the statute of Virginia, strongly negative such an opinion. As the law in this respect is still unsettled, a brief view of the successive statutes of England may be of public utility.
      By the 27 Hen. 8, c. 9, § 2, no person shall sell merchandize, and within three months after, buy the same upon a lesser price, knowing them to be the same.
      § 3. No person by way of any corrupt bargain, loan, exchange, chevisance, shift, or interest, of any wares, or by any other deceitful way, shall take in gains for the forbearing of one year, for his money, or other thing, that shall be due for the same wares or other things, above 101. in the hundred.
      § 5. If any person shall do any thing contrary to this statute he shall forfeit the treble value; and shall suffer imprisonment, &c.
      13 Eliz. c. 8. All bonds and assurances, in any thing against the act of 27 Hen. 8, c. 9, shall be void: and those violating it punished, &c.
      21 Jac. 1. c. 17, was designed only to alter the rate as its preamble shews.
      § 2. No person shall take directly or indirectly for loan or any monies, wares. &c. above the value of 8 per cent, and all bonds, &c., for more shall be void. And every person who shall receive by way of corrupt bargain, loan, exchange, chevisance; or by any deceitful ways or means, or by covin, or any deceitful conveyance. &c., more than 8 per cent, shall forfeit the treble valué.
      Ih e 12 Car. II. c. 13, altered the rate to six per cent, and retained nearly the same words.
      The 12 Ann c. 16, was nearly in the same words; but changing- the rate to 5 per cent.
      
        From which statutes, it is manifest, that there was no distinction between the civil and the penal clauses in England, until the 21 Jac. I. and all the cases to shew the necessity of the corrupt agreement. were before the passage of that act.
      The lirst statute made in Virginia on the subject of usury was in the year 1730, Geo. II. which fixed the. rate at 6 per cent, and is founded on the 21 ,iac. 1, which had been copied in all the subsequent acts of England. The same words are reiterated in the act of 1784, in that of 1748, which reduced the rate to 5 per cent, and with a few unimportant verbal variations, they are retained in all our acts since.
      It is for our courts to say whether they will regard the statutes of Hen. 8. and 111Í7,. in the construction of an act. passed in Virginia in the reign of Geo. II. containing entirely different provisions; or whether they will look to the words of the act itself, as containing the real meaning of the legislature. Even in England recent decisions shew the corrupt agreement to be a mere form of pleading, and does not imply a knowledge in the party, that the contract is usurious. For this Marsh v Martindale, 3 Bos. & P. 158, is a clear authority. In that case the jury expressly found, that the plaintiff was innocent of the intention of violating the law, But Lord Alvanley says, that an agreement to take more than 5 per cent, is a corrupt agreement.. within the meaning of the act, whether the party think he acts contrary to the statute or not.— And that the agreement in this case was corrupt, whatever was the intention.
      The Virginia statute having made an original distinction between the civil and penal clauses; using a number cf technical words implying collusion, and fraudulent agreement in the penal which are wholly omitted in the civil clause; the inference is strong, that the corrupt win is necessary to convict of an offence, but not to vitiate a contract altogether prohibited, with whatever intention it may be made, or whatever form it assume, so it be a loan, and more than 6 per cent, be reserved.— Edition 1821.
     
      
      (c) Tate v. Wellings, 531.
     
      
      (d) 1 Bast. 94.
     
      
      (e) Wilkie v. Roosevelt, 3 Johnston 306, ana Bay’s Rep.; Payne V. Tervant, 23.
     
      
      (f) Tally v. May, 1 Bay’s Rep. 486.
     
      
      (gr> 2 H. Black. 144.
     
      
      Oi) Page 63.
     
      
      (I) lb. 87.
     
      
      (k) Ord 69, 74, 84.
     
      
      (l) Ord 116.
     
      
      ) Dougr. Rep. 698; Smith v. liromley.
     
      
      ) Pag-e S90.
     
      
      (o) i Mun. 496.
     
      
      ) 15 Johnson’s Rep. p. 54.
     
      
      a) Ibid. p. 355.
     
      
      ) 2 Johnson’s Rep. p. 60.
     
      
      (s) 3 Johnson, 66.
     
      
      ft) l Camp. 140.
      
     
      
      (u) P. 96.
     
      
      (v) 1 Camp. 690.
     
      
      (w) Doug-. 708.
     
      
      (x) Ord 47.
     
      
      (y) Doug. 710, Lowe v. Waller.
     
      
      (z) Ibid.
     
      
      (a) P. 68.
     
      
      tt>) Chitty 16.
     