*Watkins v. Taylor and Mewburn.
Monday, October 14th, 1811.
Usury — What Cohstitutest — Case at Bar. — T. being indebted to H. in the sum of 1,2001., payable, by fonr equal instalments, in little more than three years; an agreement took place, between T. and W., that W., in consideration of 8001. cash, paid him by T. should exonerate T. from his debt to H.: this agreement is usurious and void; notwithstanding W. might have reaped advantage from it, by buying the bonds of H. at a discount, or by selling him tobacco at a high price.
Upon an appeal from a depree of the superior court of chancery for the Richmond district, pronounced the 12th day of May, 1807, in a suit in which Robert Wat-, kins was plaintiff, and Thomas Taylor and William Mewburn defendants.
The bill stated that, some time in the year 1798, Thomas Taylor purchased of Harry Heth a tenement, at the price of 1,2001. payable, in instalments of 3001. each, in the month of September, of the years 1798, 1799, 1800 and 1801 ; that the said Thomas Taylor applied to the complainant to know how much he would take in cash, as the consideration for binding himself to discharge the said 1,2001. at the periods aforesaid, in the bonds of the said Harry Heth ; meaning that he should be at liberty to discharge the same by discounts arising from the said Harry Heth’s bonds; that the complainant thereupon agreed to pay the said 1,2001. in manner aforesaid, for the sum of 8001. in cash ; that, in pursuance of this agreement, he purchased a bond given by the said Heth, which
*518had been due a considerable time, and amounted to 3001. ; which bond he delivered to the said Taylor, who accepted the same as a partial satisfaction of the contract": that (at the instance of the said Taylor) the complainant, with William Mewburn as his surety, executed, to the said Harry Heth, three bonds for the sum of 3001. each, payable, on the 6th day of ‘September, in the years 1799,1800 and 1801; that, at the like instance of the said Taylor, he delivered to him the three last-mentioned bonds, to be delivered to the said Heth ; that these bonds appear to have been in the said Heth’s possession, inasmuch as he has assigned the same ; that the said Taylor informed the complainant, when he executed the said three bonds, that the agreement between Heth and himself was, that they were not to be assigned away, or passed off, until they became due ; which circumstance operated as an inducement of convenience in the estimation of the complainant, since it afforded him an opportunity of procuring bonds of the said Harry Heth, with which the said Thomas Taylor stipulated that his own bonds aforesaid should be redeemed ; that, from some cause or other, a difference took place between the said Taylor and Heth, in consequence whereof, the said Taylor refused to receive, from the comr plainant, in discharge of his said three bonds, any thing but money : that two of them, to wit, those payable in the years 1799 and 1801, have been discharged by the complainant to the said Thomas Taylor, as as-signee of the said Harry Heth, in actual cash ; that, upon the third bond, due in the year 1800, the said Taylor brought suit, in the Richmond Hustings court, against the said Mewburn, and obtained a judgment by default ; owing to the complainant’s having written to an attorney to defend the same, who, contrary to his'expectation, did not practise in that court; that Mewburn thereupon gave the .complainant notice, and obtained a judgment against him, by motion, for the sum of 3311. 7s. 6d. including costs and sheriff’s commissions.
The bill proceeded to charge that the demand of the full sum of 1,2001. of principal, for 8001. only, of principal, under the circumstances aforesaid, was usurious ; and, if not usurious, unconscionable ; that Mewburn had informed the complainant, that, although he had procured a receipt from Taylor, it was merely to enable him*to proceed by motion against the complainant; the .said Mewburn having, in fact, paid no money to the said Taylor, but having depqsited in his hands-merchandise to be sold for the discharge of the judgment against the said Mewburn, in case the execution sued out by the latter upon his judgment against the complainant should not produce the amount.
The prayer of the bill was, therefore, that Mewburn’s judgment against the complainant be perpetually enjoined ; that his merchandise be restored to him, and the judgment aforesaid against him vacated ; or that the complainant might receive any further, or other relief, &c.
The injunction was awarded, on' the usual terms, the 12th of November, 1802.
