#### Fox v. Taliaferro.

Argued Thursday, February 13th, 1812.

1. Bond for Usurious Interest — Equitable Relief — Effect of Assignment of Bond.* — If a bond for usurious interest be taken, in consideration of forbearance to bring suit on a previous bond, which in its origin, was free from objection; it is competent for the obligor to obtain relief in equity against the . obligee, by having such usurious bond cancelled, or credit given him, for the amount of the principal and interest due thereon, against the original bond. And this right is not lost by the assignment of either of the bonds.

2. Same — Injunction against Assignee — Decree— What It Should State. — On a bill of injunction against the assignee in such case, the obligee being also a defendant, the court ought not to decree that the injunction be dissolved, and the bill dismissed as to the assignee, and that the obligee pay to the complainant the amount of such usurious bond ; but should appoint a reasonable time for the obligee to produce to the complainant the bond for the usurious interest, or a satisfactory acquittance therefor ; and in that event, should dissolve the injunction ; or (if he do not produce such bond or acquittance,) should make it perpetual as to so much ; — and, in the last event, a farther decree should be made that the obligee pay to the assignee the sum for which the injunction is made perpetual.

3. Same — Same—Reversal of Decree — Dismissal of Bill— Decree of Appellate Court. — And, if a decree dismissing the bill be reversed, and the injunction ordered to be re-instated, the court reversing such decree should moreover direct, that, if it shall appear that the whole amount of the judgment has been coerced from the complainant by the assignee, such farther decree shall not be entered in favour of the assignee, but of the complainant.

James B. Taliaferro filed his bill' in the Superior Court of Chancery for the Williamsburg: District, stating: that *Thomas B. Eox, previous to the 17th of May 1803, had become entitled by assignment to three bonds of his, which were payable on the same day, and carried interest from the 12th day of September 1802 ; one for 81. 14s. 0d., one for 1101., and the other for 1121.; that on the 17th May 1803, the said Eox was pressing him for payment, and, as he could not raise the money, proposed to indulge till .January 1804, if he would give him his bond for 451., which was the amount of interest to that time on the three bonds calculated at more than 10 per cent.; that the complainant, being unable to pay the debts, and fearing to be immediately sued on the bonds, which would distress him exceedingly and produce a sacrifice, was obliged to consent to the proposition, hard and oppressive as it was, and accordingly gave his bond for 451.; that, until the month of July 1805, the said Fox did not bring suit on any of those bonds ; but, then, he became so urgent that the complainant believed he would sue them ; and being still unable to pay, he was induced by Fox to give him another bond, (calculating Interest at about 10 per centum per annum,) for 691., who agreed to wait till the said bonds, calculating interest at that rate, should produce interest to that amount; that, on the 8th of August 1805, Fox represented that he had assigned the bond of 451. to Mrs. Nelson, and that she had sued him on the assignment, and he insisted that the complainant should pay him the amount, and interest thereon, which he accordingly did; that, very shortly after the bond for 691. was given, the said Fox assigned the bond for 81. 14s. to Samuel Stubbs, who assigned it to William Stubbs, who assigned it to Robert Greenhow ; a suit was brought thereon in the County Court of King and Queen, a judgment was obtained thereon, and the complainant discharged the whole amount, both principal and interest, without any deduction ; the bond for 1121., was assigned also to Samuel Stubbs, who demanded payment of the principal and interest without abatement; and the complainant gave him a draft on Richard Bowden & Co. for the amount, which draft they accepted, and paid one hundred and sixty seven dollars at least; and the cornplainant had no doubt but the *whole would be paid : the other bond, for 1101., Fox assigned also to Samuel Stubbs, who assigned it to Henry Fox, who instituted a suit thereon, and obtained a judgment for the whole amount of principal and interest; that execution issued on the judgment, and the complainant gave a forthcoming bond; *99that the said bond for 691. was placed in the hands of Benjamin Dabney, and the complainant consented to pay it, and mortgaged to the said Dabney lands of the value of four or five thousand dollars, to secure the payment: that these circumstances could not be given in evidence at law ; but he conceived himself entitled to a discount against the said judgment, “for the whole amount of the bond for 451., and interest to the time he paid it, and for the 691. bond :” he therefore, prayed that the said Henry Fox and Thomas B. Fox be made defendants ; and that the said judgment and forthcoming bond be in-joined, &c. and for general relief.

