author: *Wright, J.,

text:
    *E. Granger’s Administrator v. H. Granger.

      Non est factum, in covenant, is a general issue for the purpose of appending a notice of offset under our statute.
    In. a suit by an administrator upon a claim of the intestate, the defendant may set off any demand of his against the intestate.
    "When the statute of limitations begins to run against the intestate in his lifetime, it will run to its completion without interruption by the death.
    A defendant in such suit can not set off a demand of his against the intestate for money paid after his death by the defendant, upon an obligation entered into in his lifetime as security for him. Such claims look to the-general assets for satisfaction.
    From Muskingum. Covenant upon a sealed agreement between the intestate and the defendant, dated September 1, 1819, for five thousand dollars. E. Granger died in September, 1822, insolvent.. Administration was granted upon his estate in August, 1829.
    The defendant pleaded not est factum, to which he affixed a notice of set-off under the statute. At the trial the plaintiff, having read the contract to the jury, rested. The defendant then offered evidence, under his notice, to prove the intestate indebted to him in his lifetime, upon a book account, for goods sold, work and labor, and money lent. Also, that before the intestate’s death, the-defendant had become bound, as security for him, to pay certain debts, which he had been compelled to pay since the death. This evidence was objected to by the plaintiff and ruled out.
    A verdict was taken for the plaintiff, and the defendant now moves for a new trial.
    R. Stillwell and W. Adams, for the defendant,
    contended that, under the motion; three questions arise for the determination of the court:
    1. Can a set-off be given in evidence under the notice attached to this plea?
    2. Are the debts due by the intestate barred by the statute of limitations ?
    3. Can the defendant setoff payments which he has been compelled to make since the death of the intestate, on account of liabilities incurred by him as security for the intestate prior to his death ?

      The statute on the subject of set-off was clearly Intended to give ithe party the right to make the defense of set-off. It has specified, “ that it shall be lawful for the defendant to plead the general .36] issue, and give notice,” etc. If there is any such plea *in the action of covenant, it is the one pleaded non est factum; and unless a party can give the notice under this plea he can not avail him.self of this defense at all against a party who chooses to substitute the action of covenant for debt.
    In Oldershaw’s Ex’r v. Thompson, 1 Stark. 311, Lord Ellen-borough says, “The meaning of the words, ‘general issue,’ in the statute, is a plea that puts the whole declaration in issue.” It has never been doubted that under this plea, in an action of debt, the defendant could give his evidence of set-off under a notice, yet this plea puts the same matters in issue in both actions; it does not “ put the whole matter in issue in debt any more than it does in covenant.” 1 Chit. Pl. 482. If set-off can not be given in evidence, under a notice in covenant, the defendant is driven to his action, and perhaps to bill in chancery, for injunction. By admitting the evidence the court prevent circuity of action, delay, and the accumulation of costs. The English authorities on this subject are contradictory. The case in Starkie decides that the proof can not be received for the reasons above; but in Gower et ux. v. Hunt, cited in Bull. N. P. 181, the court held otherwise. But in England a set-off can be pleaded, so that the defendant is not wholly precluded from making this defense, as he will be in Ohio if he can not give it in evidence under a notice. By establishing the doctrine for which we contend, no possible injustice can be done; the statute will be made to operate in all actions; and the equitable purpose intended to be answered by the legislature can not be defeated by a party who chooses to prevent the defense by bringing covenant instead of debt. In Courcier v. Graham, 1 Ohio, 155, the court seem to admit that in covenant special matter may be given in evidence under a notice attached to the plea of non est factum. That was an action of covenant, and non ¿st factum was pleaded, with notice of special matter. The case was strongly contested, and the inference is very strong that the law was then understood by the court to be as we now contend, or the question would certainly have been then made and determined.
    2. It is a good reply to the statute of limitations, that there was no person in being who could be sued. If an administrator had been appointed in 1822, or before the time limited in the statute had expired, the defendant could have brought his action, and the statute could not have been interposed to the claim.
    It is true that the defendant could have prevented the operation *of the statute by administering himself within the time; but [37 this provision in the law must be construed to confer this privilege on the defendant rather than a right which he is bound to exercise under the penalty of losing his debt. If such were the law, it would give an opportunity for those interested in embarrassed estates to cheat a. host of creditors to small amounts; for they; would not administer when the receipt of their debts would not compensate them for the trouble and risk of administering. An insolvent estate may hold a specialty against an individual for a large amount; that individual may have credited the deceased to a great amount by book account, on the faith of the debt due by him, which debt is not barred by the statute till fifteen years, whereas the debt due by him is barred in six years. He can be compelled to pay, and could not interpose the statute; but the statute will prevent his offsetting his claim; and this is the very case now before the court. This palpable injustice is not the effect of any default of the defendant.
    Besides, in many cases, a creditor may not be able to ascertain whether the balance is against him or not. This may prevent his administering himself. It is true that it is a general rule that when the statute begins to run it continues till the period has expired ; but this general rule must have exceptions, and one of the exceptions must be when, in consequence of circumstances wholly beyond the control of the party, there was no person in existence whom he could sue.
    It is presumed that if the defendant had been compelled to pay money as security for the intestate during his life, there would have been no doubt of the right of set-off in this action. Does the death of the intestate after defendant had become his security, and before payment of money as security, and the insolvency of the estate, prevent the set-off? By -the provisions of the statute of set-off it certainly does not; for although the payment was not made until after the death of the intestate, yet after it was made it became as much a debt due by the plaintiff, in his representative character, and in that by which he prosecutes this action, as though made in the intestate’s lifetime. It will, however, be contended for the plaintiff that the policy of our law requires that the creditors of an insolvent estate should receive payment io ratable proportion. Such, we admit, is the policy of the law, when all the creditors at the time of the death stand in the same situation. But this policy does not extend to produce injustice. It would no 38] doubt prevent the debtor *from setting off a note of the intestate after his death. To authorize a set-off, under those circumstances, would enable a debtor of an insolvent estate, after the death of his creditor and after the insolvency was discovered, to pay his debt by purchasing claims on the estate at a rate proportioned to the rate of insolvency. But when the defendant, in the lifetime of the intestate (and perhaps relying on the debt due by him as an indemnity), becomes security for, and, after the death of the intestate, pays the amount of the debt for which he became security, these reasons do not exist — no injustice is produced. The policy of the law is protracted as far as justice requires, and the statute of set-off would have the operation which the provisions require.
    The English law of distribution requires that debts of a higher shall be fully paid, to the entire exclusion of those of a lower degree. By the argument that the policy of our laws for the equal distribution among all the creditors would prevent a set-off of the kind under consideration, the policy of the English law would prevent a simple contract creditor of an insolvent estate from any set-off, even that which existed at the time of the death of intestate ; for a set-off in that case would go to lessen the fund for the payment of the specialty creditors, and is so far entirely opposed to the policy of their law. I have not been able to find any case of the kind, or such a principle asserted in any elementary book. If the general principle of set-off for which we contend existed, we would not expect to find such a case; but if the exception to the general rule existed, as claimed by plaintiff, it would certainly be recognized in the elementary treatises, and supported by cases in the reports. We infer, therefore, that the general law of set-off has not been disturbed, and that in a suit by an administrator in England the defendant is permitted to set off, without reference to the degree of his claim. Bankruptcy and the cases under it are strictly analogous to this case. The declared object of the bankrupt laws is to make an equal distribution of the property. If the argument of the plaintiff is correct, this policy would extend to all debts which were not due at the time of the bankruptcy. Yet it has been denied that a demand arising upon an instrument, payable after the bankruptcy, may, if made before, be set off. Ex parte Prescott, 1 Atkins, 231; Smith v. Hadson, 4 Term, 211; Atkinson v. Elliot, 7 Term, 371.
    *C. B. Goddard, for the plaintiff, in reply, argued as follows:
    The first question made by defendant’s counsel is one of practice purely, and I will not trouble the court with any remarks upon it. The authorities we rely upon are 1 Stark. 311; 2 Chit. 388.
    2. The statute of limitations. As the counsel for defendant do> not attempt to withdraw from the operation of the statute any cause 'of action which subsisted during the lifetime of Ebenezer Granger, little need be said respecting those. There was a person esse, who could be sued — to wit: Ebenezer Granger himself.. The statute began to run ; and the authorities are uniform, that once begun to run, nothing stops it.
    The counsel have an ingenious mode of disposing of an objection where all the authorities are against them. They reason, thus : these authorities establish a general rule; there is no general rule without exceptions ; and we find no exception hereto— ergo, the present case is an exception.
    Upon the trial in the county, an idea was suggested, that as Eb.enezer was more largely Henry’s creditor than debtor, Henry had no inducement to sue, and that, therefore, the statute ought not to-run against him. There was a period in the judicial history of the act of limitations, when the shallowest circumstances were seized hold of to take a case out of its operation. Yet even then, was the circumstance now relied on supposed to possess any weight? It was never urged, for it is without foundation. The statute of limitation proceeds not merely upon a presumption of payment, but. upon the loss of eviden ce. If I hold a b ond against a man for a. large sum, and become indebted to him for work, goods, etc., it is his duty to present his account, and either receive payment or have it indorsed upon the bond; and if, without taking any such, steps or suing, or obtaining an acknowledgment, he wait six years, from the time his right of action accrued, the statute will protect me from the demand; and I need not ask the court to presume either that the debt is paid or that 1 have lost my receipt. The-

