
    Campbell v. Shields.
    July, 1835,
    Lewisburg.
    Usury — Excess to Pay Expenses of Collecting Debt-— Case at Bar. — A debtor owing a debt presently due, agrees to give the creditor bis bond for it payable at a future day, and to add to the debt, and insert in the bond, a sum equal to 5 per cent, on the debt, to cover commission which the creditor might be compelled to pay an agent for collection; and the bond is given accordingly, for the aggregate including the commission: with a verbal agreement, that if the debtor should pay the debt punctually, he should be exempted from payment of the sum inserted in the bond for commission for collection: in debt on the bond, and issue joined on the plea of usury, Held,
    i. Same — Same—Parol Evidence. — Parol evidence is admissible to prove the verbal agreement as to-the sum allowed for commission,
    a. Same — Same—Construction of Contract. — The contract is not usurious, since the debtor might by punctual payment of the debt, relieve himself from payment of the sum he contracted to pay for commission.
    3. Same — Same—Good Faith — Province of Jury. — The creditor stipulating that the debtor should pay the commission which would be incurred in the collection, in default of punctual payment, if made in good faith to cover such commission, and not as a device to evade the statute of usury, was in point of law not usurious; and the court ought so to direct the jury; leavipg to the jury the question of fact, whether the contract for the commission was made in good faith or was an evasion of the statute.
    Debt on a bond, brought by Campbell against Shields, in the circuit superiour court of Rockbridge. Plea, the statute of usury. The plaintiff filed exceptions to opinions of the court, given at the trial; fi;om which it appeared—
    *That the plaintiff offered in evidence, 1. the bond on which the action was brought, which was dated the 6th October 1830, and payable the 1st March 1831, with an indorsement thereon (signed by the obligee) of a credit of 48 dollars, said to be calculated in a statement of the debt for which the bond was given, as a collector’s fee; 2. the statement referred to in the indorsement, proved to be the calculation upon which the bond was taken, shewing the items of debt due the plaintiff for which the same was given, amounting to 960 dollars, with the addition thereto of “commissions for receiving and forwarding,- — 48 dollars;” and 3. the testimony of a witness, present when the bond was executed, that the plaintiff pressing the defendant for payment of the debt due, and the defendant being unable to pay it at that time, he agreed to give his bond for it, payable the first of March 1831— that the plaintiff insisted, that 48 dollars should be added to the amount of the debt, to cover the commissions which he would be compelled to pay an agent for collection, in case the defendant should fail to pay the bond when it should fall due — -that the defendant assented to this, with a distinct verbal understanding, that if he should pay the debt punctually when due, by remittance to the plaintiff, either to Philadelphia or to Norfolk (to one of which places the plaintiff intended to remove), or if the plaintiff should happen to be at Lexington, then the defendant was not to pay the 48 dollars,- — but if the defendant failed to make punctual payment, and the plaintiff should be compelled to collect the debt by an agent, then the 48 dollars should be paid to cover the commissions usually paid to agents for collection. And, thereupon, the plaintiff’s counsel moved the court to instruct the jury — 1st, that if they should find from the evidence, that the payment of the 48 dollars was optional with the defendant, the contract as proved by the evidence, was not usurious; and 2ndl3’, that if they should *find from the evidence, that the sum of 48 dollars was inserted in the bond, in good faith, to cover commissions, which the plaintiff, by the terms of the contract, might be contingently compelled to pay for collection, and not as a device for securing an usurious premium, in such case the contract was not usurious. The court refused to give such instructions to the jury; and the plaintiff excepted.
    There was a verdict and judgment for the defendant; to which this court allowed the plaintiff a supersedeas.
    Peyton and Johnson, for the plaintiff in error.
    B. G. Baldwin and Baxter, for the defendant.
    
      
      Usury — Excess'to Cover Expenses and Charges. — The principal case is cited in Myers v. Williams, 85 Va. 629, 8 S. E. Rep. 483, to the point that it is not usury if the excess is contracted for in good faith, to cover reasonable expenses and charges. See mono-graphic note on “Usury” appended to Coffman & Bruffy v. Miller, 26 Gratt. 698.
    
    
      
      Same — Same— Parol Evidence. — See the principal-case cited in Ward v. Cornett. 91 Va. 680, 22 S. E. Rep. 494.
    
   CARR, J.

I think the court ought to have given both the instructions. It was contended, in the argument, that the bond being under seal, no parol evidence could be given at law to vary the contract expressed on its face ; and, therefore, that the proof of the verbal understanding with respect to the 48 dollars, could not be received. This proposition, if sound, might be tfirned against the defendant; for, on the face of the bond, there is no proof of usury, nor any fact from which it could be deduced; and the plea of the defendent could not be supported. But the proposition, though generally true, is certainly not applicable to a case like this. The statute declaring a bond given for usury utterly void, of course, enables the defendant to plead the usury; and this, of necessity, puts in issue the contract which was the consideration of the bond, and so far sets aside the sanctity of the seal, as to enable the defendant to support his plea, by any proof establishing the real contract; and this proof the plaintiff may rebut by evidence of the same kind.

