Case ID: tenn_15/html/0545-01.html
Source: Caselaw Access Project
Author: {"author": "Peck, J,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robert Weatherhead vs Robert M. Boyers.
    A at the request of B advanced to him $4000 in Tennessee bank notes; the Tennessee bank notes so advanced run at a discount of 25 or SO per cení; B agreed to pay A the nominal amount of the Tennessee bank notes at New Orleans, in United States bank notes or stiver — doK lar for dollar. Held that the transaction was a loan, and not a mere exchange of money and that the contract was usurious.
    Money paid, beyond principle and legal interest, on a usurious contract, may be recovered back in a court of equity at the suit of the borrower against the lender.
    Neither lapse of time, nor the statute of limitations, will defeat the right of tiie borrower to recover back usurious interest paid, when the transaction is a continued one, and new dealings, new advances, new securities for money and mortgages upon property of the borrower are taken and continued to a short time upon filing the bill, although tho principal part of the usury was paid ten years before filing the bill.
    Tt is not necessary to entitle the complainant to relief in equity that lie shouM charge in direct terms that the dealing was Usurious, if tho facts stated in die bill, and admitted in the answer, or shown in tho proof, make out a case of usury a court of equity will relieve.
    The bill states, that in the year 1S22-3, complainant war. much indebted to defendant and E. Boddie, principally for monies advanced complainant to purchase tobacco; the inducement to advance the money was the following: Tennessee money, at tliat time, was much under par, perhaps from twenty to thirty per cent., and that they advanced him Tennessee money upon bis agreeing to pay" the same in New Orleans, in United States paper, then at par with silver, dollar for dollar; alleges that in the spring of 1823, he made sundry payments in New Orleans of United States paper, that the firm of Boyers and Boddie was dissolved, and that Boyers held the claims against complainant; states that on the 30th July, 1823, defendant and he came to a settlement of all their transactions, and that upon the balance which was then due against him, ten per cent was added, which however would not have made it equal to United Slates paper, but defendant said he would be content with that; that he then executed three notes to Boyers for the amount, including interest up to the time when they should fall due; to wit, one note for 01000 due one day after date, one note for $1372 21 cents;’ due on the 1st of May, 1824, and the third for $1499 85 cts. due the 1st of May, 1825, all of which were secured by a deed of trust upon a valuable tract of land and a number of ne-groes. The bill alleges that on the 29th of May, 1S25, Yeatman and Woods drew a draft upon Boyers in favor of complainant, for $1138 90 cts., which Boyers received and promised to credit the notes for the amount of the draft. Bill states that lie was likewise owing Boyers sundry other debts, which were secured by deeds of trust, judgments, and executions; that his property was about to be sold under both deeds of trust and executions, and finding that it would be sacrificed at one third of its value, went to Boyers and agreed with him and his other creditors to receive his property at valuation — that commissioners were appointed to value the property, and that in August, 1832, Boyers received the full amount of his claims in property at fair valuation, without ever allowing him any credit for the draft of $ 1138 90 cts. promising to correct any error in regard to the draft if any had intervened; states that he never has received any credit for this draft. The prayer is, (hat defendant may account for the usury he has received upon the monies advanced; and that he be compelled to pay complainant the amount of the draft of $1138 90 cts., with interest, to redeem certain negroes mentioned, to wit, Láwson and Ned and for general relief. The bill ivas filed 1st of March, 1833.
