Case Name: Winslow v. Dawson
Court: Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1792-10
Citations: 1 Wash. 118
Docket Number: 
Parties: Winslow v. Dawson.
Judges: 
Reporter: Virginia Reports
Volume: 1
Pages: 437–438

Head Matter:
Winslow v. Dawson.
October Term, 1792.
Contracts — Usury— Penalty- — Case at Bar. —A contract to pay a larger sum at a future day, upon nonpayment of tile sum agreed to be paid at a prior day, is not usurious, but the increased sum will be considered as a penalty, and relievable against in a Court of Equity, upon compensation being made; and that compensation is legal interest, unless some specific damage can be shewn.
This was a suit brought by the appellee, iu the High Court of Chancery, to be relieved against a judgment for /SO, which by an award of arbitrators (made under a rule of court) he had been adjudged to pay with interest; — insisting that the /SO was only intended as a penalty to enforce the punctual payment of /100, or to compel the appellee, in lieu thereof, to take up the appellant’s bond to one Garret, for that sum, and which he was prevented from doing by the appellant himself; *and praying an injunction against judgment rendered upon the award. The bill states and the depositions prove, that the memorandum was torn from the bond at the time the case was before the arbitrators, that the abitrators refused to hear the appel-lee’s witnesses, but permitted a statement to be read by the appellant’s counsel of facts which were controverted by the appellee. The answer states: that the defendant agreed to sell a tract of land to the plaintiff, and to receive payment in any one of the three following modes, 1st, /200 in hand, or 2d, /250 in twelve months, or 3d, /300 upon a longer credit. That the plaintiff acceded to the first proposition, if credit for a few months were allowed; and if not punctually paid, then, that the second proposition should prevail. This being agreed to by the defendant, two bonds were executed, one for the payment of /100 at the time last mentioned, and another for /ISO in twelve months after; — but, to the latter bond, a memorandum was annexed, that it might be discharged by the payment of /100 by a certain time, sooner than that mentioned in the condition.
The Chancellor decreed a perpetual injunction, and the costs at law to the complainant. Prom which decree the defendant in equity appealed.
Contracts — Usury—Penalty.—On this question, the principal case is cited in foot-note to Groyes v. Graves, 1 Wash. 1; Campbell v. Shields, 6 Leigh 520; Muhleman v. Nat. Ins. Co., 6 W. Va. 523.
See same case, Wythe 114; also, monographic note on “Usury” appended to Coffman & Bruffy v. Miller, 26 Gratt. 698.

Opinion:
The PRESIDENT
delivered the opinion of the court.
Taking the case to have been as stated by Winslow in his answer, the insertion of the /SO must be considered, either as a consideration for forbearance — and of course within the act of usury, — or as a penalty', for which a compensation may be made, and therefore relievable against in a court of equity: — for he admits, that the first proposition for /200 was acceded to, and adopted as the agreement between the parties.
The case of Groves and Graves,' in this court, has decided this principle; viz, that such a contract to pay a larger sum at a future day, upon non-payment of the sum agreed upon, at a prior day, is not usurious; but that the increased sum shall be considered as a penalty, against which a court of equity ought to relieve, upon compensation being made.
That compensation — in case the condition be for payment of money — is legal interest unless some specific damage be shewn, which may induce the Chancellor to direct a jury to assess the quantum of it.
In this case, Winslow speaks of difficulties to which he was subjected, but of no-particular injury sustained, which could entitle *him to a compensation beyond legal interest: so that upon his own statement of the case, Groves and Graves would be a direct authority in affirmance of the decree. But take the case either way, there is no difficulty in it. Eor since Dawson might have performed what was required of him in order to save the forfeiture, by taking up the bond to Garret by the 10th of February 1784, and was prevented by the interposition of Win-slow himself from doing so, that ought in equity to be considered as done, and the penalty of course relieved against.
But, as the injunction is made perpetual for /3; 12: 8: more than ought to have been injoined, the decree must be reversed with costs, and the injunction dissolved as to so much, and stand for the residue of the sum, and the costs at law, which were properly decreed, since the appellee appears to have tendered to the appellant, before the institution of the suit at law, more money than was due at that time.