John Marshall

“ It is obvious that the instructions given by the court, at the prayer of the plaintiff's counsel, cover the whole matter contained in this prayer of the defendant. It is, in truth, an effort to separate the circumstances of the case from each other, and to induce the court, after directing the jury that they ought to be considered together, to instruct them that, separately, no one of them amounted in itself to usury. ”

“ While it is admitted that an annuity may, if the transaction is in good faith, and for no other purpose but such purchase, be bought at any fair price: it is denied, that a negotiation originating in the desire of the owner of real estate to procure a loan of money, when, by the means of a rent charge secured on his property, this money is obtained at an extravagant rate per annum; is freed from the taint of usury. ”

“ If a contract was made other than that in the deed, it should be proved; and there is no evidence of it. The plea sets out a separate and substantial agreement for usury, other than the deed; and this must be made out by evidence. There is no such evidence.
If there be no stipulation to return the money to the purchaser, and the deed is not a cover for taking usurious interest, it is not a loan. It is essential to a loan, that the thing borrowed is to be returned. The communication of the purpose must be mutual. A meditated loan may be bona fide converted into the purchase of an annuity. ”

“ In giving this opinion, the judges define usury in terms applicable to the present case. 'To make this contract usurious,' said Mr Justice Burnet, 'it must be either because it is within the express words, or an evasion or shift to keep out of the statutes.' 'Whatever shift is used for the forbearance or giving day of payment, will make an agreement usurious; and is by a court and jury esteemed a colour only. Suppose a man purchase an annuity at ever such an under price; if the bargain was really for an annuity, it is not usury. If on the foot of borrowing and lending money, it is otherwise ”

“ The negotiation between Drue and Drury, by which the latter advanced the money, became the assignee of the term, and then loaned it to the former, accompanied with a power of redemption, are totally overlooked by the judges. It had no influence on the case. It was not considered as affording any evidence, that the transaction was in reality a loan of money. The principle of law announced by the judge is simply, that a bargain for an annuity is not usury. ”

“ The testimony proved that the horse was not worth more than 100 dollars, and that it was reported to be M'Chesney's practice when he lent money, to sell a horse at an exorbitant price to cover an usurious gain.
The chancellor dissolved the injunction, and the plaintiff appealed.
The court of appeals was of opinion that a tacit understanding between the parties, founded on a known practice of the appellee to lend money at legal interest, if the borrower purchased of him a horse at an unreasonable price, would be a shift to evade the statute of usury. ”

“ If an express stipulation for the repayment of the sum advanced be indispensable to the existence of usury, he must be a bungler indeed, who frames his contract on such terms as to expose himself to the penalties of the law. If a man purchases for 500 dollars an annuity for 200 dollars per annum redeemable at the will of the grantor in ten years, without any express stipulation for the repayment of the 500 dollars ”

“ The responsibility of Lloyd to Moore continued, and the correlative responsibility of Scholfield to Lloyd still continued also, unless Lloyd had released him from it. Now there is no expression in the contracts between the parties, which purports to be such a release. It has been inferred as the result of the change in the situation of the parties; but we do not think the inference justified by the fact. The obligation is unequivocal; is expressed in plain and positive terms; is dependent on the event of a suit, and independent of the ownership of the property. ”

“ The plaintiff prayed the court, upon the same evidence, to instruct the jury that the matters shown in evidence to the jury as aforesaid are proper for the consideration of the jury, to determine, from the whole evidence, under the instruction of the court as already given to them in this cause, whether the said contract so made between the said Moore and Scholfield, was in substance and effect a loan at usurious interest, or a bona fide contract for the bargain and sale of a rent charge ”

“ Power, 1 Schoales and Lefroy 182, the plaintiff being much embarrassed in his circumstances, communicated to the defendant his desire to raise money to extricate himself from his debts. After approving his purpose and increasing sufficiently his anxiety for its accomplishment, the defendant informed him that two of his estates, Poulagower and Knockavin, would shortly be out of lease, and that if he would make the defendant a lease of them for three lives, at the rent of 200 pounds per annum, he would, from friendship, advance him money sufficient to pay all his debts. ”