      •statute stands in the place of presumptions; and it is equally effectual whether, without it, the presumptions would or would not exist.
    But, in point of fact, Henry Granger’s claims against Ebenezer, as now set up, were not, at the death of Ebenezer, greater than Ebenezer’s against him.
    Again, the fact should not be lost sight of, that Henry Granger was appointed executor, and declined. “Where the executor 40] ^became possessed of his testator’s goods in 1792, but did not ■obtain probate of the will till 1802, it was held that the statute run against a creditor of the testator from the year 1792, because the executor might have been sued as executor de son tort.’’ Webster v. Webster, 10 Ves. 93. It is said to be hard to apply the statute in this case. Certainly no harder than to make it run in an action for a tort from the time the wrong was done, and not from the time the damage is ascertained, a principle universally acknowledged. He cited also 6 Bac. Ab. 136; Bull. N. P. 180; 1 Yeates, 391; 3 Marsh. 236 ; 3 Bibb, 49.
    3. Set-off. The defendant’s argument upon this point is limited to those debts which arose after the death of E. Granger, and I will so limit mine.
    It is claimed that, because the sums which Henry paid after Ebenezer’s death were paid in consequence of a contingent liability in his lifetime, they may be properly set off in this action without disturbing the course of administration. Analogies are attempted to be drawn from the English law respecting the dignity of debts and the English statutes of bankruptcy. As to the first, I am ignorant of the principle asserted by the counsel. As to tüe second, it is well known that bankruptcy cases are sui generis, governed by their own peculiar law, and not often used to illustrate other branches of the science. I am not clear that the defendant has a right to join (in this his cross action against the plaintiff) debts due from the intestate with debts due from the administrator, even though due as administrator. But if unobjectionable on this score, where is the authority to be found to show that such a set-off can be admitted? Can any case be shown, where a note falling due after the testator’s or intestate’s death, the holder can use it as a set-off, and thereby obtain full payment, while other creditors receive but their proportion ? But the present case is not so strong as that. H. Granger’s liabilities were merely ■contingent and collateral. In the natural order of such debts, the creditor would present it to the administrator and receive his distributive share, and would call upon the surety for the residue: H. Granger’s loss will be no greater, if this set-off be rejected.
    It was agreed by counsel, that there was no evidence to be offered in case of a new trial, except that offered at the trial and rejected, and if the evidence was inadmissible, no good would result to the defendant from a new trial.
   *Wright, J.,

delivered the opinion of the court:

