
    Cabaness v. Matthews & als.
    July Term, 1845,
    Lewlsburg'.
    (Absent Brooke, J.)
    Bonds — Usury—Deed of Trust — Injunction of Sale by Trustee — Case at Bar. — o. being; indebted to M. on a usurious transaction, procures B. who knows nothing’ of the usury, to execute his bond to M. for the amount; and executes his bond toB. for the same amount; and also executes a deed .of trust to secure the payment of his bond to B. After-wards B. being called upon by M. for the payment of his bond, requires the trustee in C.’s deed to sell for the purpose of raising the money to pay M. 0. then flies his bill against M. and B., charging the usury, and asking for an injunction to the sale by the trustee. Held. As B. had paid nothing on his bond to M. it was proper to enjoin the sale, and ascertain the amount of the usurious interest paid by C. to M.; which should be a credit on the bonds of B. to M. and of 0. to B. And if M. proceeded to enforce payment from B. before this was ascertained, the injunction should be extended to restrain him.
    In 1842, Matthew Cabaness exhibited his bill in the Circuit Superior Court of Law and Chancery for the county of Franklin against Edwin Matthews, J. & M. Booth, and others, to enjoin the sale under a deed of trust which he had made to secure the payment of a *bond he had executed to the Booths. The bill alleges, that in August 1837, the plaintiff borrowed of Matthews the sum of 1000 dollars, for which he was to pay five per cent, a month; that he made frequent payments, and there were settlements in which he was charged interest at that rate until December 1838, when he confessed judgment to Matthews in the Hustings Court of Lynch-burg, for 1150 dollars; and it was agreed between them that he should pay the same rate of interest on the judgment. That the plaintiff made payments on the judgment, especially one in February 1839; of 1000 dollars; and in May 1839, the parties had another settlement, when Matthews gave him a receipt for 1150 dollars paid at different times, which purported to be in full of the judgment; though Matthews s’till brought him in debt in the sum of 321 dollars 20' cents, which the plaintiff agreed to pay, with the same rate of interest. This sum it was alleged was wholly and exclusively for the usurious interest, .or a part thereof, arising on the foregoing usurious transactions.
    The bill farther stated, that there were subsequently, several transactions and settlements between the parties in relation to the aforesaid debt, and the plaintiff in the year 1839, confessed a judgment thereon to the said Matthews for a sum he does not recollect, but he thinks between five and six hundred dollars; .upon which interest at five per cent, per month was to be paid. After this judgment, Matthews pressing the plaintiff for payment, he procured the defendants J. & M. Booth to execute their bond to Matthews for the sum of 850 dollars, payable at three months; which he took in part discharge of his judgment against the plaintiff, at five per cent, per month discount; and the plaintiff gave his bond to the Booths for the same amount, and executed a deed.of trust on a tract of land and certain slaves to secure the same. The bill charged that the transactions were usurious; that the Booths knew at the time of the ^execution of the plaintiff’s bond to them, the nature of the debt for which it was given.
    Matthews answered the bill, disclaiming all knowledge of the deed of trust, or the considerations on which it was executed, and all interest under it. He said he held the bond of J. & M. Booth, of whose solvency he was entirely satisfied, and had sought for, and desired no other security. As to the loan made to the plaintiff in August 1837, he admitted it was true he had lent the plaintiff 1000 dollars at five per cent, per month interest; that there were payments and renewals of the note from time to time, until May 1839, when there was a full and final settlement of their transactions in reference to this loan, and the interest upon it, when it was ascertained the plaintiff still owed upon it the sum of 320 dollars; which sum he then paid, and took the defendant’s receipt therefor. This, the answer insisted, fully terminated that transaction ; and as more than one year had elapsed from the said final settlement to the filing of the bill, that the plaintiff was barred of all right to disturb that transaction either at law or equity.
    , The answer farther stated, that, after the aforesaid settlement and payment had taken place, and wholly unconnected with it in any manner, the plaintiff applied to the defendant for a new loan of' money, and in May 1839, the defendant lent to him the sum of 500 dollars, on which he was to pay interest at the rate of five per cent, per month; and in May 1840, the defendant advanced to the plaintiff the farther sum of 485 dollars on the same terms; and a statement having been made of the amount due upon these two sums, the plaintiff confessed a judgment for the amount, being 1195 dollars 50 cents. Shortly after this, the plaintiff offered to the defendant the bond of J. & M. Booth for 850 dollars, in part discharge of this judgment; and there being a considerable balance still due thereon, the plaintiff gave to the defendant another bond of the Booths, for 450 dollars; *both of said bonds being made payable directly to the defendant ; and a balance of 74 dollars 75 cents still remaining, the plaintiff paid that off, and the judgment was thus fully satisfied and discharged.