    The drawer admits the advancement of the money to the amount of about $4000 in 1822-3, that it was in Tennessee money, and that exchange was at that time between twenty and thirty per cent. Complainant gave bis notes for the amount payable at New Orleans, in United States bank paper, which was then at par. States that this kind of contract was. common in the conntry, merchants were obliged to make such engagements or go into the market and buy exchange, it was considered mutually beneficial for all parties; the inducement on the jrart of those to whom the money was advanced was to get the freight, which was high, and partly to vest their money in speculations which would be profitable. This was no doubt considered profitable by complainant, who bad been engaged in it for many years, that this money was advanced complainant reluctantly, that it was from his own solicitations, they were apprensive of his situation, but after making some advances they were compelled to go on, to enable him to complete his expedition. Admits payments in New Orleans, in the spring of 1823, of $1251 23 cts., admits they had a full settlement in July, 1823, of all their transactions, and that complainant then fell in debt to him the amount for which lie gave Ins three notes exhibited, and which were secured by the deed of trust; no interest was charged upon the settlement, from the commencement of the advances in November, 1822, to the settlement in July, 1823; the exchange was intended to cover this, which he admits to have been ten per cent, it ougHt to have been from twenty to thirty per cent, in consequence of his failure to pay this money in New Orleans in United States bank paper, according to his obligations, that upon every principle of justice, as well as legal rights, be should have been completely indemnified, which he was not. Admits the receipt of the draft of $113S 90 cts. which be says was paid in the following way, there was a balance then due defendant upon the $1000 note of about $59G, this note was paid off by the defendants, and surrendered to complainant, likewise defendant’s open account of $295 65 cts. the residue of the draft was paid in money; says the property of complainant was about to be sold under the deed of trust and to satisfy- sundry executions in favor of defendants, and that the property, if sold for cash, would have been greatly sacrificed; that defendant had the priority and could have immediately sold and obtained bis money rn cash, or purchased in complainant’s property himself, by which he would have made a speculation of between L and 2000 dollars, that notwithstanding this he accepted complainant’s proposition, and received property at valuation, by which complainant was enabled to pay about $1400 of debts besides defendant’s, when defendant had it in his power to have got the whole of it by legal means if he had thought proper, and that he could not get as much for the property he received in cash by $1000 as it was valued to him at. Denies positively that there has been any mistake about the draft, and says that complainant had all the credits to which he was entitled. That complainant’s claim is barred by the lapse of time which intervened from the time the payments and settlements were made, and the statute of limitations. It is unecessary to state the proof upon any of the matters contained in the issues, as the court below dismissed the bill upon all the grounds except that of usury, and decreed an account of that to be taken by the clerk and master; and upon the coming in of the master’s report finally decreed the defendant to refund the amount of usury reported. From this decree the defendant appealed to this court.
    
      J. S. Ycrger, for the complainant.
    1. It was urged below, and no doubt will be urged here, that this bill does not charge the dealing between complainant and defendant to have been usurious, consequently no issue was formed upon that point and no proof of usury was admissable, and the decree of the court erroneous upon that ground. The stating and charging part of the bill sets forth all the facts and circumstances of the transaction and dealing between these parties with precision and minuteness, and the prayer of the bill is for the money above legal interest to be refunded. The admissions 'in the answer, and the proof, fully sustain the statements in the bill upon this point. I take the rule to be, that although in direct terms a bill may not charge the dealing to be usurious, yet if it states facts and circumstances, which, if admitted in the answer or shown by proof, make out a case of usury, a court of equity will apply the necessary terms'of art, and grant the relief sought, as though the dealing were directly chaiged to have been usurious. S Wondall R. 339.
    
      2. It is insisted in the answer that the transaction and dealings between these parlies does not make out a case of usury, but a mere exchange of money. I define usury to be the reserving above the legal rate of interest on a loan of money. If the loan is direct and the illegal interest expressly reserved, no difficulty is found in the application of the rule; it is only difficult to apply the rule when the contract is indirect and evasive. To evade the statute of usury, and to acquire illegal gains, money lenders have resorted to many shifts and contrivances, and the courts, to many rules, by which the true nature of the contract may be ascertained. Thus, when a needy and oppressed man applies for the loan of money to another, and is refused a loan at above the legal rates of interest, but the money broker buys his property at a diminished price and advances the money to him, the trading has been held to be usurious. So, one holding a a note endorsed for his accommodation, applied to a note shaver and money lender for money, and offered to sell the note at a discount, and did sell it at a discount of twenty-five per cent; the contract was held to be a loan, and the excess of discount over the legal rates of interest usurious. 12 Pickering’s Rep. 565. So it has been held in this State and in the supreme court of the United States, that when one applies to another for the loan of money, and depreciated bank notes are loaned at their par value, the excess over and above the actual value of such bank notes reserved, is usurious. 1 Yer-ger’s Reports, 243, 444; 1 Pet. Rep. 37; 2 Pet. Rep. 527.
