Case Name: Seth Bearce versus John Barstow
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1812-05
Citations: 8 Tyng 45
Docket Number: 
Parties: Seth Bearce versus John Barstow.
Judges: 
Reporter: Massachusetts Reports
Volume: 9
Pages: 49–52

Head Matter:
Seth Bearce versus John Barstow.
A owing B a sum 01 money tor a valid consideration, and B owing C a sum on which he had received usurious interest, an agreement was made that A should give to C a promissory note for the sum due from B to C, including the usurious interest; and A was discharged of so much of his debt to B. It was held that the note so given by A to C was not void by the statute against usury ; the verdict of the jury having negatived any contrivance to evade the statute.
Assumpsit by the payee against the maker of a promissory note, dated March 31, 1809, for the payment of 496 dollars, in one year from the date, with interest after until paid.
Upon the trial of the action, upon the general issue joined, before Thatcher, J., at the last October term in this county, the execution of the note being proved or agreed, it was proved to have been given for the consideration, and under the circumstances following: Before and until said note was given, one Jonathan Byram was indebted to the plaintiff in two or more notes of hand, * amounting to 400 dollars or upwards, for moneys loaned to him by the plaintiff, and for which he had agreed, at the time of giving said notes, to pay, and had before paid, interest at the rate of twenty-four per cent, per annum; but no part of the said interest was included in said Byram’s notes to the plaintiff.
A short time before the note in suit was made, said Byram had sold to the defendant a piece of land for 600 dollars, being its fair value, and he was to allow the defendant one year’s credit, without interest.
The defendant, in consequence of a conversation between him and Byram, and of an arrangement between Byram and the plaintiff, agreed to become answerable to the plaintiff for 496 dollars, part of the price of the land sold as aforesaid, and to account to Byram for the residue. This was done at the request of Byram, although somewhat unwillingly on the part of the plaintiff, who was content with the security he before had. Accordingly, on the day of the date of the note declared on, the plaintiff discharged Byram of 400 dollars due on the notes of the latter, and the defendant gave the note now in suit, being for the said 400 dollars, and the interest thereof for one year at twenty-four per cent.; the defendant accounting to Byram for 104 dollars, the balance due for the land.
Byram,
being sworn as a witness at the trial, testified that all the parties were together at the transaction, and that, from what was said and done on the occasion, he had no doubt that the defendant knew that the note in suit was given for a part of the sum on which twenty-four per cent, had been agreed to be given as aforesaid, and that it also included one year’s interest due from Byram to the plaintiff, at the rate aforesaid. There was also evidence that the defendant had said, some time after the note declared on was given, that it did not contain any unlawful interest.
Upon this evidence, the judge instructed the jury that, unless they were satisfied from the evidence that the arrangement and exchange of notes before stated were made * with a view to evade the statute against usury, and that the said arrangement and exchange of notes were in contemplation, and intended at the time the original notes were given by Byram to the plaintiff for the money loaned to him, and for the purpose of eluding the said statute, they ought to find a verdict for the plaintiff. And a verdict being returned for the plaintiff accordingly, the defendant filed his exceptions to the directions of the judge; and the action stood over to this term for the consideration of those exceptions.
Mellen,
for the defendant, insisted that the note in this case was void, as coming within the express words of the statute against usury. This was a contract made for the payment of money lent, whereby there was reserved, or taken above the rate of interest allowed by the statute. And as it is within the words, so it is within the reason, of the statute. If this action is maintained, the statute may always be avoided by procuring a third person to give a note instead of the borrower. The statute was intended to operate on the lender, and not on the borrower. And it will be noticed that the original lender was the present plaintiff. In the case of Cuthbert vs. Haley, the substituted security was given to a third person without notice of the usury; and two of the justices expressly say that, if the new security had been given to the original lender, it would have been void. And this point is expressly decided in the case of Tate vs. Wellings.
Whitman, and Cutler,
for the plaintiff, cited the case of Turner vs. Hulme, decided by Lord Kenyon, as precisely like the case at 'bar.
1783, c. 55.
3) 8 D. &. E. 390.
3 D. & E. 531
4 Esp. Rep. 11.

Opinion:
Mellen.
That was a decision by a single judge at nisi prius; and, if it is good law, it goes far towards repealing the statute against usury, and in its spirit is opposed to the case of Cuthbert vs. Haley.
Sewall, J.
The only question necessary to be decided in this ° case is, whether the clause cited from the statute against usury, relied on for the defendant, is at all * applicable lo this case, as we must understand it, upon the facts stated, and the verdict found under the direction given by the justice who presided at the trial.
The English statutes against usury contain a similar clause for the avoidance of usurious contracts, expressed nearly in the same terms, and entirely of the same import, as the clause in our own statute, relied on for the defendant. The construction there is, as appears by numerous decisions, that the objection of usury, to avoid a contract, must be made to the security or promise, whereupon or whereby illegal interest has been taken or reserved, and by a parly otherwise liable therein. It is a remedy provided for his defence, to which he may resort if he pleases; and when he insists upon the objection, to avoid the usurious contract itself, and maintains by proper evidence, the law will not suffer the contract to be enforced against him, for the benefit of the original creditor or any other person. A renewal of the contract between the same parties, and every species of contrivance in the modification of any loan or contract, for the purpose of evading the statute, being cases within the mischief, are also within the remedy.
But where the party liable upon a usurious contract will not avail himself of the remedy provided by the statute, for the purpose of avoiding it, — where he voluntarily discharges it, or suffers a judgment to be recovered upon it, or makes it the consideration of a contract entirely new, as being with a third person not a party to the original contract, or to the usury paid or reserved upon it, or as combining other parties and considerations, and not being a contrivance to evade the statute, — there the provision no longer applies. Money paid upon a usurious contract is not to be recovered back; — a judgment upon a usurious contract is not, for that objection, to be avoided; — and when made the consideration for another contract, it is neither an illegal nor a void consideration.
In the case at bar, the plaintiff, as the creditor of Byram, was a party to a usurious contract, which has been paid * or satisfied in part by the defendant's note. This payment, therefore, Byram cannot recall; and much less shall the defendant be allowed to avail himself of a transaction so remote, where he has suffered no loss or injury, to defeat his voluntary contract, given for a just and valuable consideration, and in discharge of his debt to Byrmn. It is nothing to the defendant to what use or purpose his creditor has disposed of the demand against him, which is liable to no objection of usury; and which, being due from him, has been legally transferred, and made the consideration of the note in suit. Every supposition of contrivance to evade the statute against usury is negatived by the finding of the jury, under the particular direction upon the point by the justice who presided at the trial.
Per Curiam.
Judgment on the verdict.
5 Rep. 117, Whelpdale's case. — Bull. N P. 224.
[A judgment pursuant to a warrant of attorney may be avoided for usury in the security whereon it is founded. - Roberts vs. Goff, 4 B. & A. 92. — Vide Flint vs. Sheldon, 13 Mass. Rep 443. — Ed.]
[Vide Chapman vs. Black, 2 Barn, & Ald. 588. — Bridge & Al. vs. Hubbard, 15 Muss Rep. 96. — Ed.]