Case Name: GRAHAM against LOWRIE
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1817-07
Citations: 1 Taylor 189
Docket Number: 
Parties: GRAHAM against LOWRIE.
Judges: 
Reporter: North Carolina Reports
Volume: 4
Pages: 189–192

Head Matter:
GRAHAM against LOWRIE.
Where a usurious agreement is bJ,18 the illegal \ interest is received in South-Caro-tma, an ac-turn will not penalty!1*
THIS was an action upon the statute of Usury. The . Plaintiff and Defendant both reside in the county oí Rutherford., and resided there long before the circurn-stances hereafter mentioned, took place. The Plaintiff owned a tract of land with a mill thereon, worth at the time of the contract §1000, in the State of South-Car olina. The Plaintiff obtained, on loan from Defendant, the sum of §600 for six months, for which he was to pay at the rate of twelve per cent. To secure the repayment of the JBH00, together with §36 the usurious interest, the Plaintiff agreed to make an absolute conveyance, in fee simple, for the mill and lands in South-Car olina ; and it was further agreed, that the Plaintiff should keep possession of them for six months, the term of credit agreed bn. If at the end of six months, he repaid the consideration money mentioned in the deed, viz. §636, the Defendant was to reconvfey the land and mills. If he failed to pay, the Defendant was to enter on and hold them as his own absolute property, according to the tenor of the deed.
The contract was made between the parties at the house of the Defendant, in Rutherford county. The deed was signed in South-Car olina, where the parties went to have it executed. The sum of §100, part of the §600, was paid in South-Carolina, at the time the deed was executed. A part had been advanced in Rutherford, at the time of making the contract, and the balance was paid in Rutherford, after the execution of the deed.
: The ’Plaintiff kept possession of the land and mills for six months after the contract, and not paying the $636, the Defendant entered, and has had possession of thena and the profits ever since. In this the Plaintiff has acquiesced ; nor has he repaid the money and the interest reserved thereon, or offered to pay the same in any other manner than by giving up ⅛⅜ land aforesaid to Defendant, who holds the same under the absolute deed aforesaid.
The jury found for the Plaintiff the amount of the penalty sued for. The Defendant moved for a new trial, on the ground that the facts alo not, in law, subject him to the penalty. Which being overruled, he appealed, &c,
The cause was tried before Cameron, J. at Rutherford Superior Court.
Browne, for the Defendant.
This action is founded on our Statute of «Usury ; not on that of South-Carolina. The latter is not set forth ; ■and being a penal statute, we could not take notice of it if it was.
It must be admitted, that our laws are not in force in South Carolina ; and it must also be admitted, that as the land lay within the territorial jurisdiction of South Carolina, the laws of that State exclusively regulate the transfer of them.
The lex loci of the transaction governs a challenge in this State, and if they go into South-Carolina to fight, for the express purpose of evading the law, and do fight, they are subject to our law for having given or received ¾ challenge, but not for the assault or intent to kill or for the homicide, if one ensues; for they were not then and there in the peace of God and this State, because its peace extends no further than its boundaries.
Scotch marriages are good, notwithstanding what was said hv Lord Mansfield, in 2 Bur. 1079. So the lex loci governs interest on contracts There is nothing more common in this State. A merchant in New-Tork and one here, have accounts current. By that merchant shipping goods according to order, and the one here shipping produce to be applied to his credit when disposed of, the balance is sometimes on one side and, sometimes on the other ; and it is the duty of the debtor to look out for his creditor ; so that, when the balance was in favour of our merchant, the money was to be paid here, vet interest on both sides at 7 per cent, because the contract Was there.
The only exception that occurs to me, is the case of lands which are regulated according to the law of the country where they lie. Therefore, if there was any offence committed it was against the law of South-Ca.ro-lina and not jfiorth-Carolina. l.But if the transaction had taken place in fi!orth-Carol\na, no action could have been supported under our statute. It first makes all assurances, &c. utterly void; and the deed being only, an assurance, &c. it is utterly void, and the Defendant when he entered, was a trespasser as much as if he had no deed. If he had had no deed and had entered, he would not have been liable to the penalty in the statute, although there might have been a usurious contract between them before, and this is the same thing. 2. The statute speaks only of taking money, six pounds in the hnndred. No case can be found where any thing else has been taken but money, &c. If this is not so, he might recover the penalty first, and then the land ; and so the Defendant would be subject to the operation of both branches of the statute.
3 T. R. 783, per Bul. 735. 4 T.R. 184.
Vide Co. Lit 79, b in notis 2 H Bl. 412, per Eyre
2 Bl. Com 463. 1 Eq. Ca. ab. 288. 2 Vern. 395.

Opinion:
Taylor, C. J.
Usury is, in a peculiar degree, an of-fence of positive law ; because the rate of interest depending upon local and domestic considerations, is established in every country, with a single view to its own advantage, ^ is accordingly different nearly in all the States by which this is bounded, and hence it would be equally mischie-? vous in practice and absurd in principle to test a transaction occurring in one State by the standard of criminality established in another. From the facts in this case, it is evident, that the penalty was not incurred in this State, for the illegal ^nteresJS was not actually received until the Defendant obtained possession of the land, even upon the supposition that'the usury was then complete. But this might admit of doubt, if it were necessary to enter into that question, considering that the right of redemption still remained in the Plaintiff. I cannot think that any difference i& made in the case by the circumstance of the parties being citizens of this ¡State and making the corrupt agreement here. There are some opinions to the contrary, but the principle recognised ⅛ the common law is, that the criminal and penal laws of a State, haye force only within its limits, and are not obligatory upon persons in another government. This has been decided in this Sfttte, eyen where an Act of Assembly was passed for *^c FWlWffe of punishing a crime commi|ted out of the. State.
I am, therefore, of opinion, that there ought to be a new trial. The rest of the Court concurred in awarding a new trial.
State v. Knight 1799.