    The good sense of these rules is obvious. The money lender would never have money to lend if he could evade the usury statute by purchasing the oppressed man’s property at a great depreciation, or if he could purchase in depreciated bank notes for a discount of twenty-five per cet. and loan them at (heir nominal value. The statute against usury would be a dead letter, and the benefits intended to be conferred by it upon the oppressed a mere mockery.
    Apply these rules to this case, and we will soon perceive its true character. The complainant wished to borrow money to risk in speculation and applied to the defendant, he had no money but paper worth about seventy-five dollars for each hundred of its nominal value. This is loaned, and an obligation taken to repay its nominal amount in gold and silver or bank notes at par. Is this exchange? Did the defendant sell his money at a discount in order to obtain par funds? No, the complainant did not appear in the character of one wishing to buy, nor lite defendant as one wishing to sell, depreciated paper, he’ appeared in the character of a borrower, and the defendant stood up as a lender of depreciated bank notes, merely asking that their nominal value should be paid him in gold and silver, when in the market each hundred dollars of them ivas not worth more than seventy-five dollars. That the whole dealing was a lending and not a selling of bank notes, is very evident from the bill and answer. But it is said that the money was to have been paid, and was partly paid at New Orleans. This can make no alteration in the contract. The defendant and complainant were both citizens of Termes* see, and made the contract in Tennessee, which, by the laws of the State, was usurious. This species of fraud upon tile law would soon destroy the salutary influence of our law against usury, if countenanced by the courts. A pretence so flimsy cannot hide the usmy in the transaction, and defeat the law. This contract took its character at its inception, and the introduction of New Orleans as a place of payment, will not change it, but if void by the law bore for the excess, would be void every where. Story on Con. of Laws, 242, 243; Arnot vs, Redfew; 12 Eng. Com. Law Rep. 39; S.. C. 2 Carr & Payne, S8; 3 Ter. Hep. 425, Hosford vs .'Nichols; 1 Paige’s Cb. Rep. 220; 2 Kaime’s Equity, B. 3, ch. 8, sec. 4; 7 Term Rep. 24Í. .
    
    If so shallow an evasion would repeal the statute, the money lender would soon introduce the laws of that country where any interest was allowable, no matter how exorbitant, by making the note for the money payable there. Parties cannot contract in Tennessee for the doing an act which is unlawful in Tennessee, by stipulating to do it without her limits, such contracts would not be enforced, because against the legal policy of Tennessee, nor a performance of it suffered to stand if oppressive and iniquitous in its nature. But it is said the defendant did not intend to take usury, he only intended to exchange his money for par funds. Why did ho not then take par funds to the actual value of his depreciated bank notes and a reasonable interest? Why, if it was as he contends, for the accommodation of both parties, did he not take their actual value and lawful interest to be paid in par funds? The defendant says he thought it was for liis accommodation, and I do not doubt it, and that he supposes complainant did, or he would not have borrowed. So always thinks the man who borrows money at an exorbitant interest; but® this never saves the contract front the taint when usury has intervened. I can see no difference between this contract and the cases cited in 1 Yerger, 243, 444; I Peters, 37; 2 Peters, ^ °
    
    3. The next inquiry is, has a court of equity jurisdiction in a case of usury to grant relief? When the money has not been paid, the courts have, upon application, set aside the contract for the usury, and granted relief by enjoining the collection of (he excess over the principal and lawful interest. Coleman vs. Childress, 6 Yerger’s R. 39S; 3 Rand. Rep. 214; 1 John. Ch. Rep. 36S; 3 Do. 395; 4 Mon. Ky. Rep. 433; 5 Do. 394, 470; 4 Hen. and Munf. 463.
