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1825. design to avail himself of the plea of usury.
Upon this, De Wolf repaired to Kentucky, and De Wolf
v. there instituted a new negotiation with Prentiss Johnson.
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
The law of
vern, and it is
that the loan
tucky, it is supposed, that the principal debt being 1825. abolished, there could be no consideration to
De Wolf sustain the new contract; by the laws of Rhode
Johnson. Island, 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. With regard to the locality of the contract of The
the place 1815, we have no doubt, that it must be governed where the con
tract was by 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 inortgage on
lands in anoit 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 in terest. . 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
to the suit, was
1825. calling the mortgagee to Kentucky in order to
receive a tender. De Wolf
1 In the effort to sustain his defence under the Johnson. laws of Rhode Island, the defendants have inHow far the troduced into the cause the examination of their evidence of co defendant, Prentiss, taken at the instance of Prentiss, one of the parties themselves, and received in the Court below subadınissible. ject to legal exceptions. We are not informed
whether the Court below actually recognised it as competent evidence, since the grounds on which that Court dismissed the bill are not spread upon the record. It is enough that it does not appear to be rejected; we are now
called upon to pass an opinion upon it. A certifica- The only grounds upon which an argument
en has been made in support of the admissibility
of Prentiss' deposition, have been, that the comphie hart is not plainant avers him to be insolvent, which fact the
ow he testimony in the cause goes also far to establish; * ** * and that his deposition was taken before he was vahap, until au in reality made a party by the service of a subablatured upon pena. But, on no principle can his evidence be motion for that
adjudged competent. It is true, that cases occur in which certificated bankrupts are struck out of a record and made witnesses; but if this was a case in which a motion to strike out could have been sustained, the motion should have been made, and the party's name expunged from the record. On no principle could he be made a witness while he was himself a party. He may have had little or no interest in the event of the suit, except as to the costs; but still, while a party to the record, he could not be examined. We
puter has been
know of no exception to this rule, whatever be 1829. the Court in which the question occurs, except it was be in the administration of certain branches of the admiralty jurisdiction. From the views that. we take of the case, however, we do not find it necessary to inquire whether there is sufficient evidence in the cause, after rejecting the evidence of Prentiss, to sustain the facts on which the defence rests. If, with the aid of that testimony, the defence cannot be sustained; a fortiori, it cannot be without it. And here it may be proper to premise, as was very correctly remarked in the argument, that there has not been, in fact, any contrariety of opinion expressed by the counsel on the law of usury. Usury is a mortal taint wherever it exists, and no subterfuge shall be permitted to conceal it from the eye of the law; this is the substance of all the cases, and they only vary as they follow the detours through which they have had to pursue the money lender. But one difficulty presents itself here of no ordinary kind. It is not very easy to discover how the taint of Rhode-Island usury can infuse itself into the veins of a Kentucky contract. The defence would not admit of a moment's reflection if it rested on the direet effects which laws against usury have upon contracts. Whatever sums may have been derived through the usurious contract of 1815, to the contract of 1817, they would not affect the latter with usury, unless introduced in violation or evasion of the laws of Kentucky, for the two contracts are governed by laws that have no connexion. But it makes very little differVol. X.
1825. ence in this case, since, if the contract of 1817 De Wolf
is, either in whole or in part, unconscionable, this Court would not lend its aid to execute it as far as it was unconscionable, and the argument goes to show that it partakes of that character, because, admitting that the law of Rhode Island did not render the contract of 1815 null and void for the principal sum loaned, yet the sum exhibited in that contract, as principal, and so transmitted to the latter contract, contained sundry items, which it is contended, were passed upon Prentiss at a great loss, and under circumstances calculated to serve as a disguise to usury.
And first, as to the shares in the Lexington Manufacturing Company; these were fifteen in number, and appear to have been taken by Prentiss on account of the 83,000 dollars, about 2,000 dollars a share. The whole of which, there is reason to think, was sunk in his hands, in the general wreck of the adventure.
It cannot be denied, that this is a suspicious item; it does not, in general, comport with a negotiation for a loan of money, that any thing should enter into the views of the parties but money, or those substitutes which, from their approximation to money, circulate with corresponding, if not equal facility. Still, however, like every other case, it is open to explanation, and the question always is, whether it was or was not a subterfuge to evade the laws against usury. And, here it is to be observed, that it is not every sale which, in a negotiation for a loan, will taint the transaction with usury; for it may