Case ID: va_31/html/1043-02.html
Source: Caselaw Access Project
Author: {"author": "PER CURIAM.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Toole v. Stephen.
    November, 1833.
    (Absent Tdckeb, P.)
    Usury — Case at Bar. — S. and N. being indebted to the F. and M. bank, and the bank having recovered judgments against them for the debts, and the debtors then applying to the bank for indulgence, the bank agrees to give them a long indulgence, upon-their agreeing to give real security for the debt, and moreover to pay the attorney of the bank all the costs of the snits, and the commission which the bank had agreed to pay him for collecting and securing the debt; the debtors give the real security for the debt; and one of them pays the costs and part of the commission to the attorney, and his executor gives the attorney his note for the balance of the commission; the attorney having full notice of the terms of the agreement between the bank and the debtors: Held, the agreement between the bank and the debtors, and therefore the note for the commission to the attorney, were usurious.
    Decree between Codefendants. — Decree between co-defendants refused under the particular circumstances of the case.
    Adam Stephen deceased, having contracted a debt of 3750 dollars to the Farmers and Mechanics bank of Georgetown, as indorser for the accommodation of others who had failed, and George Newkirk having, in like manner as indorser for others, contracted a debt of 3510 dollars to the same bank, Stephen and Newkirk being joint in-dorsers on some of the notes, the bank placed the notes for the debts in the hands of John Baker, their attorney at law, to collect the debts from the indorsers, respectively, by suit; and Baker accordingly brought suits against them, and recovered judgments. Stephen and Newkirk, thereupon, applied to the bank for indulgence; and, upon their agreeing that each should become responsible for the whole amount of the debts due by both, and should each give a mortgage of certain real estate held by them, respectively, to secure the payment of the whole amount due by both, and should, moreover, bind themselves jointly to pay, or secure to be paid, to Baker, the costs of the suits, and the usual commission of five per cent, on the whole sum, which the bank was bound, by its agreement with Baker, its attorney, to pay him, for collecting or securing the debts, the bank agreed, on its part, to *give them a long credit for the debt. Stephen and Newkirk executed the mortgages, in pursuance of the agreement on their part; and Stephen, in his lifetime, paid Baker all the costs of the suits, and near half of his commission, leaving a balance of 190 dollars of the commission due; and, after his death, Baker applied to Alex. Stephen, his representative, for this balance, who gave him his own note for it; Baker having, at the time, exact knowledge of the particulars of the arrangement made by Stephen and Newkirk with the bank, and being indeed the agent of the bank in taking the mortgages for the whole debt. Baker assigned this note to Toole, and then died; and Toole brought a suit on the note against Alex. Stephen, and recovered a judgment.
    Whereupon, Alex. Stephen exhibited his bill against Toole and Tapscott the executor of Baker, without making the bank a party, setting forth the facts above stated; and insisting, in the first place, that the balance claimed by Baker of his testator, and for which he gave his note, was, in truth, due from Newkirk, and ought to have been demanded of him; and, in the next place, and principally, that the consideration of the note was usurious; and praying, therefore, an injunction to inhibit Toole, the assignee, from enforcing his judgment at law. The injunction was awarded. The answers of the defendants, disclaimed all personal knowledge on the subject: But the evidence in the cause, established the facts of the case as above stated.
    The chancellor, upon the hearing, perpetuated the injunction, with costs; and Toole appealed from the decree to this court.
    Leigh for the appellant
    said, 1. that the commission was undoubtedly due to Baker, from the bank; and if the debtors of the bank thought proper to make an arrangement with it, by which they assumed the payment of the debt it owed to him, and thereby to induce him to give up his just claim on the bank, he, at least, practised no usury, and they ought not to be allowed to avoid their obligation to him, on *the ground that the bank had prac-tised usury on them. He, in effect, gave a full and fair consideration for the note. The plaintiff might have a right to recover the money from the bank, who had practised the extortion, but not to avoid his obligation to Baker, who had practised no extortion, and to whom it was perfectly immaterial, who paid him the commission acknowledgedly due to him. And as to the bank, all it stipulated for, was the reimbursement to it by its debtors, of the exact expenses it’had incurred in consequence of their neglect to make punctual payment of their just debts. But 2. if it was proper to injoin Toole the assignee, from enforcing his judgment at law, the court should have given him a decree against his codefend-ant Tapscott, the executor of the assignor, this being a case between codefendants, made out upon pleadings and proofs as between the plaintiff and defendants. Cham-ley v. Ld. Dunsany, 1 Scho. & Lef. 689, 709, 718. Indeed, the court ought not to have proceeded to a final decree, until the bank was made a party, so that a decree might have been given against it for the money due to Baker.
    Stanard, for the appellee,
    said it was quite indifferent to him, what recourse Toole might be entitled to against Baker’s executor, or he against the bank; but he suggested, that, as their respective remedies at law were very easy and simple, there was no manner of necessity to perplex this case with an effort to administer justice between the defendants, especially between the defendants and the bank, which was out of the commonwealth. On this point he also cited Hubbard v. Goodwin, 3 Leigh 492, 522. As the commission due from the bank to Baker, which the bank stipulated that Stephen and Newkirk should pay him, as part of the consideration of its forbearance of the debt they owed, was so much over and above the principal and interest of the debt, the consideration of Stephen’s note to Baker for a balance of the commission, was plainly usurious; and as Baker had knowledge of all the particulats of the arrangement between the bank and Stephen and Newkirk, he could *not possibly avoid the charge of usury. He cited Meagoe v. Simmons, 1 Mood. & Malk. 121, 22 Eng. C. L. R. 266.
    
      
      Usury. — See monographic note on “Usury'’ appended to Coffman v. Miller, 26 Gratt. 698.
    
    
      
      Decree between Codefendants. — In discussing this subject, Allen, P., who delivered the opinion of the court, in Blair v. Thompson, 11 Gratt. 449, cited th e principal case. For further information on this subject, see foot-note to Ould v. Myers, 23 Gratt. 384; foot-note to Blair v. Thompson, 11 Gratt. 442; mon-ographic note on “Decrees” appended to Evans v. Spurgin, 11 Gratt. 615.
    
   PER CURIAM.

The decree is right, and is to be affirmed, in omnibus.