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It is manifest that, even on this evidence of the, The bill was not paid at maturity, and this defendants, if this were proper and just, the suit is brought to recover the amount. sum taken as exchange was even less than it There is no question between the parties as should have been.
to the principal or damages of ten per cent.
charged for the protested bill of $6,000; nor as Mr. Chief Justice Taney delivered the opin to the interest and expenses charged in the acion of the court:
count hereinbefore mentioned. The defendThis case comes before the court upon a writ ants admit that the principal amount of the of error, directed to the judges of the Circuit protested bill, the damages on the protest which Court for the Ninth Circuit and Southern Dis- are given by the act of Assembly of New York, trict of Alabama.
and the interest and expenses, were properly The action was brought by the plaintiff, as charged in the account. The sum of $6,625.25 indorsee, against the defendants as indorsers was therefore due from them to H. M. Anof a bill of exchange in the following words: drews & Co, on the day of the settlement, pay. "Exchange for $7,287.78.
able in New York. The dispute arises on the "New York, March 11, 1837. item of $662.53, charged in the account as the "Sixty days after date of this first of ex. difference of exchange between New York and change, second of same tenor and date un | Mobile, and which swelled the amount for paid, pay to Messrs. Pond, Converse and which the bill was given to $7,287.78. The Wadsworth, or order, seven thousand two hun. defendants allege that the ten per cent. charged dred and eighty-seven dollars and seventy as exchange was far above the market price eight cents, negotiable and payable at the Bank of exchange at the time the bill was given, and of Mobile, value received, which place to the ac- that it was intended as a cover for usurious count of
interest exacted by the said H. M. Andrews & “Your obedient servant,
Co. as the price of their forbearance for the
“D. Carpenter.” sixty days given to the defendants. This was "To Messrs. Sayre, Converse & Co.,
their defense in the Circuit Court, where a ver. "Mobile, Alabama.”
dict was found for the defendants under the The case, as presented by the record, appears directions given by the court. to be this: The defendants were merchants, Many points appear to have been raised at residing in Mobile, in the State of Alabama. this trial, which are stated as follows in the H. M. Andrews & Co., were merchants residing exception taken by the plaintiff: in New York; and before the above mentioned The defendant offered evidencebill was drawn, the defendants had become lia 1. To prove that the said bill of exchange ble to H. M. Andrews & Co. as indorsers upon was usurious, according to the statute and laws a former bill for $6,000, drawn by E. Hen. of the State of New York. The plaintiff obdricks on Daniel Carpenter, of Montgomery, jected to the reading of the statute and deposiAlabama. The last mentioned bill was dated tions aforesaid, because the contract was not at New York, and fell due on the 21st of Feb. made with a view of the statute or laws of ruary, 1837, and was protested for nonpay. New York. But the bill of exchange was ment. The defendant Pond, it seems, was in usury or not by the laws and statutes of New York in the month of March, 1837, shortly Alabama; and that the contract was subject after this protest, when H. M. Andrews & Co., only to the laws of the State of Alabama, as threatened to sue him on the protested bill; to its obligatory force and validity; and he and the defendant Pond, rather than be sued further objected, that if this contract were to in New York, agreed to pay H. M. Andrews & be decided by the statute of New York, that Co., ten per cent. damages on the protested bill, this proof could not be given under this isand ten per cent. interest and exchange on a sue; but the court overruled all these obnew bill to be given, besides the expenses on jections, and permitted the depositions and the protested bill.
