Jones v. . Cannady , 15 N.C. 86 ( 1833 )

The declaration stated that the defendant received of one Samuel Spears, the sum of $90, "by way of corrupt bargain and loan for the defendant's forbearing, and giving and having forborne and given day of payment of, a certain sum of money, to-wit, the sum of $270, lent and advanced by thedefendant to the said Spears, from etc." On the trial, the plaintiff produced and gave in evidence, four notes made by himself and one Lewellen Jones, payable to Samuel Spears, and by him endorsed to the defendant, and then called Spears as a witness, who proved that the notes were discounted by the defendant, upon a usurious contract made by him with the defendant, the sums forborne, the time and the premium corresponding with the declaration; but Spears also proved that the notes had been made by the plaintiff for the purpose of being sold for as much as could be obtained for them, and were placed in the hands of Spears as the agent of the plaintiff, all which he communicated to the defendant at the time of discounting the notes, and received the money produced by them as the money of the plaintiff, Spears having no interest in the same, and the defendant knowing that he had not.

Upon this evidence, the defendant's counsel insisted that the usurious contract proved, was entirely different from that laid in the declaration, and his Honor being of that opinion, directed the plaintiff to be called, and the plaintiff having, in submission to the Judge's opinion suffered a nonsuit, appealed to this Court. The defendant doubtless committed usury in discounting the bonds, as stated in the case. But the question is, (87) whether the contract as proved, is that set forth in the declaration. That alleges a loan of $270 to Spears. To whom was it made?

There was but one loan and but one penalty incurred. The loan cannot be laid at the election of the informer, to be made to either; for then the defendant would be exposed to a suit by another informer, for the penalty as upon a loan to the other. The declaration must therefore state the transaction according to the truth of it, and its legal effect. If it had set forth all the facts, that the bond was made to be discounted for the benefit of Jones, was endorsed by Spears, discounted by Cannady, and the money paid into the hands of Spears, and by him delivered to Jones, I will not say that it would not have been sufficient, although it did not expressly allege the loan to be to the one or to the other, because the law would adjudge that upon the facts. But when the party determines for himself, and states in pleading that the loan was made to a particular person, he must show a transaction which in fact and in law makes a loan to that person. Here the declaration is entirely silent as to the bonds and the endorsements. It sets forth barely a naked contract of loan of so much money from Cannady to Spears, without adverting to the securities. Upon the evidence the securities appear; and upon their face the contract of Cannady was prima facie with Spears, as his endorsement was the immediate antecedent of the advance of money. An endorsement of a note or receipt for money, is evidence upon a count for money lent, or had and received. Yet, the plaintiff cannot recover on those counts, if in fact the defendant did not receive the money, and was only a surety. (Stratton v. Rastal, 2 Term, 366.) It is the same, when the party has received the money, not as his own, but as the avowed agent of another, to whom he has paid it over. In the case before us, Cannady could not then recover this money from Spears, as money had and received by him; nor, as we think, as money lent to him. The evidence shows (88) that the apparent state of the case is not the true state of it.

In questions of usury, no form of contract or device is allowed to preclude evidence of the truth of the transaction; and this for all purposes, as well to enforce the penalty as to avoid the securities. If Jones were sued on the bond, it would be open to him to allege the purpose of making it, so as to show, that the usurious consideration infected the bond itself. Ruffin v. Armstrong, 9 N.C. 411. If it consisted only in taking the endorsement, that, being a subsequent and distinct contract, would be void, but the bond valid. In truth, however, each of the securities and the advance of the money forms but a portion of one transaction, and could be stated as such in pleading, by Jones, if sued on the bond. It is true that it would be equally usurious, whether the bond were made to be discounted for the benefit of Jones or Spears, and might be so alleged. The form of the security is, therefore, immaterial; the sole question is, by whom, and for whom, was the contract for the loan made, and to whom was the money to go? Whose money was it when Cannady delivered it to Spears? Could he have retained it as his money, or, could not Jones have maintained an action for money had and received for it, as being paid to Spears by Cannady for him? The case states that the money was applied for by Spears as the agent of Jones, that Cannady paid it to him as his agent, and that he received it as his agent. It was then Jones' money. But how was it his money? Only because it was lent to him by Cannady.

PER CURIAM. Judgment affirmed.

Cited: Jones v. Herndon, 29 N.C. 83.

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