1. Is non est factum a plea of the general issue in covenant, to which a notice of set-off can be appended ? The act allowing mutual debts and demands to be set off, 29 Ohio L. 121, authorizes ■defendants to plead the “ general issue,” and at the same time to .give notice of offset. It is admitted that in strict legal contemplation, there is no general issue in covenant. According to the common rule, the general issue must put the whole declaration in issue. Non est factum in this case only puts in issue the execution of the covenant. The decisions upon the precise questions are contradictory. 1 Chit. Pl. 561; 1 Stark. 311; S. C., 2 Chit. 388; 1 Chit. Pl. 482; Bull. N. P. 181; 1 Ohio, 155. The practice which has generally obtained in our courts, ever since the passage of the law allowing notices of set-off to be affixed to a plea of the general issue, has regarded non est factum in covenant as a plea of this general issue within the meaning of the legislature. This construction given to the law, from its enactment, by those called to construe it at the bar and upon the bench, is evidence ot its meaning, not to be overlooked. Courcier & Ravesier v. Graham, 1 Ohio, 348, was covenant, in which was a plea of non est factum, with a notice of set-off. Several counsel of high standing in the profession, and of long and extensive practice, were engaged in that case, yet no objection was made on that account; and the late distinguished chief judge (Hitchcock), in pronouncing the decision in the case, says, “the principal object of pleading non est factum, seems to have been to lay the foundation for giving notice.” These evidences of the meaning oí the legislature, in using the terms “ general issue,” united with our belief, that the construction which admits the notice under the plea accords with the spirit and intention of the act and our liberal practice, bring us to the conclusion that the notice may be affixed to the plea, and proof adduced under it.

2. The next proposition we are called to decide in the ease is, whether, in a suit by an administrator, upon the claim of his intestate, it is competent to set off a demand due from the intestate to-the defendant? The statute, 29 Ohio L. 121, authorizes a set-off “of any debt, contract, book account, or other liquidated demand against the plaintiff.” The term plaintiff, as used here, is understood to describe the party whose rights are sought to be enforced by the suit. The act is designed to allow mutual debts to be set 42] off, one against the other, to avoid circuity *of action. For the purposes of justice, it regards one of the demands, to the extent it goes, as extinguishing the other, and provides a judgment for the balance really due. As, therefore, the administrator is pursuing the rights of his intestate, the claim to set off a demand due from the intestate to the defendant is, between the same parties, mutual, and, in our opinion, founded in the law. The coming in of an administrator, by operation of law, to enforce the claim of the intestate, does not change its nature, nor violate the settled-rule, that the claim to be set off must be between the same parties. See also 6 Taunt. 448, 453.

3. Are the claims offered to be set off barred by the statute of limitations? It is agreed by the counsel that E. Granger died in-September, 1819. This suit was commenced in 1832, a period of thirteen years after the cause of action accrued. The right to sue for such claims is limited by our act to six years. The same limitation is supposed to apply to set-offs as to actions. But it is urged that the statute, not having run to its completion in the lifetime of the intestate, was suspended by the death, and only commenced running again when administration was granted; since which, six years have not elapsed. We think it well settled, in ordinary cases, that where the statute of limitations once begins to run upon any subject, it continues to run to its completion, unless interrupted by some act of the party setting up the statute, which places the claim within some of the exceptions pi-ovided in the act. The death of the debtor is not such an act, and does not interrupt the running of the statute; nor does the delay in taking out administration. If a creditor would save his debt from the statute, bar, he should take out administration himself. We do not feel called upon to consider the effect of the fact urged, that the defendant was appointed executor in the will of the decedent, but declined to prove the will, or qualify as executor.

4. The next question propounded to us is: In a suit by an administrator, upon his intestate’s claim, can the defendant set off a demand for money paid after the death of the intestate upon a liability entered into by the defendant, as surety for the intestate? Our judgment resolves the question in the negative. No cause of action or demand against the intestate existed against the intestate at his death. A liability only was incurred, upon which/ on the contingency of the security being compelled to pay for the intestate, he would • have a right of action for his indemnity. A *bare possibility, that in a certain [43 future contingent event, he would have a demand, is not a debt due from the intestate, and. such claim has not the mutuality required for a set-off. Such a demand, though good against the estate, can only look to the general assets for satisfaction. To allow it to be offset, would change the course of distribution of intestate estates. The hardships expected to result from the rejection of this set-off can have no weight with us, unless the law opens the door for their redress.

The result of our opinion would be to award a new trial, be-cause the evidence was ruled out under the notice, but as the parties agree there is no evidence to offer, which is admissible under the points decided, the motion is overruled, and judgment entered on the verdict.


source: Caselaw Access Project

author: Collet, C. J.,

license: Public Domain

text:
    John Goodrich v. Henry W. Jenkins.
    The plea of nul tiel record to an action on a judgment of a sister state, draws nothing into controversy hut the existence of that record.
    Matter properly to be investigated in the original case, in an action on a judgment in a sister state, can not be drawn into controversy in Ohio.
    This cause came up from the county of Huron. It was an action of debt, founded upon the transcript of a judgment rendered by the court of common pleas of Tompkins county, New York, at the suit of the plaintiff against the defendant. The declaration was in the usual form.
    The defendant pleaded several pleas:
    1. Nul tiel record.

