
    Campbells v. Patterson.
    April, 1840,
    Richmond.
    (Absent Pabker and Stanard, J.)
    Bonds —Usury—Bill for Discovery — When Borrower Must Pay Principal and Interest — Statute—Quaere,—
    The obligor in a bond secured by a deed of trust files a bill in equity against the obligee and the trustee, alleging that the bond was given for money borrowed at usurious interest, and that such interest (some of it compounded) was included therein ; calling for a discovery of the amount of money advanced, and the rate of interest reserved ; and praying an injunction to stay all proceedings on the trust deed, and the collection of the debt, until the matter can be fully heard In equity ; that all compound, illegal and usurious interest may be expunged ; that the plaintiff may have such further relief as his case may require and justice dictate ; and that all persons be released from all penalties of the statute against usury ; Held, the bill is not within the third section of the statute against usury, 1 Rev. Code, ch. 102, and the plaintiff is only entitled to relief upon the terms of paying the principal money borrowed, with legal interest thereon. Whether the third section of the statute against usury, 1 Rev. Code, ch. 102, applies to the case of a bill not filed against the lender himself In his lifetime, but against his personal representative after his death? And per Tucker, P., it seems that it does not.
    Same — Same—When Usurious Bond Is Evidence of Amount Loaned) — Case at Bar. — A bond is given to close a series of transactions between the obligee and obligor, consisting of loans on the one side and payments from time to time on the other, and when the bond is executed, all the written evidences of the previous transactions are surrendered to the obligor : after the death of the obligee, the obligor files a bill in equity against his administrator, alleging usury in the bond, and setting forth the rate of interest reserved, but not the amount of moneys advanced, of which a discovery is called for from the administrator, who answers that he has no information enabling him to make such discovery : this court is of opinion that the transactions were in fact usurious, and that the bond, though containing no usurious interest in it, yet having been given for money loaned on usury, is within the statute and void as a security for money : Held nevertheless, under the circumstances of this case, the bond should be received as evidence of the amount advanced.
    Oh the 12th of February 1828, Charles C. Patterson exhibited his bill in the superior court of chancery for the Lynchburg- district, setting forth, that he had various transactions during several years with one Thomas Campbell of Bedford county, since deceased, in the course of which transactions he borrowed money of said Campbell, under an express stipulation to pay him interest at the rate of 12 per centum per an-num on all sums advanced. That on the 25th of March 1820, he executed his bond to said Campbell for ,£221. 15. 10. payable on demand, principally for money loaned at the rate aforesaid, the interest on the previous loans being calculated at that rate, and included in the bond. That afterwards on the same day he executed to said Campbell another bond, also payable on demand, for £7. 12. 5. — exclusively for interest at the rate aforesaid on sums previously loaned, which Campbell alleged had been omitted in taking the larger bond. That on the 9th of October 1822, the complainant and said Campbell had a settlement up to that date, at which the complainant took in the two bonds aforesaid, and executed a paper whereby he acknowledged himself indebted to Campbell in the sum of 1029 dollars 36 cents; a considerable part of that sum being made up of interest at the rate of 12 per centum per annum, some of which had been compounded *at that rate. That Campbell having agreed to advance to the complainant a further sum, sufficient, with the 1029 dollars 36 cents, to make up the amount of 3000 dollars, on condition that the complainant should pay interest at the rate of 12)4 per cent, per annum, and execute a bond for 3000 dollars, and a deed of trust to secure the payment thereof, the complainant accordingly, under the pressure of pecuniary embarrassment, which had much increased since the commencement of his dealings with Campbell, executed his bond to said Campbell on the 23d of December 1822, for 3000 dollars payable on demand, and to secure the payment thereof, executed to Robert Campbell (a son of the said Thomas) and B. A. Ridson, a deed of trust on a valuable tract of 400 or 500 acres of land', and eight slaves. That when the bond for 3000 dollars was taken, Campbell made a calculation of interest (on what sum the complainant does not know) which he said was to be included in that bond as part thereof; and immediately after the execut:on of the said bond and trust deed, he required complainant to execute another bond, for 63 dollars, which he said was also for interest. That complainant executed the bond for 63 dollars, and afterwards paid off and took in the same. That the express agreement between said Campbell and the complainant, before and at the time of executing the bond for 3000 dollars and the trust deed, was, that Campbell should pay to the complainant, in cash, at that time or in a few days afterwards, the difference between 3000 dollars and the amount of the 1029 dollars 36 cents with interest thereon at the rate of 12)4 per centum; but the said Campbell failed and refused to perform his part of the agreement, and instead of paying cash, procured outstanding debts due from complainant to other persons, to a considerable amount, and compelled him to allow them as part of the consideration for the bond of 3000 dollars. That Campbell