Case Name: Bell & al. v. Calhoun
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1851-07
Citations: 8 Gratt. 22
Docket Number: 
Parties: *Bell & al. v. Calhoun.
Judges: (Absent Cabell, P.)
Reporter: Virginia Reports
Volume: 49
Pages: 408–409

Head Matter:
*Bell & al. v. Calhoun.
July Term, 1851,
Lewisburg'.
(Absent Cabell, P.)
i. Bonds —Assignment — Usury — Case at Bar.— In December 1843 O assigned to B a bond on E, who was in doubtful circumstances, for 529 dollars and 6 cents, due on 26th October 1888, and subj ect to a credit of 15 dollars paid 1st October 1842; for which B gave him 494 dollars and 25 cents; and Oat the same time, executed a deed of trust on property with condition that if the bond with its interest was not paid in twelve months, the trustee should sell and pay the amount to B. This was usurious.
2. Usury — Deed of Trust to Secure Debt — Heasure of Relief. — On a bill to enjoin a sale under the deed of trust, the plaintiff says he has proof and does not wish a discovery, but that the sale may be enjoined until the validity of the deed can be tried at law. Upon an issue directed by the Court, the jury find the usury; and that the usurious premium is the difference between the sum advanced by B to C and the bond with interest to that time subject to the credit for 15 dollars. Held : That the proper relief is, not to perpetuate the injunction for the whole amount of the bond and its interest due; but only for the amount of the usurious premium.
In March 1844, George A. Calhoun applied to the Judge of the Circuit court of Augusta county, for an injunction to restrain a sale of slaves under a deed of trust. In his bill he alleged in substance, that in December 1842, he ascertained that he would be compelled to raise a sum of money of over four hundred dollars by the first or second of January 1843. That he finally made an arrangement with Samuel H. Bell and William Crawford, whereby he assigned to them a bond which he held on John Edmondson for 529 dollars and 6 cents, due on the 26th of October 1838, subject to a credit of 15 dollars, paid the 1st of October 1842, for which he '^received the sum of 494 dollars and 25 cents; and he at the same time in pursuance of the agreement between them, executed a deed of trust, a copy of which was exhibited with the bill, whereby he conveyed to Eittleton Waddell four slaves, upon trust, that if within twelve months from that date the bond so assigned with interest should not be paid to said Bell and Crawford, then the trustee should sell the slaves at public auction for cash, and pay the whole amount of said bond to Bell and Crawford. He charged that this atrangement was not a sale of the bond, but a usurious agreement, whereby Bell and Crawford agreed to lend to the complainant 494 dollars 25 cents for twelve months, for which he was to pay the full amount of Edmondson’s bond amounting to about 693 dollars 43 cents, something over thirty-three per cent.
The bill as originally prepared, after making Waddell, Bell and Crawford parties, called upon them to answer the bill upon oath, and asked that they might be restrained from selling under the deed of trust; that the deed might be declared usurious and void; or if not, that the plaintiff might at least be relieved from the payment of all over the sum with its interest which he had received. Afterwards but before the bill was filed, a clause was added by which the complainant alleged that he could prove all the allegations of the bill going to establish the usury charged therein, and that he did not require a discover of the usury from the defendants by their answers; and he asked for an injunction to restrain the sale of the trust property until the validity of the deed could be tried at law. The injunction was granted.
The defendants Bell and Crawford answered the bill. They alleged that Ed-mondson was insolvent at the time, and the bond referred to in the bill was secured by a deed of trust; but there were so many other debts secured by the same deed, having priority to this, that it *was very doubtful whether it would be paid. That the agreement between the complainant and themselves was, that he should assign the bond to them at a discount of twenty five per cent. ; and secure them for the money they should advance to him by a deed of trust on negroes. That accordingly on the same day, the defendant Waddell, at the instance and under the directions of the complainant, prepared the trust deed; and on the same day the bond was assigned to them, and they advanced to the complainant the sum of 494 dollars 25 cents.
They aver that their understanding of the contract at the time, and ever since, has been, that they had a right to the whole amount of the bond on Edmond-son, if they could collect it of him. Of this however they had considerable doubt; and if they failed, then that they had a right to look to the trust deed executed by the complainant, as a security for the money actually advanced to him, with the legal interest accruing thereon. And they aver that they never have claimed or demanded under said deed of trust more than the said sum of 494 dollars 25 cents, with legal interest thereon.