    2. In substance, that the judgment set out in the declaration was rendered' on a penal bond for two thousand dollars, with a collateral condition to pay one thousand dollars in saudlery, at cash price; that the judgment was taken by default; that by a. statute of New York, in force when the judgment was rendered, it was provided that upon a judgment by default, on a penal bond, conditioned for the performance of some collateral matter, breaches should be assigned on the record, and damages should be assessed on the breaches for such amount as it should be proven had been sustained; that in this case no such breaches had been assigned, but that the judgment was for the whole penalty.
    *3. The same matter as the second, with the addition that the-
    consideration of the bond upon which the.judgment was rendered, was the sale and conveyance of a tract of land, the title to which, had failed before the rendition of the judgment, with an allegation, that four hundred dollars had been paid upon account of the condition of the bond.
    4. That before the rendition of the judgment, the defendant paid the plaintiff six hundred dollars, in payment of the condition of the bond, that no breaches were assigned on the default, or damages assessed, but judgment taken for the entire penalty. A notice-of set-off was also put in.
    The plaintiff joined issue, on the plea of nul tiel record, and demurred to the other pleas. The whole case was submitted to the-Supreme Court of Huron county, at the last term, and adjourned here for decision.
    No argument was furnished on either side.
   Collet, C. J.,

delivered the opinion of the court:

A judgment of a court, in the State of New York, is of the same-force here that it is in the court where it is rendered. The judgment now before us, being rendered by a tribunal of competent jurisdiction, is doubtless final and conclusive between the parties until set aside or reversed, according to the regulations of the jurisdiction where it was rendered. 7 Cranch, 483; 1 Ohio, 261; 5 Ohio, 546.

The first plea in bar shows that very probably the judgment, is ii’regular or erroneous; but judgments of this description are. held conclusive between the parties, on the subjects involved, wherever the court had jurisdiction, whilst they remained unreversed.. 3 Ohio, 306.

The second plea in bar presents the additional question, that before the judgment was rendered, the consideration of the bond had failed. In New York, this matter could not have been pleaded in bar, to the action at law on the bond. But if it could, it was matter to be investigated and decided; antecedent to the rendition of the judgment. No such matter can be examined into, in an action on the judgment.

The other pleas in bar amount to nothing but a partial payment made on the bond, before suit brought. This would have been no' bar to the original action ; nor can partial payment be pleaded in bar to an action on the j udgment itself, if actually *made upon [45 it. Part performance is no answer to any action. It can only prevail in adjusting the actual amount due, or in the character of accord and' satisfaction, in which it is not pretended to be here used. The rule is inflexible in this country. In an action upon the transcript of a judgment, in a sister state, nothing can be pleaded or proved, that could have been pleaded and proved in the original action, whether it was so pleaded and proved or not. The demurrers are sustained, and the pleas in bar overruled.

Upon the plea of nul tiel record, the court find for the plaintiff, for whom the judgment must be entered.


text:
    Philemon Brockway v. Ralsa Clark.
    Where a money-lender takes from a borrower an obligation for a greater amount than the money lent and the stipulated interest, with an undertaking on his part to receive a less sum in discharge of the obligation if punctually paid, chancery may relieve against the excess as a penalty.
    In chancery, from Trumbull. The bill makes the following case: That the complainant being pressed for money in October, 1827, applied to the defendant to lend him one hundred dollars. The defendant, knowing the complainant’s embarrassment, and that he had a good farm, fraudulently contriving to extort from him an unconscionable bargain, loaned him the hundred dollars for ninety days, and took from him a note for one hundred and thirty dollars, with a condition inserted in it, that if it was paid within the ninety days, one hundred and ten dollars should discharge it. The compilainant, when the note fell due, made application to the defendant to continue the loan for ninety days longer, which was agreed to, and a new note given, for either one hundred and fifty or one hundred and sixty dollars, ■ conditioned that a less sum should discharge it, if paid within the time. When this note-had run its time, the complainant applied to the defendant to continue the loan another ninety days, which was acceded to, and a new note given for two hundred and sixteen dollars, conditioned, as before, that a less sum should discharge it, if punctually paid. The complainant paid, on this note, thirty dollars in September, and thirteen dollars in December, 1828. The residue remaining 46] ^unpaid, the parties entered into a new agreement, in pursuance of which, the complainant executed to the defendant three notes under seal; one for seventy-two dollars, on demand, one for seventy-two dollars and forty-two cents in sixty days, and the other for seventy-two dollars and twenty-one cents at four months. In June, 1829, the complainant paid forty-five dollars; after which the defendant'commenced several suits before justices of the peace, for the balance due on the notes, and recovered judgments, which were appealed by the complainant to the court of common pleas, where the suits are still pending. That, reckoning interest at the rate of six per centl per annum, upon the money borrowed, there remained, at the filing of the bill, less than thirty dollars due to the defendant. The complainant has not the notes which have been paid off, and charges that the defendant has fraudulently retained them. The bill prays that the defendant may be compelled to give up the notes paid off; to accept the balance of principal and interest at the rate of six per cent, upon the'money loaned; be perpetually enjoined from collecting the residue; and for general relief.
    The defendant answers, denying all the fraud and extortion charged against him, and the possession, detention, or knowledge of the notes paid off. To the residue of the bill he demurs generally.
    Giddings and Wade, for the demurrant, made two points:
    1. That the several contracts set forth in the bill having been entered into by the parties, with a full knowlege of their rights, in contravention of no law, can not be avoided in equity, without fraud or covin.
    2. The court can not, as is prayed for in the bill, make and
      carry into effect between these parties, a new contract, which neither of them ever intended to enter into.
    C. Pease, contra:
    It is urged in support of the demurrer, that the legislature, by the repeal of the usury act, had left it entirely to the discretion of men to take such bargains as they please, in relation to the use of money, without being subject to any restraint by the courts of law or chancery; that the complainant acted with his eyes open, and was without the aid of chancery, etc.
    I have a different view of the intention of the legislature. *They have certainly established what they considered to [47 be the fair and just rate of interest at six per cent, per annum, and no more. Under this act,- the Supreme Court in Hamilton county decided, in a suit brought upon a note, promising to pay three and a half per cent, per month, amounting to forty-two per cent, per annum, that they would compute (in the words of the statute) six per cent, per annum, and no more.