statute to be read. to show the bill of exAccording to this agreement an account, change to be void by the laws of New York; which is given in the record, was stated be to all which plaintiff excepts. tween them on the 11th of March, 1837, in
2. Plaintiff 'then offered to prove by Joseph which the defendants were charged with the Wood that the banks purchased bills at a far protested bill, and ten per cent. damages on less rate of exchange than others; that they the protest, and interest and expenses, which never bought any than undoubted paper; that amounted altogether to the sum of $6,625.25, from the facility of collecting, remitting, etc., and ten per cent. upon this sum was then they had many advantages over the citizens at added, as the difference of exchange between large, and that the exchange of the banks was Mobile and New York, which made the sum therefore much lower than the community at of $7,287.78; for which the defendant Pond large; that there was no fixed rate of exchange delivered to H. M. Andrews & Co., the bill of between Mobile and New York; that it varied exchange upon which this suit is brought, in from one to twenty per cent., according to dorsed by the defendants in blank. The bill the solvency, punctuality, risk, etc.; that exwas remitted by H. M. Andrews & Co. to s. change was ever fluctuating, and was high or Andrews, at Mobile, for collection. The drawees low as *the risk was great or small. The (*75 refused to accept it, and it was protested for court rejected this testimony also, to which non-acceptance; and after this
refusal plaintiff excepts. 74*) *and protest, it was transferred by S. 3. Plaintiff asked the court to instruct the Andrews to J. J. Andrews, the present plain- jury, that if they were satisfied that the excess tiff. It is stated in the exception, that after over legal interest retained in this bill was this transfer it was a cash credit in the account taken and contracted for innocently by the parbetween H. M. Andrews & Co. and S. Andrews. I ties, without intending to violate the laws
against usury, that they might find for plain- From the manner in which the points are tiff; but the court refused this also, and arranged in this exception, and the similarity plaintiff excepts.
of the questions presented in some of them, we 4. Plaintiff moved the court to charge the shall be better understood by expressing our jury that the contract expressed in this bill of opinion on the whole case, as it appears before exchange, if to be executed in Alabama, was us, without regarding the order in which the subject alone to the laws of Alabama against questions are stated in the exception; and usury; and that the usury laws of New York without examining separately each one of the had no force, or anything to do with this in instructions asked for by the plaintiff, and revestigation. This was refused by the court, fused by the court. and plaintiff excepts.
The transaction, upon the face of it, does 5. Plaintiff next requested the court to charge not profess to charge any interest for for. the jury, that if they believed S. Andrews re- bearance. It is a bill of exchange in the usual ceived the bill before maturity, for a valuable form; and in the account stated at the time, consideration, without any notice of usury, and and which formed the basis of the bill, the that plaintiff received it from S. Andrews, only item in relation to interest is the small without notice of usury, and before maturity, sum charged for the eighteen days which interthat the plaintiff might recover; notwithstand - vened between the time when the first bill being plaintiff offered no proof of the considera- came due and the present one was given. This tion he gave for it. To this refusal there was interest is charged at seven per cent. which is also an exception.
the legal rate of interest established in New 6. Plaintiff next moved the court to charge York. The transaction, taken altogether, was th th variance between the bill declared on, indeed a ruinous one on the part of the defendand the one set up as the same bill by defendants. A debt of $6,000, payable at Mobile on ants' deposition, was fatal in a plea of usury; | the 21st of February, was converted into a debt to which the court refused, and plaintiff ex- of $7,287.78, payable at the same place on the cepts.
25th of April following; being an increase of 7. It appeared that before the bill was deliv. $1,287.78 in the short space of eighty-one days. ered by S. Andrews to the plaintiff, it had Yet, if the defendants brought it upon them. been, while in the hands of S. Andrews, pro- selves by their failure to take up the first bill tested for non-acceptance, which appeared on at maturity, and the transaction was not inthe face of the bill. There was no evidence of tended to cover usurious interest, they must any settled account between H. M. Andrews & meet the consequence of their own improvi. Co. and S. Andrews, or which was creditor or dence. The sum of $6,625.25 was undoubtedly debtor upon the statement of accounts. It was due from them to H. M. Andrews & Co. on also proved that the expense of transporting the day the bill in question was drawn. They specie from New York to Mobile. including were entitled to demand that sum in New insurance and interest, would not exceed one York, or a bill that was equivalent to it at the and one half per cent. on the sum transported. market price of exchange; and if ten per cent. Upon the whole case, and the several points discount was the usual price at which others stated, the court charged the jury, that if they purchased bills of this description in the markbelieved from the evidence that by the usages et of New York, they had a right to take the of trade between New York and Mobile there bill at that rate, in satisfaction of their debt. was an established rate of exchange between There is nothing, therefore, upon the face of those places, the drawers and drawees of the the papers, from which the court can under. bill of exchange here sued on, had a right to take to say that usurious interest was exacted. contract for such rates of exchange; and that But although the transaction, as exhibited in even for a higher rate to a small amount, if un- the account. appears on the face of it to have der the circumstances it did not appear to have been free from the taint of usury, yet if the been intended to evade the statute against ten per cent. charged as exchange, or any part usury, might be allowed by them.
