Case ID: va_20/html/0798-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE ROANE.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Pollard v. Baylors and Others.
    Decided. Nov. 27th, 1819.
    1. usurious Contract — Case Overruled. — The case of Pollard v. Baylor’s devisees, 4H.&M. 233-241, overruled.
    Same — What Constitutes — Penalty.—A penalty, inserted in a contract, from which the party may deliver himself, does not make such contract usurious, and the law is the same where it is íd the power of the party, by a compliance with his contract, to convert the penalty into a compensation for services rendered him by the other party.
    2. Same — Same—Case at Bar. — A Creditor, being" a Commission Merchant, may justly connect, with a contract by which he grants indulgence to his debtor, a stipulation that he shall be allowed the usual commission, according to the course of trade, for selling tobacco, to be shipped to him by such debtor in payment: and, if it be agreed, that such commission shall be allowed in the event of the debtor’s failing to ship the tobacco, such agreement is not usurious; for it is competent to the debtor to bind himself to ship it, and agree to pay the commission, as damages for failing to comply with that stipulation.
    Same — Same—Time with Reference to Which It Was Decided. — The question whether a contract is usurious, or not, is to be decided with reference to the time when it was entered into; for a contract legal at such time, can not be made usurious by subsequent events.
    Ejectment — Judgment as Bar to Subsequent Ejectment. — No verdict and judgment in. Ejectment, can be relied on as a bar to a subsequent Ejectment, though for the same land, and between the same defendants and lessors of the plaintiffs; the fictitious plaintiffs being not the same.
    The controversy in this case turned on the authority of the decision in the case of Pollard v. Baylor’s devisees, reported in 4 H. & M. 223-241; the question whether the same deed of trust therein mentioned, was. usurious, or not, being again brought before the Court upon another Ejectment brought by Pollard, to which John and George Baylors, and sundry persons tenants in possession of the land under them, were defendants.
    A special verdict was found, nearly to the same effect with that in the former case, with some additional facts,. ^relating to the circumstances under which the laud was sold by the Trustee.
    The lessor of the plaintiff moved the Court to grant a new trial, on the ground that the Jury had found one fact contrary to evidence; viz, “that, after the execution of the said Deed, the said John Baylor did ship and consign to the said Donald and Burton one hundred and five hogsheads of Tobacco, agreeably to the covenants in the said deed.” The Court was of opinion, “that the said fact was improperly found; it appearing, from the account and settlement made between the said Baylor and Brown on the 29th of January 1795, (which is set out at large in the special verdict,) that the said John Baylor in fact acknowledged that the shipment was, at least in part, made to meet bills drawn by him on Donald and Burton in favour of James Brown; the said account and settlement being the only evidence exhibited on that subject; yet the Court refused to grant a new trial; first, because it is expressly found that the.said Donald and Burton (nor either of them) did not in writing request the said Brown to make the sale; 2dly, because the sale was not duly advertised, agreeably to the terms of the trust-deed ; and 3dly, and principally, because the Court of Appeals has already decided that the identical Deed of Trust, on which the lessor of the plaintiff’s claim is founded, is void, being given for an usurious consideration to which opinion the lessor of the plaintiff excepted; and, judgment being entered against him upon the Verdict, he appealed.
    The cause was argued by Call for the Appellant, William Hay, jr., Stevenson and Nicholas for the Appellees, before a special Court of Appeals, consisting of Judges Roane, Coalter, Holmes, Smith, Allen, Parker, and Summers.
    
      
       Usurlous Contract — What Constitutes — Penalty.— A penalty from which a party may deliver himself by complying with his contract, does not make such contract usurious. As strongly laying down this proposition, the principal case is cited in Selby v. Morgan, 3 Leigh 588. A debt, to be usurious, must be so in the beginning. It cannot be made so by subsequent events. An usurious agreement is one to pay originally a greater rate of interest than the law allows, where a debtor, by a punctual payment of the debt, may relieve himself and avoid the payment of the illegal interest stipulated for, it is not usury. Ward v. Cornett, 91 Va. 881, 22 S. E. Rep. 494, citing the principal case, on the same subject. The principal case is cited in Campbell v. Shields, 6 Leigh 520. See further, monographic note on "Usury” appended to Coffman v. Miller, 26 Gratt. 698.
    