    I have supposed that 'the legislature intended to fix the rate in computing damages, remove all pains and penalties, and leave people at liberty to contract as they please, subject, however, to the same rules and regulations which govern other contracts in cases of fraud or oppression. Although some lawyers insist, that as the law has fixed the boundary, beyond which wé can not pass, and as it is contrary to the letter and policy of the law to pass that boundary, such a contract would be illegal and void, and should be so treated by courts of law and chancery. 1, however,-have considered such contract good for the true consideration, and, under some circumstances, for the legal interest also.
    I can not entertain the supposition, that while the courts of chancery protect us against fraud and extortion in ordinary contracts, and daily set them aside where the fraud is evidenced principally or entirely by the inadequacy of consideration, that in mere money transactions, weak and necessitous persons are to be left entirely to the mercy of usurers, grinders, and extortioners. If they are to be our lawgivers, woe betide us.
    I shall, therefore, consider this cause as depending upon the same principles as other cases of fraud and extortion, evidenced by inadequacy of consideration. I am aware that a rule is laid down in the books, that for inadequacy of consideration merely, without some other circumstances, a contract will not be set aside j. but where the inadequacy is so gross that a man will readily exclaim against it, very slight circumstances will be sufficient to consummate the evidence of fraud, and it can not be disguised that, in many instances those slight circumstances exist more in the imagination than in the vision of the court.
    Rook rules should undoubtedly receive a due share of veneration, although they may many times appear illiberal and contracted, and, in the opinion of some, should be got round, rather than met by other rules more just and equitable, but where the 48] inadequacy is so monstrous that even Mammon himself *would be ashamed of it, we may, without any great violence to rule, pronounce it fraud per se, and as rationally as in other cases conclude that the party cheated was so weak in mind, or under such embarrassments and distress, and so completely within the power of his oppressor, that he could not exercise his judgment, if he had any; and I confidently hope that this court will adopt and apply this new rule, or manufacture one as efficacious.
    So far as I can gather from cases, what may be termed a standard rule of such inadequacy as would be deemed presumptive evidence of fraud, is, where the thing sold is worth double the price, or the price double the value of the thing sold, although there are many cases where the courts have rescinded, contracts when the-inadequacy was less, and refused where it was more, according to the attendant circumstances.
    Reasoning, then, from analogy, if six per cent, per annum is the fair price for the use of money, twelve per cent, would be gross, twenty-four per cent, monstrous, fifty per cent, outrageous, and one hundred and fifty-five per cent, (about the rate exacted by the defendant for the first nine months) beyond endurance. If any case can be presented to the court carrying internal evidence of rank oppression, this is one. It is a fit companion for the case of the sale of a horse for a penny a nail, doubling each to thirty-two. Where the subject matter is sufficient of itself, circumstances are useless companions.
    It may be said that here were several distinct and separate contracts ; that no one of them was so very outrageous; and the court must look only to the last. To this I answer, that each contract was bad enough, but they must be taken together as parts of a systematic operation. It makes no difference, in the eye of justice, whether a man is ruined by a single transaction, or a systematic course of oppression continued for months or years, whether-he be devoured by mouthfuls, or swallowed at a single gulp.
    The great question is, will our judicial tribunals afford any protection to the weak and necessitous against their oppressors, or must the legislature again resort to usury laws ? When the avarice of man is insatiable and knows no bounds, and no legal-restraint is laid upon his cupidity, the evil of extortion, which has already risen to an alarming height, will soon become intolerable. It already cries aloud for reform. The public should be-made acquainted with their situation.
    *The equitable statement of the case stands thus:
    The complainant, in October, 1827, borrowed................. $100 00
    Interest to October, 1828............................................ 6 00-
    $106 00-
    Payment in August or September, 1828.............. $30 00
    Interest on do. to October, say.......................... 15
    - 30 15-
    Balance................................................................... $75 85
    Interest on balance to October, 1829............................ 4 73
    $80 58-
    Payment in December, 1828............................ $13 00'
    Interest on do. to October, 1829........................ 65
    - 13 65-
    Balance................................................................... $66 93
    Interest on balance to October, 1830............................. 4 02
    $70 95-
    Payment, June 12,1830.................................... $45 00
    Interest on do. to October 1830......................... 90
    ' - 45 90
    Balance due October, 1830.......................................... $25 05
    But defendant claims upon his last three notes, after deducting the payment of lorty-five dollars in June, 1830. $183 73-
    Making the trifling difference of................................. $158 68-
    0
    Loomis and Metcalf,
    on the same side, contended that this-transaction was characterized by a degree of injustice and oppression, which must at first blush shock the feelings of every .good citizen, its terms being so extremely inadequate as to satisfy the conscience of the court, that there must have been imposition upon the complainant, or that species of pressure upon his distress, which, in the view of equity, amounts to oppression; and that from the intrinsic unconscionableness of the demand, fraud would be presumed, to give the court jurisdiction, and require of it to order the instrument to be delivered up. They •cited 2 Swift’s Dig. 47; 14 Johns. 559; 5 Ohio, 472; 2 Vern. 14, 121, 402; 1 Atk. 301; 1 Bro. C. C. 1, 558; 2 Bro. C. C. 167; 10 Ves. 219; 13 Ves. 103 ; 14 Ves. 214; 4 Des. 651, 697.
   *Wright, J.,

delivered the opinion of the court:

The denial by the defendant that he had any knowledge of the complainant’s embarrassments, of the use of undue means to induce the loan or its continuance, and of all fraud in the transaction set out in the bill, presents this case to us upon its intrinsic merits, as shown in the nature of the transaction, unaccompanied by the ordinary tests of jurisdiction. But if resort were had to the evidence filed to do away the answer, the result would be the .same.

