Case ID: ky_3/html/0175-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

TARDEVEAU and INNES vs. SMITH’S ex’r.
    A contra#* to be ufarious* muft fubftan-tially be a lending an<j borrowing.
    Ifitbefoun* derftood, no (hi ft or contri» vanee will enable the parties to evade the law-
    But if the con trad be really not for a borrowing or lending, it can. not be brought within the fta-tute.
    In a contract for the purchafe of property, the parties may fti-pulate the damage to be paid in cafe of failure, and the court and jury are bound by thofe damages* thus afeertain-ed, though it exceed legal in-tereft on the value of the property which ought to have been paid.
    THIS was a suit brought in the Danville district court by Smith’s executor against the firm of Tardeveau, brothers, and Innes, their security. It was founded on a bond, with a penalty in the usual form, dated the 29th May 1788, and conditioned as follows : “ Whereas the above bound Tardeveau, brothers, are indebted to the said James Smith, two likely negroes between the age of fifteen years and twenty-five, to be sound and healthy; which said negroes ought to have been delivered in the month of January last past; but from some circumstances, it hath been inconvenient for said Tardeveau, brothers, to pay the said negroes, and the said James Smith being willing to wait until the 29th May 1791, on re-ceivirtga reasonable hire for said negroes. Now if the said Tardeveau, brothers, shall well and truly pay or cause to be paid to the said James Smith, his heirs or assigns, two likely negro male slaves, sound and healthy, between the age of fifteen and twenty-five years, on or before the 29th May 1791 ; and also the sum of 12/. per annum for each of said slaves, to commence from the first of January last past, until the said slaves shall be paid to the said James Smith, as a compensation for their services, until paid, then the above obligation to be void,” &c*
    On the trial of the cause, in the Lincoln circuit court, to which court it was transferred on the change of the judiciary, the defendants moved the court to instruct the jury, “ That the hire of the negroes specified in the writing obligatory, on which the suit was founded, was usurious, and as such not recoverable : and that it would be proper to find legal interest on the value of the negroes, as it would otherwise be a greater compensation than the law contemplated.”
    This motion was overruled by the court; and judgment being given for the plaintiff, the defendants appealed. The errors assigned in the cause, went only to question the propriety and legality of the opinion of the court, in overruling the aforesaid motion.
    
      A.’.'sn, for the appellants
    — -It is the duty of the court to instruct the jury whenever it is asked for, unless the instruction desired be not law — 2 Wash. 272.
    The proper criterion for damages, is the value of the property, when it should be paid, and interest from the time the cause of action accrued — Pope vs. Campbéll{ in this court , where the contract was for young ne-groes — 2 Bur. 1011, a contract for stock — 1 Stra. 406--' 8 Term Rep. 162, 1 Wash, 3.
    An agreement between the parties, to set the hire ofá negro against interest of money, is usurious and void, as respects that part of the contract — Reed vs. Lansdale$ in this court 
      . This is án attempt to do the same thing. The act of assembly is designed to guard against imposition. It expressly mentions the cases of forbear1 anee . This bond, on the face of it, is for forbear^ anee- The right to receive hire for a slave, is on account of the risk the owner runs, of the life oí his slave; It is the same principle, which authorises a man, on a money contract, to take more than legal interest wheré the principal was at risk. Here, the title to the negroes remaining in the Tardeveaus ; they risked the lives of the negroes ; Smith risked nothing. It is therefore illegal and unconscientiGus, for him to receive the compensation for the risk run by his debtor. It is true, that the contract expresses that it is for hire, but the fact is apparent, that it is for forbearance. There can be no ■hiring, where the party pretending to hire out, has no title to the property, and can run no risk of its life,
    If the contrary doctrine be maintained, how would you settle partial payments ? By the common law, partial payment went first to sink the principal, and then the interest . It is altered by our statute , In casa part of the principal was discharged, would you calculate interest on the residue, or apportion the hire i The inconvenience and uncertainty that would result from attempting to apportion the hire, will shew that it ought not to be allowed.
    Talbot, for the appellee
    — The statute against usury, was intended to guard against irauds in loans, and not to restrain men in making real and bona fide contracts* which are not for loans, nor intended to cover a lending. For the true exposition of the statutes against usury, I refer to 5 Bac. (old Ed.), 406 to 410, title, Usury, letters B. C.- — Cowp. 115, which fully support the position I have taken.
    This is a real contract, and a stated compensation for the breach of that contract; and is intended to place the party in the situation he would have been in, if the failure to pay had not taken place; A jury should in all cases give such damages as in conscience will remunerate the plaintiff for the failure of the defendant tó perform his contract.
    If there be a failure to transfer profitable property; more than six per cent, should be given ; if unprofitable» less. This is an attempt to restrain a mart from making a contract which is fair ill itself, and equitable in its application. In the case of Talbot vs. Buford, which was in two several shapes before this court, some years since ; and which was as obstinately defended as any suit ever was in this country ; there was a clause in the Contract similar tó thé one now iri question ; and Under which, several hundred pounds wfere eventually recovered. It is true, the point now in question, was not made irt that cause ; but if it had been thought á tenable point, it would not have escaped the attention of those concerned.
    In the case of Pope vs. Campbell, the attention of the court was drawn to the time or age at which the ne-groes were to be valued. No question was there made between their hire and interest; Negroes of their ages (ten years) were not worth more per year, than interest on their value. The cases cited from Strange ánd Bur; were decided on questions to the form of action, and not on the quantum of compensation. The caSe of Reed and Lamdale, was the case of a loan, and therefore does not apply. The case of partial payment put by Mf. Allen, coüld never be made a question ; in this action, it could not be pleaded so as to bring it in.
    But if the contract were Usurious, the appellant could not take advantage of it without pleading it — 5 Bac. ab; (old Ed.) 420, § 12, 13 — 423, § 17, 18 .
    