having subsequently ^‘advanced to complainant a claim for 680 dollars on one Irvine, and 150 dollars in cash, informed complainant in January 1824, that he had made a statement of their accounts, including interest at the rate aforesaid, and required complainant to execute a further bond for 752 dollars 57 cents, and to secure the same by an additional trust deed. That complainant, without having ever seen the statement, accordingly executed his bond for the last mentioned sum, and conveyed to the same trustees, for securing the payment thereof, another tract of land of 105 acres, and four other slaves. That complainant never did receive, directly or indirectly, the whole amount of the last mentioned bond: that both the bond for 3000 dollars, and that for 752 dollars 57 cents, were in part composed of usurious interest: and that the latter not only included interest on the former at the rate of 12)4 per centum, but interest compounded at that rate. That the complainant had at various times made considerable payments to the said Campbell, (the dates and amounts were particularly set forth in the bill,) which were applied to the extinguishment of the usurious and illegal interest claimed of him. That the said Campbell died in 1827, intestate, and his two sons William and Robert, and his grandson M. D. Gray, were the administrators of his estate. That the trustees in the deeds executed by the complainant had advertised for sale the property thereby conveyed to them, for the purpose of raising the amount which appeared to be due on the two bonds aforesaid. The bill made those trustees, and the administrators of Thomas Campbell, defendants, and called upon them to answer all the allegations thereof, and particularly to discover and set forth the rate of interest agreed to be paid by the complainant for moneys advanced him by the said Thomas Campbell, in what manner the amounts specified in the two bonds aforesaid were made up, the payments made by the complainant to the said Thomas Campbell, and *the application of those payments. And the prayer of the bill was, that an injunction be awarded “to stay all proceedings on the said trust deeds, and the collection of the debt therein named, until the matter can be fully heard in equity; that the whole matter be referred to a commissioner of the court, to adjust and settle, and expunge all compound, illegal and usurious interest, and credit your orator by all sums in any manner paid, and extend to your orator all such other and further relief and aid as his case may require and justice dictate; and that all persons be released from all penalties under the statutes against usury.”
    An injunction was awarded according to the prayer of the bill.
    All the defendants answered. The}' all disclaimed any knowledge of usury in the transactions between the intestate and the complainant; and the answers of William and Robert Campbell expressed the belief of those respondents that no usurious interest whatever was included in either of the bonds secured by the trust deeds. William Campbell said, it was not the practice of his intestate to include such interest in any of his bonds, but when he lent money at more than legal interest (as he sometimes did), he relied on the promise of the borrower for the excess. And Robert referred to and insisted on the statement of the bill itself, as incompatible with the allegation that usurious interest was included in either bond. These two respondents declared themselves ignorant of the manner in which the amount of either bond was made up. They admitted a payment of 950 dollars by the complainant to their father in his lifetime, but disclaimed all knowledge of any other, or of the manner in which that was applied.
    The two bonds of 3000 dollars and 752 dollars 57 cents were exhibited with the answer of Robert Campbell; and all the other evidences of debt, referred to by the complainant in his bill, were exhibited therewith. *At the foot of one of these, namely, the bond for ¿221. IS. 10. was the following1 memorandum — “Agreed to pay 12 per cent.” And at the foot of another (the bond for 63 dollars) was the following: “The above note of $63 was for interest due at the time of taking the bond of $3000 as believed not legal to put in with the principal.” I)ach memorandum was proved to be in the handwriting of the decedent.
    The deeds of trust, it seems, were never filed in the cause.
    On the 27th of October 1828, the cause coming on to be heard, the court dissolved the injunction as to the sum of 1497 dollars 55 cents, part of the bond for 3000 dollars, and as to the sum of 322 dollars 53 cents, part of the bond for 752 dollars 57 cents; which sums were the balances of principal money due on those bonds respectively, according to a statement made by a commissioner of the court, “to which” (the record stated) “there was no objection for the present by either party.” The court further ordered that the marshal should make sale of the land and slaves conveyed in trust to secure the bond of 3000 dollars, or of so much as might be sufficient to discharge the said sum of 1497 dollars 55 cents ; and of the land and slaves conveyed in trust to secure the bond of 752 dollars 57 cents, or of so much as might be sufficient to discharge the said sum of 322 dollars 53 cents ; and should pay the proceeds, after defraying the expenses of sale, into one of the banks at Lynchburg, to the credit of the cause, and make report of his proceedings, in order to a final decree. At the same time the court referred the accounts between the parties to a commissioner, with directions to make two statements thereof, in one of which he should exclude all interest, and in the other allow it at the legal rate.
