Planters' Bank v. Snodgrass

5 Miss. 573 | Miss. | 1840

Lead Opinion

Mr. Justice Trotter

delivered the opinion Of the court.

Several questions have been presented for the determination of this court, by'the record in this case. The-first'i's; whether'the contract which is the- subject of the action is usurious, and I shall proceed to the examination of that inquiry; in the first place. The others' are' dependent Oh that, and need not be considered until that is' disposed of. This pause, and the'others which'are connected' with it, were examined and argued with much zeal and ability by the'counsel of both parties, who accompanied-their arguments With a critical review of the various and numerous' Cases which hav'e been decided on qhestionsof usury. By the aids thus afforded to the court, I have' been enabled the more readily to arrive' at what I trust will be regarded a satisfactory conclusion’. In the process of examination, by which I ha'v'e formed my' opinion; I have looked’solely to the law;- and have disregarded all extraneous considerations either of the necessity or policy of a decision either" way. With any. other question than what is the settled rule in reference to' the subject before me, I have no concern. And I shall always esteem myself fortunate, if I shall be able to make my min.d master of the law as it is written, or has been declared by authoritative judicial precedent, and make a just application of its principles to the case submitted for" my decision. I shall in all cases congratulate myself, if I can succeed in doing this, without troubling myself in hunting after or indulging in speculations Which belong to the other and co-ordinate departments of tfie government. My province is to ascertain what the law is, and not what it should be. And it shall ever be my study to do this, by a different and more enduring standard, than the power of one party and the weakness of the other, or the' equally fluctuating and uncertain criterion of comparative, actual, or im-, puted criminality of the one or innocence of the other. These questions and others of a similar character, can never have any just influence, and will always be discarded by the judge who feels it to be his duty to go no further in any case submitted for *621his investigation, than to inquire whether on the body of the evidence there is found the feature which receives or rejects the application of some general principle of law.

Having made these preliminary remarks, deemed not to be unsuited to the occasion, I shall at once dispose of the question before me. In order to constitute the offence of usury, there must be an agreement between the lender and the borrower of money, by which the latter knowingly gives or promises, and the former knowingly takes or reserves, a higher rate of interest than the statute allows, and with an intention to violate the statute. There must be an agreement, and this is in all questions of usury the first thing to be considered. Does the special verdict find any agreement between the parties in this suit, as to the rate of interest? It does not, but finds expressly that nothing was said by them on that subject. Is this necessary? It would seem essentially so, from the very character of the offence. All the cases proceed upon that ground. In the case of Smith v. Beach, 3 Day’s Cases, 26, more than lawful interest- was reserved by the lender, without the knowledge of the borrower, and it was held that the transaction was not usurious. “A corrupt agreement” say the court, is essential to constitute usury, and to form a corrupt agreement, as in all other contracts, the minds of the parties must meet. The assent of Beach, the borrower, was therefore as essential to the existence of an usurious agreement, as that of Bird.” In Price et al. v. Campbell, 2 Call’s Rep. 123, the court in Virginia assert the same doctrine. After commenting upon the other circumstances of the transaction, they say, although Braxton states, that it was the intention of Campbell to take usury, he does not say that he assented, which is necessary to form the contract.”

Our statute against usury is penal, since it inflicts a loss of the entire interest, legal as well as usurious, upon the lender. And it is not the less a penal law because it does not provide for the whole debt, or visit the offenders with fine and imprisonment.

The first section of the act of 1822, which regulates the rate of interest, enacts, that if it shall be ascertained upon the plea or answer of the defendant in any suit, that more than eight per *622cent, be taken or reserved in or by any such contract, fyc. no interest or premium whatever shall be allowed or recovered; but the principal sum only may be recovered. The second section allows ten per cent, on contracts for a bona fide loan of money, and annexes the like penalty for taking more. If this statute had made a usurious contract the subject of a penal prosecution, and the present proceeding were on that branch of the act, it is difficult to conceive how, under the proof before the court, either party to this transaction would be liable to a conviction. The defendant, however, has insisted upon a consequence of the alleged violation of this law, which is in its nature equally penal; that is, a forfeiture of the whole debt. And yet I apprehend the rule of construction is the same in the latter as it would be in the former case.

In the case of Hammet v. Yea, 1 Bos. & Puller, 144, which is one of the leading cases on the subject of usurious contracts, the action was defended on the ground of usury, and the judges held that the transaction was entitled to as favorable a construction as if it had been the subject of a proceeding on the other branch of the statute.

I conclude, then, that it is impossible to resolve a transaction into the form of a corrupt agreement, when the proof is that there was no agreement at all. But it has been argued, that the taking or reserving of more interest on this loan than the law allows, though done by the clerk of the Bank, is a violation of the law by the Bank, and is therefore, as to the Bank, as much the subject of legal animadversion as if there had been an express contract between the Bank and the defendant. In order, then, to respond fully to the question which has been raised in the argument, I will proceed to its investigation upon the position that it is in the same condition, so far as regards the plaintiffs, as if an express agreement had been made. It then remains to be seen whether this agreement was corruptly made, or, in other words, was entered into' with a full knowledge of the excess which would result, and with an intention to violate the law.— It is the intent, in all cases of this sort, which constitutes the offence, or renders the contract corrupt. But this' intent is a question, which in this, as in all cases where the intent is material, *623must be ascertained by a jury, upon a full view of all the circumstances of the transaction. This is the doctrine which is sanctioned in all the books. 2 Wm. Blac. Rep. 865; 1 Vesey, Jr. 533; 1 Bos. & Puller, 151; 9 Peters’ Rep. 400.

