Case Name: The President and Directors of the State Bank v. Henry B. Hunter, Executor of Henry Hunter, Peter Evans, and Gray Little
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1826-12
Citations: 1 Dev. 100
Docket Number: 
Parties: The President and Directors of the State Bank v. Henry B. Hunter, Executor of Henry Hunter, Peter Evans, and Gray Little.
Judges: Tati,or, Chief-Justice, concurred.
Reporter: North Carolina Reports
Volume: 12
Pages: 100–132

Head Matter:
The President and Directors of the State Bank v. Henry B. Hunter, Executor of Henry Hunter, Peter Evans, and Gray Little.
From Edgecombe.
Talcing interest in advance by a Bank, upon discounting a negotiable security, though payable directly to the Bank, is not usurious.
Deducting interest for the days of grace, upon discounting a bond, is not usurious, though the obligee is not entitled to the days of grace, the parties supposing that on such an instrument he was entitled.
A. new trial is matter of discretion, and ,the refusal to grant one cannot be assigned as error. The Supreme Court is a Court of Errors in Daw, and the case stated by the Judge, is a substitute in our practice for a bill of exceptions. Hence, this Court cannot grant a new trial because the Judge below refused one, for that refusal is not error ; but where the Court below errs, as in receiving evidence, instructing the Jury or the like, this Court orders a venire de novo, as a means of correcting such error.
The Plaintiffs declared in debt on a single bond executed by Henry Hunter, Peter .Evans and Gray Little, for 3870 dollars, payable to the Plaintiffs, dated December 28th 1819, and due eighty-eight .days thereafter,- fto which the Defendants pleaded usury.
On the trial, the Cashier of the Bank proved that the bond was offered by Henry Hunter, and discounted for Ihis benefit, fourteen days after its date; that it was the-universal practice of the Bank, on discounting bonds, to take interest in advance on the whole amount j that wlion a bond was made payable at eighty-eight days at-ter its date, and was discounted on the day of its date, interest for ninety-two days was deducted, and that the interest was calculated at the rate of one per cent, for sixty days, according to Rowlett’s Tables, which were formed upon the supposition, that the year consisted of only three hundred and sixty days; that interest was calculated on the bond in question, according to the above principles, for seventy-eight days. ' He stated that before the discount of this bond, he was aware that the principles upon which the tables were formed, gave a greater rate of interest than six per centum per annum, hut as the book had been long used in the Bank, before his appointment, he adhered to its use, believing the mode of calculation to be lawful ; that the tables were used for the sake of accuracy and dispatch, and from no other motive.
This witness also proved, that the bond had been offered by Hunter in renewal of one for the same amount, dated June 22d 1819, and payable eighty-eight days thereafter; the last in renewal of a former one, dated Feb. 16th 1819, .also payable at eighty-eight days, and so on in a course of renewals; that all these were discounted on the days of their dates, in the manner and upon the principles above mentioned; that frequently,
Hunter on renewing, did not pay in cash, tiie difference between the net proceeds of the new bond, and the amount of the old one, and as the Bank never received partial payments, the settlement was sometimes postponed for days, weeks and even months, and w'hen made, interest was taken on the old bond from its maturity, ^without regarding the discount of the new7 one.
The witness also proved, that in discounting bonds, the Directors of the Bank discriminated between those offered for renewal and new ones, but whenever a discount was made, the proceeds of the bond were credited to the person for whose benefit it was offered, and were not applied to the old note, or to any other purpose, without his check: that Hunter often complained of the mode .. adopted in settling the old bonds, as injurious and oppressiVe; that these complaints were represented to the Directors, who ordered the witness to persist in it. He stated that the Bank allowed three days of grace on every bond | that the reason of taking discount for ninety-two days, was to make the renewals take place on the same day of the week j that the Board met every Monday night, the bonds offered were usually dated as of the next day, and the proceeds of those discounted, were passed to the credit of the offerer, on the morning of Tuesday, and were subject to his order on that day;, and that although the proceeds of bonds offered for renewal, passed to the credit of the offerer, yet. they could only be applied to the payment of the old bond.
A witness was examined, who had formerly been Cashier, who agreed with the other witness as to the custom of the Bank in discounting, and the manner of calculating; but he stated the reason why ninety-two days interest was taken, was this, — that the time the bond had to run, was estimated as eighty-eight days, exclusive of the day of its date, and as the borrower had the use of the money on .that day, the time of the loan was eighty-nine days besides the days of grace.
His honor Judge Paxton, instructed the Jury, that deducting the interest at the time of making the discount, supposing the interest was calculated on proper principles, was not usurious. That it was usurious to ealeu-late the interest according to Rowlet’s tables, the officers being aware of the principle of calculation adopted in those tables, and that their supposition that this mode was lawful, made no difference — that a corrupt agreement means any agreement which violates the statute,, and that although a mistake in fact, as a miscalculation upon a right principle, is not usurious, yet a calculation upon a wrong principle, however innocently made, is usurious. And that, in this case, if it was the intent to take interest at a rate greater than that allowed by law, through ignorance, it was a corrupt intent within the statute. That receiving interest on the old note up to the time of settlement, if the new note carried interest only from that time, was not usurious ; but if interest was calculated on the old note up to the time of settlement, from its maturity, and interest was also reserved out of the new note for the same time, it was usurious.
That as to the days of grace, if the Defendants had the use of the money for ninety-two days, and legal interest only was calculated for that time, it was not usurious.
The Jury returned a verdict for the Plaintiff, and assessed the damages to $1615,72. A rule for a new trial was obtained by the Defendants, upon the grounds that the verdict was contrary to law' and to evidence, and that the Jury had been misdirected by the Judge. His honor informed the counsel for the Plaintiff, that the verdict would be set aside, and a new trial granted, unless the excess of interest was remitted. The Plaintiff then remitted three hundred and fifty dollars “ the excess aforesaid,” whereupon the rule was discharged, and judgment rendered for the Plaintiffs, from which the Defendants appealed.
Gaston, for the Defendants.