    
      
       Ejectment — See monographic note on “Ejectment” appended toTapscotlv. Cobbs, 11 Gratt. 172.
    
   The following unanimous Opinion of the Court was delivered by

JUDGE ROANE.

This is an Ejectment brought by the appellant against the appellees for a tract of land, lying in the County of Caroline. At the trial, the jury found a special verdict.

*That verdict sets out a Deed of Trust from John Baylor to James Brown, of August 24th, 1790, and also a Deed from Brown to the appellant, who-purchased the land at a public sale. The Verdict has also other findings; in relation to the state of accounts between Baylor and Donald and Burton for whom Brown was acting; to the regularity of the proceedings of the trustee previous to the sale, &c. These last findings, however, must be thrown out of our view, under the dccison of the Court of Appeals in the cases of Taylor v. King, and Harris v. Harris. Under the influence of those dcci-j sions, the ajjpeilant, having the legal title, without any objection to the Deed on the score of fraud as at the time of the execution thereof, must prevail in a Court of law, whatever irregularities may have taken place, on the part of the trustee, in relation to the sale in question. This view of the subject narrows the case to the construction of the Deed of August 24th, 1790, and particularly to the question whether that Deed is on it’s face usurious or not.

Before we go into that question, however, a preliminary inquiry is to be disposed of. It is, whether that question is to be considered as an open one, or as concluded, by the previous decisions of the Court of Appeals; and we are all of opinion that we are at liberty to go into that question. We are informed that the point was made in the Court of Appeals, and so decided, prior to the constitution of this Court, and that it was only in consequence of that decision that this Court was ordered to be summoned. Had the question been considered as concluded by former decisions, there would not have been a defect of the judges of the Court of Appeals to try the cause.— That decision of the Court of Appeals is, as much as any other, to be respected by us as an authority. But, farther, we ourselves entertain the same opinion. We will en-deavour to assign briefly the grounds of it.

The case before us being an Ejectment, (and the fourth Ejectment between the same parties,) no verdict and judgment which may have taken place in the former actions, *can be relied on as a bar in this. If, however, any decision has been given, and, particularly, by the Court in the last resort, in a former case, it is to be respected as an authority. It is to be so respected, if it even occurred between other parties. If, between even other parties, a Deed substantially similar to that before us has been held to be usurious, or otherwise, this Court would conform to that decision. This consequence grows out of our system of jurisprudence, which is based and bottomed upon decisions and precedents. While this system, thus understood, affords a check to the arbitrary discretion of the judges, it also sets up a standard by which our Citizens may govern themselves in the formation of their contracts. The solemn decisions of our Courts, therefore, and especially of the Court in the last resort, ought not to be lightly departed from. In the case of recent decisions, however, if they be erroneous, they ought to be corrected. They ought to be corrected, because they are erroneous, and because, being recent, they have, probabljV ' not spread their influence extensively into the transactions of other citizens. As to the decision before us, (to be presently more particularly noticed,) it ought, probably, to be considered recent, and be corrected, if erroneous, even if it were not affected by other circumstances: but the Court is of opinion that it’s authority is also weakened by other circumstances. The decision relied on to shew 1 hat the Deed in question is usurious, is that of October 1809, between the same parties; and found in 4 H. & M. 221. That decision, in itself, was only rendered by two Judges against one. It is also confronted by the adverse opinions of two Judges, (out oí four,) stated, in the same Report, to have been solemnly given in a former case between the same parties. It is also weakened by the consideration that, in another case, between the same parties, only twelve months before, (the same three Judges composing the Court,) a venire de novo had been awarded. Tnat destination of the case can not be reconciled with the idea that the then Court held the deed to be usurious. Had *they then so thought, (and, especially, as we are informed that the question of usury was made and argued,) they would, it is fair to infer, on that ground have decided for the defendant, instead of sustaining the cause, in order to a more perfect verdict. This decision, then, (of October 20th 1808, see note to 4 H. & M. 229,) may be set off against the other, and will at least weaken it’s authority. But this is not all. The decision of October 1809, is affected by intrinsic circumstances tending to weaken it’s authority. One of the Judges composing the majority on that occasion, expressly founds his opinion upon the facts stated in the Verdict rendered in that case, and would have been of the same opinion had he con-; sidered the Deed not usurious. The quest*' tion of Usury only follows on, in fais opinion, asa supplemental one, and was no how necessary to support his opinion. It might, therefore, be even contended, that this part of his opinion was, in some sense, extra-judicial. When, too, he enters into the question of Usury, he mistakes the contract as to a fact which must entirely have governed his opinion. He supposes that, if íifty hogsheads of Tobacco had been shipped, and found competent to pay the debt, a commission of a guinea a hogshead must still have been paid by Baylor for thirty hogsheads more. We are all of opinion that this is a misconception of the terms of the Deed. This mistake, however. must have essentially influenced the opinion in question, and undoubtedly weakens it’s authority.