The deed of trust recites, that its object is to secure to Bell and Crawford the full payment of the bond assigned, with interest thereon; and it provides, that if it is not paid in twelve months, the trustee shall, at the request of Bell and Crawford, or their assigns, sell for cash so much of the trust property as may be necessary to make the amount which may be then due upon said bond; which amount he shall pay over to those entitled.
At the June term 1844, the cause came on to be heard on a motion by the defendants to dissolve the injunction ; whereupon the Court overruled the motion, and ordered that an issue be made up between the parties and tried at the bar of that Court, before a jury, to ascertain whether the assignment of the bond of Edmondson *by the plaintiff to Bell and Crawford, and the deed of trust of the same date, were founded on a corrupt and usurious agreement or not; and if upon a usurious agreement what was the amount of the usurious premium reserved on said contract. Upon the trial of this issue the jury found that the assignment of the bond and the deed of trust were founded in a usurious agreement; and that the usurious premium amounted to the difference between the sum of 494 dollars 25 cents and the sum of 529 dollars with interest thereon from the 8th of May 1838 to the 31st of December 1842, the date of the deed of trust, subject to a credit of 15 dollars, as of the 1st of October 1842.
The cause came on to be finally heard at the June term 1847, when the Court approved the verdict of the jury; and being of opinion that the measure of relief consequent on the verdict, upon the authority of Marks v. Morris, was the annulment of the trust-deed and assignment, and forfeiture by the defendants of the entire debt, perpetuated the injunction with costs. Erom this decree, Bell and Crawford applied to this Court for an appeal, which was allowed.
The cause was argued by Eultz, for the appellants, and Michie, for the appellee, but as the authorities are all cited in the case of the Bank of Washington v. Arthur, 3 Grattan 173, it cannot be necessary to refer to them here.
Bonds — Assignment. —See monographic note on “Bonds” appended to Ward v. Churn, 18 Gratt. 801; monographic note on “Assignments” appended to Ragsdale v. Hagy, 9 Gratt. 409.
Usury — Deeds of Trust to Secure Debt — Pleasure of Relief, — In Marks v. Morris, 4 H. & M. 463, it is held that, in cases of usury the borrower filing a bill in equity is entitled to relief, not against the contract entirely but to the amount of all but the principal money, the lender being entitled to receive his principal without any interest. This case was subsequently overruled in Bank of Washington v. Arthur, 3 Gratt. 173; Bell v. Calhoun 8 Gratt. 22. In which latter case itis held that, on abillto enjoin a sale under a deed of trust to secure an usurious debt the proper relief is, not to perpetuate the injunction for the whole amount of the bond and its interest due; but only for the amount of the usurious premium. But see sec. 10, ch. 141, Code 1849, where the doctrine in Marks v. Morris, was given the form and force of statutory law. Tlie usurious laws of Virginia are discussed in the following cases, which cite the principal case: Brockenbrough v. Spindle, 17 Gratt. 26; Munford v. McVeigh, 92 Va. 452. 23 S. E. Rep. 857: Davis v. Demming, 13 W. Va. 270, 274, 275, 276. See sec. 2821, Code 1887; Poll. Suppl., sec. 2823; also, monographic note on “Usury” appended to Coffman v. Miller, 26 Gratt. 698.

Opinion:
BAUD WIN, J.,
delivered the opinion of the Court.
The Court is of opinion that there is no error in so much of the decree of the Circuit court as approves the verdict of the jury, ascertaining that the assignment and trust deed in the bill and proceedings mentioned, were founded in a corrupt and usurious agreement and contract between the appellants and the appellee, and ascertaining the amount of usurious premium reserved on *said agreement and contract. But that the said decree is erroneous in holding that the proper measure of relief consequent upon the verdict of the jury, is the forfeiture by the appellants of the entire debt, and in wholly perpetuating the injunction which had been granted to the appellee to restrain proceedings under said trust deed; this Court being of opinion that the proper measure of relief to the appellee, is a credit for the amount of the usurious premium found by the verdict of the jury, against the principal money and interest secured by said assignment and trust deed, and a further credit against the same for the sum of 15 dollars mentioned in said verdict; and that the said assignment and trust deed ought to stand as securities for the balance of the principal money and interest thereby, secured, and payment thereof enforced if necessary, by a sale tinder the direction ot the Court, of the property conveyed by said trust deed. It is therefore adjudged, ordered and decreed, that so much of the said decree as is above declared to be erroneous, be reversed and annulled, and the residue thereof affirmed, with costs to appellants. And the cause is remanded to the Circuit court, to be proceeded in according to the principles above declared.
Decree reversed.