    But it is said that the nt.oney has been paid in this case, and that both parties being engaged in the breach of the usury law, and both equally guilty of a violation of that law, the borrower having made a voluntary payment of the principal and excessive interest, cannot recover it back. This position is not correct, the rule does not apply to such a case as the present. The statute against usury is made to protect the needy and oppressed from the griping and avaricious money lender. The rule is, when contracts are prohibited by positive statute for the sake of protecting one set of men from another set of men, the one from their situation and condition being liable to be oppressed and imposed upon by the other, then the parties are not in pari delido; and in furtherance of these statutes, the person injured after the transaction is finished may bring his action and defeat the contract. And the payment of the money will not alter the case in a court of equity, as it ought not to have been paid, and it is iniquitous in the lender to retain what it was illegal to recover. The right of the borrower of money, who has paid principal and illegal interest, to come into a court of equity and have the excess above the principal and legal interest refunded, is well settled; and is called by Chancellor Kent “a commanding equity.” Talbot’s Ca. in Eq. 37; Powell on Con. •123; 2 John. Ch. R. 182; 6 John. Ch. R. 95; Comyn on Usury, 81, S2 and 83, reprinted 5 Law Library. So it hás been held and is now settled, that it may be recovered at Liw in an action for money had and received. 20 John R. 290; 2 Strange, 915; Chitty on Con. 193; 8 East. 383; Cowper’s Rep. 200, 792; 2 Douglass, 697, 472; 2 Burrow Rep. 1005; Powell on Con. 123; Talbot’s Cas. 37; Comyn on Usury, 79; Reprinted 5 Law Library. .
    In this State it has been decided by this court, that a court of equity upon the same principle will decree a deed founded upon gaming to be delivered up and cancelled. 2 Yerger’s Rep. 524.
    3. No statute of limitations, or lapse of time, has operated to bar the complainant’s equity. [It is true, that the larger portion of the interest was paid ten years previous to the filing of the bill; yet the transaction was continued down to about two years previous to filing the bill,' by new- securities being taken, new mortgages, deeds of trust, and liens of one kind or other, and the money not all paid until within two years before the bill was filed. In such case, neither the statute of limitations, nor lapse of time, will bar the claim.' The complainant had no right to sue, to recover back the usury, until he had paid all the principal and legal interest. This was not done until within two years. In such case, the usurious payment would be applied as a payment of principal and legal interest, and the excess held to have been received within the time. 6 John Cb. Rep. 103; Talbot’s Gas. 37.
    
      John J. White, of Gallatin, for the defendant.
    There are several grounds which may be relied upon, by the defendant, in this cause; First, the substance of the bill must contain ground for the relief, and the material facts, on which the complainant relies, must be so stated as to put them in issue. 10 Wheaton, 188, Car-mical vs. Banks; 11 Wheaton, 103, Hardyital vs. Har-dyital; 1 J. C. R. 184, Lyon vs. Talmadge. Such is not the case here, there is no charge of usury in the bill. ■ Second, The transaction complained of, is of so stale a character, that a court of equity would not give relief. This bill was filed the 1st of March, 1833, the usurious payments are alledged to have been made in New Orleans in the spring of 1823, and on the 30th of July, 1823, the settlement was made between them, in which this ten per cent, was added for exchange. 2 J. Chan. 191, Day vs. Durham; 1 Aik. 494, Prince vs. Heylin; 1 Vernon, 362; 1 Vez. and Beams, 246; 2 Vez. Jr. 87; 2 Schoales and Lef. 629, Hovenden vs. Lord Annesly; Sugden on Vendors, 278-9. It is true, the final settlement of these notes was not until August, 1832, but that does not change the principle, for it was in the power of complainant at any time to have filed his bill for relief, if there was any usury in the transaction, or any other ground of equity for coming into this court. See 1 John Chan. 517, Hamilton vs. Cummings; 7 Vez. 20. Third, The facts disclosed in the testimony do not establish a case of usury. What are they? In the winter of 1822-3, the currency of the State of Tennessee consisted of the Bank of the State of Tennessee, and branches of the State Bank of Tennessee, and the Nashville bank and branches. In all domestic transactions, or the internal commerce of the country, payment of debts, purchase of produce, &c. the notes of these banks were received at par, but not in exchange for specie. The State bank and branches, except