of it, was intended as a cover for usurious in. 8. But if they believed that no such usage terest, the form in which it was done, and the existed, the parties had no right to contract for name under which it was taken, will not promore than the actual expense of transporta- tect the bill from the consequences of usurious tion of specie from one place to the other, in agreements; and if the fact be established, it cluding interest, insurance, and such reasonable must be dealt with in the same manner as if variations therefrom as above stated.
the usury was expressly contracted for in the 9. And, further, if they believed from the bill itself. But whether this item was intended evidence that the drawers of the bill of ex- as a cover for usury or not, is a question exchange contracted with the drawee in the State clusively for the jury. It is a question of in. of New York, at the time the bill was drawn, tent. And in order *to enable the jury (*77 for a greater rate of interest than seven perto decide whether usury way concealed under centum per annum, for the
forbearance the name of exchange, evidence on both sides 76*] *of the payement of the sum of money ought to have been admitted which tended to specified in the bill, although it may have been show the usual rate of exchange between New taken in the name of exchange, the contract is York and Mobile when this bill was negotiated. usurious; and unless they believe from the evi- | There is no rule of law fixing the rate which dence that the plaintiff took the bill in the reg: may be lawfully charged for exchange. It does ular course of business, and upon a fair and rot altogether depend upon the cost of trang. valuable consideration bona fide paid by him, porting specie from one place to another, al. and without notice of the usury, they ought to though the price of exchange is, no doubt, in. find for the defendants, otherwise for the Auenced by it. But it is also materially af. plaintitf.
fected by the state of the trade by the urgency
of the demand for remittances, and by the the account adjusted at the time this bill of exquantity brought into the market for sale; change was given, it had appeared that Alaand sometimes material changes take place in bama interest of eight per cent. was taken for a single day, although no alteration has hap- the forbearance of sixty days given by the con. pened in the expenses of transporting specie. tract-and the transaction was in other reThe court, therefore, can lay down no rule upon spects free from usury—such a reservation of the subject. H. M. Andrews & Co., when interest would have been valid and obligatory about to take this bill in payment of an exist- upon the defendants, and would have been no ing debt, had a right to include in it a fair al. violation of the laws of New York. lowance for the difference in exchange. Wheth But that is not the question which we are er they exacted more or not, for the forbear. now called on to decide. The defendants alaner of their debt, is a question for the jury lege that the contract was not made with refto decide; and in order to enable them to decida erence to the laws of either State, and was it correctly, they must be allowed to hear the not intended to conform to either. That a rate evidence which either of the parties may offer, of interest forbidden by the laws of New York, as to the rates of exchange for such a bill as where the contract was made, was reserved on this; which was payable in specie, and not in the debt actually due; and that it was conany depreciated currency. Taking this view of cealed under the name of exchange, in order to the subject, we think the court below erred in evade the law. Now, if this defense is true, rejecting the testimony of Joseph Wood, who and shall be so found by the jury, the question was offered by the plaintiff to prove the rate of is not which law is to govern in executing the exchange; and also in the direction given to the contract ! but which is to decide the fate jury, that if there was no fixed rate of ex. of a security taken upon an usurious agreechange, the creditor had a right to take no ment, which neither will execute! Unquesmore than the actual expense of transporting tionably, it must be the law of the State where the specie. or a small amount more, where the agreement was made, and the instrument the additicn was not intended to cover usury. taken to secure its performance. A contract of
Another question presented by the exception, this kind cannot stand on the same principles and much discussed here is, whether the va with a bona fide agreement made in one place lidity of this contract depends upon the laws to be executed in another. In the last menof New York or those of Alabama. So far as tioned cases the agreements were permitted the mere question of usury is concerned, this by the lex loci contractus; and will even be question is not very important. There is no enforced there, if the party is found within its stipulation for interest apparent upon the pa jurisdiction. But the same rule cannot be apper. The ten per cent. in controversy is plied to contracts forbidden by its laws and de. charged as the difference in exchange only, and signed to evade them. In such cases, the legal not for interest and exchange. And if it were consequences of such an agreement must be otherwise, the interest allowed in New York decided by the law of the place where the con. is seven per cent., and in Alabama eight; and tract was made. If void there, it is void every. this small difference of one per cent. per annum where; and the cases referred to in Story's upon a forbearance of sixty days, could not Conflict of Laws, 203, fully established this materially affect the rate of exchange, and doctrine. cuilld hardly have any influence on the inquiry In the case of De Wolfe v. Johnson, 10 to be made by the jury. But there are other Wheat. 