      Littell, on the same side.
    — A man who has a legal or equitable right to property, has also a right to its profits. If he could only claim its pricey he should have interest as the profits of the price. If he coüld have a specific performance, he is entitled to the real profits of the thing he could have in specie . If the doctrine contended for by the appellant be correct, á man who held a negro which he ought to pay over to another, might hire that negro out for 25 per cent, of his value, and pay the debtor six per cent, of it; leaving himself a balance óf 19 per cent, made on the property of another, when he could only make six per cent, by the loan of his own property.
    February 11th.
    
    
      Allen, in reply.
    — If we could not by plea avail ourselves of a partial payment, it shews that the measure of damages which I have contended for, is correct ; for we should have to resort to equity to get a discount, and chancery would only allow us our payments, with interest thereon.
    The statute against usury, is not confined to the cases of lending. It extends to cases of forbearance. This is a case for forbearance in terms. If the contrary doctrine be supported, it will materially injure securities. They must stand by while their principal and his creditor are litigating any point in the cause ⅝ and if at length the principal fail, they must pay a sum which they Could not have foreseen nor guarded against. Here the security might, by pleading the usury below, have avoided the whole. He has not done it ; but only wishes to get clear of that part which is oppressive. If there had been no stipulation for hire, nothing more than legal interest, together with the value of the negroes, could have been recovered ; and the parties cannot by contract, legally stipulate for more for forbearance, than the law would give.
    
      
      
        Ante 31.
    
    
      
      ⅜) Ante 6 .
    
    
      
      ¿) A&s of 5 fef, 2798, ch. 75, § i-P-75) a Brad* 75.
    
    
      
      •(¿) But fee a Dai* 378, Wythe 147,&c
    
    
      
      ¿} Ads of *799. ch- *7. § 1, p. 4°-
    
    
      
      ⅛ j ⅛ (Gwit. Ed.) io8»
    
    
      
      ^ ⅛ Rep.
    
   The Opinion of the Court. — After reciting the |)epore stated, it proceeded : — This court are called on to decide whether this contract be within the statute of usury. To make it so, it is plearly essential that the substance of the transaction should have been a lending and borrowing. And if it was so understood by the parties, no shift or contrivance, however disguised, can avail to evade that statute. But if on the other hand, it was not a borrowing or lending, the converse of the proposition is equally true, that it cannot be brought within the statute . On the part of the appellant, no evidence was exhibited to shew that a lending was in the contemplation of the parties. And as the contract itself does not import a loan, this court cannot presume it to have been a loan. Therefore, the contract on its face not importing a loan, and whether it was a mere colourable transaction to disguise a loan or not, being a fact which it was the peculiar province of a jury to decide, the circuit court of Lincoln were right in refusing to give the direction prayed for.

It has been contended by the counsel for the appellant,.that this case amounted to usury, because the plaintiff below recovered more damages than the value of the property covenanted to be delivered to him, at the time that covenant was broten, together with legal interest thereon, up to the time of the rendition of the judgment. But, as in the case of annuities, (a usual mode of borrowing in England) , if the annuity was really purchased, and not used as a cover to, a loan, it is immaterial how low it was purchased — how good a bargain on the one side, or how bad on the other.

So in this case, if it was really as it appears to be, a, contract for the actual sale and purchase of negroes, the parties had a right to stipulate the damages that should accrue upon the breach of this contract; and also those that had previously existed. And whether a good or a bad bargain for either, neither a court of camón law nor a court of equity could relieve against it.

For the non-performance of this contract, the verdict of the jury must have been in damages.; the amount of which would or might have been uncertain. And it was as competent to the parties to contract for the liquidation of those damages, in such an event, as to contract for the subject matter of the contract itself. And where a precise sum is fixed and agreed upon between them, that very sum is. the ascertained damage, and a jury is con-, fined to it.

Judgment affirmed.

A motion was made for a,re-consideratipn .of the case, and overruled. 
      
      «) i Vezey jun. 531.
     
      
      ^ CoWpec 7/0.