The answer of Thomas Taylor admitted his purchase,of a tenement, of Harry Heth, at the price mentioned in the bill, payable by instalments of 3001. each, without interest ; denying that he applied to the complainant to know how much cash he would take for binding himself to pay the said interest ; on the contrary, averring that the proposal came from the complainant, who repeatedly applied to him on the subject, and informed him that he had an opportunity of making an advantageous contract with the said Heth, who was willing to receive, in satisfaction of the said bonds, some tobacco, which the complainant wished to dispose of, and would allow a very high price ; that this proposal was not agreed to by the respondent, until repeated applications had been made" to him by the said Watkins, seconded by the said Heth, who also informed him that he and the complainant . were about making an agreement concerning the said tobacco ; that the respondent, accordingly paid the complainant the sum of 8001. ; that there was no conversation between them relative to a loan of that sum of money ; that he had, on his part, no idea of a loan, nor any expectation that the complainant wished to become a borrower *of money by means of the said agreement, but supposed his object was to make an advantageous contract with the said Heth ; that the money was not raised without difficulty, and his object in raising it was not to lend it to- the complainant, but to pay off a debt due from himself, payable- at future periods ; that he would not have lent to the complainant such a sum of money, on the terms aforesaid ; indeed, a considerable part of the said sum was actually borrowed by the respondent; that, when the said contract was made, and the 8001. paid, he understood that the complainant and the said Heth had come to an agreement, and considered himself exonerated from the debt to the said Heth ; that, some time afterwards, the respondent was informed that Heth and the complainant had disagreed about the price, of the tobacco, and that the debt originally due from the respondent was still unpaid; and the said Heth informed him that he still looked to him for the said debt: this defendant thought himself in equity discharged therefrom, as the said Heth had urged him to make the agreement with the complainant, and he understood that Heth was to look solely to the complainant, and not to him for payment ; but, in order to avoid a dispute, he thought it best to urge the complainant to fulfil his contract by paying off the debt to Heth ; that the complainant lodged with this defendant a bond, due from the said Heth, (which he the complainant had purchased at a very large discount,) and the three bonds executed by the complainant, with the said Mewburn as his surety, in order that they might be given to the said Heth in satisfaction of the debt; that the said Heth was willing to take the bonds of the complainant and Mewburn, but objected to taking in his own bond, (which he did not admit to be justly due,) and, moreover, insisted on retaining the legal title to the said tenement as a security for his debt; that this defendant became justly alarmed at his situation : he had not been'' sufficiently careful, at the time of *519*his contract with the complainant, with respect to the exoneration which he understood he was to have from the said Heth ; and it was doubtful whether he could compel the said Heth to look to the complainant, only, for his money ; and if this defendant should be obliged to pay it, the inconvenience would be a very serious one : at length, it was agreed, between him and the said Heth, that the latter should receive the said bonds, and assign them to this defendant, and that he should redeliver the said Heth possession of the tenement aforesaid, which was accordingly done; and the said Heth, some time afterward, took in his own bond. The respondent further said that, during the time that he was possessed of the said tenement, he laid out a considerable sum in improvements, part of which, to the value, he believed, of at least 1001. had been lost to him ; and that he had also lost the benefit of the rise in the value of the said tenement, which was very considerable. He acknowledged having received full satisfaction of the judgment against Mewburn, and declared that he had no interest in Mewburn’s judgment against the complainant, which he believed was not the property of the said Mewburn, but of a-Compston, or his trustee ; the said Mewburn having made an assignment of his effects for the benefit of his creditors.
No answer was filed by Mewburn, and no proceedings against him appear in the record ; but John Richard, agent and attorney for Thomas Compston, of Philadelphia, (though not made a defendant by the bill,) filed an answer, claiming the benefit of the judgment, against the complainant, by virtue of the assignment of Mewburn’s effects.
Two depositions were taken, which did not materially affect the case ; except that one witness deposed that he understood the agreement between Watkins and Taylor to be, that Watkins, in consideration of 8001. cash, was to pay for the tenement, with bonds; “but with what *bonds the witness could not certainly say ; though (as well as he remembered) it was understood between them that Heth’s bonds would be good in payment.”