    J. & M. Booth in their answer say, that being called upon to pay their bond to Matthews, they had required the trustee to sell in order to raise the money to meet the debt. They deny that they had any knowledge of the dealings between the plaintiff and Matthews when they executed their bond; and they insist, if the plaintiff is entitled to relief against Matthews, that their bond shall be delivered up to them, and they be discharged from all liability.
    The cause having been removed to the Circuit Superior Court for the county of Montgomery, came on there to be heard in May 1833, upon a motion to dissolve the injunction, when the Court dissolved the same; and from this decree Cabaness applied for and obtained an appeal to this Court.
    Eskridge, for the appellant,
    insisted, 1st. That the appellant was entitled to recover from Matthews the usurious excess of interest which had been paid by him on the first loan admitted by Matthews, as well as the usurious excess of interest on the second loan ; and that a Court of Kquitj' ought to open the accounts as to the dealings and transactions of the parties, from the commencement of the first loan. Eor this he cited Stone v. Ware, 6 Munf. 541; Thompson v. Berry, 3 Johns. Ch. R. 395; Palmer v. Lord, 6 Id. 95; and Dey v. Dunham, 2 Id. 182.
    2d. That the act for preventing usury contains no limitation to a suit at the instance of the party aggrieved to compel the defendant to discover and refund the usurious excess of interest; and that the plea relied upon by the appellee Matthews, that the appellant did not bring his suit within one year after the settlement and ^payment of the money and usurious interest upon the first loan, cannot avail him. Palmer v. Lord, supra.
    3d. That the Court ought not to have dissolved the injunction; but should have referred the case to a commissioner to ascertain the whole amount of illegal interest exacted bj Matthews of the appellant, in the series of transactions which occurred between them; and treating Matthews as the creditor, not of the Booths, but of Cabaness, should have set-oif the usurious excess of interest against the debt of 850 dollars ; and if Matthews, after the said sum of 850 dollars was extinguished, was still indebted to Cabaness, the Court should have given him a decree for the balance against Matthews.
    4th. That although the Booths had no notice of the usurious nature of the transaction between Cabaness and Matthews, yet as they have not paid any part of their bond, the Court has it in its power to relieve Cabaness without in any way affecting their rights, by enjoining a sale under the deed of trust, and directing their bond to be delivered up to them.
    Cooke, for the appellees.
    The light in which law and equity will regard this transaction, I apprehend to be as follows. It will regard Cabaness as having induced the Booths to buy a debt tainted with usury, by virtually representing to them that he owed the debt bona fide to Matthews. When, therefore, Cabaness comes into a Court of Equity averring that it was not a bona fide debt, but that it was usurious, he thereby admits that he made a false and fraudulent representation to the Booths, and must on this ground be turned out of Court as to the Booths; because a plaintiff in equity must come into it with clean hands. The application of this general principle of equity jurisprudence to cases like this, and far weaker than this, has been made b3 this Court again and again. Buckner & als. v. Smith & ais., 1 *Wash. 296; Hoomes ex’or &c. v. Smock, Id. 389; Stone v. Ware, 6 Munf. 541.
    Although the case had been set for hearing, it was not taken up to be heard upon the merits, as between Cabaness and Matthews; but it came on upon the motion by the Booths to dissolve the injunction; and it does not appear that the plaintiff was then ready or willing to have it heard as between himself and Matthews. Coming on simply on a motion to dissolve the injunction, it would have been, obviously, premature to order an account of the transactions between Cabaness and Matthews;- or to have passed upon the questions in, controversy between them. Accordingly,, these questions are not acted on or decided-by the Court below, but might have been afterwards considered; and the only purpose of the decree appealed from, was to-disconnect the Booths from a controversy in which it was not proper that they should be involved by the plaintiff.
    Upon these grounds the decree of the-Court below must be sustained, and it is, therefore, unnecessary to discuss any other.
    
