
    *Town of Danville v. Sutherlin.
    March Term, 1871,
    Richmond.
    Absent, Joynes and Anderson, J’s.
    Municipal Securities — Usury.—The council of the town of Danville has authority, under its charter, to contract loans and issue certificates of debt. In 1863, the council sold the bonds of the city, to be issued, at public auction for Confederate money, and for a bond of $5,000, bearing six per cent, interest, and payable at the end of twenty years, the purchaser gave $11,050; Confederate currency being at the time as ten for one of gold. This is usury.
    This was an action of assumpsit, in the Circuit court of Pittsjdvania,- brought in February, 1867, by William T. Sutherlin against the town of Danville, to recover three years’ interest upon a certificate of debt of said town for five thousand dollars, bearing date the 1st of September, 1863, and payable in twenty years from its date, with interest at the rate of six per cent, per annum, payable semi-annually. The defendant pleaded non-assumpsit, and usury; upon which pleas issues were joined.
    On the trial the jury found a special verdict, from which it appeared that, on the 10th of August, 1863, the council of the town of Danville adopted a resolution that the president of the council be authorized to sell bonds of the corporation, in sums of $500 and $1,000 each, to the amount of $30,000, as follows:-ten ^thousand payable each in ten, fifteen and twenty years, interest payable at six per centum, semi-annually, on the 1st of January and 1st of July of each year; to be sold at public auction or private sale.
    
