De Wolf V. Johnson. veyed to the Johnsons. He further alleges, that 1825. at the time of the execution of the deed of trust to him," he was ignorant of the complainant's claim, except so far as that claim is recognised in the deed of trust," and also sets up the usury between the mortgagor and mortgagee, in avoidance of the mortgage. R. M. Johnson also files an answer, in which he recognises and adopts the answer of James Johnson, and further denies, altogether, knowledge of the mortgage to De Wolf at the date of the transfer to Barry. He then sets out, that he is a creditor of Prentiss to the amount of near 500,000 dollars, for which he has no other security than the assignment to Barry, through which he derives title to the mortgaged premises. Upon this state of the pleadings, with a few formal and immaterial additions, the parties went into their proofs. And as the complainant exhibited his mortgage in legal form, and with all the evidence of authenticity required by law, it followed that the defendants were put upon their proof to maintain the grounds on which they sought to avoid it. It was not contended, that in the immediate contract on which the bill was founded, there was any usurious taint belonging to that transaction itself. The ground taken was usury in a transaction anterior by two years, out of which the mortgage in question drew its origin, and from which the usurious taint was supposed to be transmitted either directly or incidentally. The case proposed to be established in proof De Wolf V. Johnson. 1825. was, that in the year 1815 there was a negotiation for a loan between these parties, the scene of which was in Bristol, Rhode Island. That the sum to be loaned was 83,000 dollars, but which sum in fact was reduced below 80,000 dollars, by means which they contended were resorted to for the purpose of disguising the usurious interest, to be retained by way of premium, or bonus, or imposition. That the interest actually stipulated for was twelve per cent., of which six per cent. was reserved in a bond executed at the time for 111,000 dollars, comprising compound interest, there being no annual interest reserved. The other six per cent. was secured under the aspect of a rent payable out of lands in Kentucky, for which Prentiss executed absolute conveyances, and De Wolf stipulated to reconvey on the payment of the amount for which Prentiss his bond, and a sum annually, by way of rent, equal to six per cent. upon the 83,000 dollars, that is, the sum of 4,980 dollars. gave This rent, it seems, was paid the first year, together with an additional sum of 498 dollars, added as interest and damages. And a bill for the sum of 4,980 dollars was drawn the second year by De Wolf upon Prentiss, payable in Philadelphia, but this was returned under protest, and subsequently taken up by a bill for 5,154 dollars, endorsed by J. T. Meder, jun. The evasion of the statute against usury, supposed to have been practised upon Prentiss in making up the sum of 83,000 dollars, had relation to three items. The first a sum of about 32,000 dollars, admitted into the computation as the price set upon fifteen shares of the Lexington Manufacturing Establishment, transferred by De Wolf to Prentiss. The second, treasury notes to the amount of 20,211 dollars 94 cents, received at par; and the third 30,802 dollars 73 cents, bills drawn upon Philadelphia also taken at par. Upon these three items there was an estimated loss sustained of about 3,400 dollars. The contract of 1815 was unquestionably entered into in the State of Rhode Island, and was there reduced to writing; but had a view to Kentucky for its consummation. As it entered into the contract that Prentiss should secure De Wolf by a conveyance of Kentucky land to a large amount, two agents were employed and intrusted by De Wolf, with the securities to be passed to Prentiss, and a power to draw upon him for the money, to be paid in Philadelphia; which Prentiss was to have the benefit of, upon complying with the articles of his contract, purporting an absolute conveyance of the land. The place where the contract of repayment of the principal on the part of Prentiss was to be fulfilled, appears no farther than this, that the bond is given to pay generally, without regard to place, and the money to be paid by way of rent, appears by the subsequent acts of the parties respecting the bills drawn for the rent, to have been payable in Philadelphia. The contract of 1817, in which this mortgage originated, was executed in Kentucky; and had its inception in an intimation from Prentiss of a 1825. De Wolf V. Johnson. De Wolf V. Johnson. 1825. design to avail himself of the plea of usury. Upon this, De Wolf repaired to Kentucky, and there instituted a new negotiation with Prentiss personally, having for its object to clear the contract from all usurious incidents, and to take security for the sum loaned, at the legal interest of Kentucky, which, as well as that of RhodeIsland, is six per cent. Accordingly, all the instruments of writing which appertained to the old contract were surrendered mutually, and a new mortgage given to secure the balance now sued for; the original sum having been reduced by large actual payments to the sum for which this mortgage was given, and which includes the same premises conveyed under the prior contract. The defence set up rests upon the assumption that the new contract was not purged of the usury; or, rather, that the whole contract of 1815 was void, and could, therefore, form no basis or consideration for the contract of 1817. Or if not wholly void, it comprised several items of an usurious character, which ought to be included in the new contract. And here two preliminary questions arose, the first of which was, whether the lex loci of the contract of 1815 was Rhode-Island or Kentucky? By the usury laws of the latter, the contract, and all the securities given for it, are void, both for principal and interest. By the laws of the former, although it is prohibited to take more than six per cent. interest, and a penalty imposed for the offence, the act does not render the contract void, certainly not for the principal sum. By the laws of Ken De Wolf V. Johnson. tucky, it is supposed, that the principal debt being 1825. abolished, there could be no consideration to sustain the new contract; by the laws of RhodeIsland, that the reverse would be the effect, unless, as was contended in argument, that the simple prohibition of such a contract, which is express in the Rhode-Island act, would affect it with the character of an illegal contract, and, as such, one which a Court of equity would not lend its aid to carry into effect. the place tract was vern, and it is that the loan cured by a lands in ano With regard to the locality of the contract of The law of 1815, we have no doubt, that it must be governed where the conby the law of Rhode-Island. The proof is po- made is to gositive that it was entered into there, and there is immaterial nothing that can raise a question but the circum- was to be sestance of its making a part of the contract, that mortgage on it should be secured by conveyances of Kentucky ther State. land. But the point is established, that the mere taking of foreign security does not alter the locality of the contract with regard to the legal interest. Taking foreign security does not necessarily draw after it the consequence that the contract is to be fulfilled where the security is taken. The legal fulfilment of a contract of loan, on the part of the borrower, is repayment of the money, and the security given is but the means of securing what he has contracted for, which, in the eye of the law, is to pay where he borrows, unless another place of payment be expressly designated by the contract. No tender would have been effectual to discharge the mortgagee, unless made in Rhode Island. On a bill to redeem, a Court of equity would not have listened to the idea of |