V.

Payne turn at the end of the four months, upon the payment of the Trezevant. 580 sterling, which money and receipt he went immediately afterwards and delivered to Mr. Trezevant, the defendant. That this 5801. was exclusive of commissions.

ceipt was pro

shewn to him.

Moses Sarcedas was the next witness called by defendant, and he confirmed the testimony of Mr. House, as far as respected the transactions between them two. That he was applied to by Mr. House, on behalf of Mr. Trezevant, to lend 500/. and was offered a note for 5801. for the use of it N. B. The re- for four months, to be secured by a Georgia certificate or duced and indent for 2,000. sterling, which he agreed to. That the receipt now produced and shewn him was the one he signed and delivered to Mr. House. That he kept the note for 580/. for three months, together with the indent, and then passed them both over to one Richard Dennis. The note was payable to Mr. House, but was not indorsed by him till after he had passed it to Richard Dennis; then he got Mr. House to indorse it, who was only a mere agent in the business. He relied on the defendant, and the security of the indent. That after the note became due, it was renewed for one month, for the same sum, 580. and another note for 277. 18. 4d. was given for forbearance money for that month; and these are the notes on which the present suit was brought. That he, Sarcedas, owed Mr. Payne about 3001. on a purchase of lands, and upon his order to Dennis, and on his paying Dennis 700l. the original note and indent were delivered to the plaintiff, Mr. Payne, by Dennis; but he thinks Mr. Payne did not know that the indent had been. lodged as a collateral security for the note.

William Freeman, a clerk in the branch bank of the United States, produced the bank book, by which it appeared, that Mr. Payne had lodged Mr. Trezevant's note, dated in December, 1794, for 580l. for collection, in the month of April, 1795, which not being paid, was returned to him. And that on the 23d of May, 1795, Mr. Payne again lodged defendant's two notes in the branch bank for eollection, one for 5801. and another for 271. 18. 4d. which

he supposed were the notes on which this action was founded, as they were returned to him on non-payment, and corresponded in sums, and nearly in dates, according to the times they had to run.

On the part of the plaintiff, Richard Dennis was called as a witness, who confirmed the testimony given by Sarcedas, that the note for 580/. dated in December, 1794, had been passed to him, with the Georgia indent for 2,000l. as security, as mentioned by Sarcedas; and that in consequence of an order from Sarcedas, he delivered them both over to the plaintiff, Mr. Payne, upon his paying him 700%. which he received, but does not think Mr. Payne knew that the indent. had been lodged as a collateral security for the payment of the note.

At this stage of the evidence, it came out, that Mr. Payne had sold this Georgia indent for 8007. sterling, and that the real object of the suit was only to recover from Mr. Trezevant as much on these notes as would fully pay him up what Sarcedas owed him, at the time when he gave the order on Dennis to deliver up the note and indent, about 2001 sterling, together with interest, Sarcedas having in the mean time become insolvent.

Charles Nowell Simons, a broker, was also called by the plaintiff, who swore, that it had been a very customary thing in Charleston, ever since the establishment of the banks, to send notes into the market for sale, and that these were not considered as loans, but sales of notes; as much as old bonds had been for one-half, or state indents at one-third.

Here the testimony closed on both sides.

For the plaintiff, several grounds were taken to the jury : 1st. That this was a sale of a note, and not a loan; and even if it was not a sale, then, 2dly. That this was not a usurious transaction between defendant and House originally; it was fair in its creation, and lawful as between these two parties. As Mr. Trezevant had a right to make this te payable

Payne

V.

Trezevant.

Payne

to order if he pleased, and it was legal and fair in House to Trezevant. receive it, any transactions afterwards, between the payee and third persons, might make it usurious as between them, but could not affect the validity of the note for 5801. sterling against the drawer. And for this purpose the case of Foltz v. Mey was relied on, in which it was determined, that a note originally fair, and not usurious, should not be affected in the hands of a fair holder, against the drawer, by any intermediate usurious transactions between other persons, through whose hands it had passed. Also, Esp. Rep. 274.

Bay's Rep. ol 1. p. 486. Riley's edit.

2dly. That it would interrupt trade, and embarrass commerce exceedingly, if notes of hand and bills of exchange were liable to these exceptions, or could be affected in the hands of innocent holders for valuable considerations, by these pretexts of usurious transactions. No man could know when he was safe by receiving one of them in pay. ment, as objections of this nature might start up against him at any time, after he might have passed them off on his part in the course of trade.