383, this court held that the lex loci considerations which make it necessary to de contractus must govern in a question of usury, cide this question. The laws of New York although by the terms of the agreement the make void the instrument when tainted with debt was to be secured by a mortgage on real usury; and if this bill is to be governed by the property in another State. And in the case of laws of New York, and if the jury should find Dewar v. Shaw, 3 T. R. 425, shows with what that it was given upon an usurious considera- strictness the English courts apply their own tion, the plaintiff would not be entitled to re- laws against usury to contracts made in Eng. cover, unless he was a bona fide holder, without land. In the case under consideration, the notice, and had given for it a valuable consid- previous debt for which the bill was negotiated eration; while by the laws of Alabama he was due in New York; a part of it, that is to would be entitled to recover the principal say, the damages on the protest of the first bill, amount of the debt, without any interest. * were given by a law of that State; and (*7 9
The general principle in relation to contracts the debt was then bearing the New York in78*) made in one place *to be executed interest of seven per cent., as appears by the another, is well settled. They are to be govo account before referred to. And, if in considerned by the law of the place of performance; eration of further indulgence in the time of and if the interest allowed by the laws of the payment, the parties stipulated for a higher place of performance is higher than that per interest, and agreed to conceal it under the mitted at the place of the contract, the parties name of exchange, the validity of the instrumay stipulate for the higher interest without ment, which was executed to carry this agreeincurring the penalties of usury. And in the ment into effect, must be determined by the case before us, if the defendants had given laws of New York, and not by the laws of their note to H. M. Andrews & Co. for the Alabama. debt then due to them, payable at Mobile, in In this aspect of the case, another question sixty days, with eight per cent. interest, such arose in the trial in the Circuit Court. "By the a contract would undoubtedly have been valid, laws of New York, as they then stood, usury and would have been no violation of the laws was no defense against the holder of a note or of New York, although the lawful interest in bill who had received it in good faith, and to that Stato is only seven per cent. And if, in whom it was transferred for a valuable con
sideration, and without notice of the usury. I gave for it, the known embarrassments, the The present plaintiff claims the benefit of this want of punctuality, and the loss of credit of provision. But upon the evidence in the case, the defendants, whose former bill had already it is very clear that he does not bring himself | been protested. But, as between the debtor within it. The bill of exchange was pro- and his creditor, no difference in the rate of tested for non-acceptance, while it was in the exchange can be made on that account. If, in hands of S. Andrews, the agent of H. M. An. consideration of further forbearance, the creddrews & Co., to whom it had been sent for col-itor receives a new security from his debtor for lection; and this fact appeared on the face of an existing debt, he cannot enlarge the amount the bill at the time it was transferred to the due by exacting anything either by way of plaintiff. Now, a person who takes a bill, interest or exchange, on account of the ad. which upon the face of it was dishonored, can. ditional risk he may suppose he runs by this not be allowed to claim the privileges which extension of credit; nor on account of any belong to a bona fide holder without notice. doubts he may entertain as to the punctuality If he chooses to receive it under such circum- of payment, or the ultimate safety of his stances, he takes it with all the infirmities be. debt. longing to it; and is in no better condition It is hardly necessary to add that the right than the person from whom he received it. of the defendant to offer in evidence, under There can be no distinction in principle be the plea of non assumpsit, that the instrument tween a bill transferred after it is dishonored was given upon an usuruious contract, has been for non-acceptance, and one transferred after too well settled to be now disputed, and we it is dishonored for nonpayment; and this is see nothing in the record upon which a ques. the rule in the English courts, as appears by tion for the court could be raised, upon the the case of Crossley v. Ham, 13 East, 498. supposed variance between the bill mentioned Now, it is evident that no consideration passed in the testimony produced by the defendants between Carpenter, the drawer of the bill, and and the bill declared on by the plaintiff. the defendants, who are the payers and in- Upon the whole we dissent from the Circuit dorsers. The bill was made and indorsed by Court in the second and eighth points in the the defendants, for the purpose of being de exception, as we have already mentioned; and livered to H. M. Andrews & Co., in execution of we concur with them in the residue. the agreement for further indulgence. And The judgment of the Circuit Court must, if that agreement was usurious, then the bill therefore, be reversed with costs. in question was tainted in its inception; and that taint must continue upon it in the hands This cause came on to be heard on the tran. of the present plaintiff.