-I. The verdict is against law, the bond being usurious for the reasons assigned by the Judge, and as the Jury did not find according to the law, as laid down in his charge, it was his duty to set aside the verdict and grant a new trial. The Jury set the law at defiance, the Judge knew it and permitted it. He ought not to have entered up judgment for the sum said to be due, as principal and interest. This Court can see his error and ought to correct it.
1. It is usurious to calculate interest upon the supposition, that ninety days is the fourth of a year. (Revised code 139, ditto 1178.) The belief of the officers of the Bank, that they had a right thus to calculate, can have no °Ppra^on ’ ** was not a mistake of fact, hut a mis conception of right. In March v. Martindale, (3 B. & F. 454} the Jury found that the Plaintiff did not intend to violate the statute, yet the Court upon the facts, inferred that the transaction was usurious. (Firemen Insurance Co. v. Sturges, 2 Cowan 664, same v. Eli & Parsons, 2 Cowan 678, 704, Bank of Utica v. Wager 2 Cowan 712, same v. Smally, 2 Cowan 770.)
2. It was usurious to take interest for the same time on both notes. There was in fact but one debt, for which both notes were security; this was the understanding of the parties, and by the mode adopted, 12 per cent, is taken upon this debt. The pretence, that the proceeds of the new note had been passed to the credit of Hunter, is unfounded, he could not use them, they could only be applied in discharge of the old note. If it should be alleged that this usury does not aifect the new note, the answer is, that in truth no loan was made until the day of settlement, for not until then, did Hunter derive any benefit from the discount, the proceeds were not received as a partial payment, and he could not draw them out of the Bank. There was no forbearance, no discount, until they had been applied to the discharge of the old one. If the proceeds had been applied as a payment of the old note at once, or had been placed at the disposal of Hunter, tiie transaction would not have been usurious. (Hutchinson v. Piper, 4 Taun. 810.)
3. The verdict is illegal, and this illegality is apparent upon the record. The verdict is for the principal of the bond and six per cent, upon it, fr.om its maturity; there is then, no excess of interest, unless the bond itself covered much excess. The Judge declared, that he would grant a new trial, unless the excess of interest is remitted, “ whereupon the Plaintiffs do remit of record 350 dollars the excess aforesaid.” The fact then is indubitable, is admitted of record, that the bond in suit, to which usury is pleaded, secures an excess of interest. Until this fact is justified, tbe law presumes that the excess is usurious; (Revised code 189, Roberts v. Trenayne Cro. Jas. 507, 3 Ser. & Low. 45 note, 2 Cowan 705) pre-ciscly as where a killing is established, malice is presumed. Had a special verdict found, that this bond secured an amount of interest, exceeding that authorised by law, the law without explanation, presumes it to be usurious ; here, there is no explanation, no defence or excuse, the naked fact appears, and is by the Plaintiff entered of record. The Judge therefore erred in refusing a new trial, and entering up judgment for the Plaintiffs.
It is the clear right and undoubted duty of a Judge, to set aside a verdict when the Jury perversely, corruptly, and ignorantly find against law, and unless this duty be faithfully performed, there is an end to law in the administration of justice. The Judges are appointed specially to administer the law', which must be uniform in its operations : Jurors are not competent to decide such questions, being a fluctuating body, without the necessary learning or experience to determine abstract principles. Without the exercise of this power by the Judge, there can be no remedy even for corruption in the Jury, since an attaint no longer lies, and in this country, where the Judge is prohibited from intimating an opinion on the evidence, a liberal exercise ®f this corrective power, } is peculiarly necessary. Whenever, therefore, a verdict is against law, it ought to be set aside. (Grant V. Vaughan, 3 Burr, 1523, 1526. Ward v. Ghmston, 2 do. 394. 'Viudal v. Brown, 1 I). & E. 168. Wilkes v. Cqffield, 3 Hawks, 28. 5 S. & L. 425. 1 John. Cases, 184, 336. Wilkie v. Roosevelt, 3 do. 66, 206.) The necessity of this is obvious, for if error be committed in rendering a judgment, it may be reviewed, but if a Jury disregard the law and find a verdict against it, the only remedy is a new trial.
The Judge also erred in supposing that the Plaintiffs by remitting the usurious interest, freed their case of injustice, and thereby making the equity of the case coincide' with the verdict, rendered his interference unnecessary. For the law vacates the contract, but the Judge, though a minister of the law, and bound to avoid the contract, made himself wiser than the law, and, gave it validity for all except the excess of interest, in doing this, he was led astray by a supposed analogy to the rales of Chancery, when application is made to it for relief. But the analogy fails entirely: an application for a new trial is to the legal discretion of the Judge; a Chancellor acts upon the conscience of the applicant. In this case, the Judge was called upon to pronounce on a legal defence, not to prevent an unconscientious use of a legal advantage. Although Courts of Equity do not relieve unless the debtor pays the principal and legal interest, yet the ground of the practice is not that they consider the Defendant as entitled to the money, but because the Plaintiff has waived the penalties of the statute. (3 S. & L. 99 note-)
The Judge might have thought that the parties were in pari delicto, and as the Plaintiffs had the advantage, he would not deprive them of it; but this is not true, the borrower is considered as the oppressed party, and the object of the statute is to protect the necessitous and prevent their becoming victims to extortion and injustice. (6 John. Chan. Bep. 100. Jones v. Berkley, Doug. 698. Smith v. Bramley, do. 696 note. Bosanquet v. Dashwood, Cases Temp. Tal. 57.) This is peculiarly the case where the contest is between a vast monied institution and an humble individual.