      In pursuance of this resolution, John W. Holland, president of the council, advertised in the Danville Register a sale to be made on the 26th of August, in the town of Dan-ville, at the auction store of Neal & Sword, of corporation bonds of the town of Dan-ville, to the amount of $30,000, payable with six per centum, semi-annually, in ten and twenty years. And in pursuance of this notice, Holland proceeded to sell at auction the said bonds, when William T. Sutherlin purchased a bond of $5,000, payable at twenty years, at the price of $11,050, which he paid at the time of the sale in Confederate currency; that being the only currency then in use in the State, and being at a discount of ten in such currency for one dollar in gold. The certificates were not then prepared, but they were prepared soon after, and a certificate for $5,000, payable to Sutherlin at the end of twenty years, with interest, as directed by the resolution, was delivered to him. On the face of the certificate it is said to be according to the provisions of an ordinance passed by the council of the said town of Danville, in pursuance of an act of the General Assembly passed the 7th day of March, 1862.
    The act of March 7, 1862, to amend the charter of the town of Danville, 'i 22, provides that the “council may contract loans and issue certificates of debt, and provide a sinking fund for the payment of the same; but no loan contracted shall be irredeemable for a longer period than thirty-four years; nor shall the outstanding debt of said corporation at any one time exceed the sum of seventy-five thousand dollars.” And the same power existed under the charter of 1854.
    Upon this special verdict, the Circuit court rendered *a judgment for the plaintiff for nine hundred dollars, with interest thereon from the 12th day of August, 1867, till paid, and his costs. And thereupon the town of Danville took the case to the District court of appeals at Uynchburg, where the judgment was affirmed ; and there was then, an application to this court for a supersedeas, which was awarded.
    Ould & Carrington for the appellant.
    I.The town of Danville had no authority, under its charter, either to pass the resolution of the 10th of August, 1863, or to issue the bonds named therein. It had no right either “to contract loans or cause to be issued certificates of debt or bonds,” for the purposes mentioned in said resolution. The bonds being issued without authority, and certifying in their endorsement the illegal ordinance under which they were issued, are null and void. Zabriskie v. Cleveland, Columbus and Cincinnati Railroad Co., 23 How. U. S. R. 398; 2 Kent’s Com. 290, 299; Niagara County Bank v. Baker, 15 Ohio St. R. 68; Clark v. City of Des Moines, 19 Iowa R. 199; Hodges v. City of Buffalo, 2 Denio R. 110; McCullough v. Moss, 5 Denio R. 567; Halstead v. Mayor of New York, 3 Comst. R. 430; Tallmage v. Pell, 3 Seld. R. 328; Rogers v. Burlington, 3 Wall. U. S. R. 654; Mr. Justice Miller in Meyer v. City of Muscatine, 1 Wall. U. S. R. 384, 395.
    II. The authority “to contract loans and issue certificates of debt or bonds,” does not confer the right to sell the certificates or bonds. Gould v. Town of Sterling, 23 New York R. 456, 460.
    III. E)ven if the transactions set forth in the record were those of purchase and sale, being speculative in their character, they were ultra vires. The city had no right, under its charter, to traffic in depreciated securities, and especially in the promissory notes of its citizens. The power to contract loans, or to issue certificates *of debt or bonds, does not include the authority to purchase a depreciated circulating medium, or promissory notes to be paid in depreciated currency. See Tallmage v. Pell, 3 Seld. R. 325, and the authorities cited on first point.
    IV. The transactions set forth in the record are usurious.
    1. It is admitted that a bona fide sale or purchase of notes or stocks of third parties for more than their market value, not exceeding par, is not usurious, though the strong presumption in any such cases, where the parties know that more than the market value is paid, is that the transaction is not in fact a sale, but a loan. The bur-then of proof in such case is on the vendor, to rebut the presumption of a loan by the facts. Where the transaction is found in contemplation of law, or in fact, to be a loan, whatever it may be called, the mere fact that more than their market value is given or agreed to be given, makes the transaction usurious. In all cases of loan, whether so-called or not, the taking of more than lawful rates on value is usurious. Mumford v. Amer. Uife Ins. Co., 4 Comst. R. 463, 474, 476.
    2. Some transactions are necessarily loans, whatever they may be called. Thus a party cannot sell his own obligation, nor can any person purchase it from him. The first is a borrower of the value which he receives, and the latter is a lender or investor of that value. If more than legal rates on value be taken, the transaction is usurious, how much soever both parties may insist it is a sale and purchase. The nature of the transaction is not changed by calling it “an exchange of securities” or an “exchange of credits,” or a “sale of a commodity,” as the appellees have done in these cases.
    So, there cannot be such a thing as a sale or purchase on credit, even of stocks or other securities, including the obligations of third parties, for more than their market value, and exceeding par; no matter what may *be the form of such a transaction, or the name given to it by the parties, it is necessarily a loan, and usurious. 3 Comst. R. 358, 368.
    3. If this case is tested by the rule which is applied to stocks, bonds and notes of third parties, and those classes of securities, the transaction must be declared usurious. But it is submitted, that the true rule which ought to be applied to this case, in determining • whether the transaction is usurious, is that which governs money itself. The usury laws control not only money, but its 1 substitute. Confederate money, at the date of these transactions, was the universal currency. If, in point of fact, there be one rule for money and another for securities and commodities of that character, Confederate notes, as to the period of the war, shoud be controlled by the former rather than the latter. When a circulating medium in its uses supplies the place of gold and silver or legal tender, it should be governed, so far as the question of usury is concerned, by those rules and principles which apply to gold and silver and legal tender, rather than those which apply to collateral securities. While Confederate notes may be a commodity, it is also a currency and a substitute for money, and should be governed by the laws which control the use of money. 14 New York R. 115, 119; 3 Comst. R. 358, 359, 361, 362, 363.
    4. Independently of the fact that the bonds . were those of the city itself, the other facts clearly show that there was no sale of Confederate money as a commodity by the defendant. The subject of negotiation, or barter, or traffic in these cases, was not the Confederate money, but the bonds of the city. If the Confederate money had been the subject, the obligations of the city would have made their first appearance after the conclusion of the negotiation or sale. Such is the case both at private sale and at auction. If the defendant *had advertised his surplus Confederate notes for sale, at auction, and the city had bid for them successfully, and given its obligation, there might have been some countenance to the theory of a sale of Confederate money, though even in that case, if the negotiation had been at a greater rate than six per cent, on the market value, and so known to both parties, the transaction would have been usurious, or at least prima facie usurious. But such was not the fact. The bonds of the town were made the subjects of the pretended sale, and the Confederate currency made to perform the function of money, in measuring their value.
    5. These transactions were loans. There was an application by the town for a loan, under the form of an auction sale of its bonds, a negotiation between the town and the appellee in relation to a loan, and an actual loan to the town. Schermerhorn v. Taiman, 14 New York R. 93, 115; Dry Dock Bank v. Amer. Bife Ins. Co., 3 Comst. R. 344; Ord. 23, 69, 77; Bowe v. Waller, Douglas R.-736; Warfield’s Adm’rs v. Boswell, 2 Dana R. 224.
    6. The authority of the charter extends only to the funding of an old debt or the making of a new.one. The first is done by an “issue of certificates or bonds,” the latter by “contracting a loan.” It, is true that certificates or bonds may be given in both cases, but if the certificate is not given for a debt already contracted, it must be in pursuance of a contract of loan. These bonds not having been given for a debt already contracted, must have been in consideration of a loan. It was not a case of funding, but of borrowing.
    7.There was no sale of the bond or certificate to the appellee, nor could there have been, as they could not be the subjects of sale. Nichols v. Fearson, 7 Peters U. S. R. 103; Schermerhorn v. Taiman, 14 New York R. 117; Whitworth v. Adams, 5 Rand. 333.
    8.If not a loan, it was at least a case where, upon a Negotiation for a loan, there was a sale of a commodity, wherein a loan was made dependent on a sale, and the sale made at a price above market value. Such a transaction is usurious within the rule laid down by Judge Carr in Bank of the Valley v. Strib-ling, 7 Beigh 59. Where the commodity is a circulating medium, the case is much stronger. Byles on Bills, 467; Gibson v. Fristoe, 1 Call 62; Skipwith v. Gibson, 4 Hen. & Mun. 490; Bank of Washington v. Arthur, 3 Gratt. 173; Smith v. Nicholas, 8 Beigh 330; White v. Wright, 3 Barn. & Cress. R. 273.
    9. If the bonds of the town could have been the subjects of sale, and there was a sale of them, yet, as they were made for the purpose of being sold, and as that fact was known to the appellee and expressed in the endorsement, the transaction was usurious if the bonds were sold at a greater discount than six per cent. Taylor v. Bruce, Gilmer 42; Whitworth v. Adams, 5 Rand. 333; Brummel & Co. v. Fnders, &c., 18 Gratt. 873; State Bank North Car. v. Cowan, 8 Beigh 238.
    10. Where an obligation is given for the transfer of depreciated currency, other than the promises of the party making the transfer, at a greater discount than six per cent, on the maket value at the time of the negotiation, the market value being known to both parties, the transaction will be deemed a usurious loan, even though it may take the form of a sale; more especially is this the case where the depreciated currency is the exclusive circulating medium. Bondu-rant v. Commercial Bank Natchez, 8 Smedes & Marsh. R. 533; Cook v. Bank of Bexingtion, Id. 544; Archer v. Putnam, 12 Id. 286; Walker v. Meek, Id. 495; Maury v. Ingra-ham, 28 Miss. R. 171; Harrison v. Bank of Kentucky, 2 J. J. Marshall R. 140; War-field’s adm’rs v. Boswell, 2 Dana R. 224; Moore’s ex’r v. Vance, 3 Dana R. 361; Collins' v. Secreh, 7 Monr. R. 336; Swanson v. White, 5 Humph. R. 373; 1 Yerg. R. 243; Weatherhead v. Boyers, *7 Yerg. R. 545; State Bank of Elizabeth v. Ayers, 2 Halstead- R. 130; Bank of State of North Car. v. Ford, 5 Ired. R. 692; Cleveland v. Boder, 7 Paige R. 557; Broswell v. Clarksons, 1 J. J. Marsh. 47; Pratt v. Adams, 7 Paige R. 615, 637; Fggleson v. Shotwell, 1 Johns. Ch. R. 536; Gaither v. Farm. & Mech. Bank Georgetown, 1 Peters U. S. R. 37; Bank of United States v. Owens, 2 Id. 527; Doe v. Barnard, 1 Lsp. R. 11; 3 Parsons on Contracts, 108, 115, notes a and f.
    11. The contract between the town and the appellee was not that of risk or hazard, as no contract can be where there is an obligation to pay money at all events. Risk and hazard can only be applied to a contract where there- is an inherent contingency as to payment in any event, or where the obligation is to repay in something else than money. But it is submitted that if the contract is relieved of the taint of usury on the ground of its inherent risk and hazard, then it is thus shown to be void for want of authority to make it. Steptoe’s adm’rs v. Harvey’s ex’ors, 7 Leigh 501; State Bank of North Car. v. Cowan, 8 Leigh 238; Smith v. Nicholas, 8 Leigh 330; Bank of United States v. Owens, 2 Peters U. S. R. 527; Parker v. Ramsbottom, 3 Barn. & Gres. R. 257 ; 3 Parsons on Contracts, 137.
    12. The statute of usury applies not only to the “loan of money,” but to the loan of any “other thing.” Under the statute there may be a direct loan of a thing, or the loan of a thing under the form of a sale, without usury, provided not more than six per cent, upon the value of the thing be taken. But if there be a direct loan of a thing, or the loan of a thing under the form of a sale, and more than six per cent, on the value of the thing be taken, it is usury. The usury, therefore, in the case of a loan of a thing does not depend upon the fact that the parties resorted to the artifice of a sale, but upon the excessive charge upon value.
    13.The Virginia decisions bearing upon the facts of *this case, to wit: Gibson v. Pristoe, 1 Call 62; Skip-with v. Gibson, 4 Hen. & Mun. 490; West v. Belches, 5 Munf. 187; Greenhow’s adm’x v. Harris, 6 Munf. 574; Stribling v. Bank of the Valley, 5 Rand. 132; Steptoe’s adm’rs v. Harvey’s ex’rs, 7 Leigh 501; State Bank of North Car. v. Cowan, 8 Leigh 238; Whitworth v. Adams, 5 Rand. 333; Bank of Washington v. Arthur, 3 Gratt. 173; Brock-enbrough’s ex’rs v. Spindle, 17 Gratt. 21; Brummel & Co. v. Enders, &c., 18 Gratt. 873; Boulwarev. Newton, 18 Gratt. 708; are not only consistent with the foregoing propositions, but sustain the following doctrines, to wit:
    1. Where A makes an application to B for a loan, which is not bona fide declined, but a negotiation ensues between them in relation thereto, the result of which is an accepted offer to transfer a commodity at a price exceeding its market value, which is to be paid at all events, and in money at a future day, with six per cent, interest from date, the transaction is usurious.
    2. Where a public proposal is made for a loan by A, and without further negotiation in relation thereto, B, in response to such proposal, offers to deliver a commodity at a price well known to both parties to be in excess of its market value, and which is to be paid at all events in money at a future day, with six per cent, interest, semi-annually from date, and such offer is accepted by A, the transaction is usurious.
    3. Where an obligation of A to pay money at all events, with six per cent, interest from date, then in his possession or thereafter to be made by him, is made the subject of negotiation between A and B, and the result of that negotiation is a transfer of such obligation to B for a consideration, whether that consideration be money or a commodity, such a transaction is a loan, and not a sale of the consideration by B to A; and when in such a case the market value of the consideration, if it be a commodity, at the time .and place of the ^negotiation, is less than the face of the obligation, the transaction is usurious.
    4. Where A, with a view of raising an amount of notes, which, though greatly depreciated, constituted the only circulation in use at the time and place, and with which he proposed to make purchases of real estate, makes a contract with B (who is cognizant of such contemplated purchase by means of the notes so to be raised), by which B agrees to furnish a certain amount of such circulation, and A agrees, in consideration thereof, to give his obligation, payable in money at all events, at a future day, with six per cent, interest from date, for a sum largely in excess of the market value of the said notes at the time of said contract, such a transaction is usurious.
    By “market value” in each of these propositions, we mean value in the community, according to a money or other legal tender standard.
    If either one of these propositions is sustained, the case is with the appellant.
    14.Both at law and in commercial circles, persons who invest in bonds or securities of this description are regarded as lenders, and the other parties as borrowers. The corporation which puts such securities upon the market, according to universal acceptation, negotiates a loan when they are taken. Bissell v. City of Jeffersonville, 14 How. U. S.R. 287, 290; Rogers v. Burlington, 3 Wall. U. S. R. 654; Middleton v. Comm’rs Alleghany Co., 37 Penn. R.- 237; Mitchell v. Burlington, 4 Wall. U. S. R. 270; Larned v. Burlington, 4 Wall. U. S. R. 275; Parson’s Lawrs of Business for Business Men, 228.
    Read & Bouldin, with whom was Marshall, submitted a printed argument for the appellee.
    Is the transaction in this case usury on its face — usury direct?
    *In Bank U. S. v. Waggener, 9 Peters U. S. R. 378, Justice Story says, “If the contract, on its face, stipulate for it (usury), there is no further enquiry ; otherwise it must be shewn that there was. some agreement or shift dehors the written contract to cover usury.”
    Unless a Confederate treasury note is different from bank stock, unless State stock is a commodity, and the notes of the Confederate States is money, and not a corn-modity, there cannot, we humbly submit, be a shadow of doubt, under the rulings of the courts of this State and the Supreme court of the United States, that the mere exchange of the notes of the town for the Confederate treasury notes; or a sale be either for the other (for it is immaterial what name is given to the transaction) is not usury per se. And the reason of these decisions is, as we conceive, mone3r is not actuallj’’ loaned by such a transaction, it being a note given for a commodity, and to constitute usury it must be shown further that it was substantially a loan of money, under the pretext of a sale or exchange. But be the reason of these rulings what it may, the courts referred to have certainly arrived at the conclusion as thoroughly res adjudicata, that the sale of stock or anjr other commodity, at whatever price, is not usury per se, and that individuals may give their bonds payable at a future dajr, for depreciated stocks for their face value.
    