Chancellor Taylor, on the 12th of May, 1807, dismissed the bill with costs ; whereupon the complainant appealed.
After argument by Peyton Randolph and Hay, for the appellant, and Wickham, for the appellees, the President (Friday, November 29th) pronounced the following opinion of the majority of the court.
The principal question in this case is, whether the contract before us be usurious or not ?
Net us consider what acts of the parties to a contract constitute usury, and apply the law to the case under consideration.
The general legal principles on which questions of usury are to be decided, seem to be well settled. An agreement, by which a higher premium than legal interest for the loan of money, is directly, or indirectly, secured to the lender, or a forbearance of a debt due, in consideration of receiving, at a future day, a higher premium, or greater emolument than legal interest, is clearly usury, within the statute, unless attended with some peculiar contingent circumstance, (not existing in the case before us,) by which the money lent, or the debt forborne, be put in evident hazard.
The forbearance of a debt due, being, in the present case, out of the question ; let us see whether there was a loan of money, with a view of receiving a higher premium than legal interest ? And, in my conception, we need only advert to the answer of the appel-lee, to establish the fact; and whether the first proposition came from the appellant, or was made by himself, seems quite immaterial. We must consider the contract as we find it stated in the record.
*The appellee, indeed, says, in his answer, that “there was no conversation between him and the complainant, relative to a loan of money. That he had. on his part, no idea of a loan, nor any expectations that the complainant wished to become a borrower of money by means of the said agreement; but supposed that the object of the complainant was to make an advantageous contract with Harry Heth.” And what, let me ask, was to enable him to make the advantageous contract with Heth, but the 8001. advanced him by the appellee, for which he agreed to pay, and has actually paid, a most exorbitant premium ?
The appellee acknowledges that he paid the appellant the sum of 8001. in consideration of his agreeing to exonerate him from a debt of 1,2001. which he owed the said Heth for a tenement purchased of him in the city of Richmond, to be paid by annual instal-ments. Net it be called a payment, a supply, an advance, or what it may; and whatever attempt may be made to cover, or disguise the transaction, it was, in substance and effect, according to my apprehension, a borrowing and lending of money, with a view of receiving a higher premium than legal interest for the loan ; and whether that premium was to have been paid, immediately, to the appellee, or to Mr. Heth on his account, makes no difference in principle; as, in either case, it is clearly within the mischief intended to be guarded against by the statute of usury.
The original contract appearing, on the face of it, as stated by both the parties, to have been usurious, no after transactions of theirs could, I conceive, take it out of the statute ; and the cancelling the contract between the appellee and Heth, respecting the purchase of the tenement in the city of Richmond, cannot affect the merits of this case. It appears, however, by an exhibit in the record, that the appellee had, in March, 1801, received from the appellant the sum of 301. 16s. 4d. over and *above the principal sum of 8001. loaned in the year 1798, with the legal interest thereon; and he confesses in his answer, that he has also received full satisfaction of the judgment he obtained against William Mewburn in the proceedings mentioned, amounting to 3001. with interest from the 6th day of September, 1800; and that he hath no interest in the judgment, obtained by Mewburn against the complainant, as his security in the bond, on which the judgment against Mewburn was rendered, and which, by the bill before us, is sought to be enjoined.
It has been observed that the appellee, *520when he advanced the money to Watkins, put it in hazard; and the’ extraordinary premium contracted for, was a compensation, or recompense, for the risk he ran, and therefore no usury ; but it was not such a risk as the law contemplates to take the case out of the statute.
If such slight pretences were to be admitted, every usurer, who lends money at an exorbitant interest, payable at a distant day, might allege that he ran the risk of the borrower’s dying insolvent before the da3r of payment, and thereby evade the statute, and render it nugatory, and a dead letter.
On every view I have been able to take of this case, usury appears conspicuous; and I have no hesitation in saying, that I think the appellant entitled, at least, to the relief prayed for by his bill; and am, consequently, of opinion that the decree is erroneous, and ought to be reversed; and that is the opinion of a majority of the court.
Whereupon, the following decree, was entered.
