Opinion
(June Term, 1831.)
1. A sheriff who had collected money upon an execution, and had neglected to pay it to the plaintiff, and was thereby subject to damages at the rate of twelve per cent per annum, having lent the money thus collected to a third person at the same rate of interest, was held guilty of usury, and liable to the penalty imposed by the Act of 1741 (Rev., ch. 28).
2. It seems that an agent who lends money at an usurious rate of interest is liable to the penalty, notwithstanding he discloses his character.
3. A pure contract of indemnity against a doubtful claim is not within the statute against usury.
4. But an agreement whereby the borrower agrees to pay the lender the same rate of interest which the latter is bound to pay a third person, and which exceeds the legal rate, is not a contract of indemnity, within the meaning of the rule; and this, whether the obligation of the lender be created by an act of law or by stipulation.
5. The payment of usurious interest to the sheriff, or to an assignee, and much more to an agent, completes the offense.
6. The omission to date a writ can only be taken advantage of by plea in abatement.
7. A verdict that "the statute of limitation does not bar" is not responsive to the issue, and is erroneous.
8. But it is such a minute of the verdict as to enable the Superior Court to correct the entry; and although the Supreme Court cannot make this correction, but if it proceeds to judgment, must award a venire facias de novo, yet it will stay the judgment till the correction is made in the court below.
9. In popular actions, under nil debet, the plaintiff must prove his action to have been brought within the period of litigation, and when that plea is entered, a special plea of the statute of limitation presents an immaterial issue.
DEBT, upon the Act of 1741 (Rev., ch. 28), "for restraining the taking of excessive usury."
Badger for plaintiff.
Gaston for defendant.
The writ was in the usual form, but was tested "the second Monday of September, in the 53d year of our Independence, A.D. 182," and by a memorandum at the foot, was stated to have issued 12 September, 1828.
The defendant pleaded nil debet, and the Act of 1808 (Rev., ch. 743), limiting the time of bringing penal actions to three years after the cause of action had accrued.
On the trial, before his Honor, Daniel, J., at WILKES, on the spring circuit of 1830, the plaintiff proved that the defendant, being sheriff of Wilkes, had an execution for $600 against the plaintiff, at the suit of one Crissman, returnable to the Fall Term, 1825, of Surry Superior Court; that upon this execution the defendant had made but $400, which he sent, together with the writ, at the return day, with directions to pay it to Crissman, only upon condition that the latter would not amerce him for not making the whole amount of the execution. Crissman refused to receive the money upon these terms, and not only amerced the defendant, but took steps to subject him under the Act of 1819 (Rev., ch. 1002), to the payment of the sum actually received, together with damages at the rate of 12 per cent per annum. The defendant then loaned part of the money he had thus collected to one Thurmond, and took from him the following bond:
"We, M. Thurmond, principal, etc., promise to pay to Joel Vannoy three hundred and twelve dollars, forty cents, money lent, to be paid by March Superior Court of Surry, 1826 — the same is money collected for C. L. Crissman. We agree to pay to Joel Vannoy the interest which he may liable to pay for failing to pay the above money into (44) office at September Term, 1825, of Surry Court. 15 September, 1825."
Thurmond paid the amount of this note, together with interest at the rate of 12 per cent per annum, to an agent of the defendant, who immediately took the same money, together with the balance due upon the execution, to Surry courthouse and paid it to Crissman, with interest at the same rate on $400. At the time of this payment, the defendant was present, and then surrendered to Thurmond the note above set forth.
His Honor instructed the jury that although by law the defendant was bound to pay Crissman interest upon the money he had collected and failed to pay over at the rate of 12 per cent per annum, yet that the law which imposed so high a rate of interest upon him did not authorize him to exact the same of others, and that if the defendant had received more than 6 per cent per annum of Thurmond, they ought to find a verdict for the plaintiff. The jury found "that the defendant does owe the sum of $624, and that the statute of limitations does not bar."