In the case of the Dank of the United States v. Waggoner et al. 9 Peters, 400, the supreme court of the United States held, that to constitute usury, there must be an intention knowingly to contract for, or take more than lawful interest. For, if neither party intend it, but act bona fide and innocently, the law will not infer a corrupt agreement. When, indeed, the contract upon its face imports usury, as by an express reservation of more than the legal rate of interest, there is no room for presumption. The intent is apparent. Res ipsa loquitur. But when the contract, on its face, is for legal interest only, then it must be proved, that there was some corrupt agreement, and that it was in the full contemplation of the parties. That case, as well as the others referred to, lays down the rule, that the quo animo, the contract was made, as well as the acts of the parties, becomes an important inquiry; and that this inquiry belongs to a jury. This determination of the Supreme Court of the United States is in exact accordance with the principle of the earlier cases in England, of Bolton v. Downham, Cro. Eliz. 642; Bedingfield v. Ashley, ib. 741; Roberts v. Tremayne, Cro. Jac. 507; and the more modern decisions in Murray v. Harding, 2 W. Black. 859; Floyer v. Edwards, 2 Cowp. 112; Hammet v. Yea, 1 Bos. & Pul. 144; Doe v. Gooch, 3 Barn. & Ald. 664, and Salorette v. Melville, 7 Barn. &. Cres. 431. The same doctrine was held in the case of the Bank v. Owen, 2 Peters’ Rep. 536. To the special plea, alleging a corrupt agreement in that case, the plaintiff demurred. Judge Johnson, who delivered the opinion of the court, observed that he had great difficulty, because the plea did not aver an intent to violate or evade the law, but he was content to unite with the three other-judges, who made the majority on that point. And he gives as a reason for this, that the demurrer, implied a confession of the quo animo, or intent. And he lays down this rule, on the. authority of the case I have already cited, of Bolton v. Downham. This I apprehend to be a full recognition of the doctrine that the intent of the agreement must be found, and that where it is not apparent *624on the record or face of the contract, it must be ascertained by a jury. And this is the more evident from what immediately after-wards fell from the judge. “ But if,” says he, “ the plaintiff had traversed the plea, then the question of intent would have been for the jury.” And he cites, in support of this position, the decision in Bedingfield v. Ashley, already quoted.

There is then, no other distinction in the two cases on this subject, decided by the Supreme Court of the United States, than what is to be found in the state of the pleadings. For in the case subsequent to that of the Bank v. Owens, I mean that of the Bank v. Waggener et al. Judge Story refers to the first, and remarks, that there is no distinction in the principle of the two decisions. “The demurrer in Owens’ case admitted the quo animo,” otherwise it must have been left to the jury. In Spurier v. Mayoss, 1 Ves. jr. 533, the court decide, “that to make the contract usurious, it must be apparent upon the face of it, or by evidence, that the intention of the parties in the creation of it, was by means of shift or device, to take more than legal interest.” In Hine v. Handy, 1 J. Ch. Rep. 6, it was held that the excess over the legal rate of interest should be made a condition of the loan. In Hammet v. Yea, Eyre, Chief Justice, says, “I repeat, in conclusion, that 1 cannot agree, that in usury more than in any other case, the whole transaction is not to be taken together. Whether more than 5 per cent, be intentionally taken, is a question of fact to be decided by the jury.” The principle which grows out of all these cases, I take to be that stated by Gould, J. in Murray v. Harding, “that the ground and foundation of all usurious contracts, is the corrupt agreement” And that the motives of the parties are to be found by the jury. There is one other case much later in point of time than most of those to which I have referred, which illustrates with such clearness and precision the true boundaries on questions of this character between the powers of the Court and those of the jury, that I cannot pass it over. It is the case of Steptoe’s adm’rs. v. Harney’s ex’ors. 5th Leigh’s Rep. The president of the court of appeals in giving his opinion observes, “that the (distinction arises out of the theoretical incapacity of the court to ascertain any fact, or to judge of any motive, and the power of the jury to ascertain every fact and ferret out every motive” A *625plea of usury should therefore present such facts with certainty to every intent, as in themselves distinctly amount to an agreement to receive more than lawful interest, or it must state the facts with such necessary averments of an intent to evade the statute, that a jury upon the trial might decide that the agreement was a contract for usurious interest.” What is here said in regard to the plea of usury, applies with equal force to a special verdict, and if the latter do not find that the contract was corrupt, the court surely cannot infer it. It is true that if the special verdict finds that there was an agreement by which the lender knowingly receives or takes illegal interest, the court may infer the intent to violate the law. But this can only be so when no other conclusion would be consistent with the facts found in the verdict. If then the verdict either negatives the corrupt motives, or finds other facts inconsistent with such motives, I know of no rule by which the court can fix the intention. In the case at bar, the record shows that the contract was to receive only 8 per eent. on the loan, which is the rate of interest allowed by the charier, on loans having more than one year to run: that the rule of computation adopted by the clerk did reserve to the bank a trifling excess over 8 per cent, and that he and the officers of the bank did know at the time that this mode would give such excess. Had the proof stopped here, the defendant might very properly assimilate it to the cases of the Bank v. Owens, in 2d Peters, and of Marsh v. Martindale, 3 Bos. & Pull. 153, and invoke the powers of the court to make an application of the doctrine there asserted. But I take it that the court is bound to connect the whole of the circumstances connected with the transaction, and thus ascertain whether the motives of the officers of the bank can be explained on any other hypothesis than a corrupt intention.

