and duress will be a good objection to a grant. Where it can be proved that the grantor was compelled to execute an instrument under duress or terror, such as would operate on the mind of a man of ordinary courage, it will be declared void by any court of law; though strong proof will be required to vacate acts of deliberation. This defence, however, like fraud, only renders the deed voidable not actually void; but according to Perkins, (a) where a grant is void for duress, the grantor, his heir, or assignee of the land, may treat the grantee as a trespasser, if he distrain.

It has been shown that equity endeavours to restrain contracts between persons standing in particular relations towards each other; and it has been stated that this arises in a great measure from the opportunity of fraud which is afforded by such situations. There is another reason for this principle, sometimes applicable, and that is the degree of coercion which such relations are apt to create, and which destroys one of the necessary requisites of all contracts, namely, freedom of will. Thus filial affection is sometimes disturbed by the excessive exercise of parental authority, and, the guardian becoming the master of his ward, gifts are made to relieve the child or the ward from an irksome restraint through the impulse of terror and coercion, rather than of affection and regard. It need hardly be added, that such gifts will not be supported, but the courts will vacate the transaction when brought before their cognizance. Where the son of a freeman of London. released his interest in his orphanage, part to his father, whose unkind usage had reduced him to great necessities, for an annuity of 50%., Lord Hardwicke held that such a release, so extorted, could not be supported. (b)

At the same time the law will not interfere with an act of affection, springing from feelings of gratitude or duty, freely and voluntarily executed. As in Blackborn v. Edgeley, (c) where a large fortune had been left to a son, his (b) Heron v. Heron, 2 Atk. 160.

(a) Grants, sect. 16. (c) 1 P. W. 607.

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OF THE CONSIDERATION.

Effect of parental coercion.

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Consideration illegal for breach

father being passed over; the latter prepared a bond to secure an annuity of 1207. to him, which the son declined to execute, saying it was more reasonable that his father should trust to his honour. The father left the bond with him, saying if he would not sign it he might let it alone. The son afterwards, in his father's absence, being about to travel, signed it, and directed it to be delivered to his father. Lord Chancellor Cowper, in his judgment, said, "The words might be spoken in such a manner as to amount to a threatening, and with a design to intimidate the son; but it might be otherwise ;-and that, for aught that appeared to the contrary, it was the son's free act, and what he thought himself obliged in honour to do; therefore, without any proof to impeach it, it should not to be set aside."

The next head of inquiry is where the grant is made in of statutory law. violation of some express statute, in such case it is illegal, and therefore void. It is impossible to enumerate all the different cases prohibited by statutes, the breach of which may render the grant void, but the most familiar instances shall be examined, which are with reference to usury, gaming, sale of public offices, bribery, simony.

1. Of usury.

I. Of Usury. The loan of money on usurious interest was prohibited at common law, but it was not defined what was usurious interest. Various statutes have fixed a certain rate, above which none is allowed to be taken, and these rates have been gradually diminished according to the increase in the monied capital of the country. Thus the 37 Hen. VIII. c. 9, and 13 Eliz. c. 8, fixed the rate at ten per cent.; the 21 Jam. I. c. 17, reduced it to eight per cent.; the 12 Ch. II. c. 13, to six per cent.; and, lastly, 12 Ann. c. 16, to five per cent. which has continued to be the legal rate of interest.

The last statute enacts, "That no person upon any contract shall take, directly or indirectly, for loan of any monies, wares, merchandize, or other commodities whatsoever, above the value of 5l. for the forbearance of 1007. for a year, and that all bonds, contracts and assurances whatsoever made for the payment of any principal or

money to be lent or covenanted to be performed upon, or

CHAP. V.

OF THE

for any usury, whereupon or whereby there shall be re- CONSIDERATION. served or taken above the rate of 57. in the hundred, shall

be utterly void."

In

not usurious.