the branch at Nashville, not having refused to pay specie for their notes, and the bank of the State being fixed upon a basis that was considered worthy of confidence. It was the general custom of the country at that time, for-farmers to freight their produce to New Orleans, and risk the market at that place, and to receive an advance from the freighter in Tennessee currency, and finally to receive the nominal amount, for i • i • n i i • ft, . , winch it sold below, in Tennessee currency, without any difference of exchange. It was likewise common for merchants to advance to freighters Tennessee funds, in order to enable theny"to advance to the farmer on his produce, it being the understanding in such cases, that the merchant who made advances was to receive the same sum, in numero, in New Orleans'. The freighter lost nothing upon the money thus advanced by the merchant, because he paid over the same kind of funds to the farmer, and then paid the amount advanced by the merchant, to him in New Orleans, out of the proceeds of the produce which he freighted — the produce being sold iri New Orleans for specie. The inducement on the part of the merchant was to realize his funds below, and that of the freighter to enable him to obtain freight. The loss in such case, if any, fell upon those whose produce was thus freighted, the farmer always lost the difference of exchange, and not the person who freighted the produce. It was not the custom of the merchant to charge interest upon the sum advanced, nor would he have advanced money for such consideration — the object of the merchant being the exchange.
    It was likewise profitable to the freighter, as it enabled him to obtain freight which he found it difficult to procure, unless he could make the advances which the owners of produce required, and by making the advances, he could freight at a higher rate. The difference between Tennessee funds and specie, according to the testimony of Mr. Boddie, in the fall of 1822 was ten per cent, which rose, in the spring of 1823, to twenty per cent, and continued to rise until it reached thirty. '
    This money, according to the testimony of the same witness, was advanced to complainant, to enable him to procure freight to New Orleans, and the object of defendant, in making the advances, was by having the money paid in New Orleans, to enable him to procure that kind of funds which would answer his purposes at the East, where his principal purchases were made.
    It appears that $3840 31icls. was advanced complainant, in Tennessee currency, that some payments were made by him in the spring and summer of 1823, at New Orleans, and upon the balance remaining unpaid in their settlement, in July, 1823, ten per cent was charged for the difference of exchenge, and no interest included.
    Is this a case of usury, or is it not one simply of exchange, which is defined to be “the act of giving one thing or commodity for another, the form of exchanging one debt or credit for another;” or “the receiving or paying of money in one place, for an equal sum in another, by order, draft, or bill of exchange?” It seems to me that it is unquestionably the latter.
    In order to constitute the offence of usury, an amount must be reserved by way of interest which will exceed the rate of six per cent per annum. In this case no interest at all was reserved or agreed to be given for the money which was advanced.
    The principal alone was agreed to be paid in New Orleans, in the currency of the country there, for which produce was sold.
    How did the parties themselves regard it, for the court will look at their intention? The intent of the bargain is the material thing, as said in Earl of Chesterfield vs. Jansón, 2 Vez. Sen. 143. Did'they suppose that the one was to pay, and the other was to receive •usurious interest for the money which was advanced? Certainly not. Boyers would not have loaned the money at all upon such consideration, according to the testimony of a witness, the object was exchange. Boyers wanted eastern funds, to enable him to meet his engagements at the north; Weatherhead would have that kind of funds in New Orleans, upon' the sale of the tobacco .there which he had freighted.
    To enable him to get that freight, and at a higher rate, it was necessary for him to have money to advance to the t> ^ 11- -mr i i. i • larmer. Boyers advanced this money to Weatherhead in Tennessee currency; he pays it over to the farmer, who is willing to receive that currency, because it answers all his purposes. Weatherhead agrees to pay the amount advanced, without interest, in New Orleans,'in sound currency — he can do it without injury, or loss to himself, because he will have a righ#to retain out of the proceeds of the sales, dollar for dollar, the-amount advanced to the farmer in Tennessee currency.