4. This Court ought to correct the errors of the Judge below: the act of 1818, (Revised Code, 1434,) equires of them to inspect the whole record, and to rnder thereon such a judgment as ought to have been rendered in the Court below. Upon this record, it appears that an action of debt was brought, the statute of usury was pleaded, that certain principles of law were laid down by the Judge; the Defendants allege that the Jury have found a verdict contrary to law; the Judge, declining to decide this question, and assuming a character not given him by law, says he will not grant a new trial if the Plaintiffs will release the excessive interest; this is done, and judgment is rendered for the residue, it appears then, upon the face of the record, that the verdict is against, law, and as the Judge below ought to have set it aside, upon bis refusal to do so, this Court will correct the error. It appears as clearly to this Court as it did to the Court below, is not affected by any enquiry as to the credit to be given to the testimony, and may as well be acted on here as any where. Whenever it appears that a party has not had the full benefit of a rule of law, this Court redresses him. (Love v. Wall, 1 Hawks, SI5. Tate v. Southard, do. 45. Sneed v. Creath, do. 309. Heel v. Reel, 2 do. 63.) As in cases where a new trial is moved for and no case made up, this Court grants one. (State v. Powers, 3 Hawks, 376. Jlnder-son v. Hunt, do. 244. Hamilton v. McCulloch, 2 do. 29.) But it may be said, that an application fora new trial is to the-discretion of a Judge, and that being an exercise of discretion, his decision cannot be reviewed. It is true, that they are within the discretion of the Judge,’ but this discretion means, not the whim of a Judge, but a legal discretion ; it is bis duty discerniere per legem quid sitjustum, and there must be a legal rule for the government of this discretion, otherwise jus est vagum.
There are many cases of discretionary powers, the exercise of which this Court cannot revise; but the reason is that the Court here, cannot see the facts as they happened in the Court below. In this case, however, the Court must see that the discretionary power of the Judge has been abused. The whole results in this, that this Court is appointed to examine the decisions of the Courts below, and if upon the whole record it appears that injustice has been done, they will interfere. So where this Court sees upon the record that a Judge be- , „ . .. low has mused to exercise his legal discretion, either ¡jy not knowing he possessed any, or by a mistake in its application, this Court revises and corrects. (Wellborne v. Younger, 2 Hawks, 208. Clarke v. Blount, do. 208. Cherrtj v. Slade, 2 do• 400. Williams v. Jlverett, S do. S08.) It may be said that substantial justice has been done by the Judge, and therefore this Court will not set aside the verdict. But how is justice to be ascertained except by the law of the land, the only measure of right ? The question is, not whether justice has been done, but whether the law has been properly administered.
II. The Judge erred in charging the Jury, that to take the interest in advance, on the nominal amount of the bond, was not usurious. The lending is only of the nett proceeds, but the interest taken is for the amount of the principal and interest. By this mode of calculation, on a loan of 1000 dollars for ninety days, the sum forborne is only 985 dollars, whereas the interest taken, is that due for 1000 dollars.
This mode is directly against the words of the act of 1P49, which forbids, by way of discount or interest, the taking of more than at the rate of six per cent, per annum on the sum loaned. This is the general rule, and the Plaintiffs must shew some established exception.— (Barnes v. Worlish, Cro. Jas. 26 — Bank of Utica v. Wager, 2 Cowan 766, Savages opinion — Manhattan Co. v. Osgood, 15 John. 162, 9 Mass. R. 49 — Fleckner v. Bank of the United States, 8 Wheat. 838, 3 Wils. 262 — Worleys case, Moore 644 — 1 Bulstrode 20 — Loyd v. Williams, 2 Blk. R. 792.) The only exception to this rule, is the purchase of a bill of exchange or promisory note, where discount may be taken. March v. Martindale, (3 B. and JP. 154 — Ord. on-usury, 53 to 59 — Cowp. 70S 766 — 3 S. and L. 95.) 'It is not however pretended, that this case is, within the exception, the lending is direct, and a bond is taken as the security.
There is also error iu that part of the charge, as to the days of grace. The usage proved is certainly usurious, and the charge amounts to an approval of that usage. It is questionable, whether interest can be taken for days of grace, upon a promissory note; but on a bond, grace is not demandable. (Jams v. McMain, 3 Hawks, 10.) The Bank could commence suit on the day the bond became due. In law, they contracted to forbear but eighty-eight days, and on this contract, deducted interest for ninety-two days, which is more than the rate of six per cent, per annum, (Cowp. 766.) Supposing however, that three days of grace belong to this instrument, where is the shadow of right to charge four ? According to the evidence of the first witness, four days were deducted, to make the renewals take place on the same day of the week ,* but thirteen weeks, is ninety-one days, when the note is either paid or renewed. According to the second witness, the fourth day is charged because the borrower, 1ms the use of the money on the day it is lent, and also on the day when he is to repay it. But he gets it within the banking hours of one day, and is to pay it within those of another j then is there no difference between this case and an ordinary loan, and every debtor has the use of the money borrowed on the day he gets it, and has the whole of the last day to make payment.
Badger, for the Plaintiffs.
We claim nothing against the Defendants, because they are “humble individuals” and in this Court, nothing to which we are entitled, will be denied us, because the Plaintiffs are “ a vast monied corporation.” Considerations of this sort may gain attention elsewhere, but are urged here to no purpose.
I. A new trial will not be awarded by this Court, on the ground that the verdict was contrary to law, for
1st. The Judge was right in refusing a new trial.— The counsel on the other side admits that this is matter . .... ... , ,. of discretion, but it is contended that the discretion is' ,]egaj9 an¿ js †0 j,e exercised not upon the equity or conscience of the cause but its legal merits ; this is certainly erroneous. Lord Mansfield informs ns in the case cited from 1 Burrough, that parties were formerly forced into Equity to obtain new trials, because of tiie strictness of Courts of law; hence the latter Courts relaxed into greater liberality to save the parties this tedious and expensive remedy, and Sir Wm. Blackstone says, that a new trial is not granted in cases of strict right or sum-mum jus, where the rigorous exaction of extreme legal justice is hardly reconcileable to conscience, (3 Bl. Com. 392.) All the cases accord with the view of those Judges.
