Sizer v. Miller

The case states the special grounds on which the two referees proceeded who agreed in making the report. They have not found any intention in the trustees of Rathbun to take usury, or that there was any shift or device to evade the statute. Indeed, they have not drawn any conclusion of fact from the evidence, but say they are of opinion, “ as mat- ' ter of law, that the note was void for usury.” In this we think they erred. The evidence does not necessarily and as a matter of law make out the fact of usury, and there must consequently be a rehearing.

If the advance to Miller is to be regarded as a loan, I apprehend we cannot disturb the report, unless the referees erred in rejecting the question put to Clary. There was sufficient evidence to warrant them in finding considerable disparity between the value of the* advance and the amount at which it was estimated. That being so, they. were authorized to take another step, and pronounce the transaction a device to cover usury. And though we might even differ from them, that furnishes no argument for setting aside their report. They occupied the place of a jury, and had to deal with a body of evidence upon which it was their peculiar province to form their own conclusions.

Considerable stress was, in the course of the argument, laid upon the maimer in which they have expressed themselves in stating their conclusion, viz. “A majority, &c, were of opinion, as matter of law, that the said note was void for usury.” ’ This is supposed to negate, by implication, that they thought that there was any device, and to

The main effort of the plaintiff’s counsel on the argument was addressed to the point, that, to call the advance to Miller, as both he and Clary did, a loan, was to be guilty of a misnomer ; that the loan proposed was declined ; and, at least so far as the notes advanced were concerned, the whole was a mere exchange of credit. Had the advance consisted wholly of the notes, which were, no doubt, considered good at the auction, the case would furnish a better reason for adopting the view suggested. The transaction would have been literally an exchange of credits; and though at an obvious loss on the side of Miller, it was open to the explanation that he held a large debt against Rathbun’s estate, expecting no more than a partial and remote payment. The purchase of the notes, therefore, and paying a larger sum than they were worth, was, in effect, but throwing off something more of a bad debt than he would lose by awaiting the dividend. Yet, even in such case, the transaction beginning by an express proposition for a loan, it is too much to deny, that the substitution of depreciated notes might not very well be pronounced, by triors of the fact, one of those numerous disguises by which lenders seek to obtain with impunity more than seven per cent, for their money. The request was, in

The case, however, is on its face more than a simple exchange of credit. The request was for a loan of $12,000; and the answer was, “ I cannot loan you money to that amount; but 1 will let you have about one third in money, and the residue in depreciated notes, taking your note on time upon interest with good security, for the uttermost farthing due on the notes you take, even including the interest accrued at the time,

' though that will not, in my hands or yours, carry interest.” Such a case is far from being met, or even rendered doubtful, by the cases to which we have been referred. (Bank of the United States v. Waggener, 9 Pet. 378 , 400, 401. Stewart v. Mechanics’ and Farmers’ Bank, 19 John. R. 506 to 512.) On the contrary, these cases assume and express]y hold, that if the loan of depreciated notes be intended by the parties to have the effect of fetching more than seven per cent., it is usurious. To be sure they treat the question of usury as in such case resting upon intent, and hold that this must be found by the jury, or the court of chancery which comes in the place óf a jury on the question arising in that court. Another case cited was intended as an answer to the objection, that interest on the notes was cast, and made to draw interest as money. (Marvin v. Feeter, 8 Wendell, 533.) But the transaction there passed upon, was not á loan. It was a sale of the notes on which interest was cast, without the pretence of any shift to evade the statute of usury. Izi the case before us, several of the notes were not yet - due when

Clary was asked, whether there was any intention, shift or device, on his part, to get more than seven per cent. The question would have been very exceptionable as a leading one, had it not been put to the witness on cross-examination ; but it was exceptionable also, as calling on him to pronounce broadly upon the very point in issue before the referees. The answer must have been matter of opinion, as derived from what he remembered in respect to the operations of his own mind, even had it been confined to mere intention. Again, the question covered not only intention, but shift and device. This was about the whole issue, unless it be conceded that the transaction was usurious, per se. Why not put the question directly—“ in your opinion were you guilty -of usury ?” It would be a short, but I apprehend not a very satisfactory mode of inquiring into the point on trial. . The witness is thought to have been peculiarly qualified to speak concerning his own intent. So he was to the mere moral intent, the secret operations of his own mind. But these were not material one