Case Name: Hopkins &c. v. Koonce
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1849-10
Citations: 6 Gratt. 387
Docket Number: 
Parties: Hopkins &c. v. Koonce.
Judges: 
Reporter: Virginia Reports
Volume: 47
Pages: 387–392

Head Matter:
Richmond.
Hopkins &c. v. Koonce.
1849. October Term.
( Absent Cabell, P. )
A surety in a bond who had given a deed of trust to secure the debt, executes another deed of trust, to secure another debt of his principal, due to the same parties, in consideration of the forbearance of the creditors to sell under the first deed. Held : The second deed is given upon a usurious consideration, and is, therefore, void.
This was a bill filed in October 1837, by Hopkins & Brothers against Nicholas Koonce and Andrew Hunter, in the Circuit court of Jefferson county, to set up a deed which had been executed on the 16th of September 1837, by Nicholas Koonce to Andrew Hunter, in trust to secure a debt of 746 dollars due from David Koonce the son of Nicholas, to the plaintiffs. The bill stated the execution and loss of the deed, and the preparation of another substantially the same with the one lost, and the refusal of Nicholas Koonce to execute it.
Nicholas Koonce demurred to the bill in June 1838, for a misjoinder of parties, but his demurrer was overruled at the same term. In November 1838, he filed his answer, in which he alleged that the deed was executed for a consideration which he was advised, rendered it usurious and void. And if it was not usurious, that it was a case of such extreme hardship and oppression, that a Court of equity would not set it up. He set out in his answer the facts on which he based his defence, and admitted the execution of the deed, and that the deed prepared and exhibited with the bill was similar to that which was lost.
It appeared upon the proofs, that on the 3d of November 1835, Nicholas Koonce executed to Andrew Hunter a deed whereby he conveyed two houses and lots at or near Harper’s Ferry, in trust to secure to Hopkins & Brothers of Baltimore three bonds, each for the sum of 468 dollars 28 cents, bearing date the 14th of September 1835, and payable with interest on the 1st of May and September 1836 and the 1st of January 1837. These bonds were executed by David Koonce as principal, and Nicholas Koonce as his security.
After the execution of this deed, David Koonce became further indebted to Hopkins & Brothers by account, in the sum of 746 dollars; and it was to secure this debt that Nicholas Koonce executed the deed which the plaintiffs sought to set up.
Previous to the execution of the second deed, David Koonce had paid off but one of the bonds secured by the deed of the 3d of November 1835. He had then become very much embarrassed, or as Nicholas Koonce alleged in his answer, insolvent. In August 1837, one of the plaintiffs and Hunter called upon him to obtain payment or security for the debt of 746 dollars, and Mr. Hunter’s account of what occurred then will be found stated in the opinion of Judge Daniel. Soon after this visit, the trustee Hunter advertised a sale of the property embraced in the deed of the 3d of November 1835, to be made at Harper’s Ferry, on the 16th of September 1837. On that day, by the urgent persuasion of David Koonce and Joseph H. Russell, and with much reluctance, Nicholas Koonce agreed to execute the deed of that date, by which he conveyed the property embraced in the first deed, and all his household and kitchen furniture, and all his other personal property, to secure the debt of 746 dollars to the plaintiffs. Upon the execution of this deed, Mr. Hunter made an endorsement on the first deed, that he agreed on behalf of Hopkins & Brothers, not to proceed with the sale of the property embraced in that deed, provided one half of the balance due thereon, viz: 468 dollars 28 cents, with interest, was paid within sixty days from that day, and the residue on or before the 1st day of April 1838.
The proofs in the cause satisfied this Court that the consideration on which Nicholas Koonce executed the second deed, was the indulgence extended to him on the debt secured by the first deed.
All the witnesses examined in the cause were called by the plaintiffs, and their testimony was taken before Nicholas Koonce filed his answer. The examination in chief relates to the execution and loss of the deed. After the answer was filed, the plaintiffs moved the Court to be permitted to take the depositions of the witnesses again, on the ground that they had been taken before the filing of the answer, and the plaintiffs did not, and could not fully anticipate the defence set up, and therefore did not examine the witnesses fully as to said defence. But the Court overruled the motion.
The cause came on to be finally heard in May 1842, when the Court dismissed the bill as to the defendant Nicholas Koonce. Whereupon the plaintiffs applied to this Court for an appeal, which was allowed.
Cooke, for the appellant, and Scott, for the appellee, submitted the case.

Opinion:
Daniel, J.