A rule for a new trial being discharged, and judgment rendered on the verdict, the defendant appealed.
It is argued for the appellant that the court erred in two respects. The first, in not leaving it to the jury whether the defendant was not merely the medium or instrument of Thurmond to pay to Crissman the interest to which the latter was entitled, and so Vannoy did not receive it for himself. The second, that the contract is not one for usurious interest, as such, but merely for an indemnity, which is lawful, and, at all events, that the character of the transaction ought to have been left to the jury.
In relation to the first, it may be observed, in passing, that it is far from clear that an agent, in lending money upon an usurious contract, shall be excused, either by the fact of the agency or by a disclosure of it. It is a criminal act, and upon principle it would seem that all who participate in it were liable to its penalties. And although Crissman might properly exact from the defaulting sheriff the increased interest, given against him by law, he could not, under color of that right, loan the money to a third person, through the instrumentality of the sheriff, at such greater rate of interest.
But here there was no such agency. No contract with Crissman, direct or indirect, can be inferred. He gave no assent to the loan to Thurmond. He did not know it, and was at the time actually pursuing Vannoy by suit for the money. The fact, then, contradicts the position assumed.
The force of the second objection depends altogether upon the sense in which the term indemnity is used, and the fallacy of the argument lies in the equivocal use of that word. How was this a contract of indemnity? If it be meant that for a certain sum Thurmond agreed to save harmless Vannoy against a doubtful demand of Crissman, or one which the parties thought doubtful, it covers a case of mere wager; and, in that point of view, it is immaterial whether the demand to which the risk related were one for interest or for any other cause. But, then, it must appear upon the obligation, by a fair construction, (46) that such was the nature of the contract; or, if the contrary there appear, it must be shown by other proof that such was in fact the agreement, and that the writing, as framed, does not express the truth, and was so framed by mistake — not as to the effect, in law, of the contract as stated, but as to the terms of the agreement itself. No such proof is offered here, and the case is left on the bond itself. By the terms of that instrument the agreement is not shown to have been for an indemnity of the kind alluded to; but, on the contrary, it is shown that it was not for such an indemnity. It is express that the debt is for "money lent," and that Thurmond is to pay "the interest" which Vannoy was liable to pay to Crissman. There is nothing which can lead us to suspect that Crissman's right was doubtful, or that any one of the parties thought it so. If, then, an indemnity was contemplated, of what sort was it? Simply that which consists in one person paying to another as interest upon a loan, whatever this last had agreed or was bound to pay as interest to a third person. The bare stating it thus goes far towards understanding and answering the objection. In such a case, the notion of indemnity cannot give a color to the transaction. The reference to the interest for which the oblige was liable was only to ascertain that which the obligor was to pay. And if the parties thought that the obligee might lawfully reserve that rate of interest, because he was paying it, that would not help the defendant, provided the obligation to pay was absolute upon the borrower. It would be a mere misconstruction of the statute, which cannot be heard as an excuse. If the interest reserved exceed 6 per cent, at all events the bargain is corrupt in the sense of the statute; that is, it is a violation of the statute. If the term indemnity be understood in this last sense, there was no error in leaving it to the jury. For it is no excuse for the defendant that this was an effort to save himself from loss by reason of a liability of his own, and, therefore, he gains nothing. (47) It is like selling out stock at a loss and charging the borrower with the loss. Moore v. Beatie, Amb., 371. Indeed, the avoiding of a loss is a gain. But if it were not, the true inquiry is whether he reserved as interest on the loan made by him a higher rate than 6 per cent, and received it as and for the interest reserved. The reference to his own liability upon a distinct matter is nothing. If that liability arose from his agreement to pay 12 per cent to a third person, it is manifest that he cannot rightfully make himself whole by the loan of a like sum to another at the same rate. The interest payable by him does not make that to be received by him legal. It makes no difference, to this purpose, whether the liability of the lender for the excessive interest be created by stipulation or arise by act of law. As against him the rate of interest may be lawful, but as between him and the person to whom he lends the money it is unlawful.