Where substantial justice has been done, a new trial •will not be granted, though the Judge mistake the law, (Edwards v. Mitchell, 2 T. M. 4) nor will it be granted, though the verdict be against the strict rule of law, or obtained through surprize, in order to give a second chance of success to a hard action, or unconscionable de-fence. (Farewell v. Chaffey, l Burr. 54 — Smith v. Bran-son, Salk. 644.) So, where the verdict is conformable to the real justice, conscience, and equity of the case, though against law. ( Wilkinson v. Payne, 4 T.B. 468 — . JJeerly v. Mazarine, Salk. 646 — Burton v. Thompson, 0 Burr. 664 — Marsh v. Bower, 2 Bl. R. 851 — Reavely v» Mainwairing, 3 Burr. 1306 — Macrow v. Hale, 1‘ Burr. 11.) So where the verdict is not supportable in law, according to the pleadings, but is on the honest side of the cause, or if the same effect might be had in other proceedings at law or in equity. (2 Wilson 302, 2 Burr. 936, Cowper 597, 2 Bl. R. 1221.) And so in our own Courts,1 where in a hard action, the Defendant, whose conduct had been bona fide under a practise general, but not consonant to law, had obtained a verdict, it was held that it ought not to be set aside, though the Judge who tried the cause, had misdirected the Jury in matter of law. (Tagert v. Hill, TayL R. 277-312-313.)
In all these cases, it is evident that the terms “equity,’1 “justice,” “conscience” and “ honesty,” are used in opposition to strict law, and presuppose that the legal justice of the case was against the verdict, and the substantial justice with it. Whether natural equity, or the artificial system administered in Courts of Equity be intended, is immaterial, for either sense is conclusive against the position assumed on the other side. There can be no difficulty in ascertaining that in this case, the verdict is on the honest side of the cause.
The Judge did not err in supposing, that on this question he was to exercise a discretion, governed by equitable principles, notwithstanding the attempt made, to distinguish this case from an application to a Court of Equity for relief against a judgment at law, on an usu rious contract. It is said the verdict is to be set aside because it is illegal, but the Chancellor relieves against the judgment, not because it is illegal, but because it is unconscientious in the party to use it. A verdict not responsive to the issues, insensible or otherwise imperfect on the face of the record, is indeed illegal; and it is error to render judgment on such a verdict; but where the verdict is perfect in form, and will warrant a judgment, it cannot with any propriety, be called illegal, though it may be inequitable or unconscientious. In the former case, a venire de novo is awarded as matter of right, and always was, before new trials were known ; in the latter case, the Court may award a new trial as matter of favor only ; a judgment entitles the party to execution, and a verdict perfect in its frame, entitles the- party as of course, to sign judgment. An application to a Court of Equity, to relieve against the judgment, and to a Court of Law, to set aside the verdict; each seek to deprive the opposite party of a legal advantage. Of this he will not, in either Court be deprived, when he may with a safe conscience use it, which he certainly may, w^en the real justice of the case is on his side.
2. If the Judge was wrong, this Court cannot revise ]^8 decision. His mistake, if there was one, was not error in law: there can be no error unless there be a violation of some rule of law, prescribing what the Judge should do, and giving the party a right to demand it. Discretion implies that there is no rule of law; for the instant a rule is given, discretion ceases, and the Judge is bound to obey. (Armstrong v. Wright, 1 Hawks, 93.) But a new trial is both shewn and admitted to be matter of discretion, and consequently, to refuse one, is an exercise of discretion, and cannot be error. This has been expressly decided by the Supreme Court of the U. S. (6 Crunch. 217.) and in no case has it ever been supposed by counsel, much less decided by the Court, that such refusal could be assigned for error. In England, plainly it cannot, for the statute of Westminster, which gives the bill of exceptions, provides that the party may except to the opinion of the Judge or Court at the trial, and the bill containing the exceptions being signed, the cause is removed by writ of error into an appellate Court. As soon as the bill is signed, the power of the former Court ceases; no new trial is or can be moved or granted there, but the latter Court, if the Judge be-ow has erred at the trial, award a venire de novo, in order to correct that error. (3 Bl. Com. 372, Tidd. 791.)
But this Court is strictly a Court of errors in law. The act of 1799, ch. 4. directs a meeting of the Judges “to consider and determine all questions of law ” arising and reserved on the circuits, and directs that a statement of the points reserved, made by the Judge on the circuit, or by the counsel under his direction, should be sent up. Various acts were afterwards passed, altering the form and style of this meeting of the Judges, and allowing appeals, but still confiningthe jurisdiction under all its forms to legal questions. And the act establishing this Court transfers to it the same jurisdiction, only direefing it to re-examine all questions arising; upon the i . , „ . . . ... record, instead ot confining the examination to points made below as the old Court did, but leaving the nature of these questions unaltered. ' The mode of preparing the case, derived from the act of 1799, was continued under all the modifications of our appellate tribunal, and is in lieu of a bill of exceptions. What cannot be assigned for error upon the latter, cannot be noticed as error when appearing in the former — and whatever could be thus assigned for error is, in our practice, considered as excepted to by the party injured thereby.
That this Court is strictly a Court of Errors, is fur-, ther apparent from own its decisions, for though the Court may, in some instance through inadvertence, have interfered in matters of discretion, yet it has solemnly and repeatedly decided, that it can revise only the errors in law of the Courts below. (Matlock v. Gray and Harper, 4 Hawks 18 — Bank of Neivbern v. Pugh, 3 Hawks 392, and Armstrong v. Wright, before cited.)
But further, the Judge was wrong in instructing the Jury that the calculation by the Tables of Mowlett was usurious i these tables have been generally adopted for many years, by merchants, banks and men of business, throughout the United States, and the mode of calculation pursued universally, in taking verdicts in our Courts of justice. This. consideration is sufficient to sustain the practice, notwithstanding the cases cited from Cowen.
The Judge was also wrong in stating that the calculation of interest on the old note up to the time of settlement, was usurious. The two notes were distinct and separate contracts in law and in fact. The proceeds of the new' note belonged to the offerer, and might be applied to any purpose by his check, except to make a partial payment which the bank was not bound to receive. Had the Bank refused to pay his check, it would have {jeon a denial of a right, but not usury. It is merely the ordinary case of mutual demands, one, certain and car-J ryiug interest, the other, uncertain and without interest; ^|iere 11(j doubt, the real debt is the difference, but interest may be charged on the one side, though none be allowed on the other. This may be harsh, it may, perhaps, be oppressive, but it is not usurious. The Jury therefore, if they found against the charge, did not find against law.