With respect to the first instruction, it is clearly laid down, in many cases, that where the excess may be paid or not, under the contract, at the option of the borrower, *it is not usurious. Thus, in Burton’s case, 5 Co. 69, a rent of ¿20. was granted in consideration of ¿100. lent; the first payment of the rent w'as to be made a year and a quarter after making the grant; and there was a condition, that the rent should cease, if the grantor of the rent should return the £100. in twelve months. This was held not to be within the statute, because it was in the election of the grantor to repay the ¿100. and thus frustrate the rent. “But it was resolved by the whole court, that if it had been agreed between the grantor and grantee, that, notwithstanding such power of redemption, the ¿100. should not be paid at the day, and that the clause of redemption was inserted to make an evasion out of the statute, then it had been an usurious bargain and contract within the statute.” Here, the very point, which took the case out of the statute, was the power given by the contract to the borrower, to get clear of the excess at his election. So, in Clayton’s case, 5 Co. 70, it is said, “If upon the first contract, he who lends, reserves no certain sum for the loan, but secundario speret de aliqua retributione ad volunta tern ejus qui mutuatus est, hoc non est vitio-sum. So, in Roberts v. Tremayne, Cro. Jac. 507, Mr. justice Doddridge took this distinction — '“If I secure both interest and principal, if it be at the will of the party who is to pay it, it is no usury; as if I lend to one ¿100. for two years, to pay for the loan thereof ¿30. and if he pay the principal at the year’s end, he shall pay nothing for interest, this is not usury: for the party hath his election, and may pay it at the first year’s end, and so discharge himself.” Any one who wishes to see more english cases of this kind, may find them, in any of the abridgements, under the head of usury. In Winslow v. Dawson, 1 Wash. 118, this court laid it down, generally, that a contract to pay a larger sum at a future day, on non-pa3rment of the sum agreed upon, is not usurious; for the court will consider it, either as *a penalty to be relieved against, or that the party, by payment at the earlier day, might relieve himself. The case of Pollard v. Baylor, 6 Munf. 433, was thus: Baylor being indebted to Donald & Burton, british merchants, conveyed land and slaves, to secure the debt in three annual instalments, with interest &c. the payments to be made in tobacco, tobe delivered at and addressed to them in London, on which they were to draw the usual and accustomed mercantile commission of twenty-one shillings sterling for each hogshead actually shipped; and it was farther provided, that in case of non-shipment of the tobacco, a further sum equivalent to, and in lieu of, the usual mercantile commission thereon, at the rate of twenty-one shillings sterling per hogshead, estimating each hogshead to be worth ¿10. sterling, was to be added to each payment. The case was two or three times before the court, upon the question whether this contract was usurious, and was, therefore, thoroughly considered. It was twice decided, by a court of three judges, to be usurious; judge Roane strongly dissenting. On a third hearing, before a special court of seven judges, the unanimous opinion of the court, delivered by judge Roane, declared the contract not to be usurious. The court was of opinion, that the provision securing the twenty-one shillings on each hogshead, in case of non-shipment, was, in truth, only the agreed damages or penalty for a non-compliance with the contract. “If the tobacco had been shipped,” (said Roane) “as was contracted for, all would have been right, and the compensation now objected to, would have been earned by the sales of the tobacco. We are all of opinion, that a penalty inserted in a contract, from which a party may deliver himself, does not make the contract usurious; and that the law is the same, where it is in the power of the party, by a compliance with his contract, to convert it into a compensation for services rendered. ’ ’ He concluded with this remark— ‘There is no ground to object, that the contract is usurious, but a posteriour one, arising from .the default of the appellee, and of which, therefore, most emphatically, he could not complain.” 'The principle of this case seems to me to apply strongly to the point before us. The last case I shall cite upon the first exception, is Stratton v. The Mutual Assurance Society, 6 Rand. 22. There, it was objected, that the law of the society subjecting delinquent members to seven and a half per cent, to pay expenses of collection, was usurious. The court was unanimously of opinion, that it was not. The judge who delivered the opinion, said —‘ ‘This does not seem to me to have a single feature of usury about it. The debtor may always relieve himself by paying up what is due, before the society have been obliged by his delinquency, to incur the expense and trouble of a legal proceeding. Neither is this a penalty against which equity would relieve. It is stipulated damages. ” These cases shew, very clearly, I think, that the court ought to have given the first instruction asked for.

The second instruction is so connected with the first, that little is left to be said on it. The court ought clearly to have given it: for if the 48 dollars were inserted in the bond, in good faith, to cover a commission which the plaintiff might, by the failure of the defendant, be compelled to pay, and not as a device to evade the statute, most assuredly its insertion could not make the contract usurious. And this, the court ought to have declared to the jury, as the law of the case, submitting to them, as. peculiarly proper for their inquiry, the question of fact, whether this feature of the contract was made in good faith, or to evade the law. I shall not cite authorities to shew, that (as a general rule, applying to usury as well as other subjects) the court ought, when applied to, to declare the law. That it is lawful to charge a reasonable commission, in these cases, for trouble ana expense, many cases shew: Carstairs v. *Stein, 4 Mau. & Selw. 192, is full to this point —as also to shew, that the fact, whether it be a bona fide charge, or an evasion, is exclusively- for the jury.

I think the judgment should be reversed, and the case sent back for a new trial; on which the instructions, if asked for, should be given by the court.

The other judges .concurred. Judgment reversed, and cause sent back &c.  