    Where is the usury in all this? It comes neither within the letter nor the spirit of the slatute against usury; nor within any of the mischiefs which it was- intended to prevent. No advantage either was or could be taken of Weatfierhead by this sort of contract,it was as much for his benefit as that of Boyers. A decree now that Boy-ers should refund to Weatherhead twenty-five per cent, the difference of exchange between Tennessee funds and sound currency, upon the amount paid in New Orleans, and the ten per cent allowed for exchange upon the balance unpaid in their settlement of July, 1823, would be giving Weatherhead a profit, to which upon no principle of equity or good conscience can he be entitled. If any body has a right to complain, it is the farmer, who has received the Tennessee money from Weatherhead, and who is alone injured and not Wea-therhead.
    It is true the courts will not permit the statute of usury to be evaded by any shift or contrivance, but at the same time, they will not, contrary to the intention of the parties, force a contract within the statute, which does not come fairly within its provisions. To make a contract usurious within the statute, there musf be a loan. This was never intended to be a loan, it is not stated in the bill to have been a loan, but money advanced to complainant in one place to he repaid by him in another. “It is essential to a loan, that the money is in all events 
      to be repaid with interest,” says Lord Reddesdale, “except m the cases to which Lord Hardwicke and Mr. Justice Burnett,alludes in Chesterfield vs. Janson, where a contingency is introduced merely for color and for the purpose of avoiding the statute.” Luky vs. O’Donnell; 2 Scho. and Lef. 470. In this case, as has been before remarked, no interest was to be paid, the principal alone was to be repaid; an# although the rate of exchange might, in one month, be twenty-five per cent, the next it might only be at five. The reward given must likewise be for forbearance, or giving a day of payment. The bill does not state whether any, or what time was .agreed to be forborne, or that it was to be paid in sound funds, in consequence of the forbearance; it may be, and no doubt was in part, in consequence of the uncertainty when it would be paid, and the trouble, expense, .and risk in receiving his money at such a distant point, and its remittance.
    It will be recollected from the proof, that it was the general custom of the country at that time, for Tennessee money to be advanced to farmers and freighters, to be repaid in sound funds in New Orleans. This to be sure will not avail, as it is said in Durham vs. Day, 13 John, 40. and Durham vs. Gould, 16 Do. 374, when the transaction comes within the statute; but as said by Lord Mansfield, in Floy vs. Edwards, Cowp. 112, it goes a great way to explain a transaction. In Renner vs. Bank of Columbia, 9 Wheaton, 5S7, the court says, “Evidence of the usage is admissable, for the purpose of explaining the understanding of the parties, as to their contract.” The universal custom, which is proved to exist here, would certainly go far to show the parties did not intend an illegal transaction, and consequently, if it was doubtful, to free the transaction from the taint of usury.
    There are a good many cases in the books, although not exactly analogous, may be referred to by way of illustration. Chargd by bill broker, m the country, of , , ° c , ... VV • ten per cent commissions, in respect oí bills payable m London, not usurious. Exp. Hanson, 1 Mad. 114. A reasonable commission, beyond legal interest, for extra incidental charges, as upon agency in the remittance of bills, not usurious. Bayrus vs. Fry, 15 Yez. 120. Reasonable commission, 2s. 6d. per cent, allowed to a country banker on discounts, though for a person resident in London, and paid through a banker there, 17 Vez. Jones Exparte, 332: to the same effect. 1 Bos. and Pull. 144; 2 Term. Rep. 52. The plaintiffs, who were in the habit of receiving the produce of the defen-dnnt, a country merchant, and freighting the same to New York, and accepting his drafts upon an agreement, that the produce was to be in their store at ór before the time the drafts became payable, charged a commission of two and a half per cent on all advances made by them, to meet the drafts, when the defendants had no funds in their hands, and the interest from the time the different itetiis of their account became due; it was held that the commission in this case was not usurious, but a customary allowance for the trouble and inconvenience of transacting business. 19 John, 160, Trotter vs. Curtis. In the case before referred to, of Bayrus vs. Fry, 15 Vez. 120. Hanson, the person making the claim of commissions, having advanced money upon the terms of receiving interest at five percent, took bills upon Ham-burgh, which bills he sent there, for the purpose- of procuring acceptance and payment, and a remittance of the amount. The commission was charged upon that transaction and allowed as reasonable.