The verdict also finds that the mode of calculation has never been adopted by, or otherwise received the sanction of the directors or the stockholders of the bank, that it was adopted in this case because it had been uniformly used, it being the established custom of the bank to coinpute interest by Rowlett’s tables, and that there was no intention to violate the law; the object, and only object being the convenience and accuracy of the rule, and that there was no design to make or gain by it. It will thus be *626seen that the jury have found that there was no intention to violate the law, and it has already been shown from numerous decisions of the highest courts in this country and in England, that it is their peculiar prerogative to decide the question of intent. How then can this court be called on to infer what they have said did not exist? It is said that where the body of the evidence shows a taking of usurious interest with full knowledge of the fact, there is ho room for presumption; the corrupt agreement is made out. JRes ipsa loquitur; and that the court is bound to apply the law, even though the jury do find, that there was no intention to violate the law. That ignorance of the law wifi not excuse. This is true; and the proposition runs through the whole system of criminal jurisprudence.' When a’homicide' is proven, the law presumes it to be felonious. It is however a mere presumption and is open to explanation, and subject to be destroyed by proof. This I understand is the rule in all cases of usury. It is laid down to this extent, and no further, in the case of The Bank of Utica v. Wager, 2 Cowen, 763. And I apprehend that the difference between that case, and the others, which have been decided on this point, will be found to consist only, 'in’ different applications ¿f the same doctrine. ’ When therefore the judge remarks, that “receiving usurious interest intentionally, is sufficient evidence of a corrupt agreement;” he advanced no new doctrine. I entirely agree with' him. ’ 1 only'conclude that he gave it an application in that case, which I do not feel at liberty to give it in the case at bar. I am'not'willing to carry the interpretation of the usury laws to that extent. In this case it is manifest to me that there was no corrupt intention. That in calculating the interest, the only objec-t was convenience and accuracy, and that the sordid motive of avarice which controls and influences the usurer, had no share in the transaction. I come to this conclusion from two facts which are found by the verdict. 1. That the clerk acted in obedience to the 'uniform and long established custom of the Bank. And, 2. The' amount of the excess over the lawful interest, which is so trifling as not to be an object to any money lender. It has been argued that usage cannot excuse a wilful violation of the statute laws of the country, or furnish an apology for trampling thein down. This is unquestionably true. And yet custom may.'go a *627great way to explain a transaction and unfold the motives of the parties to it. As was determined by Lord Mansfield in the case of Floyer v. Edmonds, already cited. In this case the motive is the gravamen of the controversy. And surely the party who is sought to be charged on a corrupt motive, is-entitled to the benefit of every circumstance which in its nature is calculated to repel the imputation. For this purpose he may invoke the usage which influenced the obnoxious act, and ask to have it put in the balance and weighed in his favor. The argument it furnishes is, that it is not fair to impute a wicked intention, for doing an act, which is every day committed by almost every b^ink, merchant, broker and business man in the United States. ' An act sanctioned not only by inveterate usage, long continued, and generally diffused through the operations of the almost entire banking and commercial classes of the whole country; but by a solemn legislative enactment of Congress, and of several of the states of the Union. He may ask the benefit of the custom, for the same reason and for the same purpose, that the banker does, who takes the interest on his loans in advance. Its influence in the latter case has never been denied, but oh the contrary was admitted by Lord Mansfield in the case before noticed of Floyer v. Edmonds, when the question was of first impression. He held the transaction to be usurious upon its very face, yet as the interest was discounted in pursuance'of long usage in the regular course of trade and business, it would not do to hold it usurious. This decision has been acquiesced in ever since, and is now the settled doctrine in England and in this country. 2 Wm. Black. 792; 4 Term. R. 148, 153; 15 John. Rep. 162; Bank of Utica v. Wager, 2 Cowen, 768; Fleckner v. Bank of the United States, 8 Wheat. 354; 5 Rand. Rep. 132; 1 Stewart’s Ala. Rep. 469: And yet by the practice thus sanctioned as a universal rule, the banks receive on their loans $6, for every 94, when by the law they are entitled on that sum to $5 64, only. This secures to them on every loan of $100, thirty-six cents more than the legal interest. Whereas the rule of calculation in the present case produces a gain of 8 cents per centum only. And if remote consequences can have any just influence in questions of this sort, they will be found to be much moré alarming in the former than in the latter instance. *628For by taking the interest in advance, it will be found upon a nice calculation, that if a note for @100, is made payable 16 years and eight months after date, and is discounted on the day of its date, the discount will absorb the whole amount of the note, and the lender neither advances, nor does the borrower in such case reeeive one cent. Yet the courts have felt themselves bound to uphold the contract in this case. And why? On the simple ground of usage. It is a clear and palpable violation of the law. And so held to be in all the cases decided upon it. It was so held by Judge Savage, in the case of the Bank of Utica v. Wager, and he goes on to remark, that if the question were res integra, he should feel bound to hold that it was so far usurious as to avoid' the contract. But it had been settled and could not be overturned. When the question came before Lord Mansfield, in Floyer v. Edmonds, it was not res integra, and he sustained the contract üpoh the only ground on which it can be upheld by any consistent principle. And that was, that the usage being general amongst the banks, that fact explained the intent of the banker, and repelled the inference of a corrupt agreement. Why should not the same indulgence be extended to those who have in good faith acted in obedience to a custom equally as universal, much more harmless in its results, and believed to be also highly beneficial to the business part of mankind.

Banks have in most cases adopted the practice of including the day of payment fixed in the old note, in the new one upon a renewal ; by which they receive double interest for that day. On the day of the date of the renewal they get 12 per cent. Every bank knows this, they then in such cases knowingly take usurious interest. And are therefore clearly within the operation of the general rule laid down in the adjudged cases, and exactly within the pale of the one asserted by Judge Savage in the case of the Bank of Utica v. Wager, and held to be incontrovertible “ that the taking of usurious interest intentionally, was sufficient evidence of a corrupt agreement.” And yet in that very case he held that this practice of the bank was not affected with usury. He concluded, however, that as the practice of counting interest on 360 days for the year, had not then received a judicial sanction, and was res integra, that the reservation of an excess un*629der it tainted the contract with usury. But I apprehend the principle of each case is identical — save that in the two former the sin is much more aggravated. In one, the bank takes 36 cents in every hundred^dollars more than the law allows; and in the other, when she includes the same day in the two notes, she gets exactly two-fold interest. Yet these transactions have been universally excused by the courts on the authority of custom. Why then disregard entirely a'custom by which only 8 cents per cent, is gained ? Why extend the voice of pardon, to the usurer who gets double wages for his iniquity, and put all the thunders and penalties of the violated law upon the head of him who receives by as good a title, the paltry division of the twentieth part of, one poor scruple” only? I can never consent to this discrimination ; when the only court in which it has been made, has furnished no better reason for it, than that the favored offenders have grown gray in the practice of their sins; or in other words, have sinned longer and sinned deeper. In several modern and some quite recent decisions upon this subject, in many of the States, this usage has been sanctioned on the analogy of the cases on the other classes. Thus, in the case of Lyon v. The Bank, 2 Stewart’s Ala. Rep. 469, the Supreme Court of Alabama decided against the same objection. The interest in that case was counted on the rule in Rowlett’s Tables, and it was urged on the authority of Wager’s case in New York, that for that reason the contract was usurious. But the court gave judgment for the Bank. In the case of The Bank v. Hunter, 1 Devereux’s Rep. 129, the Supreme Court of North Carolina had the same question before it. And they decided in favor of the Bank. The Supreme Court of Vermont as late as 1839, in the case of the Bank of Burlington v. Durkee et al. 1 Vermont Rep. has decided the same question in the same way. The court say they must sanction the usage of thirty years, and admit it to explain the quo animo of the parties. The usage and the small amount of the excess, they deemed sufficient to repel the inference of a corrupt design. In the subsequent cases, of the Bank of St. Albans v. Scott and Raymond, 1 Ibid. 429, and of the same Bank v. Stearns, Ibid. 432, the Judges in Vermont re-asserted the same ‘opinion, and gave *630the same judgment. It is proper to remark, also, that in each of these cases the case of Wager, in New York, was pressed upon the court, and its authority refused. The case of the Bank of North Carolina v. Cowen et al. was decided in the Court of Appeals of Virginia as late as 1837. In that, case the whole subject received a full and critical investigation by the court, and they held that there was no usury in the case. It is true that Judge Brockenborough remarked that his opinion had ahvays been opposed to the practice, and that it was a violation of the law, and that the case of the Bank of Utica v. Wager had greatly strengthened that impression. But he felt compelled to acquiesce in a contrary decision, And he gives a very consistent and satisfactory reason for it: Because,” he continues, in the case of Crump v. Nicholas et al. 5 Leigh’s Rep. 251, it had been decided that taking interest on 64 days in renewed notes was not usurious. That decision, he observed, was sustained on the ground of bank usage, and the great inconvenience and injury which would result from a contrary decision. He thought the analogy of that case required a similar decision. He therefore felt bound by the usage.”

