Case Name: WILLIAM C. STEDMAN QUI TAM vs. WILLIAM BLAND
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1844-06
Citations: 4 Ired. 296
Docket Number: 
Parties: WILLIAM C. STEDMAN QUI TAM vs. WILLIAM BLAND.
Judges: 
Reporter: North Carolina Reports
Volume: 26
Pages: 296–301

Head Matter:
WILLIAM C. STEDMAN QUI TAM vs. WILLIAM BLAND.
An action for the penalty under the statute against usury cannot be supported, unless the usurious interest, or some portion of it, has been actually received, either in money or money’s worth.
A. loaned a sum of money to B. at usurious interest, and to secure the payment B. conveyed to a trustee a house and lot worth more at the time than the money borrowed and the usurious interest: afterwards the property was sold by the trustee at public auction and purchased by A. who gave for it what was then its fair value, but, owing to the depreciation of the property, the sum for which it sold did not amount to the principal of A.’s debt. Held that A. was not liable to the penalty under the Statute against usury.
The case of ELrmghaus v Ford, 3 Ired. 528, cited and approved.
Appeal from the Superior Court of Law of Chatham County at Spring Term 1844, his Honor Judge Dick presiding.
This was an action of debt qui tarn &c. on the Statute of Usury. The plaintiff proved by H. H. Yeargain that, on the 22d of Febuary 1839, he Yeargain, borrowed from the defendant fifty dollars, and gave his bond for one hundred and five dollars, payable twelve months after date ; that on the- 23d of Febuary, 1839, he borrowed two hundred and twenty five dollars from the defendant and gave his bond payable to the defendant for two hundred and fifty dollars payable twelve months afterdate, with interest from the date; that, on the said 23d of Febuary 1839, he, Yeargain, executed a deed of trust to one W. Hanks, by which deed he conveyed to the said Hanks, his dwelling house and two lots in the town of Pittsborough to secure-the payment of the two aforesaid bonds. On the 19th of November, 1842, Hanks sold the house and lots at public sale to the highest bidder, when the defendant, being the last and highest bidder at the sum of four hundred dollars, became the purchaser. This witness further stated that previous to the 19th of November, 1842, he had executed two other bonds to the defendant for borrowed money, one bond for one hunbred and thirty dollars and the other for seventy seven dollars, and executed a second deed' of trust to secure the payment of the two last mentioned bonds; that the said Hanks was also the trustee in this second deed, and that the sale made on the 19th of November, 1842, as above mentioned, was under both deeds. This witness further stated, that, on the said 19th November, 4842, after the sale, the defendant delivered to him the same bonds aforesaid and executed to him a receipt, as follows, “Reed, of H, H. Yeargain in full of the amount due me on account of two deeds of trust made to W. Hanks to secure me by said Yeargain, this 19th of November 1842, William Bland.” The witness further stated, that he did not pay the said Bland any money or other thing of value,, at the time the above receipt was given or at any other time, in discharge of any of the aforesaid bonds. The plaintiff then examined W. Hanks, the trustee, who stated that he sold the house and lots under the two deeds of trust aforesaid; that the sale was public and fair as far as he knew; that the defendant became the last and highest bidder for the sum of four hundred dollars; that four hundred dollars was a fair price for the house and lots in November, 1842, and that the bonds were delivered up to Yeargain, and, by the consent or direction of Bland, satisfaction was entered* on the deeds of trust. This witness was then asked by the plaintiff, if he had executed a deed conveying the house and to purchaser, William Bland. This question was objected to by the defendant, because the deed was not pro-¿uce(j ky plaintiff and no notice had been served on the defendant to produce it. The Court sustained the objection and rejected the evidence. This witness further stated, that in Febuary, 1839, the house and lots were worth eight hundred dollars. The witness Yeargain further stated, that, some few months before the sale, he offered the house and lots to Bland at eight hundred dollars ; that Bland refused to give that sum, but offered the witness seven hundred dollars, which the witness refused to take.
The Court charged the jury, that, to entitle the plaintiff to recover, he must prove that some part of the usurious interest had been received by the defendant; that it was proper for them to take into consideration the receipt, in connection with the evidence of the witnesses, and if they believed the witnesses, and collected from the whole of the testimony, that'usurious interest had been received by the defendant, the plaintiff was entitled to recover. The Court further staled, it was ¿necessary for the plaintiff to prove, that Hanks, had conveyed the house and lots to Bland by deed, before the title would vest in Bland, and if they believed from the testimony, that thé 'Tegáirti'fi'ó' was still in Hanks, and that Bland had received nothing in any other way, the plaintiff was not entitled to recover.
