Vilas & Bacon v. Jones & Piercy

Decision.—Decree affirmed. For affirmance—Jewett, Ch. J.; Bronson, Gardiner, Ruggles, and Gray, JJ. Forreversal—Jones, Johnson and Wright, JJ.

Note.—Bronson, J., held, that a bill to annul a contract on the ground of usury, would not be entertained, without the debtor did equity by returning, or offering to return, what he actually received with interest.

That, the complainants being mere sureties for the repayment of the money loaned, they did not come within the statute (2 JR. S. 772, § 8; St at. 1837, p. 487, § 4,) as ce borrowers.” That there was no solid ground for saying that the *769word “borrower” included one who did not borrow, and who had no other-connection with the transaction than that of becoming a surety for the man who did borrow.

That Church, who borrowed the money, refused to join with the complainants in filing the bill; and he was not a party to it in any form. As the bill was not filed by the “ borrower,” the case did not come within the provision of the-statute which relieves him from the necessity of paying, or offering to pay, the money actually loaned. The complainants were entitled to no such favor, because-the statute did not give it to them; and when they go into chancery, they are-, met by that cardinal principle of the court, that he who asks equity must do-, equity; and as they had not paid, nor offered to repay the money loaned, with interest, the bill was properly dismissed as far as related to the question of usury.

• There was another reason why the case did not come within the statute; and-that was, that the statute provided a remedy or defence, and must be understood as applying only to a remedy or defence, which is set up or pursued before the-matter has passed into a judgment.

There were two reasons why thi’s case did not come within the statute—

1st. The bill was not filed by the borrower of the money; and

2d. It was not filed until after a judgment had been recovered on the note.

And as the statute must be laid out of view, the bill was properly dismissed,, because the complainants did not offer to return the money actually loaned, with, interest.

Another objection was, that where a party goes into chancery, after a trial at law, he must be able to impeach the justice and equity of the verdict; and it must be upon grounds which either could not be made available to him at law, or which he was prevented from setting up by fraud, accident, or the wrongful act of the other party, without any negligence or fault on his part. The defence was available at law, and the only difficulty which the complainants met with was to prove it.

If Jones told a falsehood, in relation to the ownership of the note previous to the trial, there was no allegation in the bill, that the complainants were deceived or misled by it, or that'they omitted to do anything which would have been done had Jones spoken the truth.

If Jones was excused from swearing to the usury, on the ground that he was the plaintiff in interest, and not the plaintiff on record, {Usury Act, 1837, § 2,) it was an error in the ruling of the judge, and the remedy was by bill of exceptions.

Also, held, that Church should have been made a party; that the defence of usury was common to all; the whole controversy could not be settled ,in this suit; for another bill might be filed by Church, and the defendants be subjected to a double litigation.

The complainants set up a second ground of defence to the note, that they were sureties for Church; and that, after the debt became due, Jones, without their knowledge or consent, gave further day of payment to the principal debtor.

The first answer to this was, that the complainants had tried, or had the op*770portumty of trying that matter at law, where it was as good a defence as it was in equity; and no sufficient reason was shown for a subsequent appeal to the court of chancery.

Second. Merely giving further time of payment to the principal debtor, without the consent of the surety, was no defence for the latter; time must be given in pursuance of a valid contract, founded upon a sufficient legal consideration for that purpose, which ties the hands of the creditor, so that he could not sue if he would. In this case, Jones kept the note in his hands, and might have brought a suit upon it at any time after it fell due, unless he was restrained by some binding agreement. Each and every extension of time mentioned in the bill, was made upon an usurious contract, such as was expressly declared to be void by statute; it has declared void all contracts infected with usury. Though the debtor parts with the money, it still belongs to him; and he might sue the next moment and recover it back.

Gardiner, J., concurred in the result of the opinion delivered by Bronson, J.; and as to all the points therein discussed, except that which holds that a surety was not a borrower within the provisions of the act of 1837.

Jewett, Gh. J., was in favor of affirming the decree, upon the grounds—

1st. That so far as the bill sought relief on the ground of usury, he was of opinion, that after a trial at law, it was too late, under the circumstances, for the complainants to resort to a court of equity. The bill did not pretend that they were in anywise misled by the false statement of (Jones) the payee of the note, that he had transferred it; and if they had verified their notice of the defence of usury, according to the provisions of the act of 1837, they might have called the payee, as the plaintiff in interest, and examined him as a witness.

2d. That the alleged agreements, whether executory or executed, to forbear the payment of the note, in consideration of usurious premiums paid for such forbearance, were wholly void, and therefore could not be set up by the sureties as a ground of discharge.

Reported 1 Comstock, 274.