Judge Tucker remarks, «that the idea was excellent, and the inventor of Rowlett’s tables is entitled to be looked upon as a public benefactor. Time, and the most worrying labor are saved; mistakes are prevented, and the most ordinary man is enabled* to make 'his calculations with unerring certainty. But,” he continues, “ these tables, unfortunately, are founded on the false postulate that the year consists of three hundred and sixty instead of three hundred and sixty-five days. A position adopted to simplify the calculations and avoid innumerable embarrassing fractional quantities.” After entering into a calculation which shows an excess of one cent and a fraction on $100 for sixty days, he says, “ it is impossible to consider this excess as usury.” i: It is not pretended, that this method of computation was used with any intent to commit usury.” The statute, he says, has always been held to aim at corrupt agreements. It is true that the taking of usurious interest is prima facie evidence of a corrupt agreement; but it is not conclusive. The excess was so minute, and obtained *631by a process of calculation sanctioned by so long and so general a usage of the Banks as to redeem the case from the sin of usury.” I concur entirely with this reasoning.

Having settled in this manner the main question raised by the argument, it is deemed wholly unnecessary to notice the collateral inquiries dependent on it. As the verdict finds that the $2500, included in the note for expenses, was voluntarily agreed to be paid by the defendant, and was not exacted as a condition of the loan by the Bank, it cannot affect the case with usury. I am therefore of opinion that the law arising on the facts in the special verdict is with the plaintiffs.

Let the judgment be reversed, and a judgment rendered in this court accordingly.

Judge Turner concurred.





Dissenting Opinion

Judge Sharkey,

dissenting, delivered the following opinion:

I regret that my understanding of the law, and its application to the case before us, lead me to a conclusion different from that of the majority of the court, and I shall endeavor to explain the grounds of my opinion.

The plaintiffs instituted this suit on a promissory note for $124,-068 and 51 cents, made by C. Dart, and endorsed by defendant, payable eighteen months after date, which was discounted by the Bank, reserving eight per cent, interest per annum, calculated at three hundred and sixty days to the year. The defence was usury. A trial was had which resulted in a verdict for the plaintiffs, but it was set aside and a new trial granted, and on the second trial the jury returned a special verdict, as follows, to wit: We, the jury, find that the plaintiffs had, previous to the note sued on in this action, commenced several suits against C. Dart, the drawer of said note, and the defendant and one of the other drawers, on bills of exchange and promissory notes then due and protested, which suits were compromised by the plaintiffs and defendants, and the note on which this suit is founded was discounted by the Planters’ Bank, in satisfaction of the amount due on them to the plaintiffs. That on said compromise the defendants allowed the sum of twenty-five hundred dollars over and above interest and costs to pay the plaintiffs’ attorney’s fee.

*632“ That the nett proceeds of the note sued on was passed to the credit of said Dart, and applied to the payment of said protested paper, which nett proceeds was discounted by deducting in the calculation from the whole amount of the note eight per cent, per annum interest for the whole time said note had to run from its date to its maturity. That this interest was calculated according to the rules in-Rowlett’s tables for calculating Bank interest, which estimates the year at three hundred and sixty days only, and that in ascertaining the time for which interest had to be calculated on said note, the whole number of days was estimated, including three days of grace, which was five hundred and fifty-two days, and the interest reserved by such calculation was fifteen thousand two hundred and nineteen 9-100 dollars, and the sum which was by the said Bank passed to the credit of said Dart, was one hundred and eight thousand and eight hundred and forty-nine and 42-100 dollars. The mode of calculating interest which was pursued in ascertaining the interest on the note sued on, was the uniform mode of calculating interest in the Planters’ Bank, and was adopted for the purposes of convenience merely, and not with any design to evade the laws of usury, or to take a greater rate of interest than allowed by the charter. The directors of the Bank knew nothing of the mode of calculating interest, and never gave any directions concerning it, but the officers of the Bank knew the mode of calculating interest pursued by the Bank gave a fraction more interest than the ordinary mode of calculating by years and months, at the rate of three hundred and sixty-five days to the year, and twelve months to the year. There was no agreement specially made by the parties on the subject of interest, nor was any thing said about it. But the calculation was made by one of the clerks, according to the custom of the Bank, and a settlement accordingly. At the maturity of the note (on the 18th December, 1836,) it was duly presented and payment demanded at the Planters’ IBank of Mississippi at Natchez, which was refused, and due and legal notice given to the defendant by mail, directed to Rodney, Mississippi, which was the post-office nearest to his place of residence, and put in the post-office at Natchez.in time to go out by the first mail áftér the payment was .demanded. .

« We find further, that $2500 was a sum allowed voluntarily *633by the defendant, and the said sum was not exacted as a condition precedent to the settlement and discount of said note sued oh" in this case.

“ The said note was never offered for discount at a less rate of interest than that at which it was discounted and refused.