II. The Judge was right in instructing the Jury that taking interest in advance and for ninety-t\yo days, was not usurious.
1. In England, a banker may take interest in advance on discounting a bill, such discount being in the usual course of business, tliongh he thereby receive more than five per cent. (2 Bl. Rep. 793 — March v. Martindale, 3 Bos. & Pul. 154.) But it is said, this is allowed to cover the expense of remittance and not as interest, and Hammett v. Yea, is cited. That was a case where the banker paid the proceeds on discounting a bill, not in cash, but in drafts on London, payable thirty days after date ; and the question was, if this was not usury, because the banker advanced nothing, the drafts not being convertible into cash, until they fell due. But the Court held that the benefit the banker derived from paying in drafts, which had a short time to run, should be referred to his expense and trouble in remitting funds to London, to meet them when due. But it was not doubted for a moment, that a banker discounting a bill for cash, is entitled to interest in advance, and receives the benefit of such deduction as interest. It is further objected, that this exception is in England, confined to bills of exchange. The true principle adopted there, is that in doing business in negotiable paper, according to the usual course of trade, interest may be lawfully taken in advance: it does not extend to bonds, for they are not negotiable, nor to notes &c. payable directly to the banker, because it is not usual for bankers to deal in such notes. But here, bonds are by statute made negotiable, and have become commercial securities, and the general course of business is, to discount such bonds payable directly to the Bank.
The English Judges found the practice of taking interest in advance universally established, and they refused to declare it wrong, because thereby every banker in England would be guilty of usury, and all the securities in their hands avoided. The Supreme Court of New-York have sanctioned the practice in Manhattan Co. v. Osgood, and for the same reason. The same opinion has been given by the Supreme Court of the United States, of Pennsylvania, and of Massachusetts.
It is said, these were cases of discounting bills, and not of loans, and that the exception extends to the former only. This is a mistake, they are cases of loans strictly, else the question could not have arisen, for the purchase of a pre-existing bill in market, is completely out of the statute, and may be purchased at any discount. In the Manhattan Co. v. Osgood, the note was drawn and indorsed with the express purpose of obtaining a loan for. the accommodation of the maker, by discounting it with the Plaintiff. If it be in fact a loan, the form of the security can make no difference, the statute forbidding excessive usury upon all loans without reference to the manner by which repayment is secured. What may be lawfully done in loaning money upon a note made and endorsed with a view to obtain and secure such loan, may be done also upon a bond made payable directly to the lender, with the same view’.
The case before the Court is even stronger in support of the practice adopted by the bank, than were the cases referred to in England and New-York. The same mode of taking interest has prevailed in all our banks. If this bond is void for this reason, the whole debt due to the Bank is annihilated, and np security is left them but †[,0 honor of thp debtors; how feeble is that security» ^ie names united in the defence of the present action, abundantly shew. The Court cannot look with indifference Uj)0n the evils to result from the decision asked on the other side; the bank insolvent, its stockholders ruined, the revenue of the state nearly destroyed, and all our citizens who hold the notes of the banks, received in payment for their produce and their labor, finding them at once converted in their hands into worthless rags.— These evils, appalling in their nature, and incalculable in extent, are a just motive for judicial decision, and have been so considered, by the most able and virtuous Judges in England and in this country — Judges, like all other functionaries, must realize that public safety, is the supreme law, and nothing can either require or justify such a construction of a statute as sacrifices the welfare of the whole community, for whose benefit the statute was enacted. General good is the end, and the provisions of the enactment but the means of accomplishing that end. When it is seen that these provisions, if strictly applied, tend to general ruin, the expounder of the law cannot so apply them ; for by that application, he fixes upon the law-maker, the greatest of all absurdities, that of esteeming the means of more consequence than the end, for effecting which alone, had the means any value.— This reasoning applies with equal force, to the calculation by Rowlett’s Tables, which are in the most general, use, and have in practice, the sanction of the whole community on their side.
2, Deducting interest for the ninety-two days, was not usurious. The bonds were separate and distinct contracts, and not different securities under one contract for a loan, and the Bank was not obliged in any way to renew. Their practice to accept renewals was merely gratuitous, was no stipulation in any contract, and might be discontinued at pleasure. They had then a right to take interest for the day of the loan, and of its repayment inclusive, whether that repayment was in a new note or in cash. The bond had to run eighty-eight days after its date, that is, exclusive of the day of its date, but the borrower had the use of the money on that day, which made a forbearance for eighty-nine days, and adding the days of grace, makes the ninety-two.— It is said the days of grace were not demandable on this instrument ! this is conceded, but until lately, when it was so decided by this Court, was a subject of much doubt at the bar, and even in the decision, the Court was not unanimous. But the parties intended to make a security on which the days of grace were allowable within the custom, of merchants, and supposed they had done so. Their mistake, though it be a mistake in the leg'll effect of an instrument, as there is no corrupt intent, will excuse them. (Berkley v. Guilbank, Cro. Jac. 677 — JWevison v. Whitley, Cro. Car. 501.)
It should be added also, that a corrupt bargain being essential to constitute usury, whether there be such corruption, is, in this state, always a question for the Jury. In England indeed, the Court will infer this from the facts found, without, or even against a finding of the Jury upon the corrupt intent. But they also infer u fraudulent intent within the statute of 13 Elia, and do not leave to the Jury to ascertain the intent in fact.
In this Court, it is held that fraud is a question of fact for the Jury, and the Court cannot infer it from other facts. Why is not the corrupt intent likewise to be found by the Jury ? Or how is the Court better able to infer a corrupt than a fraudulent design ?
The Counsel on the other side disclaims any participation in the vulgar clamour against banking institutions, while he touches every theme which may awaken prejudice against the Plaintiffs as a monied corporation. To awaken prejudice and to excite clamour, seem equally unfriendly to the investigation of truth ; but here, neither can be attempted with success. It is believed that a just interpretation of the law, will entitle the Plaintiffs to iuda'ment, and therefore only, we expect to obtain it. J ° J "7 *
Seawell, on the same side.
