Opinion
(June Term, 1831.)
1. A court of equity is bound by the statute of usury, and although upon the bill of the borrower aid will be extended only upon the terms of his repaying the sum lent with interest, yet the lender can have no relief whatever, and his bill to foreclose an usurious mortgage will be dismissed.
2. Where the bill alleges a transaction to be a loan and a mortgage, and seeks a foreclosure, the plaintiff cannot at the hearing ask relief as upon a conditional sale.
3. On the inquiry whether a conveyance of slaves be a mortgage or a conditional sale, the fact that no bond is taken to secure the money advanced is only one evidence of the character of the transaction.
THIS bill was originally filed in RUTHERFORD, and sought to foreclose a mortgage of slaves. It charged that the intestate of the plaintiff lent to the defendant, on 4 June, 1808, the sum of $260, and to secure it took a bill of sale for the negroes mentioned in the bill, which had been limited to the defendant by will after a life estate to two others. The deed was exhibited with the bill, and was absolute upon its face, and purported to be in consideration of $260; but the plaintiffs admitted that it was intended only as a security, and that McBrayer executed to the defendant at the same time a defeasance declaring the deed to be (76) void upon payment of the sum lent ($260) with interest, at the end of two years. The bill charged that the tenants for life were both dead, and that the defendant had lately come into possession.
Hogg for plaintiff.
No counsel for defendant.
The defendant in his answer admitted the bill of sale and the loan of money, but averred that instead of $260, the amount loaned was only $208, upon an usurious contract. He charged that the intestate was to lend him $260, and did count it out, but that he immediately took back $52, for the interest in advance for two years, and that he then executed the defeasance to avoid the conveyance upon the payment of $312, on 14 June, 1810.
The defeasance was filed by the defendant as an exhibit, and was proved by the subscribing witnesses. The evidence was very short, and will be found stated in the opinion of RUFFIN, J.
Upon the face of the transaction, as stated by the parties, it is clearly a mortgage to secure a debt contracted upon an usurious consideration.
The depositions of the subscribing witnesses to the bill of sale and defeasance have been taken. One of them disclaims any recollection of any of the incidents, except his attestation. The other directly sustains the answer. Indeed, if the whole sum of $260 had been advanced, the sum of $312 mentioned in the defeasance would itself prove the usury, as it is an excess of $20.80 above the legal rate of interest. And at any rate, it supports the statement of the answer and of the witness.
(77) Upon the case thus taken, the plaintiffs can have no relief in this Court, which can no more disregard the statute than a court of law. If the plaintiff can make anything at law of his legal title, he is at liberty; and when the borrower comes here we will make him do equity by paying the sum borrowed and the lawful interest, as the price of our assistance. But when the lender asks aid of equity, he must ask it on a contract not tainted by an unlawful and corrupt ingredient.
But it is urged for the plaintiff that here is no usury, because there was no loan, and the premium was no more than a fair compensation for the risk of losing the property, considering it as a conditional sale. The risk is supposed to consist in the perishable nature of the thing, namely, slaves, and the danger of their loss by being removed by the tenants for life, or the expense of securing them by process in this Court; and the argument that there was no loan is founded upon the fact that no security was taken for the repayment of the money, and so there was no obligation on the borrower, and if the negroes died or were removed, the loss must fall entirely on McBrayer.
The argument upon the nature of the contract might admit of consideration if the cause turned upon any construction now to be put upon it by the Court. We think, indeed, that the contract itself, if its character were now to be determined by the Court, is plainly proved by the express provisions of it, and the testimony of the witness, to be usurious. But if this were not so, the Court could not help the plaintiffs upon this bill, because mortgage and loan, or not, is a question not open upon the pleadings. The bill itself states it to be a loan of $260, and declares the conveyances to have been intended as a mortgage and security. Now, though the Court is at liberty to construe a contract and put a meaning upon the words of it according to the sense in which the parties used them, however improper that may be, and contrary to their true import, yet no such liberty can be taken with pleadings. The plaintiff, with the aid of counsel, puts a construction upon the bargain, and admits it to be of a particular character, and upon it, as such, seeks a particular relief. Treating the contract to be of that sort, when the case turns (78) out against him he cannot ask the judge to declare the contract to be different and to give him a different relief. Here the bill charges a mortgage, and prays a foreclosure. Where the debt secured, if a debt, is proved to be usurious, we cannot, against the bill, say it was not a mortgage, but a sale. A party must be bound conclusively by his statement of facts, put plainly upon the record. If not, there is no certainty in judicial proceedings; and a bill making one case may be supported by proof of one diametrically opposite.
Before I conclude, I will make an observation upon the position that there was no loan, because no security nor covenant was taken for the repayment. The want of such a covenant, or a separate bond for the money, is certainly one of the indicia of a sale, as the giving of such a security is alike evidence that the conveyance, though absolute in its terms, was in reality a mortgage. But it is nothing more than one evidence amongst many of the character of the transaction; for when it is established that the advance of the money was not as a price, but as a loan, the loan ex vi termini raises and involves a promise to pay as obligatory as a separate agreement under seal to the same effect. And this promise binds the party personally; so that the loss of the pledge does not include the loss of the debt; but the creditor may still proceed against the debtor himself. A loan, therefore, in its term includes a debt from the borrower, which it is not necessary should appear upon the mortgage or in writing, though certainly it is safest that it should, to put the fact — of loan or no loan — beyond dispute.
PER CURIAM. Bill dismissed.
Cited: Hines v. Butler, 38 N.C. 309; Ballinger v. Edwards, 39 N.C. 453; Craig v. Craig, 41 N.C. 192.
(79)