      
      Judge Anderson was interested in the question involved in this case, and therefore declined to sit in it.
    
    
      
       See principal case cited in Atwood v. Shenandoah V. R. R. Co., 85 Va. 998, 9 S. E. Rep. 748.
      See generally, monographic note on “Municipal Corporations” appended to Danville v. Pace, 25 Gratt. 1; monographic note on “usury” appended to Coffman v. Miller, 26 Gratt. 698.
    
   Carr, J.,

in Selby v. Morgan, 3 Leigh 625, says, “We have decided often, that the sale of stock, or any other property, at whatever price, does not, of itself, consti-' tute usury; and further, on the same page, he adds, in Stribling v. Bank of the Valley, 5 Rand. 132, we decided that the sale of stock at twenty per cent, above the market price, was usury, because (solely because) there was indissolubly linked to that sale a loan of money by the seller to the buyer. ’ ’

In Brockenbrough’s ex’ors v. Spindle’s adm’s, 17 Gratt. *21, the case of Selby v. Morgan was especially referred to by Moncure, P., as settling the principles, as announced above by a unanimous court. The same judge, in the same case, on p; 33, says, “That State bonds may lawfully be sold, on a credit, at par, in the market, is admitted, and cannot be denied. Nothing is better settled, ib Virginia and elsewhere, than that stock', bonds and notes may be sold, like any other property, at any price not above par, which may be agreed upon between the parties;” on p. 34, Ibid, he adds, “there is nothing unreasonable or unfair, in appearance, at least, in a sale or exchange of these bonds for the bond of an individual, of like amount, payable three years after date; it may well be supposed that the market value of the former was at least equal to that of the latter. ’ ’

It will scarcely be urged that Confederate treasury notes are not commodities, and ought to be put on a different footing from stocks and other commodities, because they had a circulation as money. Is it less a commodity because used as a circulating medium? Surely not! Their circulation cannot alter their intrinsic character as a commodity. They had fewer attributes of money than many other commodities. Certainly fewer than depreciated bank notes, which are adjudged to be commodities in the' Bank of U. S. v. Waggener, 9 Peters R. 395.

They were constantly fluctuating in value ■ — they were not made a legal tender. They rose and fell, with the success and disaster of the Confederate arms. If the revolution or rebellion had succeeded, and the government retained its faith and ability to pay, they would have been redeemed, but their collection could not have been coerced in any legal forum; and if the rebellion proved unsuccessful, which has happened, these notes would be [as they are] worthless. They were a commodity for speculation, each inidivdual fixing *his own idea of value upon them, which was greatly influenced by his belief of the success or failure of the war. The very and only object of the usury law is to prevent speculation in money. The law regards it as the only thing that never rises in value — that it has an immutable value from the inception to the due day of every contract, and having fixed its value by law, one cent above the legal rate of interest at any distant day, is more than it is worth.

This cannot be predicated of anything else, and particularly of Confederate stocks. Men are not subjected to the fearful penalties of usury laws, for speculating in commodities of varying and uncertain value, unless they do it to conceal a loan of money in disguise.

Was the transaction then a shift to evade the statute? Is it a loan of money, in disguise?

In the Bank of the United States v. Wag-gener the court decided, in the language of the Syllabus, that “the mere fact that the note was given for an equal amount of bank notes, whose market value depreciated, does not amount to usury.” The same decision was made in Orr v. Lacy, 4 McLean R. 243.

It may be well, before proceeding further, to advert to an effort to advance the argument on the other side, by denying that there was a sale of the Confederate notes to the town. As there was no money that passed in the transaction, we do insist that it is most properly denominated an exchange of the town scrip, or the notes of the town, for the Confederate notes. But grant that there had been no public auction of these certificates of debt, and the parties met, and Sutherlin gave Confederate notes, payable two years after a ratification of peace, &c., to the amount on their face of 111,050 to the town, and the town gave its bond for $5,000, bearing interest at five per cent., the principal irredeemable for twenty years. Is there any usury in this?

In Selby v. Morgan, Selby gave his bonds, payable in two or three years, and received the stock for them. In Brockenbrough’s ex’ors v. Spindle, Brockenbrough parted with his stocks and took Spindle’s bonds on time, and the judges, in the two last cases mentioned, and in the case of Bank of United States v. Waggener, speak of these transactions indiscriminately as a sale or an exchange of securities. Judge Moncure, on p. 34, speaks of “sale or exchange of the State bonds for the bonds of an individual,” and on p. 35, “here State bonds were exchanged for the bond of an individual.” And in Bank of United States v. Waggener, 9 Peters 395, Story, J., said, “It was a bona fide exchange of credits, and is not per se illegal, though it may be so if it is a mere shift or device to cover usury,” p. 401.

We will continue tlie enquiry, is it a shift to cover usury? The case seems entirely destitute of any of those features that have been termed badges of usury. There was no disguise to cover a loan of money; neither party wanted’money; no conversion of the Confederate notes into money, as is frequently done -with bank and other stocks as soon as the transaction is closed and money is raised: (and even such cases not pronounced usurious). The sale was made at public auction, in the open face of day —no previous negotiation for a loan of money. The auctioneer stated that the sale was to be made for Confederate States treasury notes. The town was not in search of money, and under no urgent necessity to procure Confederate notes. There was no advantage taken of its necessities. The public had a fair opportunity of bidding, and the result of the bidding sho-wed that in open market one dollar of the certificates of indebtedness of the town, payable in twenty years, was worth about two dollars of the notes of the Confederate States, payable two years after *a favorable close of the war. The town wanted this commodity to invest in, or exchange for, land; and from what may be judicially known to the court, they made a profitable use of the Confederate bonds, as all did who invested in real estate during the war. The evidence shows that a portion of them was applied in liquidation of old debts.

The town received these Confederate notes, and immediately, according to assumptions on the other side, committed usury on their neighbors, by buying bonds for less than their market value in gold. “If the application be not for a loan of money, but for an exchange of credits or commodities” (and we might add, or for an exchange of credits for commodities), which the parties bona fide estimate at equivalent values, it seems difficult to find any ground on which to rest a legal objection to the transaction. Because an article is depreciated in the market, it does not follow that the owner is not entitled to demand or require a higher price for it before he consents to part with it.” Story, J., in the case last cited, p. 401. He was speaking of depreciated bank notes. Further, on p. 402, he adds, “for many purposes they may pass current at par, in payment of his own debts, or in payment of taxes.” Sutherlin could use, at that date, these Confederate notes, either in payment of his own debts, or in taxes due the Confederate States. The proof is, the town applied some of them in liquidation of its own debts. Moncure, J., in Brockenbrough’s ex’ors v. Spindle’s adm’rs, p. 34, uses language as pointed, and to the same purport as the language of Justice Story. He states, “there was nothing unreasonable or unfair, in appearance at least, in a sale or exchange of these bonds,” referring to State bonds) “for the bonds of an individual, of like amount, payable three years after date. It may well be supposed that the market value of the former, is at least equal to that of the latter.” < Sutherlin certainly *gave the market value, for the sale was made in open market, and the public valued the Confederate treasury, as to the town notes, running twenty years, as about two to one. So that the transaction has not even the feature of a sale of bank stock above its market value: as was the case in Selby v. Morgan.