    The marshal reported that on the-day of February 1829, he made sales of property comprised in the two deeds of trust, to the amount of 1820 dollars 8 cents x'(which was the aggregate of the two sums directed to be raised), besides the expenses of sale. That amount was, by an order of court made the 29th of May 1830, directed to be paid over to the administrators of Thomas Campbell. The date of the actual payment to them was the 7th of July 1830.
    The commissioner to whom the accounts were referred reported, 1. A statement wherein the complainant was charged with 3752 dollars 57 cents the aggregate of the two bonds secured by the trust deeds, and credited with 12 per cent, interest on the bond of ¿221. 15. 10. from the 25th of March 1820, the date of that bond, to the 23d of December 1822, the date of the bond for 3000 dollars, — with the amount of the two small bonds for ¿7. 12. 5. and 63 dollars, — and with two payments of 200 dollars and 950 dollars. According to this statement, the balance due from the complainant was 2287 dollars 63 cents.--2. A statement in which the complainant was charged with the amount of the two bonds for 3000 dollars and 752 dollars 57 cents, and legal interest on the same, and credited with half the amount of interest, half the amount of the two small bonds, and the-whole amount of the two payments, which had been allowed in the first statement. According to this second statement, the balance due from the complainant on the 1st day of May 1830, was 3849 dollars 58 cents of principal and interest.
    Both parties excepted to the commis-1 sioner’s report. To the first statement the complainant excepted, 1. Because a certain credit (which he specified) was not allowed him. 2. Because the charge for interest on the bond of ¿221. 15. 10. was less than it should have been. 3. Because he was improperly charged with the whole amount of the bond of 3000 dollars ; ‘1 there being no evidence that the said Thomas Campbell ever advanced to the plaintiff the amount which, at the time said bond was executed, he contracted to advance to "'make up the sum of 3000 dollars.” 4. Because the complainant was improperly charged with the amount of the bond of 752 dollars 57 cents, “when the sums constituting that amount may have been advanced to make up the amount of 3000 dollars.” To the second statement the complainant excepted for the same reasons assigned in his exceptions to the first statement, and also because, in the said second statement, he was charged with interest, when, under the act of assembly, the creditor was entitled to none. The defendants excepted to the report for the following reasons: 1. “This suit was not brought against Thomas Campbell in his lifetime, who could have given a true account of it: it is brought against his administrators, who can give no account of it. They deny (as far as administrators can deny such allegations) that the interest was included in the bonds. The plaintiff ought therefore to prove his case, and in the absence of all proof on his part, it should be taken for granted that the sums expressed on the face of the bonds were the sums advanced.” 2. Because, the plaintiff having been credited with interest, it was improper to credit him also with the amount of the bonds for ¿7. 12. 5. and 63 dollars, which were given for interest, since that was to credit him twice for the same sum. 3. “The plaintiff in this case only seeks relief as to the compound, illegal and usurious interest (see his bill). The defendants are entitled, even if the court should think usurious interest was received, to their principal money with lawful interest upon it.”
    Many depositions were taken and filed in the cause; but it is only material to notice the testimony of one of the witnesses; who deposed, that about November 1825, a sale of the plaintiff’s property being 1 expected to take place for the benefit of Thomas Campbell, the witness was requested by the plaintiff to propose to said Campbell, that he should take property of the plaintiff *at a fair valuation, in satisfaction of his debt, instead of compelling a sale; and in conversation with the witness on that occasion, said Campbell told him that 12 or 12% per cent, was the interest that the plaintiff had promised to pay. But the witness did not suppose this interest was included in the bonds, though he supposed there might be some written agreement for the payment of it.
    The cause was finally heard on the 25th of November 1331; when the court overruled the exceptions filed by the defendants to the commissioner’s report, sustained those filed by the plaintiff, and approved and' adopted a new statement made by the commissioner, in which the two bonds of 3000 dollars and 752 dollars 57 cents were wholly disregarded as evidence of the amount advanced by Thomas Campbell to the .plaintiff. Charging the plaintiff with the amount of the original bond for £221. 15. 10. and the principal of the sums which were proved by the other evidence in the cause to have been actually advanced to him by Thomas Campbell, and giving him credit for his payments, including the two small bonds of £7. 12. 5. and 63 dollars, and the net proceeds of the sales made by the marshal, this statement produced an excess of payments amounting to 550 dollars 26 cents, with interest from the 7th of July 1830. The court therefore proceeded to decree, that the injunction be made perpetual, and that the administrators of Thomas Campbell pay to the plaintiff, out of their proper goods and chattels, the last mentioned sum with interest, and out of the assets of their intestate, the plaintiff’s costs expended in this suit.
    Prom this decree the administrators of Thomas Campbell obtained an appeal to this court.
    Lyons and.R. C. Stanard for the appellants.
    Johnson and the attorney general for the appellee.
    
