Wright v. McAlexander

ORMOND, J. The objection made to the decree of the chancellor is, that the defendant should have been charged in the account with the difference between the value of the hire of the slaves, and. the interest of the money advanced upon them. The case made by the bill is, that the complainant agreed to allow the defendant the use of the slaves, as an equivalent for the interest of the money advanced by him. It is now contended, that this contract is usurious. We do not doubt, that if this shape was given to the contract, for the purpose of evading the statute of usury, it would be void, as no shift, device, or contrivance, will be available for that purpose the intention being to secure unlawful interest. But there is no such allegation in the bill, and in our opinion the contract as there set out, is not on its face usurious. To constitute usury, there must be a certainty of receiving more for the use of money, than legal interest. If there is a hazard of losing, so that the lendor may receive less than legal interest, or lose the principal, the contract is not per se usurious, but may be declared so, if the contract wás a mere device to evade the statute. The law was thus declared ip the great case of Chesterfield v. Janson, 1 Wilson, 286, argued before Lord Hardwicke, and all the Judges. That was the case of a man thirty years of age, borrowing £5,000 and executing his bond to pay the lender £10,000, within a month after the death of the Duchess of Marlborough, his grandmother, in case he survived her, she being at the time seventy-eight years of age. He survived the Duchess, and the court held the contract not to be usurious, but valid, upon the principles above stated. The case has been repeatedly recognized since, and is the established law at the present [238] day. [Darones v. Green, 12 Meeson & W. 489; Thorndike v. Green, 11 Pick. 184; Hall v. Haggart, 17 Wend. 280.] The facts of this case bring it within the influence of these principle. The slaves were, most of them small children, and all were liable to sickness, and death; there was therefore a risk to be encountered, and a possibility of losing both principal and interest. We are aware that the Kentucky cases cited on the brief of the plaintiff in error, do not take this view of the law, but it is to be observed that in both the cases cited from 3 Bibb, 207, and 4 Bibb, 327, the facts were much stronger than in this case, to authorize the inference that the form of the contract was a mere disguise, to obtain usurious interest, and in both, the question of usury was made, for the purpose of avoiding the contract for that cause. What is said upon this question in the case of Hamer v. Harrell, 2 S. & P. 323, was not necessary to the decision of the case, and so admitted in the opinion of the court. It is not therefore entitled to the weight of an adjudged case. In the case of a pure pledge, to which this contract bears more resemblance than any other, the law seems to be somewhat uncertain, as to the right of the pledgee to use the thing pledged, without accounting to the pledgor for the value of such use. In Coggs v. Bernard, Lord Holt, speaking of this species of bailment, says, if a horse be pawned, the paw-nee may use the horse, if he be at charge in keeping him. [1 Bac. Ab. 379, Chancellor Kent, appears to think, he should apply the profits, if any are made, to the benefit of the paw-nor. [2 Kent’s Com. Lee. 40.] And see also the subject discussed by Mr. Justice Story, in his work on Bailments, c. 5, 220.] But however this may be, in the case of a pure pledge of a slave, for the payment of a debt, here there was a special contract, that the use of the slave should be a compensation for the use of the money. Where such a contract is entered into bona fide, and is not a pretext resorted to as a cover for usury, it appears to us, contrary to the first principles of justice, to permit the borrower to suffer the pawn to remain in the hands of the pawnee, until the use has not only extinguished the loan, but also brought the pawnee largely in debt, and then insist on considering it a mortgage. Although it is true the defendant could have terminated this [239] contract at any time by demanding his money, yet the complainant had the same right of regaining the possession of her property, by paying the sum borrowed, and,until she elected to put an end to the contract, he had the right to consider it as still continuing. For these reasons, we think the chancellor did not err in refusing to allow hire for the slaves. Let the decree be affirmed.