The case presented is one between an avaricious money-lender and an improvident borrower, and exhibits, on the part of the lender, an appetite for gain too insatiable and greedy to rest satisfied with ordinary acquisitions. It is pressed upon our consideration as one showing a ruinous and unconscionable bargain between the parties; one that the complainant should be relieved against, as fraudulent per se, because the inadequacy of -compensation for the money loaned is so gross as to shock every correct mind. The ruinous tendency of borrowing considerable .sums where such rate of interest is exacted and paid for any length of time, is sufficiently apparent to any one. The hundred .dollars loaned, in this case, is increased in less than two years and a half to two hundred and fifty-nine dollars and sixty-two cents — one hundred and sixty per cent. — an amount so repugnant to our sense of propriety, as to induce a strong inclination to relieve against its payment; but we must take care that our feelings do not lead us to overleap the rules which govern courts in -such cases.

Until the year 1824, we had a statute fixing the rate of interest at six per cent, per annum, and providing punishment for usury. This law was held to make void so much of contracts as-stipulated for more than the legal rate of interest; and under it our courts were in the practice of enjoining from collecting the excess, where the debtor tendered the amount of principal and lawful interest due. But the tender of the sum admitted to be due, and the bringing it into court for the use of creditors, was commonly held an indispensable requisite to the chancellor’s interference. The-maxim, “ he that seeks equity, must first do equity,” was deemed applicable to that class of cases. The bill before us contains no-such offer, and the complainant does not in any way bring himself within the strict rule. He avers only that he is willing to pay the balance as the court *may direct, and leaves his case [51 embarrassed with difficulty, on account of his departure from correct practice.

The general assembly, in 1824, repealed the law against usury,, and enacted in its stead the present law, fixing the rate of interest upon all moneys, after the same shall become due, at the rate of six per cent, per annum, and no more. 29 Ohio L. 151. It is contended, for the complainant, that the only change effected in the interest law by this last act, is one of phraseology, the substantial enactment of both being the same. We do not think so. The two acts differ in very essential particulars. In the former, any person demanding or receiving “ more than six per cent, per annum, on any contract, debt, or demand whatever,” forfeited “ the whole amount of the debt on which such illegal interest was chai’ged or received,” one-half to the county, and the other to the pe rson prosecuting. See act of December 29, 1804; 1 Chase’s Stat. 484. The act of 1824 contains no provision forfeiting the debt, nor any one prohibiting the contracting for, or ■ the receiving, any rate of interest. The first was entitled “an act fixing the rate of interest, and for preventing usurythe last simply-“an act fixing the rate of interest." These differences clearly indicate that the assembly, in the two enactments, had not the same-object in view. The change of the law presents this class of cases before a chancellor in a new light.

The 'distinguished counsel for the complainant, feeling the difficulty and novelty of this case, urge their claims to relief upon the ground that the contract is hard and unconscionable; and claim-that, being open, it may be relieved against or rescinded. We feel the truth of the assertion, that these contracts are hard and ■unconscionable; and if our aid was sought to enforce their performance, we should not hesitate to refuse it. Yet, as no portion of these contracts is against law, the usual way of restraining against the illegal part of the contract, upon the party bound coming forward and paying what is legally dije, is not open to ns. To declare a contract for more than six per cent, per annum interest void, would be to go beyond the legislative provisions on the subject; and to impose a penalty upon such contracts would set up again that which the legislature has taken away. Such .a course would draw to chancery, from the legislature, to whom the subject peculiarly belongs, the power of fixing the rate of interest and defining and punishing usury. Whatever gratification, •52] therefore, as individuals, we might feel *to be able to relieve against such enormous interest, we do not find the authority, as .a court, to do so on either of the grounds pressed in argument.

The case is susceptible of one other view, the result of which may be more to the complainant’s advantage. It comes within one of the ordinary heads of chancery jurisdiction to relieve against penalties affixed to legal contracts, which the rules of proceeding in courts of law enable parties to exact. Accustomed as chancery is to exonerate parties from penalties and forfeitures, we shall pursue an open track, if the case in hearing afford opportunity to apply such relief. The transactions between these parties disclose the fact, that in the first note for one hundred and thirty dollars, there was an agreement that one hundred and ten dollars, paid before the stipulated time expired, should discharge it. We .are disposed to regard this as a penalty, inserted in the contract, in order to compel its punctual performance, and to relieve against it upon the same principles parties are ordinarily relieved from penalties. All the changes made in this contract since it was first entered into, we understand retain the same feature, although the case does not disclose the exact amount of penalty in any of the obligations except the first one. In taking measures to exonerate the complainant from these penalties, we contravene no provision of our interest law. It is due to the subject to say we should have been better satisfied if the complainant had proffered payment of the money due, and if refused, had brought it into court; but the case admitted by the demurrer is so strongly marked, and the ex-.actions for the use of the money so scandalous, that we are induced, ■without intending to establish a precedent, to overlook the omis:sion; and we the more readily do this, because the defendant has gone to a hearing of his case without raising any objection on •this account. See 3 Munf. 397.

