Glisson v. Executors of Newton, 2 N.C. 385, 1 Hayw. 385 (1796)

May 1796 · North Carolina Superior Court

2 N.C. 385, 1 Hayw. 385

Glisson v. the Executors of Newton.

Defendant had been awarded to pay Plaintiff a certain sum, but at the day of payment, not ¡laving the money, lie agreed with Plain- if to give more than six per cent, for induigenci : and a bond was given for tin principal sum, and the amount b >ve tile legal in*.Test was paid partly in money, and a note given for the balance: — Upon an action on tiie bond, it was held, that the transaction was usurious and the bond -void.

Debt upon bond, and the statute of usury pleaded, — * Upon evidence it appeared, that disputes existed between ihe Plaintiff anil Defendant, relative to a tract of land ; that they agreed to submit these disputes to arbitration $ that the arbitrators awarded 'Glisson to give possession of the laud to Newton at a prefixed day; and that on the same day, New Ion should pay ninety pounds to Glisson. On the day appointed, Newton being unable to pay the money, proposed that Glisson should give time 'for payment, about eleven months longer 5 for that forbearance be would give a premium of 25 dollars, and moreover, pay the legal interest-this proposal was accepted by Glisson. Whereupon, the bond iri question was drawn, payable at a day, about eleven months from the date, and Newton paid down IS dollars, and gave a separate note for the balance of the 25 dollars.

It was argued by Slade for the

that this was not usury to avoid the bond — usury, could only be committed on the, loan of money j and this was not a loan, but a giving a further day of payment for a sum already due from the Defendant. It is not usury for another reason — the act says, *• And that all bonds, contracts and assurances whatsoever, made after the time aforesaid, for the payment of any principal or money to be lent, or covenant to be performed, upon or for any usury, whereupon or whereby there shall be received or taken, above the rate of six pounds in the hundred as aforesaid, shall be utterly void;” Now upon the bond which is the foundation of this suit, there is not any thing reserved more than the legal interest; nor thereby is there reserved or taken more than lawful interest; and therefore the bond is not within the words of the act so as fo be made void by it, whatever fate the note might undergo, were a suit instituted upon that. To the first part of his argument, he cited Cowp. 772, 113.

Sampson e contra

Where a man has my money in his hands, and I agree to give him day of payment for it, that is as much a loan, within the meaning of the act, as if I had actually advanced him that much money, and this seems to be admitted in one of the cases cited from Cowper. . Then when this bond was taken, there was a loan for a less time than a year, and upon the contract, which is the parent of the bond, there is a reservation of more for giving day of payment- — much more than the act allows. The case of the Plaintiff is no way bettered by taking a separate security for the excessive sum. Would that serve to evade the act, nothing were more easy than t;0 avoid the effect of it, which has been hitherto supposed so difficult and indeed impossible to be eluded.' He cited 1 Haw. P. C. 248. and a case from Croke’s Rep. 2 Cro. 507 — Roberts & Fremain — where there were two instruments, one for securing the principal sum, the other for securing the unlawful interest; and Doug. 235. These authorities are directly in point to the question now before the court, and decide it in favour of the Defendant. Some of them are expositions upon the l%th Anne, from which our act is copied verbatim — the construction upon that act, is a construction upon ours. Upon these author.ities, I submit tin* case of my client to the court.

Per curiam

We wish for time to consider of this question ; and that a special verdict or statement of facts in some form may be made, that will put it in our power to .pass judgment hereafter, when we shall have had time to look over the authorities cited, as well as any others that may tend to throw light upon the subject. This was agreed to by the counsel, and a special verdict found, which stated the above facts. After some days taken to •consider, the court gave judgment.

. Per curiam — We have considered of this case with attention, and have looked over the authorities upon the subject, as well those cited at the bar, as also a case ia 3 Term, 353, and other cases found in the different Reporters. We have in fact, been averse to delating this to be a case of usury within the act, because in that event, the principal sum secured by this bond, which is a just debt, will be lost as well as the unlawful interest secured by the note, but the authorities in the books are too strong to be surmounted. Any shift or device whatsoever, to take more than the interest allowed, and particularly the device of securing the principal and interest by distinct assurances, is incompetent to the purpose of taking the c»se out of the operation of the act. If the contract itself, is upon the whole face of it, a contract to have a greater premium than the law allows, it is void, whether it remains a parol contract, or becomes clothed with legal solemnities ; as is siso, every security or assurance founded upon it, whether one only, or more. This is the true meaning of the act. Without any adjudged, case, we should be bound to decide in the same manner — -were ¿he act to be evaded by so simple a contrivance as that of taking two securities, the one for principal, the otiier for the unlawful premium, it would answer no purpose whatsoever. The 13 dollars received, is above the rate allowed by law'- — and should we decide that the contract is not usurious, so as to avoid the bond, immediately the Defendant may sue for the double value, upon the last clause of the act. Wherefore let judgment be for the Defendant, and it was entered^accordingly.

Note. — Vide Carter v. Brand, Conf. Rep. 28.