The Jury having found a general verdict for the Plaintiffs, and a motion for a new trial being overruled and an appeal taken to this Court, the question arises, has the Court below committed such error as this Court can rectify ? In regard to the factst I presume, it is not in the power of this Court to interfere ; the consideration of .them properly belonged to the Jury ; and although in a case of outrage, or even of decision against the weight of evidence, it was in the power of the Judge below, to interfere, yet as the law has prescribed no rule, but has confided the power to his discretion, no difference of opinion between this Court and the Court below, will justify an interference. The very nature of every discretionary power, excludes the idea of a general rule, and therefore prevents the possibility of a common standard. And hence it is, that error will in no case lie, when the act done is. matter of discretion $ this principle is too well settted to require any proof.— The only error then, which the Defendants can assign, must be error in law, which the Court below committed in a matter in which this discretion is not confided. It appears from the case, that the Judge directed the Jury that taking the interest in advance was not usurious; and that the law was the same, as to the days of grace.
It seems to me, that w hen the state established a Bank for the express purpose of discounting notes, and made no particular provision as to the manner of retaining the interest, when we take into view the fact that this is the practice of every Bank in the world, it must be understood as a legislative acquiescence, that the course of business authorised by this Bank was not intended to be different from that which is used every where else. And therefore, this part of the case will stand affected by our statute against usury, precisely, as if a Bank liad been established without any thing being enacted upon the subject of interest; in which case, it must be intended that the corporation was permitted to act as other Banks, Viz. permitted to retain in advance, instead of receiving at the end of the year, six pounds for every hundred loaned or forborne. For surely it cannot be supposed that the Legislature, taking a deep interest in the stock of the institution, could intend this Bank to do business upon different terms from the other Banks of the State, then in operation ; where this mode was used, and from whom the State liad frequently borrowed according to that mode, and which from an examination of the journals, was recognized upon a solemn question, raised before the General Assembly.
Then as to the days of grace, and taking interest on the old and new note for the same day, a decisive answer to this objection is, that they are separate contracts; the first note by its terms had fallen due, and the Bank might have enforced its payment by suit — and though when the old note was discounted, it was in the expectation that the Bank would permit a renewal; yet this, from the nature of the short credit allowed by every Bank, must be understood to rest in the option of the Bank, and to depend upon its own views of its interest and policy.— The new note, therefore, is but an application for a new loan, to discharge a former debt, then due 5 and does not, from the fact that it was obtained of the same bank, differ, if at all, from what the case would have been, if the dealings had been in two different banks.
As to the interest received upon the old note, which remained unpaid, after the discount of the new note, that would seem to me to fall precisely within the same rule. But it is said that the officers were directed not to pay the proceeds of the new note, unless it was applied towards extinguishing the old one. Now, it is tp be observed, that as the new note was npt discounted under any condition imposed by the Bank in its corporate character, the instructions or directions are of an informal nature, not amounting to a corporate act. The note, when discounted, produced an amount, which immediately passed'to ¿|ie c,.e(]it 0f the maker, upon the books of the Bank, without any condition. The maker could then maintain liis action for his discount, if payment was refused ; and the Bank its action on the old note, if that was not discharged. If this consequence follows in law, it can be only on the ground that they were independent transactions ; and the fact that the Bank might set off, is only an argu-. merit to prove it could maintain its action. To make taking the subsequent interest upon the old note usurious, it is necessary to prove, that the maker could not maintain his action for the sum placed to his credit, proceeding from the discount of the new note — and it must also be shewn, that the Bank, from the nature,of the old bond or note, was bound to discount the new one, as part of the first contract 5 but as the Court below charged that such interest on both notes is usurious, there is no error which the Defendants can complain of. But it is insisted, that if the law is on this point, as the Court below directed, a new trial ought to have been granted by the Court, and being refused, this Court should award it.— A complete answer to this argument is, that the law upon the point depended upon the facts which the Jury were to pass upon, and which it was the province of the Jury to find; on that account, therefore, this Court cannot interfere.
But another ground equally fatal, is, that all new trials are for the attainment of the justice and equity of the case ; and that the Courts, as they are bound by no positive rules, will render its assistance or not, as justice and honesty requires. In Edmonson v. Marshall (2 Term Meports, 4J the Court refused a new trial, though the .fudge was mistaken in point of law, as to the character of the Plaintiff, upon the ground that justice had been done. The Court said, “ the application for a new trial is to the discretion of the Court, who ought to exercise that discretion in such a manner as will best answer the ends of justice.”
Suppose in this case, application had been made to a Court of Equity, upon what terms would that Court interfere? They are known to be, upon paying all that is honestly due. The principles of justice are universally alike, whether in law or equity, whenever the Court is permitted judicially to sec them ; and they always require, that he who comes in the character of a supplicant, asking justice as a favor, should, in the first place, qualify himself by offering to do justice; and in this case, he should have been willing to pay, for the sake of a new-trial, what the Plaintiffs have been contented only to de->inand from him.
Hogg, replied at length, but the reporters have no note of his argument.

Opinion:
Henderson, Judge.
We are satisfied with the decision of the Court, in the Bank of Newborn against Pugh; we therefore decline entering into an examination of the question, whether the Court mistook its duty in refusing a new' trial. It is a mistake to suppose that this Court, since the repeal of the act declaring tiiat it possessed appellate powers upon questions of fact, ever has awarded .a new trial, because-the Judge below refused one. The new trials which have been awarded here, were in cases where there was some error, which infected the verdict; such as the admission or rejection of evidence, which ought to have been received or rejected, or some misdirection of the Judge to the Jury, on questions of law7, arising on the trial, or the like. Since the statute of Westminster the 2, (31 Ed. l) such matters may be assigned for error, and provision is made by the statute for getting them on the record, when brought into the Court of Errors. Our statements accompanying tiie re cords sent here, are nothing but a practical construction put upon that statute, and owe their origin to our act of 1799, relative to the mode of bringing points of law aris-jng on tj)e cjrcuit before the meeting of the Judges, directed by that act. This mode was still practised in cases of appeal afterwards allowed, and was continued after tiie organization of the present Court; these statements, we consider as containing the proceedings excepted to in the Court below, by the party against whom they operated. The judgment on the verdict obtained improperly, that is through the error of the Judge, is here reversed, and the cause remanded, with directions to issue a venire facias de novo. The new trial is therefore, in consequence of the relief authorised by tiio statute.' We may have inadvertently interfered in cases where we ought not; I think, in all probability, we did in the case of Cherry v. Slade. We have not the power of examining those parts of the charge operating in favor of the Defendants, for they are not excepted to.