The case will be referred to a master, with instructions to proceed on short notice to take an account showing what proportion of the three last notes mentioned in the bill is for penalties, and how much is still due the defendant, allowing the stipulated rate of interest on the sum borrowed, and deducting the payments as ■of the date when made. The complainant is required to pay the .amount so found to the master for the use of the defendant, within thirty days after the account is completed; and also to pay the •costs accrued in the suits at law; but if he fail in these payments, the injunction heretofore allowed will, from the ^expiration [53 of said thirty days, stand dissolved. Eor the coming of the report •of the master and further proceedings, the cause is continued.


author: Collett, C. J.,

text:
    T. Baker v. H. Black and others.
    The law regulating common schools does not authorize levying a second tax within three years, in consequence of changing the boundaries of the district, where the tax exceeds one hundred and fifty dollars, and the owner and more than one-third of the householders taxed are non-residents.
    This cause was adjourned here for decision from the county of ELuron. It was a bill in chancery, the object of which was to enjoin the collection of a tax levied for the erection of a schoolhouse. The bill stated that the complainant owned five entire lots of ground, and the half of a sixth lot in the township of Ridgefield, in the county of Huron. That the lots. No. 1, No. 12, and the half-lot, No. 13, on February 4, 1826, were situate in school district No. 1, in the township of Ridgefield, and the others were in school district No. 2, of the same township. That in August, 1829, in school district No. 2, a tax was assessed, and levied, and collected, for the erection of a school-house, at which time the lots in that district, 16, 17, and 20, were assessed, and the assessment paid. That in March, 1830, the boundaries of the school districts were changed, so as to include lots 16, 17, and 20 in district No. 1. That in November, 1831, a part of the inhabitants of school district No. 1, assessed a tax of two hundred dollars on the district for the erection of a school-house, and apportioned a part of this tax on the lots 16, 17, and 20, assessed for the same purpose, in 1829, in district No. 2. That at the time of making this assessment, there was a good school-house in district No. 1, where it was proposed to erect the new one. That the complainant did not reside, and never had resided, in Ridgefield township. That more than one-third of the land assessed to raise the tax of two hundred dollars, was owned by persons, who, at the time the tax was levied, resided out of the district. That the defendant, Morse, appointed treasurer of the school district, was proceeding to collect the tax upon the lots 16, 17, and 20, and had made a seizure of property for that purpose. The whole proceedings were claimed to be illegal, and an injunction prayed for, to stay them, as also a 54] Sprayer for general relief. There is a general demurrer to the bill.
   Collett, C. J.,

delivered the opinion of the court:

The statute to provide for the support of common schools gives jurisdiction to this court in cases like the one presented by this bill. Sections 13, 14, and 15 of that statute provide that where less than two-thirds of the property subject to taxation, in a school district, is owned by persons residing within it, no single tax exceeding one hundred and fifty dollars shall be levied by the inhabitants to erect, repair, complete, or furnish a school-house that no land of a non-resident of the district, once taxed to erect, repair, complete, or furnish a school-house for the district, shall, by any alteration of its boundaries, be again taxed for the same purpose until the expiration of three years.

The facts shown in the bill bring the complainant’s case clearly within two of the statutory provisions here enumerated. The assessment exceeds one hundred and fifty dollars; the lots in question belong to a non-resident, and had paid tax for the same-purpose within the last three years. The fact that the defendant and more than ono-third of the landholdez’s to be taxed are nonresidents, being chaz-ged in the bill, are admitted by the demurrer. The tax is clearly illegally assessed. The complainant appears entitled to the relief he seeks. The demurrer is, therefore, overruled.


author: Judge Wright

text:
    *William Davis v. Samuel P. Herrick.
    In a suit by an indorser against tbe maker of a promissory note, the question of due diligence, where the facts are not disputed, is one of law to be decided by the court.
    Where the facts are contested, the question of law becomes mixed with fact, and is for the decision of the jury, under instructions from the court, upon the hypothetical state of facts claimed to be proved.
    As to negotiable paper strictly commercial, such as that on its face negotiable at banks, the act of Ohio, of 1820, makes no change in the rule of the law-merchant.
    A demand of the maker of a negotiable note, and notice on the ninth day after the note arrived at maturity, is not the use of due diligence to charge an indorser.
    From Muskingum. Assumpsit by the plaintiff as holder and indorsee of the defendant of a promissory note, payable on April-10, 1832, made by one Wall. Plea, non assumpsit.

    During the progress of the trial on the circuit, the following-facts appeared in evidence in reference to the demand of the maker and notice to the indorser, to wit: That Wall resided in Zanesville. He left there with a drove of horses for an eastern market in February, 1832, expecting to return in six or eight weeks, (before the note fell due), but has never returned. Upon the day the note was payable, or the day after, the plaintiff’s servant, by his direction, inquired at Wall’s house if he was at home, and was informed by the family he had not returned, but would be home in the course of the week. Six days after the note fell due, the servant made a similar inquiry, and received for answer that Wall had not arrived, but would be home that week or the following one. The eighth day after the note fell due, the servant again called at Wall’s house, but neither he nor his wife were at home. On the next day the inquiry was renewed at Wall’s house, when his wife replied that he had not yet got home. The servant then presented the note to the wife and demanded payment, which being refused, it was on the same day presented to the defendant for payment, with information that Wall could not be found. The defendant refused to pay or take up the note, remarking that Wall would be .at home in three or four weeks and pay it. It appeared also that one Ballentine, a citizen of Zanesville, being in Philadelphia when Wall was there, became suspicious he would not return home. About the 1st of April, Ballentine mentioned this subject to the sheriff of the county, and the sheriff, on the 2d of April, communicated these suspicions to the defendant. Upon this state of fact, two questions were made to the court, whether the plaintiff, under the circumstances, had used due diligence, under the statute, so as 56] to entitle him to recover of the Endorser, and whether the question of diligence was for the court or jury? The court decided that what constituted due diligence was a question of law for the court, and instructed the jury that the demand and refusal in the case did not make out the due diligence upon which the plaintiff’s right to recover depended, and, therefore, they ought to find for the defendant. A verdict was so returned.
    The plaintiff moves for a- new trial, “ because the court erred in charging the jury that due diligence had not been used to charge the indorser.”
    Goddard and Converse, for the motion, contended:
    1. That the statute of Ohio has materially altered the commercial rule as to the steps necessary to charge an indorser of a promissory note.
    2. That under that statute the question of diligence is a question of fact to be determined by the jury.
    3. That due diligence has been used in this case. The consideration of this point will, of course, be unnecessary, if the two first be established in our favor.
    1. As to the change effected by our statute.
    Section 2 of the “ act making certain instruments of writing negotiable,” passed February 25, 1820 (vol. xxix, 217), provides that the indorsee may sue the indorser, “ having first used due diligence to obtain the money of the maker.”
    Section 5 provides, “ if any indorsee of a note made negotiable by this act, on trial of any suit instituted thereon, against any indorser, shall prove a demand made of the maker, at the time the «ame became due, or within a reasonable time thereafter, it shall be adjudged due diligence under section 2 of this act.”
    Under the act of January 25,1810 (1 Chase’s Ohio Stat. 660), it might have been contended that the commercial rule was not altered, that statute requiring an indorsee to use due diligence, but not attempting to define in what that due diligence consisted.
    Under the act of 1810, we are willing to permit our opponents to contend that an indorser is not liable, unless payment be demanded, of the maker on the day the note becomes due, and notice of non-payment be given to the indorser on that day or the day following.
    That is the commercial rule.

