Case ID: scl_3/html/0548-01.html
Source: Caselaw Access Project
Author: {"author": "Bay, J., Brevard, and Wilds, Justices, Watjes, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CONSTITUTIONAL COURT,
    CHARLESTON,
    MAY, 1805.
    Edwards v. Skirving.
    A bond was given to secure the payment of usurious interest, by one who died before it was taken up. After his death, his friend, who.was ignorant of the usury, in order to prevent a lawsuit to recover the sum due on the bond, and the expenses which would thereby accrue, gave hie ■own bond in lieu of that which was given by his deceased friend, to the same obligee. The statute against usury was pleaded, and it was held that the defendant ought to he protected by the statute. But the judges did not agree as to the propriety of the plea, some of them being of opinion the bond was void for want of a legal consideration, t* wit, tbé first bond ; and others, that the act against usury was as properly pleadable to the second and substituted bond, as to the first or original bond % and that as it regarded the plaintiff, there could be no difference in the case.
    Debt on a bond, tried before Johnson, J., in Charleston. Defendant pleaded the statute against usury. The case was — J. S. borrowed of the plaintiff £600, and gave his bond to secure the repayment of the money, and £100 more, arid gave a mortgage* Sundry payments were afterwards made by J. S., which were receipted for on the boud : then J. S. died, leaving his wife, and the defendant, his executors ; but the defendant did not qualify as executor. After the death of J. S. the plaintiff pressed for the payment of the money due op. the bond, and threatened to push the mortgage. Then the defendant, in order to protect the estate of J. S. from the operation of the mortgage, gave to the plaintiff his own bond for the balance due upon the said bond of J.,S., and took up the bond and mortgage given by J. S., and took an assignment thereof; but the executrix of J. S. soon after gave him notice that she would not pay the money due on the said bond of J. S., as the same had been given for an usurious consideration. It did not appear whether the defendant, when he gave the bond to the plaintiff in lieu of the bond of J. S., was coguusant of the usurious consideration on which it was founded.
    The action was brought on the substituted bond given by the de"fendant. The judge, at the tria!, charged in favor of the defendant, for whom the verdict was given. The motion in this court was for a new trial.
    Ward, in support of the motion,
    admitted that the bond given by X S. was usurious and void ; and that the defendant, when he gave the bond in question, might have been ignorant of the usurious tineture that affected that which he took up : yet he contended the statute a¿p inst usury could not be pleaded, to avoid a recovery oti the substituted bond, although it -mgiit be objected to, as wanting a sufficient consideration. It ought to have been taken advantage of under the discount law. The contract in regard to the second bond was fair, at least it had no concern with the receipt or securing of illegal interest, or attenpt to elude the act against usury. But at any rate, the assigned mortgage cannot be affected by the act, and if so, there could be no reason to say the second bond was without consideration.
    Pringle, on the other side.
    The first bond was clearly usurious and void, having been openly taken for more than the legal premium. The defendant was ignorant of the usury, and to befriend the estate of his deceased friend, gave his own bond for the other. The plaintiff did not disclose to him the truth of the case, or he would not have entered into the transaction. It was, in this respect, a fraud practiced by the plaint.ff, an act contrary to the rules of common honesty. But the original bond, for which this was given, being void by the express provision of the legislature, and this having been substituted in the room of, though by another person, if. is also void, being to secure the payment of the same unlawful premium, which polluted the first bond. 3 T. R. 536, 7. 8 T. R. 390. The plaintiff is not an innocent assignee without norice of the usury, but the very person claiming the usurious premium. As to the mortgage, it does not alter the case ; but it must stand or fall fay the bond on which it is bottomed.
   The court,

Waties, Bay, Brevard, and Wilds, Justices,

were of opinion that the original bond being usurious and void, by the act of 1777, P. L. 286, the bond given for the same, was also void.

Bay, J.,

said, the first bond being utterly void, in law, could not be a lawful consideration for the second, and that the ignorance of the obliger in the second bond, of the invalidity of the first bond, ought not to operate to prejudice his right.

Brevard, and Wilds, Justices,

were of opinion that the act against usury was properly pleaded to the second bond, as the' Obligee in the second bond was the same person who is obligee in the first; and that although a bond given for a negotiable note, in the hands of an innocent indorsee, without notice of its having been give» for an usurious consideration, cannot be avoided by thé plea of usury, (see 8 D. and E. 390,) yet it may be avoided if the indorsee had notice of the usury before he received ^10 nole' So, here, tire plea is good against' the obligee, in the substituted bond, because he is the party to whom the original bond wag payóle, and the person to be benefited by the unlawful interest contracted for, and must have been cognusant of the illegal quality of the original bond ; and as to him, it is a mere renewal of the original usurious contract, and, therefore, void by the act against usury. 7 D. and E. 184. 3 Wilson, 250. 1 D. and E. 296. Moor, 752. Cro. J. 508, 33. Doug. 936. 3 D. and E. 537. Peake’s N. P. 200.

Watjes, J.,

in delivering his opinion, said that the consideration of the substituted bond was illegal, being the same as the consideration of the original bond ;.but he rather disputed the propriety of the mode of defence which had been adopted. Yet as it appeared, the defendant in giving the second bond, acted as the friend of J. S., and in some sort as the agent of the executrix, it might be consi. dered as ‘a renewal of the original bond, and that he thought in that view the plea was supported.

Note. In Ellis v. Warnes, Moor, 752, Cro. J. 33, it was ruled, that as the plaintiff Une to not of the usury between the defendant and Aldworth, for the transfer of the debt due from the defendant, he ought not to suffer by the usury-ire the original transaction. In the case of Cuthbert v. Haley, 8 T. R. 390, it was ¡considered that the bond was given not to secure the payment of money lent by Plank to the defendant, upon usury, but to secure the payment of money advanced bona fide. In that case A. who gave the note to B., gave a bond for the same to C., who had received the note from B., without any notice or knowledge of the usurious consideration. If the bond had been given to B., it had been void. In Maddock v. Hammett, 7 T. R. 184, a note was made by Haviland, payable to Yea, and indorsed by him. Haviland afterwards took up the note, which had been made on an usurious consideration, and gave another note in the room thereof. The second note was held usurious. See 10 Johns. 185. Jackson v. Henry. 8 D. and E. 390. Cuthbert v. Hales. 1 Lord Raym. 87. Salk. 344. Hussey v. Jacob.