“The Court is of opinion that the said decree is erroneous, the appellant having, in the opinion of the court, just grounds of relief against the appellee, Taylor, and having also a right to proceed, finally, against the appellee, Mewburn; against whom, as yet, the appellant has not so proceeded, and who, therefore, ought not to *be bound by the admission of the appellee, Taylor, or by the allegation contained in the other answer filed in this cause, that the debt in question has been regularly transferred by him to John Richard.; (if he ought to be bound by the decision, upon the question of usury, rendered between the now parties; as to which this court gives no opinion;) therefore, it is decreed and ordered, that the same be reversed and annulled, and that the ap-pellees pay to the appellant his costs by him expended in the prosecution of his appeal aforesaid here; and this court proceeding to make such decree as the said superior court of chancery ought to have pronounced, it is further decreed and ordered, that the appellee, Taylor, do pay to the clerk of the said superior court of chancery, or to such other person, or persons, as the said court may order and direct, the sum of three hundred pounds, with lawful interest thereon from the 6th day of September, 1800, and also the costs of a suit, recovered by the appellee, Taylor, against the said Mewburn, in the Hustings court of the city of Richmond, in the month of May, 1802, with legal interest on such costs, until payment thereof, and also the costs incurred by the said Mewburn in obtaining a judgment against the appellant in the said court of Hustings; to be, by the said clerk, or receiver, as the case may be, paid over to John Richard, the agent in the proceedings mentioned; unless the said Mewburn shall, within ninety days after this decree shall be certified to the said court of chancery, and served upon him, satisfy the judge of the said court that the debt now in question has not been duly transferred to the said Richard, but is retained by himself, or is owned by some other person, claiming by assignment from him: in which case, the money aforesaid shall, under the order of the said court, be paid to the_ said Mew-burn, or other person his assignee as aforesaid; saving, however, to the said Richard, or those claiming under him, the right of appeal from such decision. And the *cause is remanded to the said superior court of chancery, in order to be-finally proceeded in, pursuant to the principles of this decree, and for the further purpose, after such payment shall have been made, of perpetually enjoining the judgment obtained, by the said Mewburn, against the appellant, as aforesaid. But, it being now suggested by the appellant’s counsel, that, since the exhibition of the bill, in this case, the sum due by the appellant to the .said Mewburn, under his judgment aforesaid, has been paid by him, the appellant, to the said Mewburn, or those claiming under him, whereby, while, on the one hand, the said Mewburn, or those claiming under him, may be more than’ indemnified for his undertaking as security for the appellant, the latter may be a loser by the amount of the sum aforesaid, notwithstanding the opinion of this court that the contract in the proceedings mentioned is usurious'and void; it is, therefore, further decreed and ordered, that nothing herein contained shall affect the right of the appellant to resort to the said court of chancery for relief against the payment in the case aforesaid; but that he be as free to pursue the same, as if this decree had not been made.”
JUDGE COAETER
(dissenting from the other judges) pronounced the following opinion:
If the whole answer is to be taken as responsive to the bill, and as evidence, _ un-contradicted by the competent number of witnesses to destroy it, this case, on the point of usury, would, to my mind, be a very clear one.
It would be simply this; that the ap-pellee, Taylor, being in debt to Heth, payable at a future day, the appellant applies to him to take in his debt immediately’, for that he and said Heth had made an arrangement in a tobacco contract, by which it would be agreeable to both of them that the appellee should purchase in his debt; that this proposition was seconded by Heth himself, and that the appellee, in making the payment, believed he was paying off his debt to Heth, who had made his arrangements *with the appellant; that, when he advanced the 8001. it was in discharge of his debt; and that a loan of money was never spoken of, or contemplated. If this was the real transaction, I presume it would not be contended that a man, paying off his debt, due at a future day, to his creditor, or to his credit- or’s friend and agent, and at the request and solicitation of his creditor, may not do it on terms with which all parties are satisfied.
But it is said, this part of the answer, setting up a new case, is-not responsive to the bill, which charges the transaction to have been something different, and that, therefore, it must be proved by the defendant.
