Perrine v. Striker , 7 Paige Ch. 598 ( 1839 )

The Chancellor.

The objection that the discovery sought by the bill may subject the defendant to a crimnal prosecution is not well taken. The eighth section of the act of May, 1837, to prevent usury, expressly provides that the answer of a defendant in such a case shall not be used against him before any grand jury, or on the trial of any indictment against him. Whether any criminal prosecution can be instituted in any other form against the usurer, it is not material to inquire; for the legitimate construction-of this section must be, although the word indictment only is used, that his answer shall not be received as evidence on the trial of any criminal prosecution against him. This usurious discount was received in this case long before the passing of the act of 1837, and the defendant could not be indicted under that act, which subjects the usurer to fine and imprisonment; he is therefore not liable to any crimnal prosecution. And as he has never received’ any thing from the complainants, but has only made an usurious discount of a note which is not negotiable, and therefore of no value to him, it being void, no action will lie to recover back the money, under the third or fourth sections of the title of the revised statutes relative to the interest of money. (1 R. S. 760.) As the forfeiture of the money loaned, or the recovery of the usury where it has been received, are specific penalties prescribed for the violation of the provisions of that title, such a violation was not an indictable misdemeanor under the section of the revised statutes referred to by the counsel for the defendant on the argument. (2 R. S. 696, § 45, [39].) By the common law, a defendant in a suit in this court could not be compelled to answer any charge, or interrogatory, which might subject him to a penalty or forfeiture, or any loss in the nature of a forfeiture. And this principle was also applicable to witnesses in suits at law; who could not be compelled to disclose the fact of usury, where such disclosure would have the effect to deprive them of the recovery of the whole debt. (See opinion of Sir P. York, afterwards Lord Hardwicke, in Sel. Cas. by a Solicitor, 19. Mauran v. Lamb, 7 Cowen’s Rep. 174.)

I may be permitted to doubt whether it is strictly consistent with the spirit of our institutions and of an enlightened legislation, to tempt the conscience of any man so far as to compel him to make a disclosure of an usurious bargain, by his answer on oath; where the necessary effect of such answer is not merely to prevent the recovery of the usurious interest, or premium, but also to deprive him of the power of ever obtaining satisfaction of the money actually lent, with the legal interest thereon. The legislature, however, has expressly authorized such a proceeding, in terms which it is impossible to misunderstand, and which cannot bear any other construction. It is, therefore, the duty of courts of justice to submit to this declaration of the legislative will, and to carry the law into full effect, unless it clearly conflicts with the provisions of the constitution. The seventh section of the seventh article of the constitution declares, that no person shall be compelled in any criminal case to be a witness against himself. But I am not prepared to say that this is a criminal case, within the meaning of this provision of the constitution; although the effect of the discovery sought must necessarily be to prevent a recovery of the money actually lent, and is therefore in the nature of a forfeiture.

The objection, that the surety is made a complainant with the person who was the real borrower of the money, is not well taken. The money was lent upon the joint and several note of both complainants, and both are sued in the action at law. The surety therefore was a necessary party to this bill, as a bill for relief, whether he could file a bill alone and in his own name or not. (Bailey v. Inglee, 2 Paige’s Rep. 278.) I am moreover inclined to think that both the principal debtor and the surety are to be considered in this case as borrowers, within the meaning of the act of May, 1837. And this is in accordance with the opinions expressed by Justice Sutherland and Senator Tracy in the case of Livingston v. Harris, in the court for the correction of errors, (11 Wend. Rep. 329.)

The remaining question is whether the bill shows a case entitling the complainants to come into this court, either for discovery or relief. As this note is not negotiable, and must therefore be sued again in the name of this defendant, even if the present suit at law in his name is discontinued, it is very evident that a discovery, by the aid of this court, is not necessary to enable them to prove the usury upon the trial of any action at law which may be brought upon the note. For the statute expressly authorizes the defendant in a suit at law, where the defence of usury is set up in the plea or notice, and verified by oath, to examine the plaintiff as a witness to prove the usury. (Laws of 1837, p. 487 § 2.) It is true, the statute of 1837 declares that the usurer may be compelled to answer, on oath, any bill that shall be exhibited against him in this court for relief or discovery or both. But it could not have been the intention of the legislature to compel the court of chancery to take jurisdiction of every question of usury, although a perfect remedy, both as to discovery and relief, could be had in the court of law. If this note was negotiable, so that it had been or could be sued in the name of a third person who knew nothing of the usury, or who, not being the usurer, could not be examined as a witness, for the borrower, in the court of law, it might be a proper case to come into this court for a perpetual injunction, or to have the usurious note delivered up and cancelled, as authorized by the act of 1837. But upon the case as made by this bill, I do not see any ground whatever to justify this court in withdrawing the question of usury from the consideration of a jury, in the court of law, where the suit upon the note was brought. If there are any special circumstances, by reason of which the complainants would be deprived of the benefit of the defendant’s evidence in the suit at law, they should have been stated in the bill; and the complainants may now be permitted to state them by way of amendment. But as the case now stands, the demurrer must be allowed. And the bill must be dismissed with costs, unless the complainants shall within twenty days amend their bill, and pay the costs of the demurrer and of the argument thereof.