3dly. That money ought to be left to find its own level; that it was unwise and impolitic to restrain it, more than any other species of merchandise, and that it was a right which the juries of the country ought to defend and maintain.

For defendant, in reply, it was urged, that the act against usury was a good one, founded on the wisdom of our ancestors, and the same wise measure had been sanctioned by aimost every other civil society in the world, against similar practices. That it was the duty of juries to support the laws of their country, and not to render them nugatory; that they had no dispensing power, to disregard or set at nought the solemn acts of the legislature, because they did not comport with their ideas of right and wrong; and that their oaths imposed this obligation upon them, if the evidence brought this case within the law: and that it did, there could be no doubt remaining on the mind of any man

who has heard this cause. That this act had in view two
kinds of usurious transactions, direct and indirect: Direct
usury, where it was apparent on the face of any contract,
that more than seven per cent. interest was reserved for the
use of money for one year: Indirect usury, where inge-
nious shifts and pretexts were fallen upon, to raise money
at more than seven per cent. per annum, as by pretended
sales of bonds or notes, annuities, stock, goods, or other
chattels whatever. Every such device or pretence, if for
the purpose of borrowing money, was absolutely null and
void. That the late practice of brokers and usurers in
Charleston, since the establishment of the banks, (for it never
was customary before,) of sending notes into market for sale,
as it was termed, at five per cent. a month, was one of the
indirect methods prohibited by the act.
That the case un-
der consideration was expressly one of those cases of indi-
rect usury, even allowing it to be a sale. The defendant
wanted 500%; he gave his note to the broker for 580%;
then allowing it, for argument sake, to be a sale, it could
only be a sale of a note for four months, therefore the gain
to the purchaser by this bargain, for these four months,
would have been at the rate of four per cent. per month,
forty-eight per cent. per annum, for the use of the money.
Has not this, then, at the first blush, every appearance of
usury, and that this pretended sale was only to give colour
to the usurious transaction? But the case does not stop
here. It is manifest from the evidence of Mr. House,
that the defendant wanted to borrow money, and that he
employed Mr. House to raise it for him, and pledged the
Georgia indent for 2,000l. as a security for returning the
money at the end of the four months, and the receipt
taken for the indent as a collateral security, proves it beyond
all contradiction, as it was to be returned and given back to
defendant, on repayment of the 580/

2dly. That this was usurious in its origin, is equally evident, from the offer of the defendant, before the money was borrowed, by the making of the note, in consequence of

Payne

V.

Trezevant.

Esp. 40, 41.
Cowp. 970.

Payne

V.

Trezevant.

this proposal to the broker, and by his taking a receipt for the return of the indent which was lodged as collateral security, upon repayment of the 580/.; all which evidently evinced that 80l. was offered and accepted for the use of 500/. for four months, from the lender of the money.

3dly. That as to innocent holders, if the plaintiff in this case ought to be considered as such a one, as to the note for 580%. it made no sort of difference, as far as it regards the drawer of the note. For the law is clear, that all notes given for gaming debts, on usurious contracts, and those given for (a) Bell and base considerations, at common law, (a) were all void in Wood's case, their original creation, as much as forged notes, into whose hands soever they might afterwards come. And although an innocent indorsee or fair holder might recover from an indorser from whom he received it, on a count for money had and received, yet against the drawer of such note he has no remedy.

vol. 1. p. 249. Riley's edit.

The Judge, in charging the jury, told them they were bound by the act of the legislature, enacted by the supreme authority of the state; and if a jury was justifiable in disregarding any one act, they might refuse to be bound by any other act or law which did not accord with their own opinions; and thus the fixed and stable principles of law would in future be obliged to give way to the fluctuating and uncertain opinions of juries.

That the act in question made all usurious contracts void; and that the evidence in this case brought the usurious transaction between the original parties, borrower and lender, so immediately and directly under the act, that it was impossible for them to wink so hard as not to see it. That the pretence of sale set up was a mere shift or colourable pretext, to elude the statute.

It was true, he admitted, that a man having an absolute right and power over his own property, might sell or dispose of it upon what terms he pleased, or even give it away, if he thought proper, where it was not to defeat creditors. And hence it was, that soon after the revolutionary war,