But it is said, that we ought to grant a new trial, because the Plaintiif, by remitting what is called "the excess of interest," has admitted that the contract was usurious. This affords ground for a judgment for the Defendant, if it affords foundation for any act of this Court, for it is an admission of record, that the contract was usurious; why then send it to a Jury to try that fact ? But there is no admission of such fact. It is quite probable that it was admitted as usurious interest, under the charge of the Judge; but the Court acts upon facts, not upon probabilities, and this admission is nothing but evidence of a fact; it is possible the Plaintiff may have remitted from other causes. He might for some reasons, unknown to us, wish to retain his verdict. He may have feared that he would not be able to obtain so large a one at another, time; he may have feared that delay would produce the loss of the debt, through insolvency; or he may have had an immediate demand for the suénej. These, it is true, are very improbable conjectures, but they may be correct; and if they may be so, it proves that it is not an inference of law, but of fact. In addition to this, it would not be sufficient for the Plaintiff to acknowledge simply, that he was guilty of usury in the contract, but he must confess how, that the Court may see that the statute has been violated; for peradventure lie might mistake what usury is within that statute.— This is therefore neither cause for a new trial, nor for a judgment for the Defendant. But if the Plaintiffs distinctly admit upon the recomí, any fact which shows they are not entitled to recover, the Court would be as much bound to notice.it as if found by the Jury, for the admissions of the parties upon the record, are the highest evidence of the facts.
If there is any error examinable by this Court, it arises from those parts of the charge which were in favor of the Plaintiffs, for these are understood as excepted to by the Defendant. These are, that taking interest in advance on this bond, was not usurious; and that taking interest for ninety-two days on this bond, it being given for renewal, is not usurious, for so I must understand this charge, notwithstanding the qualification that if the Defendants had the use of the Plaintiffs money, they ought to pay interest on it.
That the statute of usury is violated by taking the interest in advance, on the whole sum lent, is almost too evident to require argument. If the sum, say one hundred dollars, agreed to be loaned for one year, at six per cent, per annum, is counted down, and the lender immediately withdraws six dollars, by way of discount or interest, the sum actually forborne, which is the matrix of interest, is only ninety-four dollars, which at that rate of interest, together with itself, produces at the end of the year, ninety-nine dollars and sixty-six cents — less, by thirty-four cents, than the sum to be paid at the end of the year. As therefore, taking the interest in advance, gives an interest of six dollars for one year, on ninety-four dollars, the statute is violated, for it plainly directs that six pounds only, (i. e. six dollars) shall be taken on j-]ie hundi'cd for forbearance, for one year, and in the same proportion, for a greater or less sum, and for a longer or shorter time. The rule extended, completely shows, its impropriety, by producing a result perfectly absurd. A note for one hundred dollars, payable sixteen years and eight months after date, is offered for discount on the day of its date; if the interest on the whole sum is taken in advance, it absorbs the whole amount of the note, the person who discounts it pays not a cent for it, of course, the person who offers it gets nothing. The rule of a discount, and such no doubt, the Legislature intended to be permitted, by the statute of usury, (whatever they may have meant when they incorporated the State Bank,) was that such a sum, should be advanced upon a discount as would, together with its interest, amount to the sum to be paid at the maturity of the note. I speak not of the purchase of a note or bill in market, for that may be made at any price, taking care that it is not a device to cloak a loan ; if it is a fair parchase, the statute has nothing to do with it. Y/e can derive nothing from what was said hy the Supreme Court of the U. S. that an authority to make discounts, gives an authority to take interest in advance. True — but is the discount to be equal to the interest on tiie whole sum lent, or only equal to the interest on the balance, after taking out tbe discount, the words in the statute being, that more than six pounds on the hundred, shall not be taken by way of " discount or interest." And I take it to be very clear indeed, so much so, that not a shadow of doubt is left on my mind, that the authority to make discounts, gives the power to make them in such a way only, as to leave as much outstanding as will, with its interest, amount to the sum to be paid at the maturity of the bill, note or bond, for a bond being assignable by our law, it is as much the subject of discount as a note. Were this case therefore, to be decided by the application of our statute " * , , , against usury, to its tacts, unaffected by other considerations, I could not hesitate to declare the bond usurious, and therefore void.
But an exposition, legislative, judicial and popular, has been given to this statute and to usury laws, similar to it, which I am bound to respect. When the charter of this Bank was granted, there had been in operation for some years, two Banks chartered by the State, whose operations were extensive, and whose practice of taking interest in advance, on the whole sum loaned, must have been known to the Legislature : The old Bank of the United States had been in operation for twenty years, which discounted in tlie same manner : Banks in adjoining states, and others,, with which we had great intercourse, were also in operation, governing themselves by the same rules. With this information before them, this charter was worded in substance, in the same manlier as to the point we are now considering, and I believe in the same words, as that of the Bank of the United States. The "State was a stockholder in each of our local Banks, and many shares were retained for the State in this Bank. These are strong legislative expositions.