“And no part of the note sued on, or the interest, has been paid to plaintiffs. If upon these facts the law be in favor of the plaintiffs, we find for the plaintiffs, and assess their damages at one-hundred and thirty-nine thousand nine hundred and eighty-three 55-100 dollars. But if the law be in favor of the defendants, then we find for the defendants.”

The question is, whether this verdict presents a usurious contract ?

On both sides, the case has been argued at great length and with great ability;- and, by an unbounded research, counsel have laid before us all the adjudications and learning which could in any degree tend to elucidate the several positions taken.

On the part of the plaintiffs, the argument is predicated on three questions, into which it is said the whole case is resolved, to wit: First, was the contract usurious, or in violation of the charter of the Bank ? second, suppose it to have been a usurious contract, what is the effect on the whole contract; is it void, or is nothing lost but the interest ? and, third, did the court err in granting the defendant a new trial ?

First, then, was the contract usurious ? This question cannot be satisfactorily determined, without first ascertaining what it is that constitutes usury. It is defined by counsel to be a corrupt agreement, whereby the lender receives or reserves, and the other pays or agrees to pay, a greater rate of interest than the law allows. It is said the corrupt intent must exist, and must have entered into the inception of the contract; and that without this ingredient usury cannot exist. This is also the definition, in substance, which is given in the books. It had its origin under the British statutes, which made the usurious contract void, and the act an offence punishable by penalties and forfeitures. It is not a crime under our statute. But to adopt the definition as applicable here, and suppose it to be a corrupt agreement to take more *634interest than, the law allows, this is still an unsatisfactory explanation, and before it can be properly applied to the facts of the case at bar, its constituent parts must be understood. Before we can understand the aggregate, we must understand the particular parts. What, then, is meant by corrupt agreement, or in what does the corruption consist ? I maintain and shall endeavor to show that it consists merely in the act ,of taking illegal interest, whether it be known to be illegal' or not; in other words, in taking more than eight per cent, without áecident or mistake. If the lender knoios what, he does take, the offence is complete. It is knowingly taking, opposed to taking by accident or mistake. There is nothing else to which the term corrupt can be applied, for there is no moral turpitude in the mere act of taking interest; it does not evince depravity. The prohibition amongst the Jews is admitted to have been a mere political regulation, not established because the loaning at interest was contrary to natural justice. Lopl Bacon, in treating the ■ subject philosophically, after enumerating the advantages and disadvantages, comes to the conclusion that society is benefited by the loaning of money at interest; .and Grotius holds that it is neither repugnant to divine nor to natural law. Nothing short of extortion or unreasonable interest is prohibited by the common law. Hence it is clear that taking of usury is malum, prohibitum, and not malum in se.— When, therefore, the .books speak of a corrupt agreement, they must be understood to mean either that the corruption consists in the commission of an act which is made a crime by the statute, or that it consists in the single fact of knowingly taking more than a given rate of interest. If the terms were adopted in the former sense, it can have no foundation here, because usury is not a crime; but if they are to be understood in the latter sense, then it is clear the corruption consists in doing that which is prohibited by law, whether the lender knew the law, or intended to violate it or not. The latter position I take to be the true one, and think it is abundantly sustained by adjudged cases, either directly or by legitimate deduction from the principles they establish. There is little or no difference in the authorities cited in regard to principles, and yet there is a difference in their application of them. I will notice *635such of the cases as may seem to me most decisive of the question, and endeavor to fortify the position taken by' such' aids as they may, by a fair interpretation, afford. ■

In the case of the Bank of the United States v. Wagner, Judge Story says, “to constitute-usury within the prohibitions'of the law there must be an intention knowingly to contract for or take Usurious interest; for if neither-party intend it, but act bona fide and innocently, the law will not infer a corrupt agreement.” The import of this language is neither obscure nor doubtful. There are two’members to this sentence. .-By the first we'arc told what usury is, by the second we are told when the law will not infer it. The last does not qualify the first. The act which constitutes usury is not changed, because the law will not infer it when the parties act innocently. He says “if neither party intend it;” intend what ? “knowingly to contract for or take usurious interest;” of course. .If illegal interest be taken, it does seem to me that according to this language,- there is but one way of escaping the charge of usury, and that is by sho wing the absence of “an intention knowingly to contract for, or take usurious interest,” and-if the party had no intention knowingly to contract for it, it would seem to follow that the only other way it could happen, would be by accident or .mistake. I apprehend that he did not mean to. assert the proposition that the party' must know that he was violating the law, but merely that he. should know for what sum he contracted. He continues, “when indeed the contract upon.its very face imports usury, as by express reservation of more than legal interest, there is no room for presumption, for the 'intent is apparent, res ipsa loquitur.” What is it that rejects presumption? The intention knowingly to take a certain interest. If presumption is to be rejected when the facts are apparent from the contract, the case is precisely the same when they are made to appear otherwise. Whenever it is shown, therefore, that the parties acted knowingly, the law pronounces the agreement corrupt, precisely as though the intention had appearéd on the face of the contract, I will here remark, that the distinction between usury and the evidences of it, must be kept in view. I am now endeavoring to ascertain what it is; when that is done, I shail endeavor to show how it is to be proved or rebutted. . .

*636■In the cage of Bolton v. Downham, the court said, “the corrupt agreement (which -is confessed by the demurrer) makes it usury, and it is the intent which makes it to be so or not so.” The intent here spoken of, can mean nothing more nor less than an intent to take a certain rate of interest, knowingly. An intentional taking, opposed to an accidental taking. The language of Justice Gould, in Murray v. Harding, is much relied on. He says, “the ground and foundation of all usurious contracts, is the corrupt agreement.” This is .true, but from this language we can get no idea of what it is that constitutes a corrupt agreement, and this is certainly important to be understood.

In Roberts v. Tremayn, a special verdict was found, from which it appeared that more than lawful interest had been taken, but it did not find the corrupt agreement. The court held this to be unnecessary, because the circumstances amounted to usury, and that they could not by intendment .have any other construction. It was usury apparent. The circumstances were, that a lease had been made for a loan of money, with privilege to redeem in two years. More than 5 per cent, interest was reserved to be paid quarterly. These circumstances were said to constitute usury apparent. It was, therefore, a corrupt agreement. Why was it so? Because the fact of knowingly taking more than 5 per cent, made it so. We are told that the law will not infer a corrupt agreement. In this case then it was not an inference of law. There was no room for inference, the facts made it usury. From this it would seem that what is a corrupt agreement is a question of law.