*521I shall not stop to decide this question, as I do not think it important in the final decision, according to the view I have taken of the subject; and shall, therefore, content myself by stating this case as it is made out by the bill, such parts of the answer as are responsive to the bill, and therefore evidence, and the deposition of the witness.
X will here'remark, though, that, there being an express charge of usury in the bill, though it does not state in what way, or by what devices, the parties had contrived to evade the law, the general answer, stating that there was no communication for a loan of money, and that the appellee had no idea that the appellant wished to borrow money, must be taken as responsive to that general charge of usury, and, if not contradicted by evidence, will leave the case as one in which usury is to be established, when the party, to be found guilty thereof, had no idea, or expectation, that a loan was intended, but believed he was making a contract by which he was to be discharged from a debt he owed 1
The case, then, made out in this way, I take to be this: Taylor being indebted to H.eth, whose circumstances were somewhat embarrassed, and whose paper, to a considerable amount, was standing out against him, the *appellant applied to him to know what sum he would give him to pay off said debt to Heth, in the bonds of the latter; in other words, to deliver, to Taylor, Heth’s bonds, to the amount of his debt due to Heth.
After frequent applications, it was agreed that, for 8001., the appellant would pay off the debt due to Heth, in his bonds; which debt was 1,2001. payable in three annual instalments, without interest.
This agreement was not reduced to writing; but, some time after it was entered into, the appellant, having purchased up a bond of Heth’s for 3001. gave it to Taylor, and, at the same time, gave his bonds, with security, payable to Heth, for the balance, payable in three annual payments, but with this understanding, that Heth was not to assign them, so as to deprive the appellant of the privilege of discharging them in Heth’s paper. It was no part of the original agreement that the appellant was to give such bonds: but it took place, after-wards, in consequence of the appellant’s only delivering one bond of 3001. instead of the whole amount. Heth, afterwards, assigned these bonds to the appellee, Taylor, who told the appellant that he would receive nothing but the money for them : the appellant accordingly paid him the first and last of those bonds in money; bu refusing to pay the second bond, suit was brought and judgment recovered against the security, without defence; the attorney, to whom the appellant wrote to defend the suit, not practising in the court where it was brought. The security, against whom the judgment was obtained, not having paid the money to Taylor, but having obtained his receipt to enable him to make his motion, had got a judgment on motion against the appellant, who prays for an injunction, and general relief; retying, first, on the statute against usury; and, secondly, that, if the transaction was not usurious, it was an unconscionable bargain.
The charge of usury, in the bill, is a general charge.
*The answer expressly states that there was no communication for, or idea of, a loan; and there is no testimony contradicting this. It appears that the security had paid the money, and that, therefore, the case, as an injunction, is at an end; and then the only question is, whether the appellant ought to have had a decree against Taylor for the excess of his payments beyond 8001. and interest; or whether the chancellor was correct in dismissing his bill.
1st. The first question, then, is, was the transaction usurious?
2d. If not, was it an unconscionable bargain?
As to the first. Before a transaction can be pronounced usurious, which is not so on the very face of the bond, or contract, several things must be made to appear.
Hirst, it must appear that a loan was intended, and that both parties were assenting thereto: the statute is highly penal and, although one of the parties may wish to raise money by the transaction, and may hold out great gain to the other, as by offering him an extravagant price for property, &c. yet, if there was no communciatiou for a loan, or a knowledge, in the party selling, that a loan, or borrowing, was intended, it will not be usury; whatever the court might do with the case, as a hard and unconscionable bargain.
Secondly; if it was not usury at the time when the contract was entered into, no after circumstance can make it so; and any argument, therefore, drawn from after circumstances, would be improper.
Thirdly; the court will not presume a contract to be usurious; but it must be proved to be so.
Fourthly; where this proof is not on the face of the bond, or contract, itself, as where A., in consideration of 1001. received, binds himself to pay 1201. at the end of a year, it must be collected from a view of all the circumstances attending the case; as where there is a ^bargain for great gain, and this upon a previous communication for the loan of money; or where there is a bargain which, on the face of it, will authorize the party to discharge himself by repayment of the money and interest, yet, by a secret understanding, he was bound not to avail himself of this privilege, but to subject himself to the penalty; all these, and a thousand other devices, would not avail, if the real object was a loan of money.