“ The property was ample: the subsequent sale made by Scholfield to Lloyd proves this; the obligation to insure against fire, saved the grantee in the deed from the possibility of loss by fire.
In reference to the obligation to repay the money advanced, although it was not express, the high rate of interest made it an implied obligation, and a certain result.
If a man should advance 1000 dollars for ten years, receiving a rent which would repay the amount, with ten per cent interest, the contract would be usurious. ”

“ Loans, on a fair contingency to risk the whole money, are not within the statute; a man may purchase an annuity as low as possible, but if the treaty be about borrowing and lending, and the annuity only colourable, the contract may be usurious, however disguised.'
Richards qui tam v. Brown, Cowper 770, was an action on the statute of usury. Richard Heighway applied to Brown for a loan of money, to which Brown assented, and advanced part of the money, promising to advance the residue, being 400 pounds, in a fortnight. ”

“ That the principal money was altogether gone, unless Hammond chose to redeem; and, though it may be his interest so to do, this will not make it an usurious transaction. If a person have an annuity secured on a freehold estate, it may be clearly his interest to redeem it; but such a power will not make the bargain usurious. ”

“ Different minds allow a different degree of weight to the same circumstances.
The King v. Drury, 2 Lev. 7, is a very strong case in favour of the avowant, and has been much pressed on the court by his counsel.
Brown agreed to assign to Drue a lease of a house for forty years for the sum of 300 pounds. Drue not having the money, Drury, by agreement with Drue, paid the 300 pounds, took the assignment to himself, and then let the house to Drue for thirty-nine and three quarter years, at a rent, of which 30 pounds was payable to himself. ”

“ The case was carried before the lord chancellor, who disapproved the issues, and gave his opinion at large on the case. After commenting on the testimony respecting the leases, he says, 'Hastings has distinctly proved, that the loan of money was the inducement to this lease, and if it was, it vitiates the whole transaction. I do not mean advancing money by way of fine or the like; but where it is a distinct loan of money to a distressed man, for which security is to be taken, and he is still to continue a debtor for it. ”

“ Jacobs advanced him, on the 23d of March 1815, 2335 dollars, and took an absolute bill of sale for sixteen slaves. It was at the same time agreed that the slaves should remain in Clarkson's possession on hire for one year, and if at the end of the year, Clarkson shall pay Jacobs 2935 dollars, Jacobs shall, in consideration thereof, resell the slaves to him. The plaintiff charged that his application to Jacobs was to borrow money, and that the substance of the transaction was a loan, reserving a higher interest than is allowed by law. ”

“ This cause came on to be heard on the transcript of the record from the circuit court of the United States for the District of Columbia, holden in and for the county of Washington, and was argued by counsel; on consideration whereof, it is ordered and adjudged by this court, that the judgment of the said circuit court in this cause be, and the same is hereby reversed and annulled, and that this cause be and the same is hereby remanded to the said circuit court with directions to set aside the verdict and award a venire facias de novo. ”

“ Though this principle may be extracted from all the cases, yet as each depends on its own circumstances, and those circumstances are almost infinitely varied, it ought not to surprise us if there should be some seeming conflict in the application of the rule by different judges. ”

“ The jury found for the plaintiff.
On a motion for a new trial, lord Mansfield said, 'the question is, what was the substance of the transaction and the true intent and meaning of the parties, for they alone are to govern, and not the words used. The substance here was plainly a borrowing and lending. Heighway had no idea of selling an annuity, but his declared object was to borrow money.' 'It is true there was a contingency during three months. ”

“ And it was further corruptly agreed, that he, the said Jonathan, in and by the said deed of indenture, should, for himself, his heirs, executors, administrators, and assigns, covenant with the said William, his heirs and assigns, that he would well and truly pay to him, the said William, his heirs and assigns, the said annuity or rent of 500 dollars by equal half yearly payments, on the 10th day of June, and 10th day of December, in each year, for ever thereafter, as the same should become due ”