And we ask especial attention to the fact that the charge of usury is built on the idea, not that the exchange of the two securities, as to their market value, was not fair and equal, but when the Confederate treasury notes were reduced to the standard of gold (that is, the market value of the Confederate notes in gold), that the gold value would be less than the face value of the town notes. This is a concession that the Confederate notes is a commodity, whose value has to be reduced to money. How hazardous would it be to sell or exchange any commodity of fluctuating value, and take for it the bond of the party, payable in the future, if the penalty of usury is incurred by taking the bond for more than the gold value of the commodity at the precise date of the transaction ! And we will remark, in this connection; whenever a case of usury is made out, under cover of a pretended sale of stocks, as where part of the consideration is for money loaned, and part the sale of stocks, the stocks must be sold or exchanged for less than the market value; exorbitant gain enters into the idea of usur3r. The bond is given for more than the market value of the stock, and in ordinary times it is right to regard as the market value their value in gold and silver. “But gold (to use the apt language of Joynes, J., in another connection), it is well known, was not a currency, but an article of traffic during the late war. Scarcely any article had a value that was less stable and uniform. It went up, and sometimes went down, for short periods, very suddenly, according to the vicissitudes of the war and the demands of speculation and adventure. Its value was *not uniform in different places at the same time. At points remote from the cities, the people paid little or no attention to its fluctuations, and were not governed in their dealings by any reference to its value. ’ ’ Joynes. J., in Dearing’s adm’x v. Rucker, 18 Graft. 425, 435. Or, to use the language of another, “The value of gold, as marked by these treasury notes, fluctuated daily and hourly, and was different in different parts of the State. While it was twenty, thirty, or forty, to one these treasury notes had an exchangeable power of two, three, or four, to one, in the different species of property. ’ ’ We respectfully submit, as the contract is not usury on its face, and resort must be had to • the extraneous matter of valuing the commodity in gold, in order to have the contract even a gainful one, it would be wrong to bring the contract to the gold value to prove the animus of usurious gains, when the people were not governed in their dealings by any reference to its value, and when it was really a good contract to the town, and they were getting Confederate treasury notes to invest in land, in reference to which these Confederate notes had an exchangeable power of about two to one. Ten dollars in Confederate treasury notes would then have bought an acre of land intrinsically worth, or worth before the war, five dollars. It was the exchangeable value of these notes for land and personal property that made them practicably valuable. Gold was but little thought of, and to bring the Confederate notes down to the gold, standard, to make them worth less than the notes of the town, is an attempt to establish the animus of usury by a technicality, without reason.

It is useless again to refer to the decisions of our own courts. We know of no decision in Virginia in conflict with Selby v. Morgan; Brockenbrough’s Ex’ors v. Spindle’s Adm’rs; Bank of U. S. v. Waggener; and Orr v. Lacy, above cited. *The cases in Virginia that seemingly conflict, are either cases where the consideration was partly a commodity, and partly a loan of money; or where the new security given and adjudged usurious, is based partly on stocks at a price above their market value, and partly on an antecedent debt, in which the premium is given for forbearance, and giving day for payment : in which case we have shown no loan of money is required to constitute usury.

An example of the first: where the bond is given partly for stock and partly for money loaned, is Stribling v. The Bank of the Valley, 5 Rand. 132. An example of the second: where part of the consideration is for an antecedent debt, is Bank of Washington v. Arthur et als., 3 Gratt. 173.

We will notice specially the case of State Bank of North Carolina v. Cowan, 8 Leigh 238. Cowan in this case made an offer to the State Bank, if they would discount a note for him he would exchange an equal amount of northern funds, then good, for North Carolina bank notes, all depreciated in market. The proposition was accepted, a draft or bill of exchange was drawn on a Virginia firm and accepted, the bill and note offered for discount were both discounted by the bank, with a further condition that Cowan’s note to the bank should be paid in Virginia bank notes or other northern funds. At this time the North Carolina banks, although required to pay in specie, had suspended.

The court decided that the contract was not usurious. Tucker, JJ., only dissenting.

After quoting from the opinions of the judges who decided this case, they say:

There is a peculiar, feature in this case, that would seem to give it more the appearance of a loan in disguise, than a mere exchange of bills of a different market value from their value. It was not only .agreed *to exchange an equal amount of northern funds for North Carolina bank notes, if the note should be discounted, but there was a further condition that Cowan’s note, when due, should be paid in Virginia bank notes or other northern bank notes; these were generally as good as specie. So the transaction did not stop at a single exchange of commodities, and when the transaction was with a bank bound to pay its own notes in gold, it might have been considered by the judges, from all the surroundings, a shift to cover a loan, except for the view taken by Judges Cabell and Brooke; but, at all events, if, according to the view taken by those judges, it could under no circumstances be adjudged usury, it was very unnecessary to argue the question, whether in an ordinary case the exchange of a bond of an individual or corporation for depreciated stocks is, per se, usury. In fact, as we have before stated, the two judges named did not regard this case as a case of such exchange, because, while it was conceded that the market value of the North Carolina bank notes was less than the northern or Virginia funds or bank notes, Judges Cabell and Brooke were of opinion that the North Carolina bank notes paid to Cowan were equivalent to gold and silver, both to the bank and to Cowan. They were of opinion, that a bank bound to pay its notes in specie could not commit usury by taking the note of a customer for the face value of the bank notes paid to him when the note is discounted. They, therefore, considered it unnecessary to argue the question which Judge Tucker argued, whether, under all the surroundings of this case, it was a shift to avoid the statute. Judge Tucker himself seemed to concede.that an exchange of bills or commodities of unequal value was not usury of itself.

Are there any decisions to the effect that the giving of a note or bond for the nominal amount of depreciated bank *notes or for stocks or commodities whose market value is less than their face value is usury per se?

It is admitted that there are — particularly in Mississippi. Some rule, that if a bank gives its own notes, depreciated in market, and takes a note from a customer for face value of the notes given, it is not usury; but, if it takes the depreciated notes of other banks, it is usury; as in Maury v. Ingraham, 28 Miss. R. 171.

Some rule that the transaction is usury per se; others, that it is not usury per se. 1 ‘But in all cases where it is alleged that there was in fact a loan in the form of property sold, the fact that there was an application for a loan, and that the applicant was pressed, are essential in determining the true character of the transaction. ” Moore’s Ex’or v. Vance, 3 Dana R. 36.

In the Bank of the United States v. Wag-gener, the court decided that the mere fact that the United States Bank took the note of a customer for an equal amount of the notes of another bank whose market value was depreciated, was not usury, because bank notes were not money.

How is the case aifected by the expression in the Virginia statute, loan of money or other thing?

Upon a little reflection, it will be perceived that the expression, “loan” “or other thing,” applies to the loan of a commodity to be returned, and has given rise to another distinct class of cases, and has no application to the case under discussion.

The statute of 12 Ann, chap. 11, was continued in the revisal of 1819 in this State, and provided that no person shall take, directly or indirectly, for loan of any moneys, wares, merchandise or other commodities whatsoever, above the value of six dollars for the forbearance of one hundred dollars for a year, &c. The Legislature merely substituted the word “thing,” for the expression, “wares, merchandise or other commodities,” *leaving the usury law precisely the same in substance as before the late revisal.

In all the cases we have cited, the question was, whether there was a sale of commodities bona fide or a loan of money under cover of a pretended sale. There are cases of usury arising from a bona fide loan (to be returned) of a thing — a commodity. A contract to borrow stock for five years, and then to be returned, valued at more than the market price, and pay six per cent, interest on this valuation, might be usury. Usury, by the express words of the statute, is taking more than six per cent, interest for the loan of a “thing.” Thus, in Forrest v. Flwes, 4 Ves. R. 402, annuities were loaned for six months, and the question of usury raised. The person borrowing, of course, generally disposes of the stock, but agrees to replace; buy and replace at the expiration of the limit of the loan.

In Parker v. Ramsbottom, 5 Dowl. & R. 138, 3 Barn. & Cres. R. 257, cited by Parsons, vol. 3, p. 110, was decided to be usury, on what might be termed forbearance for the use of stock; the time for which the stock had been loaned had expired, and was worth at that time in market only 84,000 pounds sterling, but the borrower of the stock was released from his contract to return the stock, but it was agreed should account for it in money at the value of ten thousand pounds sterling, paying legal per cent, interest thereon, until the principal and interest should be repaid. There is no pretence of a loan of Confederate stock by Sutherlin, to be replaced. The only semblance for a charge of usury is a loan of mone3r under the guise of a sale of stock; or tnat Confederate treasury notes is money, and it is usury direct; both of which propositions we have discussed.

Judge Rives, in Boulware v. Newton, 18 Graft. 717, says : ! 1 And this court, as in cases of depreciated bank *notes, has treated these notes as a commodity in trade, while the common understanding, and the literal form of the transaction, justified the court below in describing it as a loan in Confederate treasury notes of $5,000, we must look beyond the mode of expression into the actual substance of the contract. Had the contract contemplated the repayment of that sum in the same currency in which it was received, then it would have been substantially a loan.” The judge means to say, that when a person passes Confederate treasury notes, and takes the bond of the transferee, he does not loan money. But, if the Confederate notes are to be returned in kind, he loans the Confederate notes as a commodity. There is, therefore, no pretext that this transaction was a loan of a “thing” or commodity,. but the exchange or sale of a thing or commodity for the note of the town.

Did the town exceed its power under its charter?

Having already protracted this note to a considerable length, we do not propose to argue this question of ultra vires as much in detail or on authority.