    In this case money is advanced to Weatherhead in Tennessee currency, from October IS22 to 1823, without interest, to pay over to the owners of produce, to enable him to obtain freight, and which answers his purpose, dollar for dollar, in the same way as if it had been gold or silver; be then gives his notes for the amount advanced, payable the 1st of May, 1S23, in New Orleans, in the currency there, and which is no loss to Weatherheed, because his produce is sold for that sort of funds. Exchange ,was fluctuating, in the fall 1822, it was at ten per cent, but continued to rise till it reached twenty-five or thirty, and it might have fallen to five per per cent. Under these circumstances, when the object of the parties was evidently exchange and not usury, and when it was sanctioned by the universal custom of the country, is it unconscientious that Boyers should have the benefit of the exchange and not Weatherhead? Is it more than a fair compensation for the advancement of the money, the uncertainty, .the risk, trouble and expense of its collection at a distant point, such as New Orleans and its remittance, and will it not be regarded by the court as a fair matter of exchange, and not a cloak to cover, an illegal transaction of usury?
    The authorities upon which the court below decided this cause against the defendant, are the Nashville Bank vs. Hays and Grundy, and Lawrence vs. Morrison. 1 Yerger, 243, 444. The first case decides this principle. A loaned to B $5000, in the notes of a bank at their nominal value, which notes were then selling at a discount of twenty-five per cent; B was to repay the $5000 in sixty days, in sound currency — this was held to be usury between A and B. In the latter case, a note was executed for $607, payable in certain bank notes; it was afterwards agreed to extend the time of payment, and a note was executed for $607, payable in specie, the bank notes were only worth about $456 — this was held to be usury. I do not in any way question the force or authority of these decisions, but the slightest examination will show, that they have no application to the present case. They are cases of (ordinary) borrowing and lending, and decided upon that principle; whereas the case before the court, as is shown from the proof, . r i i -i , . . , , ris relerable entirely to another principle, that ot exchange, which has never been regarded as usury.
    With regard to the ten per cent, included in the notes upon their settlement in July, 1823, it is unnecessary to remark at length, if the court should “regard the original transaction as a fair matter of exchange and not one of usury, It appears, both from the bill and answer, that this ten per cent was not for the interest of the money, but for the difference of exchange. Wea-therhead was to pay this money in New Orleans, upon his failure to do it, Boyers ought to have beeu indemnified; if he had received the full difference of exchange, which was between twenty and thirty per cent, it would not be unconscientious for him to have retained it. Instead of that, it is settled upon the most fair and liberal principles,.less than one half the exchange is allowed, and without interest — the parties had a right to settle and compromise the matter in this way. Even if the ten per cent had been allowed by way of interest, which it was not, inasmuch as it was not originally reserved in the contract, and as there was no obligation to pay any interest at all, it would be considered rather as a gratuity, which Weatherhead had a right to make, than a reception of usury. If an agreement be not usurious when concluded, no after event can make it so. 3 Term. Rep. 539: 1 Peters, 43.
    There is another point of view in which this matter may be regarded. Boyers seems to havé acted throughout with great justness and fairness to Weatherhead; not only in the indulgence which he gave him for the payment of the money for more than nine years, but at last, when there is no other alternative, but to resort to his deeds of trust and his executions to make his money, and when it was in his power to have realized the whole of his debts in cash, or to have purchased in his property at greatly less than its value, he enters into an arrangement with Weatherhead, and which he never would have made, if he had supposed a claim of this kind was to be set up against him, by which he receives property at valuation, and which would not have commanded in cash within $1500 of what was allowed for it. Under these circumstances, it is certainly with a poor grace, that he can now come into this court and set up this claim against Boyers, on account of usury.
   Peck, J,

delivered the opinion of the court.