script of the record from the Circuit Court of There is one other direction given by the the United States for the Southern District of Circuit Court which remains to be considered. Alabama, and was argued by counsel; on conIt is the third, as stated in the exception. The sideration whereof, it is ordered and adjudged vagueness and generality of the terms in by this court, that the judgment of the said which this instruction was asked for by the Circuit Court in this cause be, and the same is counsel for the plaintiff, justified the court in hereby reversed with costs;, and that this cause refusing it. It will be seen from what we have be, and the same is hereby remanded to the already said, that if the rate of exchange tak said Circuit Court, with directions to award en upon this bill was a fair one, and was not a venire facias de novo. intended to cover usurious interest, the plaintiff is entitled to recover; and if the payer means nothing more than this, there could be do objection to it. But, if it was intended to *THE UNITED STATES, Appellant, ('81 maintain that although a higher rate of ex. change was allowed than the fair market price,
MOSES E. LEVY, Appellee. and that this was done in consideration of the forbearance of payment, under the belief that Spanish land grant in Florida-refusal of rethe law would not in that shape regard it as
survey. usury, the mistake of the parties in this re80*) spect *will not alter the character of the
A grapt by Governor Coppinger of fourteep transaction. The instruction as asked for was thousand five hundred acres of land in East Flori. framed in such general terms, that it might da; part of thirty thousand acres, granted in con: have misled the jury; and the court, therefore, the officers of Spain, which had been surveyed by were not bound to give it.
the appointed officer, confirmed. In fine, if the parties intended to allow no The court refused to allow a survey of land to be more than a fair rate of exchange, testing it made to make up for a deficiency in the survey of by the market price of good bills of this quence of part of the land included therein being description, it was not usury; and the plain covered with water, and being marshes. Even if a tiff is entitled to recover. If, on the contrary, would not be competent for
the Superior Court of more was intended to be taken, it was usury; East Florida, or for the Supreme Court, to desig. and the plaintiff is not entitled to recover.
It nate a new location varying from the original con. is true, that after this bill had been negotiated to a new
cession as any such variation would be equivalent between H. M. Andrews & Co. and the de. fendants, other persons might have lawfully purchased it at a much greater discount bhas APPEAL. from the Superior Court of East
Florida. the market rate of exchange, and might have Moses E. Levy, a citizen of the United States, considered and estimated in the price they presented a petition to the judge of the Superior
Court of East Morida, on the 18th day of May, cording to the survey, and rejected the claim 1829, claiming title to a tract of land contain: to have the quantity of land contained in the ing fourteen thousand five hundred acres sit. grant surveyed, excluding land covered with uated in East Florida, being part of thir. water and marshes. ty thousand acres originally conceded to Fer The United States appealed from this denando de la Maza Arredondo, in full prop- cree. erty, by Governor Don Jose Coppinger, on the The case was submitted to the court by Mr. 14th day of March, 1817, in consideration of Grundy, Attorney-General of the United States. services rendered by him to the government and officers of Spain; which fourteen thousand Mr. Justice Wayne delivered the opinion of five hundred acres became, by sundry mesne the court: conveyances, the property of the petitioner. This
is an appeal from the Superior Court of The petition states that there is at the place East Florida. designated in the said concession for the loca. The appellee, after alleging that he claims tion of the said fourteen thousand five hun. title to a certain tract or parcel of land, dred acres of land, a considerable portion of containing fourteen thousand five hundred acres, the land covered by water, and consisting of situated in East Florida, being a part of a marshes; which, if included in the survey of large body consisting of thirty thousand acres, the said land, would be a complete loss of so originally granted in full and absolute proper. much land as is covered with water, or as con- ty, on the 24th day of March, 1817, to Fernando sists of marshes.