The charter of the town of Danville, granted in 1854, gave authority to the council to contract loans and issue certificates of debt. The same authority is conferred by the amended charter of the 4th March, 1862. See Sess. Acts of 1861-2, p. 114. If a question is made as to the validity of the acts of 1862, as not passed by a constitutional Assembly, then the act of 1854 was operative at the date of the contract. But the act of 28th February, 1866, gave validity to all contracts made under laws of Virginia enacted during the war. See Sess. Acts 1866, p. 187.

The question is raised whether, under the power “to contract loans and issue certificates of debt,” the town could issue certificates of debt for Confederate treasury notes.

The town has the general authority “to issue certificates *of debt.” It is not limited as for what purpose it may issue them. It would seem that, if it was indebted by contract for paving a street, or building a courthouse, it would be entirely competent for the town to give its note or certificate of debt for masonry for their streets or for the courthouse. Why not for Confederate treasury notes or any other commodity purchased for its legitimate use? The Confederate notes were used to exchange, or, in the popular language of the day, to invest in parks and burying-grounds, which where legitimate subjects of investment for the town. If the town could only give its bonds or notes for money borrowed, and be forced to pay all of its engagements with borrowed money, it would be put to great disadvantage. The town, like every other corporation, has many sources of income ; some own stocks and buildings to rent, and derive revenue from taxation. Their moneys come in at different times, and it is competent to make contracts and give their bonds, to anticipate their revenue and credit. Some towns work their own streets, and give their notes for material and timber, and hire workmen ; the expression, “issuecertificates of debt,” means to give their notes for the obligations they choose to incur.

But it seems to us that this question is put to rest by sec. 24 of chap. 54 Code of Virginia. This provision is not found, so far as we have been able to ascertain, in many States where the question of ultra vires is made. By this section every town is declared to be a corporation, and all the corporate powers thereof shall be exercised by the council; and by the 25th section [same chapter] the council may make ordinances to carry into effect their general powers, as well as the powers therein enumerated.

Chancellor Kent says, “when a corporation is duly created, many powers,rights and capacities are attached to it.” “Some of them, ” he continues, “are*deemed necessary and inseparably incident to a corporation, by tacit operation without any express provisions.” Kent’s Comm, vol. 2, 9th edi., top p. 325. He mentions, as one of their ordinary powers, the right ‘ ‘ to hold land and chattels. ’ ’ In note “ A, ” on the next page [326], it is stated that “every corporation has a capacity to take and grant property and to contract obligations;” “that it may make all contracts necessary and useful in the course of the business it transacts, as means to enable it to effect such object unless prohibited by law or its charter. To attain its legitimate object it may deal precisely as an individual who seeks to accomplish the same end.”

With such power the town of Danville could surely make any contract for a chattel, give its notes for a treasury note or for money borrowed; especially when the treasury notes are procured for the purpose of buying, or exchange for, grounds and parks useful to the town, and which they may lawfully acquire and hold. No corporation has a necessity for the exercise of more enlarged powers to make contracts than a town ; powers necessary and inseparably incident to its existence. Every town, almost daily, is under necessity, to make contracts and payments as an individual.

STAPEES, J.

Neither party claims that this is a Confederate transaction. Suther-lin treats the certificate as a security for the payment of its nominal amount in lawful money of the United States. The plea of usury is a tacit admission, on the part of the defendant, that this is a proper construction of the contract.

The special verdict does not find that this contract, according to the understanding of the parties, was to be fulfilled in Confederate notes, or that it was entered into with reference to such notes as a standard of value; nor have the jury found any fact from which this court can infer it. We must therefore consider *the certificate as a promise to’ pay the sum of $5,000 in legal currency. The question presented for our consideration is, whether this transaction is usurious.

With an anxious desire to arrive at a correct conclusion upon this point, I have carefully considered the arguments, oral and written, which have been made. I have attentively read the authorities to which we have been referred, and the conviction is forced upon my own mind, that this contract cannot be sustained by the courts. In giving the reasons which have led me to this conclusion, I prefer to present my own views in connection with the argument of the counsel for the appellee.

It is not unworthy of remark, that the counsel do not agree among themselves as to the character of this transaction. By one it is said to be what it professes — a sale of bonds; by another a sale of Confederate notes; by another an exchange of securities; by another admitted to be a loan, but not usurious, because usury cannot be predicated of a loan of Confederate currency, because the nominal amount of the notes advanced is larger than that of the obligation for their repayment. And thus the transaction, Proteus like, has the distinguishing faculty of assuming whatever form or shape the exigencies of the occasion may require. But the courts must look at the real nature and substance of the contract, and not at the name or title the parties or their counsel may be pleased to bestow upon it.

As I have just stated, it is insisted that this contract is a sale of corporate bonds, which the common council might make at any discount without trenching upon the statute against usury.

There is no doubt, whatever, that the owner of a note has the right to sell it for the most he can get; as he would have the right to sell any goods or wares he owned. But, on the other hand, it is quite as certain that no one has a right to make his own note and sell *that for what he can get; for this, while in appearance the sale of a note, is, in fact, the giving a note for money. It is a lending and a borrowing, and nothing else.

It is said, in Whitworth v. Adams, 5 Rand. 333: “If A, wishing to raise money, were to make his note payable to B, and then go to B and offer to sell it to him; and B, supposing that a man might lawfully sell his own note, were to give the money for it, verily believing he was purchasing a note, and not lending his money on the security of a note, this would unquestionably be a loan; on the ground that he had intentionally done that which the law makes a loan. And this intention would, if the note were taken at a high discount, be a corrupt intent sufficient to vacate the contract.”

This principle of law is in conformity with leading adjudicated cases, and is recognized universally by the elementary writers. Parson’s Mercantile Law 265; Brummel & Co. v. Enders, Sutton & Co., 18 Gratt. 873; Brockenbrough’s ex’ors v. Spindle, 17 Gratt. 43.

The reason of this rule is obvious. In every sale there must be not only parties, but a thing' to be sold. A man cannot sell his own promise to pay, because such an obligation is not the subject of sale. So long as it remains in his own possession it is payable to no one, and binds no one. It is the deliver;- alone that gives it vitality, and when delivered it then becomes, and not till then, a promise to pay according to the contract. The sale of the maker’s own note to the party advancing the money for it, is precisely the same as an advance of money upon a promise to secure its repayment by the execution of a note. All the authorities agree that in either case the transaction is a loan, whatever may be the intent of the parties.

That these principles apply as well to corporations as to individuals, is conceded by all the authorities I *have seen. Indeed when corporations effect loans they do so by sales of their bonds or certificates. This is the customary mode recognized in the commercial world, and by the statutes conferring authority to borrow money.

The purchaser of such bonds understands he is lending his money to the corporation. He knows that the offer to sell is but an application for a loan, made to any who have funds to invest upon the faith of such securities. The case of Rogers v. Burlington, 3 Wall. U. S. R. 654, is a direct authority upon this point. The city of Burlington loaned to the Burlington and Missouri Railroad Company $75,000, in' its own bonds. A part of these bonds passed into the hands of holders for value, and not being paid, were put in suit. It was insisted the city was not responsible, because the bonds shewed, on their face, they were issued as a loan of the credit of the city, and not for any municipal purpose. The Supreme court, in answering this objection, said, “Technically speaking, it may be said that the transaction, as between the company and the city of Burlington, was in form a contract of lending; but as between the city of Burlington and the persons who purchased the bonds in the market, it was undeniably a contract of borrowing money. The cases of Mitchell v. Burlington, 4 Wall. U. S. R. 270, 275; Middleton v. Commissioners of Allegheny County, 37 Penn. R. 237, are to the same effect. Bissell v. City of Jeffersonville, 24 How. U. S. R. 289, 290; 34 Penn. R. 511.

I hold then that the “town of Danville” intended to effect a loan ; that the advertisement of the sale of the bonds or certificates of the corporation was in law an application for a loan; and the sale subsequently made was the final negotiation and settlement of the terms of that loan, and the certificate given the security provided for its repayment; and further, that Sutherlin, as a matter of law, must be held to be aware of the *nature and legal effect of the contract to which he was a part;-. The certificate given him purported, on its face, to be issued in conformity with the act of March 7th, 1862. That act authorized the common council to contract loans and issue certificates for the same; but it gave no authority to purchase depreciated paper, or to exchange its obligations for other securities. If the common council could buy Confederate currency, could traffic in depreciated paper money, what was to prevent its acquiring, by purchase or exchange, Confederate or individual bonds; what to restrain it from dealing in land, stocks or merchandise? It can scarcely be necessary to say that no such power is conferred upon the corporate authorities of the town of Danville; that the rule applicable to all other corporations applies to them; that is, they exercise such powers only as are within the terms of the charter. If the common council of Dan-ville, under the authority “to contract loans,” may sell the corporation bonds or certificates, it is only because such sale amounts in law to, and is substantially, a loan. It is only by considering this transaction a loan that the courts can hold the certificate in question obligatory upon the town of Danville. Once divest it of the features and properties of a loan; ascertain judicially that it is entirely a different thing, it will be vain to search the charter for a provision under which this transaction can be sustained. When the plaintiff establishes that his contract is not a loan, he also establishes that it was made without authority.