Fifthly; it is the intent that makes the usury: but, if there was no such intent, then the sale of property for double its real *522value, the discounting of notes, buying in securities, purchasing annuities, &c. however advantageous the contract may be, is not usury.
Bet us examine the case by these principles, which I consider to be settled principles of law..
Was it a loan, and did the parties intend to evade the statute? To this it may be answered, that though the bond, in this case, is simply for the payment of money, and nothing unfair on the face of it, yet the original contract, in the very terms of it, is usurious,
I admit this is the fair and proper ground to put the question on; for the subsequent execution of the bonds will neither make that usury which was not so originally, nor legalize the original transaction, if it was unlawful and void.
Suppose, then, the original contract had been reduced to writing; it would have been to this effect:
The appellant, for 8001. received, would have bound himself to procure Heth’s bonds, either then due, or, at .least, payable in one, two and three .years, to the •amount of 1,2001. so as to cover and operate a discharge of a debt, to that amount, due in one, two and three years, from the •appellee to said Heth. Would such agreement, upon the very face of it, be void?
Suppose the appellant had produced Heth’s bonds to the amount of 1,2001. and for which he had paid 1,0001. and had offered them to the appellee for 8001. would the ’''purchase by him, for the express purpose of applying those bonds to the discharge of his own debt, have
been an usurious transaction? Or, suppose Taylor had not been in debt to Heth, but hearing that his paper was in market, at a large discount, and wishing to procure it, as an advantageous speculation; believing Heth to be ultimately sure; and this wish being known to the appellant; he inquires what he will agree to give him for Heth’s paper, payable in one, two and three years; and he says, 13s. 4d. for 20s.; a bargain is struck; 8001. is paid, and a • bond given for the delivery of Heth’s bonds, to the amount of 1,2001. : would such contract, necessarily, and on the face of it, be usurious? There is no doubt but such a contract, made under particular circumstances, or accompanied with particular •private understandings, (as, not to purchase the bonds of Heth, &c.,) might be used as a device to cover an usurious contract: but the question now put is, whether such contract is, on the face of it, and without further averment, plainly usurious; as where the party for the consideration of 1001. received, agrees to pay 1201. at the end of the year.
Heth may, or may not, have paper in market: if he has paper out, it may, or may not, be to be had at a great discount. But, if his paper is in market, and may be purchased at 10s. or 12s. for 20s. then the appellant would have made an advantageous contract; so that, unless it be said that bonds shall not be a subject of trade and speculation, I do not see that a contract, relative to them, even where they are contracted for at a considerable discount, must necessarily be usurious, Where are all the contracts for the notes of Morris and Nicholson?
If it be true, then, that the contract is not necessarily, and from the very terms of it, usurious and void, the next question will be, whether this contract, although it has a fair and legal exterior, is not rotten at the core, *and used merely as a cover and device to avoid the statute?
If this was the secret intent of the parties, they themselves must know it: the court will not, and cannot, presume that such was their intention: it must be proved; and, I presume, in the usual way, to wit, by an allegation to that effect, and the corresponding proof,
The appellant, however, does not allege .that a loan was intended; or that the paper of Heth was not in market; or that it had unexpectedly appreciated; or that there was any private agreement not to purchase it, but to subject himself to the penalty; or any other kind of shift, or device: on the contrary, he makes no other complaint in his bill, except that the ap-pellee said he would receive .nothing but the money: indeed, by the question he asks the witness, viz. “whether Heth’s paper could not have been procured at a large discount,” he seems to admit, that he could have discharged himself by a sum equal to the 8001. and interest, but that the appellee said he would have nothing but the money. As to the usury, he seems to rest that on the ground, that the contract, in the very terms of it, was usurious.