      
      See monographic note on “Usury” appended to Coffman v. Miller, 26 Gratt. 698; monographic note on “Injunctions” appended to Claytor v. Anthony, 15 Gratt. 518.
    
   ST AWARD, J.,

delivered the opinion of' the Court.

Without minutely stating all the facts of this case, it suffices for the decision of the question presented by this appeal from the: order of the Court below dissolving the injunction that had been awarded the appellant to restrain the trustees in a deed of trust from the execution of it for the purpose of providing . the.- funds - to ' pay,- an obligation of J.' &'M. 'Booth to’Edwin Matthews for 850 dollars, to state, that the pleadings incontestibly shew that after a series of transactions commencing in August 1837, between Cabaness and Matthews, on which usury,at the rate of five per cent, per month was charged, Cabaness was ostensibly indebted to Matthews on those transactions the amount of 1195 dollars, for which he confessed judgment in May 1840. That on *the 2d of June 1840, Cabaness obtained the obligation of J. & M. Booth to Matthews for 850 dollars, (it being that provided for in the deed of trust,) and delivered it to Matthews, as a payment of 743 dollars 75 cents on said judgment; and afterwards settled the balance of the judgment with Matthews. That the usurious interest charged to Cabaness in the course of these transactions, and which he will pay if he pays the said obligation of the Booths to Matthews, will exceed the amount of that obligation. That the Booths had no notice when they gave their bond to Matthews, of the usurious transactions between him and Cabaness ;'.a.nd their bond is still outstanding in the hands of Matthews, and unpaid.

On this state of facts the. question is, was the injunction properly dissolved? The facts ascertaining that at the time the obligation of the Booths was delivered by Cabaness to Matthews, he had received from Cabaness for usurious interest, more than 743 dollars 75 cents, the amount at which the obligation was valued ; if Matthews could be made accountable to Cabaness for these usurious payments, then Cabaness did not owe him any thing, and the obligation as between Cabaness and Matthews, was wholly for usury, and without consideration; so that so far as Matthews was concerned, it is not nor could be considered that there should be a dissolution of the injunction. Did the rights of the Booths require that the injunction should be dissolved? They had paid nothing, and if they were relieved from their obligation to Matthews, they would have no right to proceed on the,deed of trust to provide the funds to pay it. The object of enforcing the deed of trust, to provide the means of paying their obligation to Matthew's, and the effect of permitting them to do so, is to apply the property of Cabaness to pay a debt to Matthews when Matthews is liable to Cabaness for the usury he would thus receive, and has heretofore received, to a larger ^amount. If the Booths raise from the trust property of Cabaness 850 dollars, and pay it to Matthews, Matthews by that payment becomes accountable to Cabaness for an equivalent, for w’hich Cabaness would be entitled to a decree against Matthews, and if the deed of trust be enforced, the strange spectacle would be exhibited, of a Court of Justice deliberately adjudging, with all the parties before it, and subject to its order, that the Booths shall sell the property of Cabaness to raise money to be paid to Matthews, which as soon as received ..by. Matthews.,it ought to decree to'bé'pafid-’by him td’Cdbaness. This circuity would be not merehy wanton, it would be a gratuitous mischief, producing advantage to no one. As the parties were before the Court, subject to its order, the plain course was to have retained the injunction, until the amount due from, Matthews to Cabaness for the usury should be ascertained. If it exceeded the amount of Booth’s obligation to Matthews, Matthews should have been decreed to surrender that obligation to the Booths, and crediting that against the amount due on the account between Matthews and Cabaness, should have decreed in favour of Cabaness for the balance. Thus every right and interest of all the parties would have been upheld arid protected. Instead of dissolving the injunction, it should, if Matthews endeavoured to enforce the obligation of the Booths, be extended, so as to prevent him from doing so, while this controversy is unsettled.

Decree reversed, and cause remanded to be proceeded in according to the principles above declared.  