But it is said that the law infers a loan only where money is advanced upon the discount of the maker’s own note; and that Confederate currency was a mere commodity, and not money. I am free to admit, according to the uniform decisions of this court, that money, in a legal sense, is the coin issued or adopted by the sovereign authority, and made a lawful tender *in the payment of debts. It must be remembered, however, that the usury laws apply to the loan of money or other thing. And, in ascertaining whether the transaction be a loan, it is difficult to perceive any substantial distinction between the sale of a note by the maker for money, and a sale for currency, received and recognized as money. When the cases say that an advance of money to the party offering his note for sale constitutes a loan, I think it is quite certain they mean, not only coined money and legal tender notes, but anything which passes current as the common medium of exchange, and measure of value for other articles, whether it be government issues or bank notes. Money is defined, by writers on commercial law, to be cash, tha.t is, gold or silver, or the lawful circulating medium of a country, including bank notes when they are known and approved of, and used in the market as such. Burwell Daw Dictionary; McCul-loch Com. Dictionary, Title Money & Banks.

In Miller v. Race, 1 Burr. R. 452, 457, Lord Mansfield said, in reference to bank notes: “They pass by a will which bequeaths all the testator’s money or cash. They are never considered as securities for money; but as money itself. They are not goods nor securities, nor covenants for debts; nor are they so esteemed; but are treated as money, as cash, in the ordinary course and transaction of business, by the general consent of mankind, which gives them the credit and currency of money, to all intents and purposes. ’ ’ See also Mann v. Mann’s Ex’or, 1 John. Ch. R. 231.

At the time of this transaction Confederate currency was the only money circulating in Virginia. It was exclusively used in the payment of taxes, State and Confederate, and in the purchase of property. For it the merchant sold his goods, the broker his. gold, and the farmer the products of his farm. By the laws of the land, by general consent, and in a large majority *of the transactions of men, it became a circulating medium and a standard of value. For nearly four years it performed all. the functions of money, and was so treated by the people, not only from motives of patriotic devotion to the cause in which they were engaged, but by the command of a government as potential in Virginia as that which now bears sway over the people. This view is sustained by the opinion of this court in Dearing’s Adm’x v. Rucker, 18 Gratt., Joynes, J., said it was undoubtedly true that the “parties in that case, and the people generally, dealt with Confederate notes, to a certain extent, as money. They regarded their relation as that of debtor and creditor, and not that of buyer and seller.-’’ In Thorington v. Smith, 8 Wall. U. S. R. 1, it was said by Chase, Ch. J., “that Confederate notes were the only measure of value which the people had, and their use was a matter of absolute necessity. ” It was argued that, as" these notes were not convertible into gold, and were greatly depreciated, they cannot be treated as money. At an early period of the war, Confederate notes were at par, and readily converted into gold. According to the test suggested, they were at that period money, and so governed by the laws that regulate loans of gold and silver. In September, 1863, however, when at a depreciation of ten for one, they ceased to be money, and became a mere commodity. And the transaction, which, in 1861, would have been a loan, must, if occurring in 1863, be treated as an exchange of securities or the sale of a commodity. And yet, in 1863, Confederate currency constituted the circulating medium of the State more generally than in 1861. True, the depreciation was greater in the latter period; but the only effect of such depreciation "was an enhancement of prices: gold and all other commodities commanding higher nominal rates than in 1861.

The counsel for the appellee place much reliance *upon a remark made by Judge Rives in Boulware v. Newton, 18 Gratt. 708, to the effect that the transaction there was not to be treated as a loan, but as an engagement to pay for a commodity. Now, this remark, as applicable to that case, may have been, and no doubt was, correct. But I am sure Judge Rives did not mean to assert that every advance of Confederate money, upon the discount of a note, is to be regarded as the sale of a commodity; that proposition is not sustained by the decisions of this court. It is especially in conflict with the opinions expressed by all the judges in Dearing’s Adm’x v. Rucker. I have already quoted the views of Judge Joynes. Moncure, P., said: “The lender had no idea of selling, nor the borrower of . buying, Confederate notes; but the transaction was purely one of a lending and borrowing of money, having reference to Confederate notes as a standard of value, and as a medium and measure of the loan; because, and only because, it was then the only, or almost only, currency of the country. ’ ’

The same rule prevails in regard to a loan of Confederate notes as any other currency. Nor does it require argument or authority to show that the same rule prevails in regard to the loan of currency as the loan of coined money. Whether it be a bank note, or a Confederate issue, or stock advanced, once stamp the transaction with the impress of a loan, and the law denounces it as usurious if a greater value than the legal rate of interest be reserved. This proposition is sustained by the entire current of American authorities. See Bank of State of North Carolina v. Ford, 5 Ired. R. 692; Cleveland v. Bode, 7 Paige R. 557; Bondurant v. Commercial Bank Natchez, 8 Smedes & Marsh. R. 533, 544; Maury v. Ingraham, 28 Miss. R. 171; and the cases collected in a note to the 3d vol. Parsons on Contracts; State Bank of North Carolina v. Cowan, 8 Leigh 238.

* Another view, urgently pressed upon our attention, requires a somewhat extended notice. It was said that an anomalous and extraordinary state of affairs existed during the war; that gold was subject to sudden fluctuations; that it disappeared from circulation and ceased to be a standard of value, and should not be applied as a standard to Confederate contracts. The scarcity of the precious metals, and the fluctuations to which, they were subject during the war, though unusual occurrences, are by no means without precedents in history. In 1797, the Bank of England suspended specie payments, and did not resume until 1822. Gold and silver disappeared from circulation; contracts were not made with reference to them, nor payments received in them; and during all that time, a period of immense operations in commerce and war, the entire business and revenue of the country were carried on with the aid of paper currency alone.

It is a fact familiar to all, that in 1836 the banks in this country suspended specie payments, and, did' not resume until 1842 and 1843; that gold and silver ceased to circulate as money; and the country was flooded with depreciated bank paper, producing unusual distress and embarrassment. In the State of Kentucky, at one period, the issues of the Bank of the Commonwealth constituted almost the entire circulating- medium of the State, and gave rise to innumerable controversies for alleged violation of the usury laws. Illustrations might be drawn from the States of Mississippi and Illinois also, at certain periods of whose history the precious metals disappeared from the channels of circulation. In none of these instances has it been held, so far as I am informed, that gold and silver ceased to be the standard of value; that contracts then made were not to be tested by the rules of law applicable to contracts made in times more auspicious for the debtor class of the community. Look at the Federal States during *the recent struggle. With all their vast wealth, credit and resources, their currency rose and fell with the rapidly-varying fortunes of the contest, until, at one period, its depreciation was in the proportion of two dollars and ninety cents for one. This fact, alone, incontest-ibly shows that gold, as a circulating medium, was withdrawn from the channels of trade and commerce, and was the subject of traffic and speculation, as other commodities.

With us of the south, after the disastrous campaigns of 1862, the depreciation was more rapid; but there was not a period during the war when the currency was not available in the purchase of gold, either from individuals or the government. We say that the Confederate treasury notes were depreciated. How depreciated? With reference to what standard? By what rule are we to ascertain the extent of the depreciation? Certainly not by other commodities. Provisions and the means of subsistence were scarce, difficult to be obtained, and commanding exorbitant prices. On the other hand, lands and slaves, thrown upon the market by the necessities of those who were forced into the armies or were driven from their homes, were purchased without difficulty at extremely low rates. The price of commodities is not a safe or reliable standard. All must agree that gold was the standard of value during the earlier period of the war. When did it cease to be such? When did the usury laws cease to operate? What day, or month, or year, in that eventful history is to be designated, when it may be said that all contracts for the loan of money or currency, before such day, are to be controlled by the general rules of law; but if made thereafter, they shall be pronounced legal and valid, no matter how exorbitant the rate of interest reserved. The principle asserted will constrain us to proclaim a suspension of the usury laws in regard to all contracts made during the war. The same rules *of construction must be applied to loans of bank paper, and even of gold and silver. For how can usury be predicated of any contract in communities having no standard of values? It was attempted to make Confederate notes a legal tender in the payment of debts; but the effort was unsuccessful, and the people of the state could not fail to understand that gold and silver were the only constitutional currency, and, as such, legally, the representative and standard of values.

