Summary
In Carter v. Brand, 1 N.C. 255 (1800), for example, our Supreme Court held that the contract at issue was usurious because "[n]o part of the principal is put in hazard, but the whole is actually secured by [a lien]; nor is the agreement to pay the [interest] subject to any contingency, but is found to have been positive and absolute."
Summary of this case from Odell v. Legal BucksOpinion
(Spring Term, 1800.)
Where A. had a judgment and execution against B., and on the day of sale consented to indulge B. in consideration of a sum more than the legal interest for the time of indulgence, and afterwards the judgment, together with this sum, was paid; it was held that this was usurious, and that A. was liable in an action for the penalty, under the statute against usury.
This was an action of debt upon the statute of usury, commenced in the county court of Glasgow, to which the defendant pleaded nil debet, and stat. lim. The plaintiff had a verdict in the county court, and the defendant appealed to the Superior Court of Law for the District of New Bern, at March Term, 1799; the cause was tried, when the jury found a special verdict, in the words following, to wit: "That the defendant does owe the sum of two hundred and thirteen (256) pounds ten shillings and six pence, and that the plaintiff instituted his action within the time limited by law, subject to the opinion of the Court upon the following points reserved, viz.:
"1st. Whether this action is subject to the operation of the Act of Parliament passed in the 31st year of Elizabeth, chap. V, and on a question arising out of these facts, which the jury find, to wit: That on the thirty-first day of January, one thousand seven hundred and ninety-four, the said William Carter was indebted to the said John B. Brand in the sum of one hundred and six pounds eleven shillings and nine pence, for which judgment had been obtained and execution thereon had issued, which execution the sheriff had levied, and had appointed the said thirty-first day of January to sell the property levied on to satisfy the same; and on that day the said John B. Brand did agree that the said sale should be postponed eighteen days, in consideration that the said Wm. Carter would pay him, the said John, ten dollars more than the legal interest arising on said sum; and afterwards the said John B. Brand, to wit, on the eighteenth day of February next following, did receive from the said William Carter the amount of the said judgment, and also the said sum of ten dollars more than legal interest, as aforesaid, for the said postponement and forbearance." And the question submitted to the Court is, whether the case upon these facts is within the statute of usury. "If the opinion of the Court upon the law and facts above stated is in favor of the plaintiff, they find for the plaintiff, and assess six pence damages and six pence costs; but if the opinion of the Court should be in favor of the defendant, they then find for the defendant."
From the facts stated in the special verdict, I am of opinion that the contract is usurious, and that there should be judgment for the plaintiff.
I am clearly of opinion that the facts stated in the special verdict amount to usury.
Every case arising upon the Act of Assembly to (257) restrain excessive usury must be viewed in all its circumstances, so as to ascertain the real intention of the parties. If that be corrupt in the substance and design, no pretext however plausible, no contrivance however specious, no coloring however artful, with which the transaction is veiled, will secure it from the censure of the law. Crimen omnia ex se nata vitiat.
I think this special verdict discloses a clear case of usury. There is a debt due and an agreement to postpone the sale by which it was to be satisfied, for a consideration of ten dollars beyond the legal interest. The actual receipt of the debt, as well as the excessive interest for the forbearance, is also found. No part of the principal is put in hazard, but the whole is actually secured by the levy; nor is the agreement to pay the excess subject to any contingency, but is found to have been positive and absolute. In short, I do not perceive any principle upon which the attempt is usually made, to take cases of this sort out of the Act of Assembly.
If the doubt arose from the circumstance, that the execution being levied, the plaintiff had, therefore, no right to postpone the sale, but could only use his good offices to that end with the sheriff, I should not conceive it as making an alteration in the case. For although the law does upon the levy vest a possessory property in the sheriff to enable him to protect it from wrongdoers, yet he is substantially the agent or trustee for the plaintiff as to the produce of the goods. The law creates a privity between them, and will consider many acts done by the sheriff, by direction of the plaintiff, as the acts of the plaintiff himself. Thus he may by parol discharge a defendant when taken in execution upon a ca. sa., and if a payment of the money to the sheriff will, upon a fi. fa., discharge the execution, by the same reason will a payment to the plaintiff himself, who may consequently put a stop to the sale. Cases might arise where a sale of all a defendant's property was about to be made under such circumstances, as that the judgment could not possibly be discharged, when perhaps a postponement of the sale would (258) produce a different result. Cases of combination also between the sheriff and the bidders might be checked by the timely interposition of the plaintiff, and thereby much future litigation saved. I think from the statement in this case that the postponement and forbearance must be considered as the acts of the then plaintiff; and that if they were not so, nothing would be more easy than to evade the act upon which this suit is brought.
Judgment for plaintiff.
The Judges gave no opinion in this case respecting the operation of the Act of Parliament, passed in the 31st year of Elizabeth, chap. V.
Cited: Pratt v. Mortgage Co., 196 N.C. 297.