The complainant proved, by the subscribing witness to the bond for 451., that it was given in consideration of indulgence for the money which he owed Thomas B. Fox.

The defendant, Henry Fox, in his answer, said, that he knew nothing about the different transactions between Thomas B. Fox and the complainant, but thought it contrary to every principle of law and equity, that any credit should be allowed on his judgment on account of the usury stated; it being admitted in the bill, that the bond on which his judgment was obtained was given for a good consideration, and in no wise usurious. He farther answered, that about the month of May 1805, he applied for payment of the said bond, and the complainant then promised to pay it, so soon as he could make sale of a certain vessel; that the respondent, being in want of money, instituted his suit on the said bond, and, in a short time afterwards, met with the complainant, who then promised that he would discharge it, immediately on the return of his brother, who was gone to Norfolk to receive a sum of money due him there, for the said vessel, which had been sold.

The answer of Thomas B. Fox admitted that the bond for 451., “was given for addi- • tional interest in consequence of frequent ^delays in the payment of said bonds;” that, some time afterwards, upon a settlement of accounts, the complainant fell in his debt 691., and gave a bond for that sum; after which, the complainant met with him at Gloucester Courthouse, and informed him that they had made a mistake of 451.; whereupon, after some explanation, this respondent gave a receipt for the said amount; not one cent of money being paid, or any other consideration received.

On the 13th of October 1807, the chancellor dissolved the injunction, (which had been granted to stay all proceedings on the judgment and forthcoming bond,) as to 691., with the interest thereon from the 12th day of September 1802, and ordered that the complainant amend his bill, and make the representatives of Benjamin Dabney deceased defendants. (1) On the 30th of June 1808, the injunction was wholly dissolved, and the bill dismissed, as to the defendant Henry Fox, with costs ; and it was decreed that Thomas B. Fox pay to the complainant 451., with six per cent, interest thereon from the 1st day of January 1804, till paid, and the further sum of 691., with the like interest from the 1st day of July 1805, till paid ; also his costs by him expended in the prosecution of this suit.

On the 21st day of July 1808, on the motion of the defendant Thomas B. Fox, the last decree was set aside, for reasons appearing to the court, and the cause was again heard on the papers formerly read, and a document verified by an affidavit, shewing that the bond for 451. was, in fact, included in that for 691. ; which being considered, the chancellor decreed, that the injunction be wholly dissolved, and the bill dismissed as to Henry Fox with costs; and that the defendant Thomas B. Fox pay to the complainant the sum of 691., with six per cent, interest thereon from the 1st day of July 1805 till paid, and costs as aforesaid.

From this decree Thomas B. Fox appealed.

*On Saturday, the 26th of March, 1814,

*

Usury. — See monographic *note*on ‘ Usury” appended to Coffman v. Miller, 26 Gratt. 698.

Same — Application to Payment of Debt. — Where excessive interest has been paid on a debt, it is well settled that, as long as the debt is unpaid, the debtor may have the usurious interest applied as apayment on the debt. Reger v. O’Neal, 33 W. Va. 165, 10 S. E. Rep. 377, citing principal case. See also, *foot-note*to Spengler v. Snapp, 5 Leigh 478.

