1827.

BEETE

v.

BIDGOOD.

authority could be found on either side, and the parties
compromised. If the argument now submitted on the
part of the defendant is right, the party might be com-
pelled to receive the money. The test in this case is
the conduct of the parties themselves. Floyer v. Ed-
wards (a) is very different. In that case there was no for-
bearance, but a penalty. It was not incumbent on the
part of the plaintiff to forbear. How far that case may have
been maintainable by the custom of the trade is another
question (b). The seller might have called in his money.
Here the lender was bound not to call it in. It is not
necessary that there should be an actual transfer of money
to constitute usury. The debt accrued on the settlement
of the account. The plaintiff might have sued, unless he
had agreed to give time. There was a debt before the
account, as between the plaintiff and Newton. [Bayley, J.
The account looks to a purchase. Holroyd, J. Newton
was debited 25,000l. Bayley, J. What is there to shew
the account anterior to the contract? Lord Tenterden, C. J.
All is dated the same day].
part of the same transaction.
tion was a sale of an estate].
sum of 25,000l. in the agreement.
9,000l., they deduct 5,000l. as a loss.
an allowance of 5000/. as his share of the loss].
treated the 16,000l. as the balance of an account.
an actual sale for that sum. [Holroyd, J. There was no
debt of 16,0007., except that which arose by an actual
sale]. They treat the 16,000l. as principal, and charge six
per cent. as interest. They should have called it 20,000l.
by instalments. The defendant considers, that when
he was signing the note, he was a party to a contract of
forbearance; being the balance of an account, they con-
templated the forbearance of a debt, for which the plain-
tiff might have sued.

It is admitted that all was [Holroyd, J. That transacNo notice is taken of the [Bayley, J. Of the The plaintiff makes They

It was

Lord TENTERDEN, C. J.-This case comes before the (a) Cowp. 112, ante, 153.

(b) And see Aynsworth, exparte, 4 Ves. jun. 678.

Court out of a contract for the sale of an estate, not out of a contract of loan; though the parties have calculated the price partly in what they considered the value in present money, partly in money to be paid at a future day, They have chosen to call it "interest," which creates the whole difficulty. If they had said "payable by instalments," there would have been no doubt. Our business is to look not at the words, but at the substance. If we are to look at the substance of a transaction to ascertain whether, notwithstanding the words used, the case is within the statute (a), so, on the other hand, we must look to see whether, though the words used appear to be within the statute, the substance is not so. Here I am clearly of opinion, that in substance there is no usury.

BAYLEY, J.-To constitute usury, there must be a loan or forbearance. Here there was no loan or forbearance. This was a contract of purchase.

HOLROYD, J.-There was no loan of 16,000l., nor any debt of 16,000l.; there was no debt but what arose upon giving the notes.

LITTLEDALE, J.-This is a contract for the sale of an estate, and not a loan of money. The plaintiff in effect said, if you can pay me 160007. down, you shall have the estate at that price. The purchaser says, no, but I will pay you by instalments; upon which, the seller says, then you shall me at the rate of six per cent. That they considered to be a reasonable rate. The jury have not found that this was a colour, nor does it appear to be so upon the case (b). The doubt is raised merely by the use of the term "interest."

pay

(a) See Marsh v. Martindale, 3 Bos. & Pul. 154.

(b) Vide ante, 135 (e), 136 (c). (c) And see Barnard v. Young, 17 Ves. jun., 44; Dearden v. Binns, ante, 130; Solarte v. Melville, post.

Postea to the plaintiff (c).

For the law of usury in general,
see Comyn on Usury: Pothier,
Traité de l'Usure; Say, Traité de
l'Economie Politique, 2d vol., 2d
edition, 111; 3d edition, 122.
In connection with this colonial

1827.

BEETE

บ.

BIDGOOD.

1827.

BEETE

v.

BIDGOOD.