Several questions are drawn in issue by the pleadings in this cause; but the proof has narrowed our examination to those connected with the charge of usury. This is repelled upon several grounds, the principal of which will be noticed. It is said that the charge in the bill of complaint does not make a case of usury; that the terms of contract, as they are laid, amount to a mere exchange of currency: Boyers to advance notes of the Bank of Tennessee, then greatly under par; an equal nominal amount to be paid by Weatherhead at New Orleans, in specie, or notes on the Bank of the United States, which, it is not questioned, were at the time equal to gold or silver. Both the admissions in the answer, and the proofs show, that the money advanced was by way of loan. The application was made to borrow money; the terms on which it was to be advanced were entered into, and the advances made. As no shift or device, however plausible the pretext, will take a transaction, in itself usurious, out of the operation of the statute, it will follow, that exacting property at a price greatly under its value, or the withholding an equivalent for the money secured, where the transaction is a loaning or giving day, will make the transaction usurious. If the courts did not proceed upon such premises, the invention of man would always evade the statute; the oppression on the one side, and advantage on-the other, would be a certain consequence of dealings between the oppressed and him having the power to exact his own terms. Therefore, as it is not to be tolerated for men to do indirectly what they are forbid to do directly, the courts of justice have always stripped the transaction of its guise, and pronounced upon it according as the intention could be spelled out. That the transaction was usurious, abundant authorities prove: 1 Yerg. 243, 444: 2 Peters 527: 1 Peters 37: 12 Pickering 565.

But it is supposed, that because the charge in the bill is not made in direct terms, that this was a usurious dealing; that the pleadings will not let in the proofs. We hold this to be a mistake. The facts and circumstances charged and admitted, make out the usury. These being before us, we apply the terms; for it is always better to make a full charge of substantive matter, to which terms of test can at once be applied, than to be lame in these and redundant in terms the facts will not support. 8 Wendell’s Rep. 339.

Having ascertained the kind of case we have, the next question is, can the money exacted and paid, over and above principal and six percent, interest, be recovered back. To this point, and to sustain the affirmative of the proposition, that both the courts of law and courts of equity have exercised jurisdiction in such cases, the authorities are ample. Talbot’s Cases in Equity 37: Powell on Con 128: 2 John Ch. R. 183: 6 do. 95: Comyn on Usury 79, 81, 82, 83: reprinted 5 Law Library: 20 John R. 290: 2 Strange 915: Chitty on Cont. 192: 8th East. 383: Comyn Rep. 200, 792: 2 Doug. 472, 697: 2 Bur. 1005. As, therefore, it may be recovered back, this casein equity affording matter proper for an account, account will be entertained.

The next question in order to be considered is, whether time, or the statute of limitation, operates to bar inquiry and relief. The transactions commenced in 1822 or ’23, and were continued up to within two years next before filing the bill. When the estate of Weatherhead, the oppressed man, was transferred and received at valuation, by Boyer and the other creditors; and even at the time of rendering the decree, Boyers held against the complainant a judgment unsatisfied, for which he claimed a set ofF, and which the chancellor allowed him. Where the transaction was a continued one; new dealings; new advances; new securities for money; mortgages upon the estate of the complainant; some of the claims outstanding and unsettled up to the time of filing of the bill; these, when taken together, make a case where neither time nor the statute of limitation can have effect. 6 John. Ch. Rep. 103: Talbot's Cases in Equity 37. The case upon the pleadings and proofs is a plain one, entitling complainant to relief. But we are far from thinking that Boyers designed to act oppressively; a course of trade and exchange, as it is called, of the currency of the country, grew out of the banking mania of the period when most of the transactions took place. No doubt it Was common to advance notes under par, to be replaced in future in notes at par. Many cases occurred, where it looked like accommodation to do so; still the semblance of accommodation does not remove the stain of usury, although it may be made under circumstances calculated to soften its character, and remove the impression of any design purposely to overreach or oppress. It is more than probable, that the object in filing the bill, was to open the account as to the eleven hundred dollar draft, which Weatherhead honestly thought he had not got credit for, but in which he was mistaken; still, though this might be the principal grounds of coming into this court, it does not follow that justice must be withheld as to the matters rightfully charged, and sustained by the proofs.

Decree affirmed.