Now as it cannot be denied that an annuity, where A life annuity is money is advanced as the consideration, is a mode of raising money, it early became a question whether the transaction did or did not fall under the prohibition contained in these statutes. But one principle was admitted in the construction of the usury laws, namely, that they do not apply where the principal sum advanced is risked, or is not to be returned, and therefore that a contract for the paying of a higher rate of interest than is fixed by these different acts does not become invalid in such cases. an annuity granted during the continuance of a life the principal is risked, because the life may drop before it has been returned by the annual payments. Hence this contract falls within the exception, and a higher rate of interest is not prohibited. At the same time where there is no risk in the contract, but the principal is secure, and this mode is merely adopted as a device for a loan, the law will not allow the statutes to be evaded, and the case will fall within the prohibition. In Chesterfield v. Jansen (a) Mr. J. Burnet expressed the result of the cases thus-"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, for if the court are of opinion the annuity is not the real contract, but a method of paying more money for the reward or the interest than the law allows, it is a contrivance that shall not avoid the statute by giving the avarice of one kind of men the opportunity of preying on the necessities of another, 4 Leo. 208; 2 Lev. 7, K. v. Drury. Noy, 101; Cro. El. 642, 643."

a partner in

It is not necessary that the principal should depend Annuity paid to upon the existence of a life only, there are other contin- trade. gencies which may also put it in jeopardy. The profits of

(a) 1 Atk. 340.

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CONSIDERATION.

trade are not controlled by the statutes of usury, because among other reasons the losses must also be considered, and the consequent risk which the trader undergoes of his capital. This is illustrated by a case in the Court of Chancery of Fereday v. Hordern. (a) There one advanced a sum of 4000l. to three partners in a trade, and was admitted into the partnership. In lieu of profits he was to have clear 550l. per annum, and the sum of 4000l. at the determination of the partnership. The other three partners were to conduct the business in their names alone, and they were to indemnify him from the debts incurred therein. And he was at liberty to retire on giving twelve months notice, when his 40007. was to be repaid to him. Lord Eldon held that this was not usurious, since although the party might not be responsible for the partnership debts as between himself and his co-partners, yet he was as to all the rest of the world. Here, therefore, the principal was risked, inasmuch as, in fact, it became part of the capital invested in trade.

A case occurred before Lord Mansfield in 1775, which also supports this position; it is Bloxam and others v. Pell and Brooke, and is cited by Serjeant Davy in his argument in Grace v. Smith. (b) Pell and Brooke entered into partnership for seven years, and after a year dissolved partnership, it being agreed that Brooke should give a bond for the capital brought in by Pell and five per cent. interest, and should also pay him 2007. per annum for six years, provided Brooke lived so long, as in lieu of the profits of the trade. Lord Mansfield held that Pell was a secret partner. "This," he said, was a device to make more than legal interest of money, and if it was not a partnership it was a crime, and it should not lie in Pell's mouth to say it is usury and not a partnership."

66

But it must appear that the annuity is to depend upon the profits of the trade, for where it was certain and was charged upon the estate of the remaining partner, it was considered by the court that a jury were warranted in (b) 2 Sir W. Bl. 999.

(a) Jac. 144.

finding that there was not a partnership, where they were of opinion that the annuity was not to be paid out of the profits. (a)

Another case, illustrative of this exception out of the Statute of Usury, has lately occurred in the King's Bench. (b) Gilpin and Enderby, by deed, covenanted to become partners for ten years, and that E. should advance 20,000l. as part of the capital for carrying on the business, and that G. should find a like sum, that E. should, during the continuance of that term, have, out of the profits, if sufficient, if not, out of the capital, 20007. yearly for his share of the profits. G. covenanted that 20,000l. should be repaid at the end of the term, and to indemnify E. against all losses and debts. To an action on this covenant by E. it was pleaded that this was a device in pursuance of an usurious agreement. The jury negatived that plea, and judgment was given for the plaintiff by the Court of Common Pleas. (c) It was held, on a writ of error in the King's Bench, that the deed must, after that finding, be taken to disclose the real intention of the parties, and did not disclose a case of usury.

"By this deed," said Lord Tenterden, " E. undoubtedly made himself answerable as a partner to all strangers, though he might not be answerable as between himself and Gilpin. And if the deed discloses the real facts and the intention of the parties to it, this is not the case of a loan of money by E. to G., but a contract of partnership between them of a peculiar kind. If the deed does not disclose the real facts and the intention of the parties, but was executed only as a contrivance to cover a loan of 20,000l. for ten years at 10l. per cent. the deed was undoubtedly void, but this is a fact which ought to be found affirmatively by a jury, to enable the court thereupon to declare the deed void. No such fact has been found, and

(a) Grace v. Smith, 2 Sir W. Bl. 998. See also Young v, Axtell, cited in Waugh v. Carver, 2 H. Bl. 242; and Morse v. Wilson, 4 T. R. 353. (b) Gilpin v. Enderby, 5 B. & A. 954; 1 D. & R. 570.

(c) 5 Moore, 571.

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OF THE CONSIDERATION.