Case Name: Douglass v. McChesney
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1823-12-10
Citations: 2 Rand. 109
Docket Number: 
Parties: *Douglass v. McChesney.
Judges: 
Reporter: Virginia Reports
Volume: 23
Pages: 245–247

Head Matter:
*Douglass v. McChesney.
December, 1823.
Usury — Evasion of Statute — Case at Bar. — A tacit understanding- between borrower and lender, founded on a known practice of the latter, to lend money at legal Interest, If the borrower purchased of him a horse, at an unreasonable price, is a shift lo evade the statute against usury.
Chancery Practice-Issue. — Where a Court of Chancery has doubts, whether the sale of the horse or other property, is really Intended as a shift to evade the statute against usury, it ought to direct an issne to be tried upon viva voce testimony, if to be had.
This was an appeal from the Staunton Chancery Court. The case was this:
Douglass borrowed $500 of McChesney. About the same time McChesney sold him a horse at $400, and took a deed of trust on real and personal estate to secure both debts. As soon as the money became due, McChesney advertised the property for sale.
Douglass thereupon filed a bill of injunction, stating, that in consequence of being pressed for money, he applied to McChesney for a loan of $500; that Mc-Chesney replied, that it was his practice, whenever he lent money, always to sell a horse; that the complainant expressed his willingness to take a horse, but McChes-ney did not then shew him one, nor say any thing about the price ' that some time afterwards, the complainant went, by appointment, to the house of McChesney, when the latter shewed him a horse, for which he asked the price of $400, saying at the same time that he had sold a horse to one of the complainant’s neighbours, at the same price; that this neighbour, the complainant believes, was David Cunningham, to whom McChesney had lent money at the time of selling him the horse; that although the complainant had no objection to purchase a good work-horse at a fair price, he at once perceived that the horse offered him was not worth any thing like the sum of $400, and that his value did not exceed from 80 to $100, which must have been known to McChesney, who is a good judge of such property; that the complainant, urged by his necessities, *and knowing that there was no chance of getting the $500 from Mc-Chesney, without giving him his own price for the horse, was compelled to assent to this oppressive condition; that McChesney required a deed of trust on the complainant’s farm, containing 142 acres, with considerable improvements, to secure both the $500 and $400 aforesaid; that afterwards, McChesney required the complainant to include in the deed of trust, sundry slaves; to all which, the complainant, impelled by the same necessity, consented, and the deed was accordingly executed, as Mc-Chesney wished; that McChesney also took two bonds for the two sums above-mentioned, payable twelve months after date, and the bond for $500 bearing interest from its date; that, on the very day that the time limited in the trust deed expired, McChesney applied for the money, and, the complainant not being able to make payment, he advertised the property. He therefore prayed, that the sale might he injoined, and that McChesney and Clarke, (the trustee,) might be made defendants to the bill.
The injunction was granted.
The answer of McChesney denied all the material allegations of the bill. He admitted, that he lent $500 to the complainant, and sold him a horse for $400, and that the latter executed a deed of trust to cover both sums; but denied, that there was any kind of usury in the transaction, and affirmed, that the sale of the horse and the loan of money were not connected in any manner whatever; that the proposition for the sale of the horse came from the complainant himself; that the complainant came by appointment to the defendant’s house, saw the horse, and gave his bond for $400, on twelve months credit, with a deed of trust to secure the payment; that before the deed was executed, (but after the horse had been delivered and the note aforesaid given,) the complainant proposed to borrow of the defendant $500, promising to include this sum also, in the deed of trust, and to add three slaves, to the real property, to be conveyed by the deed; that nothing was said *about the interest; but, the defendant took it for granted, that the loan was to be -at lawful interest from the date, and with this understanding he agreed to lend the complainant the sum of $500; that accordingly the money was actually lent, and a deed of trust executed to secure both debts; that nothing was said by either party, during the negociation for the horse, about the loan of money, nor was any thing said on that subject, until after the sale of the horse was complete, the bond for the purchase money executed, and the horse delivered; that the horse was a very fine horse, about five years old; that the -eason why he so promptly advertised the property was, that he was induced to believe, from the conduct of the complainant, that he did not mean to pay the debt.