The jury found a verdict for the defendant, and judgment being rendered accordingly, the plaintiff appealed.
George W. Haywood, for the plaintiff,
contended in substance, that the defendant had by the deed of trust and the sale under it, acquired more than enough or quite enough to discharge his debt and the usurious interest; that by his acceptance of the property in February, 1839, as security, he had taken it at its valuation at that time and should be bound by that valuation at its subsequent sale — and he quoted as authorities, Maddox qui tarn v Hammett, 7 Term. Rep. ISO. Oro. Eliz. 20. Note 1st Ferrall v Shaw, 1 Saund. Rep. 395. 1 Starkie’s Evid. 356. Bowell v Vannoy, 3 Dev. 43.
J. TL Uaughlon, for the defendant,
insisted, that no usurious interest, had been received by the defendant — that the property by the deed in trust was a mere security for the debt until its sale by the trustee in November, 1842, when the title was purchased by the defendant for $400, being less than the principal of his debt — 2dly, that, if the receipt of usurious interest was consummated by the execution of the deed of trust in February, 1839, the plaintiff could not recover because he had not brought his suit within three years from that time. Bowell v Vannoy, 3 Dev. 49. 3dly, that the usurious interest, not having been received in actual money, must at least have been received in money’s worth, 5 Dane, p. 333, 334. Wright v Me Gibbong, 2 Dev. & Bat. 474-— and the defendant received nothing by the conveyance of the house and lots, under the deed of trust, because the deed of trust was infected with usury, and therefore no title passed. Shober v Hauser, 4 Dev. & Bat. 91.

Opinion:
Nash, J.
Several questions of law were made during the trial, and several objections taken to the Judge's charge. We do not deem it necessary to notice any of them; for, if his'Honor did commit an error in his directions to the jury, it would do the plaintiff no good to grant him a new trial. Upon the case, as it appears before us, it is obvious he cannot recover. The simple statement is, that the defendant loaned to Yeargain at different times $482, upon which large usurious interest was reserved, but that he has'actually received no more than $400 in return. So far from exacting usurious interest, he has not got back that which by law he might have received, which was the actual sum loaned with six per cent, interest on it. He has not, therefore, according to the case, taken one cent of usurious interest, and of course has not incurred the penalty of the law. The plaintiff's right to a recovery has, before us, been placed on the ground, that, as the house and lot were, at the time they were con-veye(^ to Hanks, worth $800 — which is more than the sum loaned with legal interest — the defendant has incurred the penalty designated by the act of the General Assembly, by taking the house and lot in discharge of the bonds. We do not think so. The bonds, which were given, as well as the conveyances, could have been avoided for the usury, if suits had been brought to enforce them, as they were but securities for the money loaned. But this is an action to recover the penalty, inflicted by statute, for making an usurious loan, which is double the amount of the money loaned — and, before the defendant can be subjected to this heavy penalty, it must not only be shewn that the loan was usurious, but that the defendant has received the usurious interest or some portion of it. And if in this case the house and lot were worth at the time $800, and had by Yeargain, the borrower, been conveyed to the defendant, in payment of the bonds so given by him, and by the defendant so received, it would clearly have been usurious and the penalty incurred; for, in order to complete the usury, it is not necessary the usurious interest should have been received in money — if received in property it is sufficient — the law looking to the substance, and not to the form, of the transaction. That is not the case here. The house and lot are conveyed to' Hanks, not that shall convey them to the defendant, but that he shall sell them and with the proceeds pay the debt due the defendant. The trustee, after due notice, sells the property at public auction, and the defendant becomes the purchaser for the sum of $400 — a sum the full value of .the property and less than the moneys loaned — and the bonds are given up and the deeds satisfied. It may be that Yeargain has been injured by the deterioration of his property — but the loss to borrower is not the only, criterion by which to judge whether a transaction is usurious. Ehringhaus v Ford, Ired. 528. If a third person had purchased the house and at the sale, for the price the defendant bid for them, the to Yeargain would have been precisely the same ; yet no one could imagine, for a moment, that, upon trustee's paying over that money to the defendant and his surrendering the bonds, he would have incurred the penalty of the law. How is the principle varied by the defendant's purchasing %
However contaminated the contract was, and unquestionably, according to the statement of the case, it was usurious, we are of opinion that it does not appear, that the defendant has received the usurious interest reserved or any portion of it, and that he has not incurred the penalty of the law.
Per Curiam, Judgment affirmed.