Opinion
June Term, 1823.
1. The general ground on which this Court proceeds in cases of usury is to compel a discovery upon the complainant's bringing into court the principal money advanced, with the legal interest, and then the court will relieve against the usurious excess.
2. In a bill for discovery of an usurious contract it is not necessary to waive the penalty.
3. And in such cases the rule of practice requires a tender of the sum due or bringing into court. But where there is an independent ground insisted on in the bill, as going to avoid the whole transaction (though not entitled to that effect), it affords a justification to the court in relaxing this strict rule of practise.
THE bill stated that in 1820 one John Evans, being much in want of money, applied to the defendant Smith for his assistance in raising the sum of $2,000, and it was agreed between Evans and Smith that the latter would advance the sum at a discount of 25 per cent, provided Evans would make to him a bond with the complainants as sureties thereto; that a bond was accordingly executed for the sum of $2,500, and offered by Evans to Smith. Smith declined advancing the money upon the bond, alleging that the contract would be usurious, but told Evans that if he would bring him a note for the same sum made by the complainants, payable to Evans, and by him assigned to the defendant, he would advance the money at the rate of 25 per cent discount, and that by this proceeding the statute against usury might be evaded; that shortly thereafter the complainants, at the request of Evans and without any consideration, but solely for the purpose of enabling him to raise the money by a transfer to Smith at a discount of 25 per cent, executed a note payable to Evans twelve months after date for $2,500; that when the note was presented to Smith by Evans, the (466) former, perceiving the great anxiety of Evans to raise money, compelled him to consent to a deduction of 33 1/3 per cent from the amount of the note, and on these terms Evans indorsed the paper to Smith. The bill proceeded to state that very soon after this transaction Evans became insolvent, and Smith commenced a suit on the note against the complainants in Granville County court, to which they entered appearance and pleas, and in support of their pleas had summoned Evans, the only person acquainted with the transaction, and made arrangement to procure his testimony; that to defeat this Smith dismissed the suit against the complainants, and upon a judgment obtained against Evans by another person, procured a capias ad satisfaciendum to be executed on Evans at the very moment commissioners were taking his deposition to be used in the suit brought by Smith against the complainants; and that on this ca. sa. he had him imprisoned until he could issue on the note a writ against these complainants and Evans jointly; that such a writ had issued and was executed and returned to court, and was then pending; to this latter suit the complainants had pleaded that the note was founded on an usurious transaction, but they had no means of proving it, save by the testimony of Evans, who was made a party; that one of the complainants had asked Smith if he would receive the money advanced by him with legal interest thereon, with an intention of paying that amount, but Smith positively refused to receive it, and complainants, it was stated, were still ready to pay the same if it were required by the court. The bill prayed a discovery and relief, and in the meantime an injunction against the suit at law.
To this bill defendant demurred, showing for cause of demurrer that the complainants did not in their bill waive or release the forfeiture that this defendant might incur by making the discovery sought for; and further, that the complainants ought to show that they have brought into court the principal money, with the lawful interest (467) thereon, which they admit to be due.
The court below dissolved the injunction and sustained the demurrer whereupon complainants appealed.
Gaston for complainants.
Ruffin for defendant.
The bill sets forth an usurious transaction, attended with circumstances of hardship and oppression, and is exhibited for the benefit of the securities of an insolvent person. There are two grounds of demurrer; one is that the defendant is not so bound to discover matter which might subject him to a penalty or forfeiture; the other is that the complainant ought to have brought into court the principal and interest actually received by Evans. The general ground on which this Court proceeds in cases of usury is to compel a discovery upon the complainant's bringing into court the principal money advanced, with the legal (468) interest, and then the court will aid as against the usurious excess. By this precaution the defendant is protected against any forfeiture, and is restored to all the money which he can equitably claim. It was not necessary to waive the penalty in the bill, since none is incurred before the receipt of usurious interest.
In a bill for discovery of an usurious contract, the rule of practice requires a tender of the sum due, or bringing it into court, upon the principle that he who seeks equity must do equity. Besides the charge of usury in this bill, there is an independent ground insisted on by the securities as going to avoid the whole transaction as against them; but though I do not think it is entitled to that effect, it affords a justification to the court in relaxing the strict rule of practice as to the payment of the money into court, and, accordingly, this order must be made, that if the principal sum received by Evans, together with the interest, is paid to the clerk of this Court on or before the ____ day of September next, then the demurrer is to be overruled, and the defendant is directed to answer; otherwise, the bill to stand dismissed with costs.
HALL and HENDERSON, JJ., concurred.
PER CURIAM. Judgment accordingly.
Cited: Hines v. Butler, 38 N.C. 309.
(469)