Sundry depositions were taken, which prove nothing material to the present controversy, except that the horse was not worth more thn eighty or one hundred dollars cash, and that it was reported to be McChesney’s practice, when he lent money, to sell a horse at an exorbitant price, to cover an usurious gain; but, there was no evidence to prove, that in this particular transaction the loan was connected with the sale, although some of the witnesses give it as their opinion, that the two contracts were so connected.
The Chancellor, on motion, dissolved the injunction, and the complainant appealed to this Court.
Stanard, for the appellant,
made two points:
1. That the evidence, by fair deduction, proves the case as it is stated in the bill, and that usury, the most gross, was prac-tised .by McChesney. Even, if usury is not established, the exorbitancy of the contract for the sale of the horse, proves a degree of oppression which ought to be relieved against in a Court of Equity. The case of Cole v. Gilbourn, 3 P. Will. 290, is an authority for this principle.
*2. That the Court ol Chancery ought, at least, to have directed an issue, to try whether the sale of the horse was intended as a shift to evade the statute against usury.
Johnson, for the appellee.
The bill is unsupported by the evidence, while the answer denies 'every charge. It must, therefore, be considered as true, •'here being no testimony to contradict it. The witnesses do not even identify the horse. It is of no importance, that the two bonds, (which are of different dates,) are-covered by the same security. The solemn affirmation of the defendant, on oath, that they are totally distinct, must prevail over the assertions of the plaintiff in his bill, unsupported by evidence. In Green-how v. Harris 6 Munf. 448, Judge Roane declares, that Courts of Justice ought only to be governed by judicial proof, and not by their private opinions.
An issue is only proper, where there is conflicting evidence, not to enable a party to look for further evidence. Here, there is no conflict in the testimony. All that can be said is, that there is an absence of evidence to support the plaintiff’s claim.
As to the exorbitancy in the price of the horse, that alone is never held sufficient to set aside a contract, unless some fraud or undue means are used to draw a party into the contract. Sugd. 192.
December 10
üsury. — See monographic note on “Usury” appended to Coffman y. Miller. 26 Gratt. 698.
See principal case cited with approval on the subject of Usury in Smith v. Nicholas, 8 Leigh 360; Wise v. Lamb, 9 Gratt. 305.
Chaneery Practice — Issue.—See monographic note on “Issue Out of Chancery” appended to Lavell v. Gold, 25 Gratt. 473.
On this subject, tbe principal case is cited with approval in Whitworth v. Adams, 5 Rand. 397; Powell v. Manson, 22 Gratt. 189

Opinion:
JUDGE BROOKE,
delivered the opinion of the Court.
The Court is of opinion, that a tacit understanding between the parties, founded on a known practice of the appellee, to lend money at legal interest, if the borrower purchased of him a horse, at an unreasonable price, would be a shift to evade the statute against usury. Whether the transaction under the consideration of the Court, was of *that character or not, the Court is not entirely satisfied by the testimony in the record; and, is of opinion, that an opportunity ought to be afforded the appellant, (of which he has been deprived by executing the deed of trust,) to submit the facts alledged in his bill, to a jury, who will be more competent to decide them on the viva voce testimony of the witnesses, (if to be had,) than the Chancellor or this Court, on the depositions in the cause, and that the said decree is erroneous; therefore, it is decreed and ordered, that the same be reversed and annulled, &c. And it is ordered, that the cause be remanded to the said Court of Chancery, with directions to that Court to have an issue made up and tried, to ascertain the value of the horse at the time of the sale of the same to the appellant; whether he was or was not influenced in agreeing to'give the price of four hundred dollars for said horse, by the expectation of a loan of money; and whether the purchase of the horse at that price, was or was not, an inducement to the appellee to lend the five hundred dollars to the appellant, at legal interest; and that the cause be further proceeded in, according to the principles of this decree.