Opinion
(June Term, 1843.)
1. To avoid a security as usurious you must show that the agreement was illegal from its origin. If the taking of usurious interest be contemporaneous with the making of the bond, or in the contemplation of the parties, the security will be void, although no usury appears on the face of it.
2. If a loan be made in silver, and the bond to secure it is made, by a bona fide agreement, payable in current bank notes, it is not usurious to include in the bond for such loan the difference in value between such notes and the silver loaned.
APPEAL from Dick, J., Spring Term, 1843, of LINCOLN.
This was an action of debt upon a bond, of which the following is a copy:
$250. One day after date, I, Henry Fullenwider, as principal, and William Fullenwider, as security, do promise to pay Henry Rhodes, his order or assigns, two hundred and fifty dollars, for value received. As witness our hands and seals, this 25 January, 1839.
HENRY FULLENWIDER, [Seal]. WILLIAM FULLENWIDER, [Seal].
The defendants pleaded the general issue and the statute against usury. On the trial, the plaintiff proved the execution of the bond. The defendants then called a witness who proved that the defendant Henry Fullenwider inquired of him if he knew any person who had money to loan; that witness informed him the plaintiff had $250 in silver, which he would loan at six per centum if the money was returned to him in silver, but if not, and the money was repaid in bank (416) notes, he must have four per centum in addition to the lawful interest, silver being four per centum more valuable than bank notes. The witness at the same time informed Henry Fullenwider, that he (the witness) was the agent of Rhodes, and could then let him have two hundred and fifty dollars in silver on the above terms, provided said Fullenwider would give him security. Fullenwider remarked that he did not know what to do, went off, and in a short time returned with the bond, on which this suit is brought, handed it to the witness and received from the witness two hundred and fifty dollars in silver. Fullenwider immediately handed back to the witness ten dollars, and told him to give the ten dollars with the bond to the plaintiff. The witness further stated that very shortly afterwards, he gave the bond and the ten dollars to the plaintiff, and that the plaintiff made no objection to receiving the bond or the ten dollars. The plaintiff then proved, that at the date of the said bond specie in the county of Lincoln was worth from four to ten per centum more than bank notes.
The plaintiff's counsel requested the Court to charge the jury that if the transaction was a fair sale of the silver followed by a loan of the money, in that case the contract was not usurious. The counsel further requested the Court to charge the jury that if the silver was actually worth the four per cent premium allowed for it by the defendant, then the contract was not usurious. The Court declined giving the instructions prayed for, but instructed the jury, that if from all the circumstances of the case, they found that the plaintiff by the contract had secured to himself a greater rate of interest than six per centum for the money loaned, and that it was his intention to do so, the contract was usurious, and they ought to find for the defendants. The jury found for the defendants, and judgment being rendered pursuant thereto, the plaintiff appealed.
Hoke and Osborne for the plaintiff.
Alexander and Boyden for the defendants.
To avoid a security as usurious, you must show that the agreement was illegal from its origin. If the taking of usurious interest be cotemporaneous [contemporaneous] with the making of the bond, or in (417) the contemplation of the parties, the security will be void, although no usury appears upon the face of it. Therefore, when A. had borrowed £ 100 from B., for which he had given a bond payable with lawful interest; but, at the time of the advance of the money, paid an additional premium, Lord Mansfield decided that the bond was void. Fisher v. Beasley, Douglass, 225; Comyn on Usury, 188, 189. In the case now before us, the Judge charged the jury that if the plaintiff, by the contract, had secured to himself a greater rate of interest than six per centum for the money loaned, and that it was his intention to do so, the contract was usurious and void. We see no objection in point of law to this charge.
What the counsel for the plaintiff intended by his prayer to the Court to charge, is quite unintelligible from the case made out and sent up to this Court. It may be that he intended to pray the Court to charge the jury, that if it was at the time agreed, that the bond then taken was to be paid in current bank paper, and that part of the agreement had been left out of the bond by mistake, then the intent to violate the statute would be negatived, and the bond would not be usurious. Had such an instruction been prayed, we think it ought to have been given. But we are unable to see from the case sent here, what the counsel wanted the Judge to charge, and therefore no opinion can be given by us upon his prayer.
PER CURIAM. No error.
Cited: Wharton v. Eborn, 88 N.C. 347.
(418)