Case ID: scl_4/html/0199-01.html
Source: Caselaw Access Project
Author: {"author": "Wilds, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CONSTITUTIONAL COURT, CHARLESTON,
    MAY, 1807.
    Boisgerard v. Fogartie.
    Defendant had passed a promissory note to the plaintiff, at a discount considerably above legal interest for the time the same had to run, which note he'indorsed; and being sued as indorser, he set up the act against usury in his defence, and it was adjudged for him.
    The action was brought on a promissory note against defendant, as indorser. It appeared in evidence, at the trial, before Tkeze-vant, J., in Charleston district, that defendant had negotiated the note to the plaintiff, at a discount considerably above the legal interest, for the lime it had to run ; and at the same time he indorsed the note, and thereby made himself liable for the return of the money.
    The judge charged the jury, that though the indorsement was founded' on a usurious consideration, the plaintiff was nevertheless entitled to recover the money actually advanced upon receiving the note ; and the jury found accordingly.
    Motion in this court, on the ground, that the judge misdirected the jury.
    The motion was opposed by Pringle, the Attorney General, who insisted, that the act against usury being a penal act, ought to be strictly construed. That there was a clear distinction between a loan and a sale; in the one case, the act against usury declares the contract void, if more is reserved for forbearance than the legal interest; but in the other case, it is not so. In the present case the note was sold bona fide, for so much as was paid down for the note. The indorsement was a new contract. There was no agreement to pay more than the legal interest. It was the transfer of a chose in action, which no law prohibits, at any price. This parting with a chose in action for less than its nominal value, is not usury. The object of such a transfer is not, in all cases, corrupt, or to evade the law against usury. In this, there was no communication about a loan ; nor any intention to violate the act of the legislature.
    Cheves, in support of the motion for a new trial. It was proved that the note in question was passed for negroes, at a discount of one and a half per cent, per month. Was stopped by the court.
   Wilds, J.,

delivered the opinion of the court,

Bat, Trezevant, Brevard, and Wilds, Justices.

The substance of the opinion was, that the note being indorsed, was, as to the indorser, a new note' was ^*a^e f°r the whole of the money mentioned in the note' "i’hat the consideration of the. indorsement was usurious, and, therefore, void ; because the money payable on the indorse* jggjjf wag agreej t0 paid at a future day, upon condition of pay. ing one and a half per cent, per month, discount, or by way of forbearance, which is evidently contrary to the act of assembly. Vid. P. L. 280.

Note. The jury are to judge whether the transaction he a contrivance or mask to disguise usury or not. 2 D. and E. 52. 3 do. 427. 538. 1 do. 296.

New trial granted.