With the case of Hammett v. Yea, it seems to me that 1 might well close the inquiry, as to what is meant by a corrupt agreement, for it is'certainly as clear as need be. Eyre, chief justice, has placed it in language which leaves no room for doubt. He says, “ I will begin with stating my assent to the proposition that where a party-on a contract for a loan intentionally takes more than 5£ per cent, per annum, for forbearance of that loan, he is guilty of usury. But I add to it this further proposition, that whether more than per cent, is intentionally taken upon any contract for such forbearance, is a mere question of fact for the consideration of the jury, and must always be collected from the whole of the transaction as it passes between the parties.” The *637proposition to which he so unqualifiedly assents, relates merely to the constituents of usury; that which he adds, relates merely to the mode of ascertaining the intention of the parties. The latter does not, in the slightest degree, qualify the'first, but as a definition of usury leaves it perfect, and in that definition there is but one point to be determined, and that is, whether the party intended to take more than 5 per cent. An intentional taking is here evidently intended to be distinguished from an accidental taking. If the party know what he is doing, it is an intentional taking, and falls precisely within this definition; but if the taking was by accident or mistake, it is not, and whether so taken by accident or mistake, is a question to be determined by the jury. An intention to violate the law certainly does not enter into either of the propositions here laid down.

In Marsh v. Martindale, we find usury defined in the same way. Lord Alvanley said, “ that if a man agree to take more than 5 per cent, for the forbearance of money, the law declares that such an agreement is corrupt, within the statute of Anne, whether the party thought at the time that he was acting contrary to the statute or not.”

The case of Childers v. Deane & Page, is directly to the point. The court say, “ to constitute usury, there must be an intention to take more than legal interest. Wherever such intention appears in the taking more than legal interest, it is evidence of the corrupt agreement required by the statute, though the party may never have heard of the law, or may think he is steering quite clear of it.” The intention is here made the foundation of the offence, and constitutes the corruption. Not an intention to violate the law; that has nothing to do with the question, and, placing that out of view, we can understand the intention of the party as applicable to nothing else but the mere fact of taking more than 8 per cent, interest. Taking intentionally, or, what is the same thing, knowingly, as contradistinguished from taking by accident or mistake. This is shown to be the true understanding of the decision by the subsequent language of the court. The judge says, “ignorance or mistake of law excuses no man, but a mistake of fact does excuse.” From this I conclude that nothing will excuse usury but mistake of fact. If there be no mistake of *638fact, but a taking intentionally or knowingly of more than 8 per cent, it is usury. To the same effect will other authorities be found, but certainly more cannot be necessary to establish the truth of the position with which I set out, to wit, that taking knoioingly, without accident or mistake, move than 8 per cent, interest, is corrupt.

But it is said the law will not infer a corrupt agreement, and although it appears that more than legal interest has been taken, this is but prima facie evidence of a corrupt intent. When the fact appears on the face of the contract, or is shown by a special verdict, or admitted by a demurrer to a plea, there is no longer o ny room for inference of law. The law then passes judgment on the facts and pronounces the agreement corrupt. There is nothing left to infer. The law will not presume innocence when guilt is shown. But still it is insisted that all this is but prima facie evidence of the corrupt intent, which may be explained or rebutted. This I admit, and then the question naturally arises, how may it be explained or rebutted ? To remove or do away the effect of this prima facie evidence, something must be shown which will amount to an excuse, and what will do this ? If I am right in my first position, there is but one excuse under such circumstances, and that is mistake of fact. When the prima facie case is made out, it may be rebutted by showing that more than 8 per cent, was taken by accident or mistake, and it cannot be rebutted in any other way. Ignorance of the law affords no excuse, nor does want of intention to violate the law, because such an intention constitutes no ingredient in. usury. And certainly it would afford no defence for the usurer to say, that although I knowingly took more than 8 per cent. I did not intend to violate the law. That instead of being a defence, would make the case conclusive, as usury, like most other things, certainly admits of positive proof. When it is shown that more than 8 per cent, was taken, that is prima facie evidence of usury, but when it is shown that it was intentionally and knowingly taken, that is positive proof of usury, and admits of no excuse. Two plain questions answered affirmatively must settle the question of usury. 1. Did you take more than 8 per cent, interest ? and, 2. Did you know that you were taking it ?

*639We are next to enquire what kind of agreement was necessary to make out a case of usury. It is insisted that the minds of both parties must be brought to the act, and must act knowingly and wilfully; both must concur at the time in the commission of the act.” It is difficult to perceive any good reason for a distinction between a contract for usury, and a contract for any thing else, and yet the counsel have endeavored to place it on different grounds. In all contracts there must be an assent or meeting of the minds of the contracting parties, either actual or constructive. Under certain circumstances, in the absence of an express contract, the law will imply an agreement or assent of the minds, and this it will do in usurious as well as other contracts. The customer who goes to his merchant to buy an article, is supposed to have agreed to give the selling price, although in point of fact he neither knew nor inquired the price. The usurer who sits in his counting room with his rates upon his counter, as much exacts them as though he had done so in so many words, and his customer is supposed to assent to them, if no express contract be made, although he may never have heard of them. It is certainly true that some of the books say that the assent of the lender is no less essential than the assent of the borrower. Many of them, however, do not go this extent in laying down the ingredients of usury, and I do not think any of them can be justly construed as going further than I have already stated, to wit: that no other assent is necessary, than such as the law requires in any other contract, which may be either express or implied. The conclusion of the court in the case of Smith v. Beach, seems to me to go a step further than the- authorities, or the premises there taken will warrant, The court sky, A corrupt agreement is necessary to constitute usury; and to form a corrupt agreement, as in all other contracts, the minds of the parties must meet. The assent of Beach was therefore as essential to the existence of a usurious agreement, as that of Bird.” “ From these premises it follows as an undeniable consequence, that there could be no corrupt agreement while either of the parties remained ignorant of the excessive reservation.” If the contract for usury was a separate and .independent agreement, unconnected with the contract for the loan, this would be true; but usury is always connected with, as *640a constituent part or condition in, a contract for loan. And whilst the mind assents to the contract for loan, it may be ignorant of the condition or terms. Suppose an ignorant man who knows nothing of interest or the mode of calculating, borrows money from one who does know how it is calculated, and who exacts more than legal interest, under this conclusion of the court it is difficult to perceive how this could be usury. The borrower is wholly ignorant of the excessive reservation, but the lender is not. Under the broad proposition laid down by the court, the ignorance of the borrower, would take it out of the statute against usury. As a consequence of this, a recovery could be had of course, for the taint of usury being removed, nothing could prevent a recovery. A perversion of legal principles would follow as a further consequence. The borrower who knows that an illegal reservation is made and assents to it, is protected under the usury laws; but the ignorant man who knows not what is reserved, and who of course does not assent to. it, is compelled to. pay the usury. The court, however, expressly stated in the outset in this case, that “to form a corrupt agreement as in all other contracts, the minds of the parties must meet.” Now in all other contracts the minds meet expressly or impliedly, and so it is in usury. I confess myself somewhat at a loss to know why it was that the assent of the borrower was ever necessary under the statute; I mean his assent on the point of usurj; his assent to the loan was of course necessary. The statute is prohibitory to the lender only, and is silent as to the borrorver, and it does seem that if a case can be imagined in which more than legal interest is knowingly taken, without the assent or knowledge of the borrower on the point of usury, that it would be usury still.

