#### * John K. Simpson, *Qui tam,*&c., *versus*Isaac Warren.

A receives B’s note for 400 dollars, payable at a day certain, and delivers him the amount secured by the note, deducting interest, for the time the note has to run, at the rate of two per cent, per month, on the 400 dollars. In an action by A on the note, the defendant had judgment, on the ground that the contract Sued was usurious. In an action for the penalty prescribed by the statute, it was held that A was not liable.

This was an action to recover the penalty prescribed, by law, (1) for taking usurious interest.

Trial upon the general issue before the *Chief Justice*at the last November term.

. The evidence in support of the action came principally from the testimony of one *Kettell,*a broker, who testified that a note, made by *W. B. Simpson,*January 15, 1817, for 800 dollars, payable in 60 days, and grace, to *Daniel Pomeroy,*and endorsed by him and *Thomas Holt,*was put into his hands by the said *Simpson*to sell in the market; that he sold it to the defendant at a discount of two per cent, per month; that when the note became due, *viz.,*on the 19th of March, another note was made and endorsed by the same parties, for 600 dollars ; another, May 21st, for 500 dollars ; another, July 24 th, for 450 dollars; that all these notes were given to him by the said *W. B. Simpson,*to sell as before stated, and were all successively sold to the defendant *Warren*at the same rate of discount ; and that when the last-described note became due, a new note for 400 dollars, with the same promisor and endorsers, was made and delivered to him in the same manner, and for the same purpose; that he offered this last note to several persons, who were in the practice of buying notes, the defendant beingvthen absent from home; but not being able to sell it, he pledged this, with another note, for 1200 dollars, to a broker of whom he borrowed 450 dollars, to take up the said note for that sum, which was theui due; and that upon the defendant’s return he sold to him the said note for 400 dollars, at the same rate of discount as before men tioned.

*409The several notes before described were lodged in one of the banks for collection; and it appeared, from the testimony of an officer of the bank, that they were paid as they became due, except the last-mentioned one.

The said *Kettell*further testified that no funds were furnished by said *Simpson,*the promisor, to pay the notes as they became due, except the difference between the note * that had become due and the note given him to sell; but that he, the broker, knowing, from the defendant’s course of business, that he would not buy the new notes until the preceding one was paid, advanced the money to pay the notes, borrowing it for that purpose, without any request or knowledge of the said *W B.*Simpson; the said *Kettell*having heard the defendant, on other like occasions, state that he wished to break the chain of communication between notes. He also testified that he was directed to offer the said notes to the defendant, but was not restricted to him in the sale; and that, with respect to the last-mentioned note, it was given him by *Simpson*for the purpose of paying, with the proceeds, the preceding note for 450 dollars; that he was directed to apply to the defendant, but was at liberty to sell it to any one else; and that he offered it to the defendant, after his return, who took it at the rate of discount before mentioned. The witness had never communicated to the defendant for whose use the note was sold, or who was to receive the money; nor was there any intercourse, to his knowledge, between the said *Simpson*and the defendant, or between the witness and the defendant, relative to the renewal of the notes.

*Thomas Molt,*the second endorser upon the note, testified that, on the day the note for 450 dollars became due, it lying over in the bank, the defendant called on him to inquire why it was not paid. The witness told him that the money was due from *Simpson,*and that he, *Simpson,*would pay it by renewing the note, and paying a part of the sum due. The defendant said he should like to have it paid; but the witness told him it could not be paid except in the manner he had stated. He had called upon the witness once or twice before, and the witness understood him to agree that the note should be renewed ; although he said that he should rather not renew it, as it had been renewed long enough.

The defendant *Warren*brought his action against *Pomeroy,*as endorser of the last-mentioned note for 400 dollars; * and he failed of recovering, on the ground that the note was given on a usurious contract, the foregoing testimony of *Kettell*being all the evidence given at the trial of that action.

*410The jury were instructed that, as the action was upon a statute which created a great penalty for the offence of usury, they ought to be fully satisfied that the offence was proved, before they charged the defendant with the penalty ; that, taking the testimony of *Kettell*alone, no usury was proved, because he did not testify of any corrupt bargain, as set forth in the declaration, nor of any loan, but of the purchase of the note; and although there might be grounds to suspect the transaction was different from the representation of .,e witness, yet that they could not supply any defect in testimony by conjecture. They were further told that, if they were satisfied that the appearance of a sale was resorted to for the purpose of covering a usurious loan, they were to disregard the appearance ; and they were referred to the testimony of *Holt,*and were directed that, if they believed that the defendant, when he took the last note, did in fact reloan the money before lent to *Simpson,*it might be considered as a usurious loan.

The verdict was returned for the defendant; and a new trial was moved for, on the ground that the verdict was against the evidence in the case.

*Orne*for the plaintiff.

*Peabody*for the defendant.

(1)

*Stat.*1783 c. 55

Parker, C. J.

It is admitted that the note, on which the usurious interest is alleged in this action to have been received, has not yet been paid ; and, upon that account, we are of opinion that un’awful interest has never yet been taken. Indeed, judgment has been rendered against the defendant *Warren,*in his suit upon the note, it having been avoided as usurious; and if he should be held answerable in this suit for the penalty, he will have lost twice the whole amount of the sum loaned—which we think is not within the intention of the legislature, as expressed in the statute.

* The authority principally relied upon by the plaintiff’s counsel is the case of *Loyd, qui tam, &c.,*vs. *Williams.*(2) There, the borrower received the whole sum agreed to be loaned, and paid out of it to the lender, as and for interest, a sum exceeding the lawful interest. This was held to be a taking, from which the statute of limitations began to run.

The case before us was different. The whole sum loaned was not paid over, but the balance, after deducting the discount; so that, in fact, 400 dollars were never lent, as stated in the declaration, but a less sum, for which the borrower promised to pay 400 dollars, which was the principal lent and the excessive interest. The defendant has, then, received nothing, either principal or interest, and *411therefore he cannot be liable for the penalty. This is like the case of *Maddock, qui tam,,*&c., vs. *Hammet & Al.,*(3) in which the same 'principle is settled by the Court of King’s Bench.

The case of *The Commonwealth*vs. *Frost*(4) has been cited in support of the action ; but the facts in that case were different. There, upon every renewal, *Clough,*the borrower, went with the usury in hand, and paid it over as interest to *Frost,*who received it as such. He therefore was liable, whether he should ever receive the principal or not. In the present case, nothing was paid or received as interest, and therefore the penalty has not accrued, *(a)*

*Judgment on the verdict.*

(2)

 3 *Wils.*250.

(3)

 7 *D. & E.*184.

(4)

4 *Mass. Rep.*155.

(a)

*Brook*vs. Middleton, 1 *Cowp.*445. — Barbe, *qui*tam, vs. *Parker*1 *H. Bl.*283.— *Borrowdale Al. v. t.*vs. Middleton, *2 Cowp.*53.