Our statute against usury, declares that no person shall upon any contract, take, directly or indirectly, for loan of any money, wares or merchandize or other commodity, above the value of six dollars for the forbearance of one hundred dollars for a year, and after that rate for a greater or lesser sum, or for a longer or shorter time; and that all bonds, contracts, conveyances or assurances, to be made for payment or delivery of any money or goods so to be lent, on which a higher interest is reserved or taken, shall be void. The uniform decisions of the Courts have settled that the forbearance by a creditor, for any premium above the value allowed by the statute, of money already due, is as much within the statute as an original loan, and that in contemplation of law and in fact, it is a loan. It is, I think, manifest from the pleadings and proofs in the case, that the only consideration leading to the execution of the paper of the 16th September 1837, which the appellants sought to set up as a lost deed, was the forbearance by them of the debt secured by the deed of trust of the 3d of November 1835. It is true that Mr. Hunter, who was the attorney of the plaintiffs, and who prepared the paper of the 16th September 1837, before mentioned, states in his deposition, that, in the August preceding, he visited Harper's Ferry, in company with one of the plaintiffs, Hopkins, with the view of securing the debt, the payment of which is provided for in said paper; that after calling upon David Koonce the debtor, and after a good deal of negotiation about the mode of securing the debt, it was suggested, either by his client Hopkins, or himself, to David Koonce, that as his father (the appellee Kicholas Koonce) had given a deed of trust on his property, to secure the former debt, (referring to the deed of the 3d November 1835,) perhaps he could make a similar arrangement to secure the new debt; that David Koonce saw his father, and that a good deal of negotiation took place on the subject ; that Nicholas Koonce said he would make the arrangement by giving the new deed of trust, as soon as certain arrangements were made between David Koonce and Joseph L. Russell, which it was expected would be made in a day or two, and with that view that Hopkins was detained at Harper's Ferry a day longer than he intended; that he did not understand Nicholas Koonce as refusing to give the deed, but as wishing to defer it only; and that he recollects distinctly of advising David Koonce, for whom he was counsel in other cases, that if his father did give the deed of trust, he ought, by all means, to indemnify him in some way, and although he knew David Koonce's goods were under execution, he was well satisfied he had it in his power to give the indemnity otherwise. It is true also that David Koonce, in his deposition, states that in August 1837. he gave a deed of trust, (which was placed on record,) on Ins bonds, notes and book accounts, tor the benefit of his father and other creditors. He does not state, however, on account of what engagements or liabilities of his father this deed was designed to indemnify him, and the deed itself is not made an exhibit in the cause; and inasmuch as he states in a former part of his deposition, that when, on the visit of Hopkins and Hunter to Harper's Ferry in August, to make arrangements for securing the new debt, he mentioned the subject to his father, the latter expressed an unwillingness to give a deed of trust to secure said debt, the fair inference to be drawn from his testimony, as well as from the failure of the plaintiffs to exhibit the deed executed by David Koonce, is, that said last mentioned deed was made, not for the purpose of indemnifying Nicholas Koonce against liabilities thereafter to be incurred, but those already existing. It is to be observed too, that the plaintiffs do not, in their bill, aver that David Koonce had made, either before or after the execution of the lost deed, any provision to secure his father against the undertakings on his account therein entered into, and that Nicholas Koonce, in his answer, expressly avers that he never received, and never was to receive, for executing said deed, any consideration except the indulgence to be granted him on the deed of the 3d November 1835, and the debt therein secured. In this averment he is, I think, fully sustained by the testimony of Russell, and all the leading facts of the case. And the validity of the defence set up by Nicholas Koonce in his answer, depends, in the view I have taken of the facts, simply on the solution of the question, whether a deed of trust executed by a father on his own property, to secure the debt of his son, who is in failing circumstances, made in pursuance of an un derstanding between the father, his son, and the creditor, and in consideration that delay and indulgence is to be granted by the creditor in the collection of another debt of the son, for which the father had become bound, and had previously given a deed of trust, in the execution of which the creditor was about to proceed, there being no proof that the father was in anywise previously bound for the new debt, and there being no assignment thereof to him by the creditor, nor any indemnity provided the son to the father, on account of his new liability, is usurious. I cannot doubt that such a transaction falls within the meaning of the statute, and that a deed of trust thus executed, is usurious and void.
The Court I think properly overruled the motion of the plaintiffs to be permitted to retake the depositions of the witnesses who had been before examined by them in the cause; and upon the hearing of the cause, properly, for the reasons above stated, dismissed the bill as to the appellee Nicholas Koonce. I am therefore of opinion to affirm the decree, with costs to the appellee.
The other Judges concurred in the opinion of Daniel, J.
Decree affirmed.