I have thus taken the several material members or parts of the definition which has been given, and have endeavored to show the true meaning of a corrupt agreement. I shall now endeavor to make an application of that definition to the case before ús, as disclosed by the special verdict.

It appears that interest was calculated for the whole time the note had to run, (eighteen months,) at three hundred and sixty days to the year, and that the officers of the Bank knew that this gave a fraction more than the ordinary mode of calculating at *641three hundred and sixty-five days to the year. These facts being found by the verdict, are to be considered precisely as though they had formed a part of the written contract, and must be so expounded. Do they constitute a corrupt agreement? They do. There is here nothing left for the law to infer; the facts are placed before the court as a part of the contract. The intention of the lender is made apparent by the verdict, and here the maxim res ipsa loquitur applies. The jury have told the court that the .Bank officers knew that they were taking more than legal interest. The intent is found; the law pronounces a contract made with such intent to be corrupt. The intention of the parties was a question of fact for the jury; the effect of contracting with such intention is a question of law for the court. It is a question of law, because it is the law which declares that an intentional violation shall be corrupt. Hence the court in the case of Stribbling v. The Bank of the Valley, 5 Randolph, 145, say, “ Many cases may be cited to prove, that the facts being agreed or found, it is for the court to decide whether in law they amount to usury.” In the case of Roberts v. Tremayne, a special verdict was found, but it did not find that the agreement was corrupt, and for this it was insisted not to be usury, but the court held this to be unnecessary. All the circumstances were found from which the usury was apparent to the court, and which could not by intendment have any other construction. So it may be said here; the circumstances show usury, and can have no other intendment. The intentional taking is found, and this makes it corrupt. The case of Marsh v. Martindale was also on a special verdict, in which the jury found that they believed that Sir Charles Marsh did not think that he was acting contrary to law. The court held that there was nothing in that finding to prevent them from looking into the other facts found, and deciding it to be usury, and this is in point in the present case. The jury present all the facts, and if they make out a case, which the law pronounces usury, it is conclusive on the party. The same doctrine is recognized in the case of Childers v. Deane. The court say, “ wherever such intention appears in the taking more than legal interest, it is evidence of the corrupt agreement required by the statute.” This remark of the court is as much applicable when it appears by other means, as when it ap*642pears by the contract. In both instances, the statute determines by the facts; and the facts being made apparent, the conclusion of law follows. But, say the counsel, this doctrine will not apply, because the jury have found in their verdict that the Bank did not intend to violate the law, and on this branch of the finding they predicate their right to exemption. Take the previous part of the verdict alone, in which it is found that this interest was taken knowingly, and it presents a case of a corrupt agreement under the law; does the latter part of the finding excuse it? It does not. I have already shown that it is no excuse to even a prima facie case of usury, to show that the party did not intend to violate the law; certainly then it is immaterial whether the Bank officers intended to violate the law or not. The verdict shows more than a prima facie case; it shows facts which make the case conclusive. The finding is, that the officers of the Bank, knowingly took more than eight per cent, interest. To this, it is no answer to say that they did not intend to violate the charter or usury laws. The facts found constitute an agreement corrupt in law, and the judgment of law is not to be changed by finding that no violation was intended. This part of the finding presents nothing but an immaterial circumstance. The facts found are corrupt in law, and the law will hear no man urge an unintentional violation as an excuse, if he intended to do the thing which constitutes the violation. That, and that only is to be pronounced upon, whatever may have been his intention towards the law. It is the object of a special verdict to present the facts, and ask the court to pronounce the law on them. In doii3g this the court must disregard such circumstances as are immaterial, and of that character is that portion of the verdict which declares that the officers of the Bank did not intend to violate the law, because such a circumstance is no defence against usury.

But it is also insisted that this contract is not usurious, because the verdict shows that «there was no agreement specifically made by the parties on the subject of interest,” and because interest was calculated by one of the clerks without the knowledge of the directory. This may be true, and yet it does not follow that it was not a usurious contract. It appears that this was the uniform mode of calculating interest in the Bank; as such it may be *643regarded as a condition on which every loan was made. Being a general rule, it as much formed a part of each particular contract, on the part of the Bank, as though it had been expressly mentioned. It was saying to every person, on these terms we discount; and adopting it as a general rule, was equivalent to an exaction in each particular case. To contract with the Bank without a special agreement about interest, was impliedly assenting to the terms adopted. The aggregatio mentium is implied from the custom of the Bank, and the acquiescence of the borrower. A Bank contracts by its officers, and whatever they do within the scope of their authority is binding. It appears that the interest was calculated bv <yye of the clerks, according to the custom of the Bank. For tins purpose he was the proper officer for aught that appears, and at all events he conformed to the customary mode of calculating interest in the Bank. There can be no pretence for an escape on this ground.