      
      Hehad formerly been counsel lor the appellants.
    
    
      
       Bonds. -See monographic note on “Bonds” appended to ward v. Churn, 18 Gratt. 801.
    
    
      
       Usury.--On this subject, the principal caséis cited in Davis v. Demming, 12 W. Va. 269, 271, 277 ; Nichols v. Campbell, 10 Graft. 566, 568, 570, 572 ; Munford v. McVeigh, 92 Va. 457, 23 S. E. Rep. 857. See generally, monographic note on “usury” appended to Coffman v. Miller, 26 Gratt. 698.
    
   *TUCKER, P.

I do not think the principles of this case difficult to adjust. But the amount due from the ap-pellee to the appellants is not so easily ascertained.

The first question of importance' is the measure of the recovery. Is the appellant entitled to interest upon his advances, or must he sit down contented with his principal?

When a borrower comes into equity seeking relief against usury, he is, by the principles of the-court, bound to do equity by paying up both principal and interest. Our act of assembly, however, provides that any borrower may exhibit his bill against the lender, and compel him to discover upon oath the money lent, and if thereupon it shall appear that there was usury, the lender shall be obliged to accept his principal money without interest. 1 Rev. Code, ch. 102, l 3, p. 374. I incline to think that wherever a case is strictly within this section, and the borrower insists on its protection, he can only be compelled to pay the principal; and that herein the principle of equity is modified by the statute. But where a case is not within the third section of the act, or where its protection is waived, the principles of equity have the strictest application. Such is the case of a bill filed to recover back what has already been paid. In this case it is now well established that the borrower can only recover back the usurious interest; thus leaving to the lender the enjoyment of his legal interest, as well as his principal.

The case before us I take to be not within the third section of the act. It is certainly not within its letter. The bill here is not exhibited against the lender, but against his representatives. The bill under the statute must be exhibited against the lender himself, and call upon him to discover the money lent. If the plaintiff rests upon the disclosure of his adversary, he shall pay only the principal, and the usurer shall receive no more. But if he declines, during the usurer’s lifetime, to exhibit *his bill, and to afford him an opportunity of explaining the transaction, and of shewing what is justly due, it may well be doubted whether it was designed that he should be absolved from the payment of any portion of what is justly due. Moreover, the usurer being dead, and it being no longer possible that the penalty can fall upon the guilty head, there would be much reason for distinguishing the innocent representative from his rapacious ancestor. He, at least, has done nothing which forbids, him to look for sheer justice at the hands of a court of equity.

Be this as it may, there is another ground on which the case may securely stand. The plaintiff in his bill clearly puts his case upon the general principles of equity, and excludes it from the operation of the third section. His prayer is, that “all compound, illegal and usurious interest may be expunged; that he may have such relief as his case may require and justice may dictate; and that all persons may be released from the penalties of the statute.” I can understand this in no other way than as expressing a willingness to pay principal and legal interest. That is what justice dictates, and what every honest man will do. And shall we reject the plaintiff’s proffer to be honest? Shall we, by a forced construction of the prayer of his bill, interpret him to refuse to pay what he justly owes? Shall we really enter into the views of his counsel, and construe a prayer to expunge illegal interest, as a prayer to expunge all interest whatsoever? and this too upon the singular hypothesis, that in usurious contracts, even legal interest becomes illegal? I think not. And if, as I conceive, the plaintiff is fairly to be understood as waiving the penalty, and proffering to pay principal and interest; a court of equity will not be so eager to enforce a forfeiture, as to compel the defendants to receive their principal only, and leave the plaintiff in possession of the interest which, upon its own principles, he ought to pay.