This principle has been repeatedly recognized, both by the legislative and judicial departments of the state. The acts of 1865 and ’6 authorize the nominal amount of Confederate debts to be reduced to their true value; and this court, in Hearing’s Adm’x v. Rucker, 18 Gratt., unanimously applied the gold standard in ascertaining the scale of depreciation. Were this a Confederate contract, we should have no difficulty in applying the same standard, in order to fix a just measure of recovery. Are we precluded from so doing because the lender has imposed upon the borrower the hard alternative of paying the debt in United States currency? Is the creditor to be heard, in one breath, to say there was no standard of value, no constitutional currency in existence during the war, to screen his contract from the arm of the law, and in the very next breath to claim that this contract was made with reference to that very standard, and that very currency he .seeks to repudiate. It seems to me we must adopt the gold standard from sheer necessity. It is impossible to advance a step in construing contracts, settling controversies and rendering verdicts and judgments, without a resort to some standard. However scarce gold may have been, however fluctuating its value, it is the only safe and reliable standard for the adjustment of the contracts made during the war. Just or unjust, no other has been adopted by the courts. *lt has been said there can be no usury unless the parties know all the facts which constitute the usury; and in this case it does not appear that they were informed of the value of the Confederate notes when the transaction took place.

It is unnecessary to decide whether this proposition is law to the extent asserted. Concede that it is: is it to be presumed, is the idea to be for a moment entertained, that the common council, entering the market to buy or borrow $40,000 in Confederate currency, and that Sutherlin, having in his possession $20,000 in like currency to lend or sell, were not apprized of the value of the money or the commodity in which they were dealing. Were they alone ignorant of facts relating to this currency, well known to every person in Virginia possessed of ordinary intelligence? Hot only the depreciation, but the extent of the depreciation, forced itself, dailj' and hourly, upon the observation of all men at that eventful period. It is a part of the public history of the country. How does it appear in any case that parties are informed of the market value of the article in which they traffic? I have seen no decision which goes to the extent of holding that this fact is to be established by independent, affirmative evidence. It seems to me the courts have the right to infer that parties dealing in depreciated paper, making it the subject of sale or loan, are aware of that depreciation. Any other inference would attribute to them the grossest ignorance of matters about which they are presumed to be informed, and tend to encourage usury, by adopting rules calculated to screen it from judicial investigation.

It is said, however, there is no case where an obligation, given for a depreciated currency, in greater nominal amount than the obligation, has been adjudged usurious. The researches of the counsel have not produced a case in which it has been decided that such an ^obligation for that reason is not usurious. What real difference is there, with reference to the question of usury, between the loan of $1,000 in notes, depreciated 25 per cent., taking the obligation of the borrower for that sum, and the loan of a like amount in notes depreciated 50 per cent., taking the obligation of the borrower for $750, with interest. In the one case the lender contracts to receive $1,000 for $750 in value, and in the other $750 for $500 in value. In either case the lender unlawfully gains, and the borrower loses, the difference, by the terms of the agreement. In Parker v. Ramsbottom, 5 Dowl. & Ryl. 138; 3 Barn. Cres. R. 273, the defendants being indebted to the plaintiff for ¿£18,000 in stock previously advanced, it was agreed between the parties that the defendants should be released from replacing the stock; and that, instead .thereof, they should account for it in money, at the value of ¿£10,000, paying six per cent, thereon. At the date of this agreement the market value of the stock was only ¿£8,400. The court held that the statute evidently applies to loans of goods or anything that is called money’s worth, as well as loans of money itself; and, as the plaintiff was lending ¿£18,000 in stock worth ¿£8,400 only, and stipulating to be repaid ¿£10,000, with legal interest on that larger sum, the contract was usurious. The authority of this case has never been questioned,so far as I am informed. In Judy’s Adm’r v. Gerard et al., 4 McLean R. 360, the defendant had executed his note for $500, in consideration of an advance of $1,000 in notes of the Bank of Illinois, worth only thirty-seven and a half cents, as compared with gold. It was held that the contract was not usurious, not because, however, the nominal amount advanced was greater than the note, but for the reason that the transaction appeared to be a bona fide sale of the Illinois notes.

These cases show that, to bring a contract within the ^statute, it is only necessary it should be for the repayment of a greater value than the amount of the loan, with an advance thereon at the rate of six per cent. ; and the result is not changed, in the slightest degree, by the fact that the nominal amount lent is a larger quantity than that of the obligation executed for its repayment.

It is . also contended that the transaction is a contract of sale, in which Sutherlin was the vendor and the town of Danville the vendee of Confederate treasury notes as a mere commodity.

It is not denied that Confederate notes, besides being a currency, may have been the subject of sale under all the modifications that affect dealings in other articles; but such cases were exceptional and not general. As was said in Dearing’s adm’x v. Rucker, the people generally dealt with Confederate notes as money, regarding their relation as that of debtor and creditor, and not that of buyer and seller. The opinion of the Supreme court of Kentucky in Warfield’s adm’rs v. Boswell, 2 Dana R. 224, though specially directed to the subject of depreciated bank paper, has a strong application to this question here. The Chief Justice said, ‘ ‘Although bank notes current as a circulating medium, like those of the Bank of Kentucky in 1822, are vendible, nevertheless they are more frequently the subject of loan than of sales on credit; and when they are actually sold on credit it is not reasonable to presume that the purchaser will agree to give double their value and interest also. We cannot doubt that when one man lets another have, as in this case, depreciated current bank notes of the value of $1,500, upon a promise to refund the nominal amount and legal interest in specie, nothing else appearing, the transaction should be deemed prima facie a loan. This would be the only probable or rational conclusion or deduction from the intrinsic character of such isolated x'facts. A, desiring to use immediately $100 in bank notes worth only $50 in specie, applies to B for the notes. B delivers to him a bank note of the denomination of $100, worth only $50, and takes his note for $100 in specie, payable in one year, with legal interest from date, no other fact appearing. A affirms the transaction a loan, and B insists it was a sale. Can there be a reasonable doubt that loan is impressed on its face? It has all the features of a loan, and if it should not be deemed a loan until the contrary be made to appear by proof aliunde, no transaction could ever be considered a loan unless the words borrowing and lending be expressly used in the contract.”

In the present case, Sutherlin did not propose to sell nor the town of Danville to purchase, Confederate notes. A sale of currency was not contemplated by either of the parties. The certificate was the subject of negotiation and sale, and the Confederate notes the medium of payment. Throughout the transaction the notes were treated as money. They were advanced on the one hand and received on the other under a statute authorizing the corporation of Dan-ville to borrow money; and they were to be used as money in the immediate purchase of property. The special verdict finds, as fact, that the president of the common council was authorized to make sale of the certificates ; that the sale was made ; that the certificate in question was sold to Wm. T. Sutherlin, he being the highest bidder; that he paid therefor $11,050 in Conféderate notes to the agent of the corporation. In the face of these plain facts, this court is asked to assume that Sutherlin, in bidding for the certificate, was in fact making sale of his Confederate notes. It is true, upon well settled principles of law, that the corporation of Danville could not sell its own promise to pay. We are not, therefore, authorized to say that Sutherlin sold, or intended to sell, his currency without a fact found *by the jury, or even a scintilla of evidence in the record, warranting- such a conclusion.

Again, it has been urged that this was a mere exchange of securities. The case of the Bank of United States v. Waggener, 9 Peters U. S. R. 378, was strongly relied on in support of this proposition. As this is the leading case cited, it may be proper to examine it with care and attention.

Waggener executed his note to the Bank of the United States, at Lexington, for $5,000. The consideration of this note was an advance by the bank to Waggener, of the Bank of Kentucky notes, to the nominal amount of $1,100, and a check upon the Bank of Kentucky for $3,900, which was paid in notes of like description. These notes were then depreciated 40 per cent. At the time of this transaction, the Bank of Kentucky was indebted to the United States Bank in the sum of $10,000, and was credited with the amount of the check just mentioned, and a short time thereafter paid the Bank of the United States the balance of the $10,000 in gold. The Supreme Court of the United States held the contract was not usurious. The decision was based upon the ground: 1st, there was no device to evade the statute; 2d, whether the transaction was a loan or exchange of securities, there was no usury, because the parties estimated their respective securities as of equivalent value, and the notes of the Bank of Kentucky, though depreciated in market, were of the full value of their numerical amount to the United States Bank, and were so treated by the borrower. The Bank of Kentucky was solvent and able to pay its debts, and the holders of its notes could have recovered the amount thereof, with interest in gold, from the Bank of Kentucky. The plaintiffs could not,' by the negotiation1, entitle themselves to more interest than they were already entitled to against the Bank of Kentucky. The court, in commenting upon the instruction *asked for by defendant, say, it was objectionable because it put a bar to the plaintiff’s recovery, on the ground that depreciated bank notes were loaned at their nominal value, without reference to the fact whether there was a design to commit usury, or whether the notes were in reality of a higher intrinsic value to the parties; which were the turning points in the case.