Such is precisely this case. For, I repeat, the bond explicitly declares that the money was lent by Vannoy to Thurmond, and adjusts the rate of interest as such, and it was afterwards paid as such. The rate fixed on is illegal. This is done by referring to the liability of Vannoy to Crissman, and that liability was certain according to the case. Indeed, the bond is not even that Thurmond should pay to Vannoy what the latter should pay to Crissman, or what Crissman should recover, but what Vannoy was liable to pay, which the case states was 12 per cent. If this defense were sustained, one of the most effective securities for the performance of their duties by sheriffs would be destroyed, and at the same time needy men exposed to the most inordinate exactions on the part of those persons whose official situations give them the best means of discovering and profiting by the necessities of the distressed.
The next position is, that as the act is highly penal, the case must be brought strictly within it; and, therefore, that the receipt of the money must be by the defendant personally. To this there are two answers. It has often been decided that payment to the sheriff on an execution, or to an assignee completed the offense — much more, to an agent. (48) But here the defendant was present when the money was counted to his agent. He then recognized it, and surrendered the bond as thereby paid. This was a payment to himself.
Two objections are then taken as arising out of the record. The first is, that the writ is without date. If this were true, it is too late, after an appearance and a plea in chief to make it. It ought to have been pleaded in abatement. But it is not true. Though the year of the Christian era is not given in the teste, yet that of American independence is; and the former is stated in the memorandum of the clerk, at the foot, of the day of issuing the writ.
The other ground for arresting the judgment is, for the defect of the verdict upon the issue on the plea of the statute of limitations. The words are: "The jury find that the statute of limitations does not bar." The authorities cited for the defendant very satisfactorily prove that the verdict in this form is bad. It is not a direct response to the issue upon the point of fact, and upon that alone. The fact is to be collected by inference only, and then is not certainly separated from matter of law. If, therefore, the judgment of the court necessarily turned on the finding of the time as thus stated, it is very uncertain what might be the determination. The truth is, that regular entries are seldom made in our courts. This is owing mainly to the want of capacity in the clerks, which is likely never to be remedied until increased business and adequate compensation shall induce competent persons to accept the office. But the Court cannot but take notice that this state of things, and perhaps also their own ease, have given rise to an almost unlimited confidence of the bar in each other, that all necessary amendments of form in the acts of the clerk shall be made or intended when the occasion shall call for them. The Court would, therefore, very reluctantly yield definitely to this objection. But we could resist it no further, probably, than by considering the entry not so much the verdict as the minute for it, and staying the judgment here until the plaintiff could move the Superior Court to amend the record consistently (49) with the minute, and bring up the transcript as amended. That court can mould the verdict into due form; there is no such power here. I mention this, that counsel may be aware of the difficulty arising out of the constitution of this Court, and be more attentive to the making up of the record where it is to be revised. If brought to judgment upon a defective verdict, this Court has no discretion, and must of necessity award a venire facias de novo.
That such is not the judgment in this case is owing to the uncommon circumstance that the fact, intended to be found upon that issue, is found upon another. In popular actions the statute of limitations need not be pleaded if if nil debet be. It is a part of the plaintiff's title or right that he hath sued and hath sued in due time. The burden of proof is on the plaintiff, and if his action be not brought within time, he is upon the general issue nonsuited. (2 Saun., 63a, note.) If the same matter be put twice in issue by several pleas, there is no authority that the verdict must refer to each issue. If the act itself be affirmed that is enough. Here the jury do find that the defendant owes the plaintiff the debt demanded, which cannot be unless the plaintiff brought suit within the three years limited by the Act of 1808.
PER CURIAM. Judgment affirmed.
Cited: Grist v. Hodges, post, 205; Cherry v. Woolard, 23 N.C. 440.
(50)