*The second question to be settled before we enter upon the facts, is as to the effect of the bonds as evidence. It cannot be denied that the bonds, as securities for money, are void. It cannot be denied, moreover, that where there are manifest signs of fraud (or usury) in the obligee, he ought to be put to the proof of actual payment. 3 P. Wms. 289. Yet this general rule admits of exception or modification. Por where, as in this case, a borrower lies by until the death of the lender, and then calls for proof of the moneys advanced, a court of justice would be cautious in the application of the rule. But where the borrower has moreover taken up all the original evidences, as is the case here; where he has, therefore, all the means of explanation in his own hands, yet fails to make it; where he comes into equity asking relief, and yet omits to set forth the money borrowed, so that equity may lay him under the customary terms of paying the amount with interest, I cannot think the rule could fairly be applied. If he has not furnished in his bill a statement of facts, within his own knowledge, and resting upon documentary evidences which have been delivered up to him, so as to enable the court to administer its justice between the parties, he cannot complain that it should look to the evidences under his own hand for proof of the facts. And where, as here, he has lain by till the lender’s death, he could with no show of reason expect to throw the onus probandi upon those who were not actors in the transaction, and are uninformed as to its character. The bonds in this case must therefore be resorted to as evidences (subject indeed to contradiction and explanation) of the amount which has been loaned.

In this case, however, there can be no difficulty. The plaintiff does not pretend that he did not receive large advances from the defendants’ intestate. But he alleges that in both the bonds for 3000 dollars and that for 752 dollars 57 cents, usurious interest was included, *and moreover compounded. The usury was 12 or 12% per centum; that is, 6 or 6% in addition to legal interest. We are of course left to infer that the residue of the bonds was composed of the advances. If, then, we purge the bonds of the 12 per cent, and of compound interest, we get the true amount loaned. And this is the more clear when we look to the prayer of the bill, which is only to expunge the illegal and compound interest, and sets up no pretence to scale the bonds because they falsely represent in other respects the amount due.

Let us, then, from all the sources of information furnished by the record, endeav-our to discover what the appellants are entitled to demand. In the obscurity hanging over the transactions, it will be impossible to ascertain this with certainty. A proximation is all we can hope for. And here, first observe, that as all the obligations are payable on demand, there can be no prospective usury in any of them. And as to the usurious interest accruing upon the several sums, I am of opinion that it was not included in the bonds of 3000 dollars and 752 dollars 57 cents. Por the scheme of the parties was to keep the usury separate and distinct, lest the bonds themselves should be tainted by it. This appears from the bond of £7. 12. 5. which the bill says was exclusively for interest, which, according to the terms of the loan, was calculated up to March 1820. It also yet more clearly appears from the bond of 63 dollars, which is distinctly stated to be for interest not put into the large bond. Of what it was made up, we can only conjecture. It was probably the balance, at its date, of the whole extra interest account. Taking the bonds then as containing no interest, the matter probably would stand thus: [Here the president entered into a statement of the account between the parties.]

*BROOKl5 and CABELL, J.,

declined expressing any opinion on the point, whether the third section of the statute against usury extends to the case of a bill filed, after the death of the lender, against his representatives. With that reservation, they concurred in the opinion of the president.

The decree entered by the court of appeals was as follows:

“'The court is of opinion that the transactions set forth in the bill were usurious, and that the bond of 3000 dollars and 752 dollars, though they are believed to contain no usurious interest in themselves, yet, having been given for money loaned on usury, are within the statute, and void as securities for money. But the court is further of opinion that as the borrower, at the successive settlements, got into his hands the documentary evidences of the transactions, and has failed to set forth the amount borrowed, the bonds above mentioned must be received as evidence, subject however to contradiction and scrutiny, and to be purged of usury, if it had appeared (which the court does not think) that their amounts were in any part composed of illegal interest. And the court is further of’opinion that the bill of the ap-pellee not being within the third section of the statute of usury, he is only entitled to relief upon the terms of pajfing principal and interest, and that the amount now due, after deducting the proceeds of sale by the deputy marshal under the decree made in this cause, is 1808 dollars and 72 cents, with interest thereon at the rate of six per centum per annum from the 23d day of February 1829 till paid, for which sum the appellants should be permitted to proceed. ” Therefore, decree reversed with costs. “And this court proceeding &c. it is further decreed and ordered, that the injunction awarded the appellee in the cause be dissolved as to the sum of 1808 dollars 72 cents, with legal interest *thereon from the 23d day of February 1829 till paid, and perpetuated as to the residue, and that the appellants be allowed to enforce their deeds of trust on the property not already sold by the marshal, so far as may be necessary for the payment of the said sum of 1808 dollars 72 cents, with interest as aforesaid, and the costs attending the sale:” and that the appellee recover his costs expended in the chancery court and circuit superior court.  