If it appeared, in the case under consideration, that Sutherlin’s Confederate notes were of equal value with the certificate, and were so treated by the parties ; that Suther-lin could not, by the negotiation, entitle himself to a higher interest than he was already entitled to against the Confederate government; and that the amount of these notes might, by the use of due diligence, have been recovered in gold; the cases might be regarded as analogous, and brought under the influence of the same principles. But, in point of fact, the securities were not of equal value, and were not so considered by the parties. Two dollars and twenty-one cents of Confederate money were estimated as of equal value with one in gold, when the real value was in the proportion of ten for one. In other words, Sutherlin advances to the town of Danville $10,000 in currency, bearing no interest, worth $1,000 in gold, and takes the obligation of the town to repay $5,000 in gold or legal tender notes, with interest thereon from date, payable semi-annually. He therefore lent a thing of the value of $1,000 only, stipulating for a return of $5,000 with interest. No interest was due and payable upon the Confederate notes ; nor could they, by the exercise of any sort of diligence, have been converted into gold at their full value, as they were only payable two years after the ratification of a treaty of peace.

All the cases in which the courts have held the transaction an exchange of credits or securities, show that the securities exchanged were bona fide estimated by the parties as of equal value, and the de-predated paper ^advanced as readily convertible into coined money. In the absence of these features, an advance of depreciated paper at its nominal value, to the party offering his note for the same, is called a loan unless evidence is adduced to satisfy the mind that something else was intended. In the case already cited, the Supreme Court of the United States say, “If A and B mutually execute their obligations to each other for $100 with interest, usury cannot be predicated upon such a transaction. If, however, one note bore interest and the other did not, or if one charged a commission for the use of his note, such a transaction would be called a loan, and usurious, whatever the parties might term it.”

In Dry Dock Bank v. American Life Insurance Co., 3 Comst. R. 344, the court use this language: “The company advanced their post notes, for these certificates are nothing else, as cash, at their nominal value, in the same manner that a bank of issue would receive and discount a note for a customer. In both cases there would be an exchange of promises. In each case the property in the note issued would vest in the receiver. In neither case would any money be paid. But in both cases a substitute, by the understanding of the parties, is advanced by the lender, and accepted as money by the borrower. livery transaction of the kind, when analyzed, will be found to be a loan of money, whether designed or not, under the form of exchange. ’ ’

In Schermerhorn v. Talman, 14 New York R. 93; 117-18, Seldon, Judge, said: “It may be said, admitting a mere exchange of obligations not to be a sale, neither is it a loan, and hence it is entirely without the statute of usury, unless brought within- it by extrinsic evidence that an evasion of the statute was intended. It is true that, literally, the transaction is neither a sale nor a loan, but an exchange. I apprehend, however, that, legally, in reference to the question of usury,- it must be regarded as a loan or as a sale. No *other distinction has ever been applied to such transactions by the courts.

In The State Bank of North Carolina v. Cowan, already cited, no application was made for a loan, but an advance of depreciated paper requested. It was claimed in the argument, that the transaction was a mere exchange of securities. But not a word fell from either of the judges that gave countenance or support to that proposition. The decision was based upon the ground that the funds in which Cowan’s note was payable, though at par when the contract was made, might be depreciated in market to the extent of the bank paper loaned, by the time Cowan’s note arrived at maturity. It was also said, these notes of the bank, though then depreciated, were the representatives of so much coin, and Cowan might instantly, upon receiving them, have demanded the coin from the bank. But for these features, the contract would have been held a palpable violation of the usury laws.

It seems to me that this case is authority for the proposition that this contract cannot be sustained in Virginia,' upon any pre-tence of an exchange of securities.

I can well understand that if two persons mutually execute their obligations to each other in like sums, such a transaction is ordinarily a mere exchange of credits. But it is difficult to understand how an advance of depreciated bank notes to a person executing or transferring his own obligation therefor, can be termed an exchange of securities. In the first place, according to the authority of Lord Mansfield, a bank note is not considered a security for any purpose. In the second place, as a man cannot sell his obligation, so neither can he exchange ’t. There is- nothing, in existence that can be the subject of exchange. A sale is a transmutation of property from one man to another fof money. An exchange is a transferring of *goods or property by way of barter. Chitty on Contracts page . But the obligation of a person in his own possession is not property nor a security. When delivered it becomes simply a contract to pay, and nothing more. If it is not a contract to pay upon a sale, it must of necessity be a contract to pay upon a loan. A delivers to B his bond, and the latter delivers to A a chattel. The presumption is, that this is a sale of the chattel; because, ordinarily, a chattel is not the-subject of a loan; and because the contract of A is to pay the price.agreed on, and not to repay money loaned. This presumption will be rebutted by evidence shewing that a loan and an evasion of the statute were intended under color of a sale. But if A delivers to B his bond, and the latter, in return, delivers a bank note circulating as money, the presumption is, that the transaction is a loan, because such currency is usually the subject of loan rather than sale. It is true the agreement is not to repay the bank note or notes of like kind. It is, however, a contract to repay the money of which the bank note is the representative. This presumption of a loan may also be rebutted by evidence shewing that the bank note was bona fide the subject of purchase and sale. If, however, the bond is the subject of negotiation and sale, then the transaction is a loan, for the reason, as I have heretofore endeavored to shew, that a party cannot sell his own obligation or promise to pay. The distinction between a purchaser of such an obligation and that of a third person, is founded upon the soundest principles of law. In the latter instance a subsisting debt is the subject of negotiation and sale, and the obligation is merely the evidence of the debt. Where, however, the party sells his own promise or obligation there is no debt in existence which can be the subject of sale. In such case the purchase of the obligation *is simply an advance of money upon the security of the parties to the instrument. The transaction in law is a borrowing and lending, and nothing else. This principle is recognized by all the authorities. No solid reason has ever been assigned why the same rule is not applicable to an advance of currency constituting a circulating medium, and performing all the functions of money. With what reason can it be said that if a note is discounted for the maker, at par or below par in gold, it is a loan; if it is discounted 25 per cent, below par in legal tender notes it is a loan; but if bank notes or other depreciated currency be given for it, the transaction is not a loan, but a sale or exchange of securities? In either case, the object of one party is to lendthat of the other to borrow money or its- equivalent. In the one case there is a loan of money; in the other a loan of currency — the substitute for money — so recognized and treated by the parties; and as such, the transaction is directly within the statute which applies to the loan of money or other thing. In the absence of evidence tending to impress upon the contract a different character, it seems to me, it is to be presumed, that an advance of a depreciated currency to the party executing therefor his own obligation, is a loan. This presumption, according to many'of the adjudicated cases, is materially strengthened by the reservation of interest payable from the date of the contract. It is very justly said that different persons estimate paper money very differently; that one person, supposing it might be equal to specie on a particular day, might be willing to purchase it for his own note, payable at that period; but that a party purchasing upon such a contingency would scarcely contract for the payment of interest in the meantime; and that such a reservation is a strong indication of a loan, and, unexplained, should be conclusive.

*In Moore’s ex’or v. Vance, 3 Dana’s R. 361, Judge Marshall, delivering the opinion of the Supreme court of Kentucky, said: “If there was any doubt that the transfer of the executions was intended as a loan, the fact that the party was to pay interest upon their nominal amount from the date, which would be considered as conclusive if the bank notes themselves had been transferred, must also be taken as conclusive as to the transfer of the executions.

The present transaction, tested by these rules, must be considered a loan; and as, by the terms of the agreement, a greater value is reserved than legal interest, it must be held to be a usurious loan.

In conclusion, it is proper to state there is nothing in the record tending to show any corrupt motive or intention on the part of the plaintiff. I have no doubt the contract was made without a thought on his part of violating the statute against usury. It is well settled, however, that if the lender intends to take more than legal rate of interest, the law will infer the corrupt motive, however innocent the parties may be of any design to violate the law.

In Marsh v. Martindale, 3 Bos. & Pull. R. 154, Lord Alvanley said: “Though the jury have found that Sir Charles Marsh did not think he was acting contrary to law, there is nothing in that finding to prevent us from examining the transaction and declaring it to be corrupt, if it appear to us to be so in point of law, without sending the case back to a jury to find the corrupt intent. It is needless to multiply the authorities upon this point, as the law is too well settled to be called in question at this day. The principle pervading the decisions, almost without exception, show that the facts being agreed by the parties, or found by the jury, or arising upon a demurrer to the evidence, the inference *of the law as to the intention of the parties and the character of the contract devolves on the court. ’ ’

CHRISTIAN, J., concurred in the opinion of Staples, J.

MONCURB, P., dissented.

Judgment reversed.  