Case ID: va_29/html/0451-01.html
Source: Caselaw Access Project
Author: {"author": "CARR J. GREEN, J. *CABELL, J. BROOKE, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Fitzhugh v. Gordon.
    April, 1831.
    (Absent Coalter, J.)
    Cases Reviewed. — The principle of Marks v. Morris, 2 Munf. 407, and Martin v. Lindsay’s administrators. 1 Leigh, 499, again brought under review; and the court, four judges sitting, divided on the point.
    Deed of Trust — Usury—Injunction—Quasre.—F. contracts usurious debt lo C. and gives him a deed of trust of land to secure It: F. exhibits bill in chancery, against G. and the trustee, charging the usury, disclaiming- any demand of discovery from the creditor, insisting that deed of trust is nuli and void, and praying that plaintiff’s testimony may be perpetuated, and defendants inioined from selling trust subject till the validity of the deed can be tried at law; G. denies the usury; but it is proved: Quaere, whether, in such case, the court of chancery ought to in join the trustee from selling under the deed of trust, till the creditor claiming under it shall establish its legal validity in some proper forum where the debtor may have an opportunity to contest it?
    Fitzhugh exhibited a bill against Gordon and Ford, in the superiour court of chancery of Fredericksburg, stating, that in May 1821 he executed a bond to Gordon, for 2400 dollars, payable in May 1823, and to secure the payment thereof, executed, at the same time, a deed of trust, conveying to Ford a tract of 401 acres of land in Fauquier, upon trust, in default of due payment of the debt, and upon Gordon’s request, to sell the land and satisfy the debt out of the proceeds of sale: charging, that the debt, for which the bond and the deed of trust were given, was usurious, and that Fitzhugh was apprehensive, from Gordon’s conduct (the circumstances of which he detailed) that it was his design to forbear proceeding to enforce payment of the debt, till the evidence of the true character of the transaction should be lost: disclaiming all benefit of a discovery from Gordon, and undertaking to prove the charge of usury by evidence now in his power, without resort to Gordon’s answer, or to any discovery he should make : and praying, that Gordon, and Ford the trustee, and all others might be injoined from proceeding on the deed of trust, until the question of usury should be tried at law; that the testimony of Fitzhugh’s witnesses might be perpetuated, *and general relief. Gordon’s answer was somewhat argumentative, but, in substance and effect, it denied the imputed usury. As to Ford, the bill was taken pro confesso. Fitzhugh adduced his proofs of the usury. The chancellor dismissed the bill with costs. He did not declare the reasons of his decree: he probably thought, either that the evidence of the usury was not sufficient to prove the charge, or that the bill was prematurely filed. Fitz-hugh appealed from the decree to this court.
    The cause was argued here by Briggs and Johnson for the appellant, and Stan-ard for the appellee,
    t. upon the question of fact, whether there was usury or not? (as to which this court considered the proof complete and satisfactory to establish the usury) ; and 2. supposing the usury proved, what ought to be the mode and measure of relief? This last question brought under .review again, the principle of the cases of Marks v. Morris, 2 Munf. 407, and Martin v. Lindsay’s adm’rs, 1 Leigh, 499.
    
      
      Usurious Debt — Bill for Relief — Measure of Relief.— See on this subject/oof-reofe to Spengler v. Snapp, 5 Leigh 478; footnote to Turpin v. Povall, 8 Leigh 93, ana other notes there cited; monographic note on “usury'' appended to Coffman v. Miller, 26 Gratt. 698.
      The principal case was cited on the subject in Turpin v. Povall, 8 Leigh 97, 101; Dayis v. Demming. 12 W. Va. 266, 267, 275, 276.
    
   CARR J.

This case is, in principle, the same with Marks v. Morris. In Martin v. Lindsay’s adm’rs, I have given my views on this subject, at large, and it is by no means my intention now to repeat them. I was overruled there; and, though I adhere to that opinion, I have no idea of embarrassing this case, because there happen to be only four judges sitting, and two of them think Marks v. Morris wrong. I consider the question settled in favor of that case, and shall not attempt again to disturb it, while the court is constituted as it now is. I have said thus much, merely to prevent the conclusion, that my opinions on the subject have undergone any change.