In the Courts in Nevv-York, Pennsylvania, Massachusetts and Connecticut, this practice has been declared not within their statutes of usury, which are similar to our own, and it has been sanctioned by the supreme judicial tribunal of the Union, and in England, even in the case of private bankers $ but I shall be told, it has been sanctioned only in case of negotiable bills and notes, and not in the case of bonds. The principle has been applied there to negotiable securities, and bonds there not being negotiable, could not be discounted: — they there applied the remedy as far as the evil extended. The same principle will extend here to bonds. The papular exposition is equal- ^ univc'rsa1' for during the thirty years that our Banks have been in operation, although many millions have been jenton f[)e sarae terms, this is the first instance of insistence which Í have heard of, made, on these grounds, to a recovery. And were I at liberty to hazard a conjecture as to the cause of this contest, I would say that it arose from the oppressive practice of this branch of the Bank, in claiming interest on two bonds, running at the same time, that is charging interest on the old bond and on the newly discounted bond, until the proceeds of the latter, were applied to the discharge of the former. B.ut I am free to declare, that in a case where the change of construction would produce those evils only which ordinarily arise from change of decision, Í should feel all that has been done, insufficient to control the plain words of the statute. But when I look to the incalculable injury which must arise from giving a different exposition^ injury, the extent of which no man can foresee, the whole of our circulating medium in the hands of individuals, and in our treasury, annihilated and rendered worthless, at a single blow — I must confess I am appalled at the consequences, and must abstain from acting — convinced that the obligation which I am under to the State, of asserting the supremacy of the law, does not require it at the expense of the peace and prosperity of individuals, and the best interests of the State.
I am inclined to think, that taking interest for ninety-two days, on the note for eighty-eight days, is not usurious. It is clearly not so for charging interest for the days of grace, although they are not demandable on a bond ; for if the contract was made with an understanding that they were to be allowed, the making of a writing, whereby they were excluded, would not be usurious ; for it is the usurious contract which vitiates the security. There cannot be any usurious security, if the contract is not usurious. II an authority is wanting to prove a pc- sition so pláin as this, it will be found in Nevison v. Whitley, (Cro. Car. 501—Ord. on usury, 59.) Computing interest for the day on which the new note was taken, if interest for the same day, had been taken on tiie old bond, would be usurious, if it was the same, or one continued loan. But I think that it is not, and the most satisfactory evidence of this, is afforded from the fact, that it was at the option of the Bank to continue it or not. It is true, that on notes of accommodation, it is understood that it is quite probable, that the time will be extended upon a compliance with the rules of the Bank; but at the same time, it is also well understood, that the Bank may, at its option, enforce payment, which must exclude all idea that the borrower, by the terms of the contract, has a further time for, payment. I think that it was usury of the most oppressive kind, to take interest on the new note, before its proceeds were applied to the discharge of the old note ; for until that time, the Bank advanced nothing, and it is- no excuse to say, that it was Hunter's fault, for he should have paid the difference and drawn a check in favor of his old note. These were the terms iinposed by the Bank on the new loan, and until they'were complied with, nothing was advanced, it was a bare agreement to lend upon . the performance of the terms by Hunter. It is a fallacy to say that the money was to Hunter's credit, and subject to his check,* — it would only stand to his credit upon his paying the difference, when he could check for it, and then he could only check in favor of his old note. Nothing therefore was lent by the Bank, until the proceeds were applied, and until that time, no interest should have been charged; but this Court cannot get at that question, if it could, the judgment would be reversed; for I believe that this mode of doing business is confined to the Tarborough Branch of this Bank. It has not either a legislative, judicial os* popular sanction.
The universality and the notoriety of the practice of taking interest in advance, by the Banks, and their connection with the government, would seem almost to ex-c]u(|e the idea of criminality; usury, by our law, is deemed to be a crime, for which, forfeitures are inflicted on the offender, as loss of the debt, and double the amount loaned or forborne, together with a liability to an indictment. In offences of this kind, if the actor is guilty, every person who is concerned in the transaction is guilty also. The directory, as having ordered the usury, which may well be inferred from their subsequent sanction, and even the stockholders if they knew of it, by receiving the dividends, incurred the forfeitures ; in this latter case, the State would be implicated, it being a stockholder to a large amount. This must exclude all idea of actual criminality, I say actual criminality, for in reality, there cannot be a crime without an actual intent to violate the law. Crime presupposes a knowledge of the law ,• and ignorance of law is no defence, not because a knowledge of the law, is not essential to crime, but because ignorance is not permitted to be averred and proven, it being a presumption of law, that every man (however false in point of fact,) knows the public laws. These presumptions of law are nothing else but certain conclusions of fact, which the law draws from motives of policy and convenience ; as where the probability of a fact is so very strong, that there is scarcely a possibility of its being otherwise, policy, and perhaps justice also, require that it should not be controverted; for in the first, place, it is so often the fact, that it had better in all ca-" ses be so considered, rather than undergo an investigation in each case ; and secondly, even if an investigation, in each case was permitted, so imperfect are all human means of arriving at truth, that there is more reliance to be placed on the general conclusion, than on the result of a particular investigation. Thus, if a stroke is given with a bar of iron, it is a presumption of law that he who gave it' intended to kill, and therefore, when death ensues, .the actual intent is not the subject of en-' , , , . quiry, although a murder cannot be committed without an actual intent to kill; here the law presumes the actual intent. So in England, leaving tiie goods in the possession of the vendor, is perse a fraud, that is, a presumption of law that the transaction is fraudulent; it is not so in this state. It is said that the common custom and usage of that country require that this presumption should be made, here we think, they do not. There has been an extraordinary change in the presumption .of law, in the case of murder j originally, murder could only be committed in secret, for it being of its essence that it should he committed with deliberation, that is witii malice aforethought, he who killed another openly and publicly, was not believed to have done it with malice afore.thought. The punishment being death, it was inferred that he was moved to the act by passion, not by judgment or reason, the presumption of law therefore, was, that he did not commit the act with malice aforethought. But experience proving that this presumption was in fact unfounded, and that wicked men would, even in public, commit homicide with malice prepense, this rule of presumption was therefore abolished.
I am almost induced to believe that upon the principle that a mistake in point of fact, exempts a person from the penalties of usury, the Plaintiffs are exempted in this case ; for I think it cannot well be believed, that they knew that they were violating the law, and ignorance of law, could it be believed, forms as good an excuse as ignorance of fact — they are based on the same principles, the only difference being, that in ordinary cases, the one is not to be Believed, but the other is.— Upon tiie whole, I am of opinion that the judgment should be affirmed.