Decree between Co-Defendants. — Where a case is made out between defendants by evidence arising from pleadings and proofs between plaintiffs and defendants, a court of equity has a right and often is bound to make a decree between the defendants. Braxton v. Harrison, 11 Gratt. 53, citing the principal case. See further, on this subject, *foot-note*to Blair v. Thompson, 11 Gratt. 442; *foot-note*to Ould v. Myers, 23 Gratt. 384; monographic *note*on “Decrees” appended to Evans v. Spurgin, 11 Gratt. 615.

(1)

 Note. No proceedings against Dabney’s representatives, appeared in the transcript of the record. —Note in Original Edition.

JUDGE) ROANE)

pronounced the court’s opinion.

The court, considering that, although the bond, on which the judgment and forthcoming bond injoined in this case were founded, was, in its origin, free from objection, yet, an usurious contract of forbearance of the money due thereby having been engrafted thereupon, it was competent for the appellee, coming to be relieved as to the usurious interest, to obtain such relief, as against Thomas B. Fox, the original party to the contract, either by cancelling the bond given for the said usurious interest, or giving him credit for the amount of the same against the bond intended to secure the principal; and that this right was not lost to the appellee by the assignment of either of the said bonds ; is of opinion, that the decree in this case, dissolving the injunction, and dismissing the bill as to Henry Fox, instead of giving the credit, or making the deduction aforesaid, is erroneous ; inasmuch as, by merely decreeing a payment by the appellant Thomas B. Fox of 691. (the sum forming the usurious interest,) with interest thereon from the 1st of July, 1805, to the appellee, the risque of Thomas B. Fox’s insolvency is unjustly thrown upon him. That decree is therefore reversed with costs ; and this court proceeding, &c. is of opinion, and accordingly decrees, that the said injunction shall be re-instated as to the said sum of 691. with interest thereupon from the 1st of July, 1805 : — provided that, whensoever the said Thomas B. Fox shall deliver to the appellee his bond, given for the said sum, and assigned to Benjamin Dabney, or produce to him a satisfactory acquittance for the money due thereby, executed by those having the right to the same, the said injunction as now decreed to be re-instated shall stand dissolved. But in the event that the said appellant Thomas B. Fox, shall not produce and deliver up such note or acquittance, within a reasonable time, to be prescribed by the Superior Court of Chancery, (as, in that case, he would throw upon Henry Fox the loss of a sum for which he has paid a valuable consideration,) this court further decrees that, in that case, the said Thomas B. Fox shall be decreed to pay to the said Henry *Fox the said sum of 691. with interest as aforesaid ; saving to the said Henry Fox his remedy against *100Samuel Stubbs, from whom he received the bond aforesaid by assignment.

And whereas, in consequence of the dissolution of the injunction in this case, by the Superior Court of Chancery, the money now in controversy may have been coerced from the appellee by Henry Fox ; in which case the injunction hereby awarded would be wholly inadequate to procure for the appellee an indemnity against the said bond assigned to Benjamin Dabney as aforesaid; it is hereby further decreed and ordered, that, in the event last supposed, and in the further event of a failure on the part of Thomas B. Fox to produce the bond or acquittance as aforesaid, that, then and in that case, the appellee shall be substituted for the said Henry Fox as to the decree against Thomas B. Fox for the 691. with interest as aforesaid, in that case herein before provided for and in favour of the said Henry Fox : — And the cause is remanded to the Superior Court of Chancery, to be finally proceeded in pursuant to the principles now declared.

JUDGE FEEMING,

dissenting, pronounced the following separate opinion.

The court is unanimously of opinion, that the appellee is entitled to relief against the bond taken on an usurious consideration, but differ as to the mode of redress, and also as to the person from whom it ought, in the first instance, to be obtained. And, that the grounds of my opinion may be clearly understood, I shall make a brief statement of the case.