de la Maza Arredondo-that he had purchased The petitioner avers, that by the concession the same after the said fourteen "thousand in this case, he is entitled to fourteen thousand five hundred acres were located and surveyed; five hundred acres of land, exclusive of land he further alleges, that a considerable portion covered by water and of marshes; and that by of the land bought by him is covered by water, the custom, practice, and usage of the Spanish and consists of marshes, and "that by the government in East Florida, where it happened custom, practice, and usage of the Spanish that at the place designated for the location government in East Florida, where it happened of the land granted, there was found to be a that at the place designated for the location part of that which would necessarily fall with of the land granted, there was found to be a in the survey according to the calls of the part of that which would necessarily fall within grant covered with water, or consisting of the survey, according to the calls of the grant, marshes, though included within the boundaries covered with water, or consisting of marshes, of the survey, it was excluded from the quan: though included within the boundaries of the tity surveyed for the party; and the whole of survey, it was excluded from the quantity surland clear of such water and marsh, called for veyed for the party; and the whole of land by the grant, was surveyed and secured to the clear of such water and marsh called for by party entitled to the benefit thereof. He there. the grant, was surveyed and secured to the fore prays that such directions for the survey party entitled to the benefit thereof." He then of the said fourteen thousand five hundred prays that such directions for the survey of acres of land may be given, as he is justly en- the said 14,500 acres of land may be given by titled to by the aforesaid concession and the the court, as he is entitled to, by the afore said usage, practice, and custom of the Span. said concession, and the said usage, practice, ish government in East Florida.
and custom of the Spanish government in East The petitioner states that since the purchase Florida. And he concludes his petition with of said lands by him, he has at very great a prayer, that the validity of his title to the expense and trouble made a settlement on the aforesaid tract of land may be inquired into lands, at a place thereon called Hope Hill; and and decided by the court. 82"] that he has erected houses and build *The court decides his claim to be [*83 ings of various descriptions on the land, and good to the 14,500 acres, according to its sur. has cultivated a considerable portion there vey, designating particularly the identity of of, and made other beneficial improvements the land by reference to the survey of Don thereon.
Andrew Burgeon, who was the surveyor apThe answer of the district attorney of the pointed to survey the concession to Arredondo, United States denies, among other things, that and it decrees that the prayer of appellee, to it was the usage and custom in East Florida to have the said fourteen thousand five hundred have the quantity of land covered by water, or acres of land surveyed to him, excluding land such as is found to be a marsh, replaced by covered with water and marshes, be rejected. surveys of other land; and insists that the pe. This court afirms the decree of the court titioner having procured and accepted a royal below. It thinks that the claimant failed to grant for fourteen thousand five hundred acres, establish, by any evidence in the cause, the exmade according to the survey under the orig. istence of any such custom or practice in the inal concession, he is estopped from setting up government of East Florida, in regard to land such usage or custom, if the same existed. covered by water, and consisting of marshes;
The answer also insists that the court has no and if such a custom or practice can be proved power or authority to direct a survey of the to exist, it cannot be applied to any concession said fourteen thousand five hundred acres of carried into an actual grant according to a surland, in accordance with any such supposed vey made and returned by the officer, or person usage or custom: if it could be shown that any appointed to make such survey. Such are the such usage or custom ever existed.
facts in this case. The survey was made by The Superior Court confirmed the grant Burgeon, the governor having appointed and for fourteen thousand ive hundred acres, ac- qualified him for the purpose; and the grant