As before stated, I think it was not so; and, as to any shift, or device, to make it so, I also think that the court cannot make out a case, for the appellant, which he has not made for himself; but that, if it was intended to show the case to be a shift to evade the statute, the appellant must have set out his case, so that the appellee could have had the benefit of his answer, and an opportunity to take depositions. No such allegation being made, the appellee, I presume, was not bound to prove that Heth’s paper was in market, and could, at any time, have been procured at 13s. 4d. for 20s.; or at any other discount; (no complaint being made as to that;) or that he was not guilty of any other shift, or device. The only complaint is, that the appellee, afterwards, refused to take any thing but money. This, however, *being an after circumstance, would not make the original contract usurious. The most that could be said of it would be, that it was a breach of contract, and to be redressed, either by a court of law, or equity, as the case should appear. But on this point the party makes no case: he does not show that he procured and offered the bonds agreeably to his contract; because, if he had done that, and in proper time, so as to enable the appellee to set them off against his debt due to Heth, he might have had redress, even at law, perhaps. Nothing, however, of this kind is shown, *523or suggested; and if it was, this after circumstance would not make the original contract usurious.
I do not think this so strong a case as 4hat of Price, &c. v. Campbell, 2 Call, 110, and perhaps not as much so as the case of Kenner v. Hord, 2 H. & M. 14.
But what will the court do, in this case, as to the 3001.? Suppose the appellant (as is highly probable) got that bond for 2001. If he recovers 4001. of the appellee, he then puts 1001. clear gain in his pocket. But, suppose he had purchased Heth’s bonds to the amount of 1,1501. and had got them for 7501.: the appellee must have taken them at the nominal sum. The appellant would then have paid 1,1501. of the debt due Heth. He has received, though, but 8001. He must, therefore, recover 3501. from the ap-pellee, and has already made 4001. by the speculation in the bonds; so that, in the whole, he would put a clear gain in his pocket of 7501. 1
Does not this serve to show that this bargain, in the very terms of it, was not necessarily usurious, or even hard; but that it would depend on testimony aliunde, to prove either the one or the other.
Suppose the appellant, in this case, had proved, by one witness only, that, although the terms of this contract were that he was to deliver bonds of Heth, yet it was privately understood that he was not to have this privilege, but that it was merely used as a cover and device *to evade the statute; would such evidence have been proper? If it would, then the party, by not stating his case, would deprive the other party of the legal weight of his answer, which would have been greater than the deposition of a single witness. This case, then, is not usurious on the face of it, and no other case is made out, or pretended.
Courts of equity may be disposed to go farther than courts of law, in deciding cases to be usurious; because they do not inflict such severe penalties; yet I am not prepared to say that' a different rule of decision should obtain on the equity side, from what should obtain on the law side of this court; and this, I apprehend, would be a very naked case, at law, on which to recover the penalty.
I am also inclined to think that there must be a great difference between setting aside hard and unconscionable contracts, on the ground of hardship and undue advantage, and setting aside even such contracts, on the ground of usury. The statute is highly penal; and if the distinctions, between hard bargains and usurious ones, are done away, parties may be subject to severe penalties who never intended to violate the law. Jfor these reasons, I apprehend, it is, that the rules which I have before stated are laid down, and,, particularly, the rule that the courts will not presume, but require proof, of usury, and that it was the intention of both parties to violate the law.
2. As to the second ground, that this is an unconscionable bargain.
I can see no evidence of it.
The appellant does not pretend to say that he could not have procured Heth’s paper at a great discount; but, in fact, states the reverse.
The contract, therefore, might, originally, have been an advantageous one to him, had he purchased and delivered the bonds.
*'He states, though, that the ap-pellee refused to receive any thing but the money. This, though, does not prove the original contract hard.
If the appellee has broken his contract, then the appellant ought to have made out his case, to wit, that he had performed his part of the agreement, by procuring and tendering the bonds, in due time, to enable the appellee to use them as a set-off against Heth.
But he does not pretend to say this; on the contrary, says that he paid off the first ana last bonds.
After this confirmation of the transaction, and in the absence of every allegation and evidence of hardship, I cannot give relief on that ground.
I therefore think, with great deference to the opinions of my more learned brethren, that there is no error in the decree of the chancellor dismissing the bill of the appellant.