GREEN, J.

This court is unanimously of opinion, that the chancellor’s decree is erroneous; but is equally divided as to the measure of relief which should be given to the appellant; whether according to Young v. Scott, 4 Rand. *415, or to Marks v. Morris and Martin v. Linsday’s adm’rs: for I agree intirely in the opinion given by judge Carr in the case last mentioned. This division leads us to the alternative of affirming the decree, or that some one of us shall yield an opinion upon the question of relief, and accede pro hac vice, to the principle of Marks v. Morris, which those who have heretofore approved of it, will not abandon. The decree involves a judicial decision, that the transaction in question in this cause, was not affected by usury, and that adjudication, if the decree be affirmed, would be a perpetual bar to any future relief to the appellant, at law or in equity, since it would estop him from alleging the fact of usury, and thus inflict an irreparable injury upon his rights by an erroneous decision upon a matter of fact. On the other hand, it can only be reversed by a judicial declaration, that the transaction was usurious; which would be conclusively binding upon the appellee, and estop him from denying the fact in any future contest touching it: thus assuming for a court of equity, a jurisdiction to do indirectly, what no one has ever claimed that it can do directly; to enforce or aid in enforcing a penalty, by sending, or rather leaving, the parties to proceed at law, with a judicial declaration, that there is usury in the transaction, which is conclusive. With this alternative presented, I think, the lesser injustice and injury will be done, by reversing the decree. To affirm it, would be to deprive the plaintiff in equity, who has completely proved the case stated in his bill, of all future relief, at law or in equity, to which he would be entitled, but for such a judgment: while to reverse it, and pronounce a judgment against the defendant, as in Marks v. Morris, will be only to deprive him of the opportunity of prosecuting his claim at law with little hope of success. Eor, he must have encountered the objection of usury there, whether he proceeded on the bond or the deed of trust. I, there" fore, consent to reverse ' the decree, and enter such a one as that in Marks v. Morris.

*CABELL, J.

This case comes within the principle decided in Marks v. Morris, and acted upon in Martin v. Lindsay’s adm’rs. It must receive the same direction.

BROOKE, P.

As some pains were taken to state the grounds on which the case of Marks v. Morris was decided, in my opinion in Martin v. Lindsay’s adm’rs, I shall add very little to what was said in that opinion. If it is supposed, that the court meant to decide the question of usury conclusively, in those cases, there is a manifest mistake. On the contrary, the whole object, as to the relief asked for, was, to open the door of the court of law, which had been closed against the plaintiff by the deed of trust, and to leave the party to prove the usury in that forum, if he could, by such proof as would be proper in a court of law, after proceedings in equity, as in other cases; the evidence of the usury adduced in the court of equity, if the best the nature of the case admitted of, to be resorted to by either party in the court of law, as in like cases, but the decree permitting the plaintiff in equity, to defend himself at law, if sued there, to have no effect in the court of law. This obviously resulted from the disclaimer of tne court to grant relief on the merits of the controversy. In doing this, the court acted on the parties only, and violated no principle of a court of equity, applicable to cases in which a judgment at law had been rendered. The relief granted in such cases is totally different from the relief prayed for and granted in the cases alluded to. The case before us must be admitted to come with the principle of the cases of Marks v. Morris, and Martin v. Lindsay’s adm’rs, since the facts in it sufficiently establish the usury in the deed of trust.

The decree is therefore reversed; and this court proceeding to render such decree as ought to have been rendered by the court of chancery, it is decreed and ordered, that the injunction be reinstated, until the ap-pellee shall establish the validity of the bond or deed of trust, in a court *of law, or other proper tribunal; and in that event, the injunction is to be dissolved, and deed of trust held, if necessary, as security for the amount due; or, otherwise, the injunction is to be perpetuated; and the cause is remanded &c.