Armstrong applied to correct the sum, for which the

nominal verdict had been taken.

case, the following enumeration
of the principal decisions in the
American courts on the subject
of usury may not be uninteresting.
First, as to what constitutes usury,
Musgrove v. Gibbs, 1 Dallas, 216;
Rose v. Dickenson, 7 Johns. Rep.
196;
Bennett v. Smith, 15 Johns.
Rep. 355; Dunham v. Gould, 16
Johns. Rep. 367; Eagleson v.
Shotwell, 1 Johns. Cha. Rep. 536;
Anonymous, 2 Desaus. Cha. Rep.
333; Hamlin v. Fitch, Kirby's
Rep. 261; Wadsworth et al' v.
Champion, 1 Root's Rep. 393;
Kent v. Phelps, 2 Day's Rep. 483,
S. C. 4 Day's Rep. 96; Hutchin-
son v. Hosmer, 2 Conn. Rep. 341;
Cutler v. How, 8 Mass. Rep. 257;
Cutler v. Johnson, 8 Mass. Rep.
266; Northampton Bank v. Allen,
10 Mass. Rep. 284; Brown v.
Brent, 1 Hen. & Munf. 550; Pol-
lord v. Baylor's Devisees, 4 Hen.
& Munf. 490; Skipwith v.
Gibson
and Jefferson, 4 Hen. & Munf.
490; Watkins v. Taylor, 2 Munf.
424; Bull v. Douglass, 4 Munf.
303; West v. Belcher, 5 Munf.
Winslow v. Dawson, 1

187;
Wash. Rep.; Groves v. Graves,
1 Wash. Rep. 1; Glisson v. New-
ton, 1 Hayw. Rep. 336; Carter v.
Brand, Cam. & Norw. Rep. 28;
Tardeveau v. Inns and Smith, Har-
din's Rep. 175; Hammond v. Alex-
ander, 1 Bibb's Rep. 333; Richard-
son v. Brown, 3 Bibb's Rep.
207. Secondly, As to the effect
of usury upon the contract. Where
more than legal interest is included
in any note, bond, or specialty, the
whole cannot be recovered, but the
plaintiff is entitled to the just
principal and interest. Wycaff v.

Longhead, 2 Dallas, 92. So the Court will order a defendant to account for moneys overpaid in pursuance of an usurious contract, Day v. Dunham, 2 Johns. Chanc. Rep. 191; and a creditor will not be permitted to make it the condition of a loan that he shall receive a compensation for his services, Hine v. Handy, 1 Johns. Cha. Rep. 6. So where a party, instead of lending money, gave a note, and received a note in exchange, amounting to more than the legal interest for the time the note had to run; the note was held to be void. Dunham v. Gould, 16 Johns. Rep. 367; S. P. Thompson v. Thompson, 8 Mass. Rep. 135. But unless usurious interest be originally reserved by the contract, a security for the loan of money upon which usurious interest has been received, is not void. Gardner v. Flagg, 8 Mass. Rep. 101; Thompson v. Woodbridge, 8 Mass. Rep. 256. Chadbourn v. Watts, 10 Mass. Rep. 121. (Et vide ante, 129). Nor will including the principal in one security, and the interest in another, prevent both from being avoided as forming part of the same transaction. Jones v. Witney, 11 Mass. Rep. 74. Maine Bank v. Butts, 9 Mass. Rep. 49. But if a security void for usury, be given for a simple contract debt, it is no discharge of the debt, which remains good. Johnson v. Johnson, 11 Mass. Rep. 359. A judgment rendered by default, on a contract including usurious interest, cannot for that cause be avoided. Thatcher y. Gammon, 12 Mass. Rep. 268. See

Lord TENTERDEN, C. J.-We can add nothing to the verdict.

ETCHES v. ALDAN.

ACTION on a policy of insurance, bearing date 22d

February, 1826, effected by the plaintiff, as agent for one

age, the probable duration of which is eight months, at 100l. per month, and by the charter-party B. is to make the advances for sailing charges, on account of the money payable for the hire of the ship, miscalled "freight;" B. insures 300l. with C., for money advanced on sailing charges, and A., at the same time, insures with C. 400l. on freight. Upon a total loss, C. is not entitled to consider A.'s policy as effected on gross freight, and that the amount being 8007., A. is his own insurer for a moiety of the risk.

1827.

ETCHES

v.

ALDAN.

Sharp, for 4007. on the Mary, upon freight on a voyage from Gibraltar to Omoa, during her stay there, and thence to her port of discharge in Europe, not in the Baltic or Mediterranean, with leave to call at Gibraltar for any purpose. This policy was subscribed by three of the directors of the Patriotic Assurance Company of Ireland, of which company the defendant was a member (a), at 70s. per cent., to return 9s. 6d. per cent. if she discharged at Gibraltar, or in the United Kingdom. The first count of the declaration stated, that before and at the time of the loss, Sharp had let to freight and chartered the said ship to one Aikin, for a certain term agreed upon between