We are also justified in departing from the decision of October 1809, by the consideration that the Court of Appeals, itself, has departed from it’s decision of October, 1808, as is seen in the decision in the case of Taylor v. King &c., before mentioned.

' We do not therefore hold ourselves bound by the decision of October 1809, weakened! and affected as ii is, as aforesaid, but consider ourselves at liberty to go into the merits of the case, as appearing in the Deed in question.

*As to the contract contained in the Deed, we see nothing objectionable in it. Donald & Burton, having a ready money claim against Baylor, were neither compellable to wait for payment, nor to receive Tobacco. Being, moreover, Commission merchants, trading in that article, they might justly connect, with the contract of payment, one enuring to their benefit in this last character. This, (as a shipment was intended,) was no how injurious to Baylor: — he must have paid somebody for selling it, and the compensation is found and agreed to be reasonable. As they, under their contract, were com-pellable to sell the tobacco, it • was competent to Baylor to bind himself to ship it, and to agree the damages in case of a noncompliance with this stipulation.

We are of opinion that, in the event which has taken place, of a non-shipment of the tobacco, altho’ the term ‘ ‘Commissions” is kept up in the Deed, it becomes1, in truth, qtily the agreed,damages or penalty for a non-compliance with the contract.

If the Tobacco had been shipped, as was -contracted fór, :all would have been right, and the cjipjpénsation 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 usurióus; 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.

We are all also of opinion', that the question whether a contract is usurious or not, is to be decided with reference to the time when it was entered into; that a contract legal at that time, can not be made usurious by subsequent events; and that an usurious agreement is one t-p pay, originally, a greater premuim man the law allows. It would indeed be ari/anomaly, if, the next day after the executed of this contract, it bad been adjudged to.lbe usurious, and had afterwards been rendered otherwise by the compliance of tbé, :abpellee with his con-tlTclCt« <

*As to the'^bjcction that this is a ((contract b'etw&en a creditor and a debtor!' the case 'of; 'Palmer v. Baker, 1 HaUle-’í & Selwyni 166, shews that, in a nákeíAcase, and í obe exhibiting no cir-cu-fn,s|||jces of oppression, there is nothing cih'.it.’.TOuch is ,the/'character of the case "beferdNis. There is no ground to object that the Mutra¿f is usurious, but a posterior one arisKB¡á>N£Ídpin the, default of the appellee;Jkn'p»fd|'''.'which '!,therefore, most emphaticaÜM,. slSeA ought. not to avail ' himself.-' \i' O Y ■ ,

, , W©.arejC'theMrorp, unanimously of opinion, thalf^fi'é'-aFdMftient should be. reversed, \and ehte^ed f<m!iyiffi"'^.ppellp.nt. ' ( 
      
       Note. See ante.