Another ground is also taken on which the plaintiffs seek to repel the charge of usury. It is said that the Bank adopted Rowlett’s tables for the purpose of convenience, merely, and not with any design to evade the usury laws, or to take more interest than the charter allowed, and this being the customary mode, adopted by the Bank, it is not usury. In the absence of law, custom or usage may serve to establish a rule which will be binding; or in some cases courts will adopt particular customs, when conformity to them operates merely as a waiver of some personal privilege; for instance, where a' bank has adopted a particular mode of making demand, and giving notice of protest on promissory notes, then any one doing business with the bank is supposed to assent to such custom, and to waive the necessity of a strict conformity to law. But where there is a positive prohibitory enactment, any custom that is in conflict with its provisions, can have no weight or force whatever. Custom may also be resorted to in certain cases for the purpose of explaining a transaction, but even for this purpose such resort is wholly useless here, because the explanation when made, can avail nothing. It does not explain away the only material circumstance in the case, to wit; that more than 8 per cent, was knowingly and intentionally taken.

The custom of calculating interest according to Rowlett’s Tables, *644has undergone frequent adjudications, and these adjudications are relied on by the counsel in support of their case. The principal one is the manuscript decision of the court of appeals of Virginia. Judge Tucker, who has discussed the question more at length than any of the other judges, yields his assent to this proposition, “that if the lender is aware that he is getting more (than legal interest) although he may suppose that he is not infringing the statute, yet he is guilty of the offence.” The language immediately following seems to me to be irreconcileable in principle with the preceding proposition. He continues, “but where there is obviously no intent to infringe the statute, I cannot think it just to consider as usury, the taking even with full knowledge, of “the twentieth part of one poor scruple” more than at the rate of six per cent.” 1 would cheerfully agree with His Honor as to the justice of the case he puts, but I cannot think that I have any right to determine on the justice of the case. The law settles- that for me. He further says, “the statute has always been construed to aim at corrupt agreements for usury,” and his determination is, that although more than six per cent, was knowingly taken, that it was not usury. The inference is irresistible, that the excess was considered too small to constitute a corrupt agreement. Now, I cannot perceive how the amount can change the principle. The law certainly never intended that the question of usury should be determined by a judge’s notions of justice. The law says that no more than a certain rate shall be taken, and if any excess be taken the law is violated, and it pronounces the agreement corrupt. It is violated by “the taking of the twentieth part of one poor scruple,” “nay, if the scale do turn but in the estimation of a hair,” it is corrupt; the line fixed, is broken. Our'particular notions of justice would be rather an uncertain standard for the determination of the question of usury. This decision does not stand alone. Similar decisions have been made in several other states, but the current is not unbroken. Opposed to them are the decisions of the Supreme Court of New York. The cases of New York Firemen’s Insurance Company v. Ely, and the Bank of Utica v. Wager, 2 Cowen, are both directly in point. Interest had been calculated, as in the present case, at 360 days to the year, and for this reason the contracts were held to be usurious. These cases *645decide that no Bank can establish a custom which will authorise it to take more than legal interest, and that the amount of the excess is wholly immaterial; that any excess, however small, will be usury. And so in the case of the Agricultural Bank v. Bissell, 12 Pick. Rep. the court say that if more than legal interest be taken by design, or if done in pursuance of the adoption of a principle of computation, which would give more than the legal rate, we are not prepared to say that it would not be usurious, however small the excess over the legal rate.” In all the cases decided under Rowlett’s Tables, the notes have been made payable in less time than a year, the most of them in sixty days, and hence there is great reason for the decisions, for the law always disregards the fractions of a day. The year, consisting of 365 days, cannot bé exactly divided without running into fractions of a day, and under the rules of law, as the precise time cannot be ascertained, that rule which comes nearest to it may be adopted with propriety. But this reason does not hold in the present case, because the note did not mature in a fraction of a year, but had a year and a half to run, so that really we have no case strictly analagous.

The principles laid down by the court in the case of the Agricultural Bank v. Bissel, applied to this case, show the contract to have been usurious. On the whole view of the case, I can perceive nothing to exempt it from the operation of the statute.— Divested of all immaterial circumstances, it is briefly this. The Bank adopted a rule for computing interest, knowing that it would give more interest than the law allowed. They contracted with Dart for a loan, and calculated the interest according to the rule adopted, and reserved the interest; or, in other words, the Bank, on a contract for a loan, knowingly and intentionally took more than 8 per cent, interest; was it usury or was it not ? How much more was taken I know not; nor is this material. Suppose, therefore, I make another statement of the case. The Planters’ Bank, on a contract for loan, knowingly and intentionally took twenty-five per cent, interest; is it usury or is it not ? To say that it is not, would be a startling assertion; and yet on principle it seems to me to be quite as sustainable as the point before us, for I have certainly shown from authority that the amount of excess makes no difference; and if the Bank may *646establish a rule of computation which will give a fraction more than 8 per cent, why may it not establish one which will give 25 per cent. ? And if the Bank may establish its rates of interest, and make them binding by custom, why may not every broker, every merchant, and every tradesman do the same thing; and if all this could be done, of what avail is the usury laws ? To establish that they are abrogated by custom in one instance, is to render them null and void; for if the door be open to encroachment, adventurers will not be wanting.

I have thus disposed of the first question made in the argument, and as this is the one on which the decision of a majority of the court mainly turns, it is unnecessary for me to extend the investigation beyond it. For the same reason, it is unnecessary for me to determine whether the contract in the case of the Bank of the United States v. Watson, submitted with this, is void, because more interest was taken than the charter allows. I will only say that on this point there is some confliction in the authorities. In the case of the Bank of Utica v. Wager, Judge Savage held that although a Bank took more interest than the charter allowed, yet if the excess did not amount to a violation of the usury law, the contract was 'not thereby made void. This question, however, was not before the court, and the remark was but incidentally made. A similar opinion was given in the case cited from 1 Stewart. The only case in which the point has been directly made and decided, is that of the Bank of the United States v. Owens, 2 Peters. The question was discussed at length by the supreme court, and the contract held to be void, because the Bank had taken a greater rate of interest than that allowed by the charter. This authority would seem to be decisive of the question before us, for two reasons: 1st, it is the only case in which the question has been directly considered; and, 2d, because it was a decision made on the same charter, under which the interest in this case was taken. And this decision was after-wards reviewed by Judge Story, in the case of the Bank of the United States v. Wagner, and, so far at least as this question is concerned, it was adhered to.