The appellant, Thomas B. Fox, held three of the appellee’s bonds, one for 81.14s. the second for 1121. and the third for 1101.; each carrying interest from the 12th of September, 1802. On the 17th of May, 1803, the appellant, in consideration of forbearance till January, 1804, took the appellee’s bond for 451., and, in July 1805, on the same ground, extorted another bond for 691. in which (it appears from documents in the cause,) the bond for 451. was merged, though the appellant had assigned it to Mrs. J. Nelson, who put it in *suit; and, as the appellee alleges, it was by him paid off. The three bonds first mentioned were severally assigned to different persons ; and that for 1101. came into the hands of Henry Fox; and, after Taliaferro, the obligor, had promised him pay,ment, he put it in suit, obtained judgment, and issued execution thereon, which being levied, Taliaferro gave a forthcoming bond : and that for 691. taken on an usurious consideration, was, by the appellant, put into the hands of Benjamin Dabney, (since deceased,) to secure the payment of which, Taliaferro executed to him a mortgage of a tract of land. Taliaferro obtained an injunction to stay further proceedings on Henry Fox’s judgment and consequent forthcoming bond; and prayed that the bonds for 491. and 691. might be credited out of Henry Fox’s judgment. It having appeared, at a second hearing of the cause, that the usurious bond for 451. was included in that taken for 691. ; the chancellor finally dismissed the bill as to Henry Fox, with costs, and decreed that Thomas B. Fox, (the usurer,) who was also a defendant to Taliaferro’s bill, should pay unto the plaintiff the sum of 691. with six per cent, interest thereon, from the 1st day of July, 1805, till payment, and his costs by him expended in the prosecution of this suit. From which decree Thomas B. Fox appealed to this court.

There is no doubt with any member of the court, but that Taliaferro ought to be fully relieved against the bond exacted from him on an usurious consideration : but it seems to me that his relief ought to be obtained, in the first instance, and immediately, from Thomas B. Fox (the usurer:) therefore, I think, the bill was properly dismissed against Henry Fox, the fair assignee of the bona fide bond for 1101. and the decree correct against Thomas B. Fox, as far as it went. First, because there is no imputation of fault, or unfair dealing on the part of Henry Fox ; to whom Taliaferro assumed payment of the bond, both before and after it was put in suit: Secondly, because he had a prompt and legal remedy against Thomas B. Fox, (who alone had injured him by his extortion,) by bringing a bill jointly, against him and Benjamin Dabney, into whose hands the usurious bond had fallen. Had he done *so, the bond, thus unrighteously obtained, would have been immediately declared void, and cancelled, and an end put to the business. And thirdly, because the appellee seems perfectly satisfied with the decree as it stands.

It appears to me, however, that Taliaferro, at the institution of his suit, had something further in view than barely cancelling the usurious bond. The judgment and execution of Henry Fox, obtained on a bona fide bond, on which he had given a forthcoming bond, bore hard upon him ; and by the manner of bringing his suit for relief against the usurious bond, he made that a pretext for getting rid of his debt to Henry Fox altogether ; for he prayed relief against both the bond for 451., and that for 691. though it came out in evidence, (as before noticed,) that the former was included in the latter. But, admitting for a moment that he had an equitable right to a deduction of the usurious bond, (which he had never paid,) out of the bona fide bonds, first mentioned ; those for 1121. and for 181. 14s. ought to contribute in proportion to their respective amounts, and not let the whole fall on that for 1101. assigned to Henry Fox ; — but my opinion is, that it should be deducted out of neither.

But it seems to me, that the decree is erroneous in this : that, as it does not appear whether Taliaferro ever paid off the bond of 691. (to secure the payment of which, he had mortgaged property to Benjamin Dabney,) instead of directing the 691. with interest, to be paid to Taliaferro, the money should be lodged in court, there to remain, until that matter be ascertained, under the control and direction of the chancellor. And that Taliaferro be reimbursed all expences incurred in consequence of his mortgage to Dabney.

But a majority of the court being of opinion, that the appellee be relieved out of the judgment obtained against him by Henry Fox, on the assigned bond of 1101. the decree reported by Judge Roane is to be entered as the decree of this court.