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![handle is hein.slavery/ussccases0088 and id is 1 raw text is: JANUARY TERM, 18s39. 845
RICHARD- C. L. MoNCuRE, AND WALTER P. CONWAY, EXECUTORS
OF MARY JAMES, PLAINTIFFS 11; ERROR, VS. ANN R. DERMOTT,
DEFENDANT IN ERROR.
An action of covenant was instituted by the executors of M. J. upon an obligation executed
by A. R. D., under seal, to M. J., by which she agreed to pay. a certain note or bond,
loaned by M. J to A. R. D., which bad been sold by A. R. D. at a usurious discount
and on a usurious contract. The bond or note of M. J. had been given to enable A. R,
D. to raise money to pay a debt due by her, and for which the note of M. J. had been
previously loaned to her. It was denied by the executors of M. J. that she had any
knowledge of the usurious dealing in which the boi.l or note of M. J. was sold. The
executors of M. J. were obliged to pay a large portion of the note or bond, and the action
was instituted to~recover so much as they had paid. A. R. D. set up the usury between
her and the person to whom she had sold the note or boid, as a defence to the suit of the
executors of M. J. It was held that the action on the covenant of A. R. D. could be
maintained: and that the usurious dealing between A. R. Dh and the purchaser of the note
or bond of M. J., did not render the covenant of A. R. D,, to pay the bond or note, invalil
The Court said the contract between the defendant and the purchaser of the bond, if em-
bracing no other person than themselves, could affect no contract between other parties,
previously made; and whether that contract was usurious depended on the intention of
the parties to it. If it was made, bona fide, for the sale and purchase of the bond, although
at a discount which would insure to the purchaser twelve per cent. a year for the money
advanced, it would. not be usurious. If, on the other hand, the'sale of the bond was a
mere cover for avoiding the statutes against usury, and the real intention of the parties was
to make a contract for the loan of money, at a higher rate than the legal interest, then
the contract was usurious. But to involve M. J. in the usury, and to extend its taint to
the covenant of A. R. D., it must be shown by proof, that M. J. executed the bond or note
sold, for the purpose of aiding A. R. D. to borrow money at usurious interest, and not to
enable A. R. D. to raise money by selling it in the market. When the holder ofM. J's.
note threatened proceedings on it, it was not necessary that the executors of M. J. should
give notice thereof.
No subsequent confirmation of a usunous contract, nor ay new contract stipulating to pay
the debt, with the usurious interest, will make it valid.
It is the settled law of Virginia that the bona fide purchaser of a bond or note, may take it,
at any rate or discount, however great, without violating the statute.
ERROR to the Circuit Court of the United States for.the county
of Washington, in the District of Columbia.
The plaintiffs in error, executcrs of Mary James, instituted an
action of covenant against the defendant, on the folkwing instrument
of writing:
Whereas, Mary James has executed her bond or note, dated the
28th day of November, 1828, payable to me on demand, for the sum
of twenty-six hundred and twenty dollars, which said bond or note
was merely loahed to me for the purpose of raising money upon,
and whereas, I'have, since the execution of the said bond or note as
aforesaid, assigned it to Philip Alexander, of 'Fredericksburg, for
value received of him, I do therefore, hereby bind myself, my heirs,
executors, and administrators, to pay and discharge the said bond
or note, with all interest that may accrue thereon, when the same
shall become due and payable.
Given under my hand and seal, this 12th day of August, 1829.
ANN R. DERMOTT. [SEAL.]](ViewImageLocal?handle=hein.slavery/ussccases0088&div=1&collection=&method=preview&ext=.png&size=3)