      “ A bill or note must be presented for payment on the very *day on which it becomes due.” Bayley on Bills, 149, chap. [57 '7, sec. 1, Boston ed. 1826.
    “In this country (England), upon the last day of grace, and within a reasonable time before the expiration of that day, a bill or note must be presented for payment.” Bayley on Bills, 153.
    So Marshall, Chief Justice, in the case of Lenox et al. v. Roberts, 2 Wheat. 373, “It is the opinion of the court that the demand should be made on the last day of grace.”
    So in New York, Johnson v. Haight and Matthews, 13 Johns. 470, by Spencer, Judge, in delivering the opinion of the court: “ The law is perfectly settled that a note must be demanded on the third day of grace, unless that day falls on Sunday, and then it must be demanded on the second day of grace.”
    But the statute of 1820 changed all this. When the legislature say that demand may be made on the day the note becomes due, or within a reasonable time thereafter, have they not changed the commercial rule which says the demand must be made on the very day the note becomes due ?
    The commercial rule says, demand within a reasonable time after the note becomes due, and you shall not recover. The statute of Ohio says, demand within a reasonable time after the note becomes due, and you shall recover.
    With respect to the time within which demand must be made, the statute has, then, materially changed the commercial law. Has it not changed it also in another important particular, by its entire silence as to notice to the indorser ? The legislature has prescribed the condition upon which an indorser shall be hold liable. They require the holder of the note to do a certain act to entitle him to recover. Can the court superadd the obligation of giving notice of that act?
    It may seem bold to question the necessity of giving notice after twenty or thirty years acquiescence in the practice; but yielding to the legislature the perfect right to mold at will commercial as well as common law, it is not easy to perceive how the right of an indorser to notice has arisen. Under the act of 1810, the courts may have thought that notice formed a part of the diligence which that statute left undefined; but. under the statute of 1820, which exercises the undoubted prerogative of defining its own-terms, room is not left for such construction. 58] *2. Our second position, that due diligence is a question of fact, not of law, is almost a corollary from the first.
    Demand of payment may be made within a reasonable time after the note becomes due. What is a reasonable time? This depends-upon the circumstances of each case. It is matter of proof. The statute says it shall be proved.
    “ What constitutes reasonable notice to an indorser is matter of fact for the jury to determine.” Robertson v. Vogle, 1 Dall. 255, 256 ; Mallery v. Kirwan, 2 Dall. 192; Warden v. Carlow’s Ex’r, 2 Dall. 233; 1 Yeates, 531; Ball v. Dennison, 4 Dall. 165; Bank of North America v. Petit, 4 Dall. 129.
    In Alabama, it is a question for the jury. 1 Minor, 85.
    In New Jersey, it is doubted whether the question of diligence-be for the court or jury. Ferris v. Saxton, 1 South. 1.
    In New York, it is a question for the court.
    We contend that the legislature of Ohio, having in view these contrary decisions, and the many difficulties attending this vexed question, have, by relaxing the commercial rule and authorizing a recovery when demand has been made within a reasonable time, left each case to be determined upon its own facts.
    In this the legislature have said nothing more with respect to-all notes and bills than the commercial law itself has said with respect to bills of a particular character — we mean those payable a certain number of days after sight. The drawer of such a bill is discharged unless the bill be presented for acceptance within a reasonable time, and that reasonable time is a question for the jury. We cite the language of Judge Story, one of the ablest expounders of commercial law, in Wallace v. Angry et al., 4 Mason, 345: “But the principal objection is, that there has been gross negligence in the remittance of the bill, and that this would at all events discharge the drawer. There is a difference between the case of a bill of exchange, drawn payable at so many days after date, and one drawn payable so many days after sight. In the former case the bill must be presented by the period of its maturity ; in the latter, it is sufficient if it be presented in a reasonable time. What that reasonable time is, depends upon the circumstances of each particular case, and no definite rule has as yet been laid down, or indeed can be laid down, to govern all cases. The question is a question of fact for the jury, and not of law for the abstract decision of the court.” A slight paraphrase of this language will illustrate the position for which we are now contending: “ There *is a difference as to the duties of a holder [59 of a promissory note between the commercial law and the statute of Ohio. Under the former code, the note must be presented by the period of its maturity; under the latter, it is sufficient if it be presented in a reasonable time. What that reasonable time is, depends upon the circumstances of each particular case, and no definite rule has as yet been laid down, or indeed can be laid down, to govern all cases. The question is a question of fact for the jury, and not of law for the abstract decision of the court.”
    In the case of Grist v. Lybrand, 3 Ohio, 307, an attempt was made to withdraw this question from the jury by objections to testimony. The court admitted the testimony, and refused a new trial. The last ten lines of the opinion of the court (page 320) is entirely inconsistent with the claim now set up, that diligence or no diligence is. a question for the court.
    3. Due diligence has been used.
    The statute of Ohio does not leave us to grope in the dark as to what shall be due diligence. It defines it. If to the demand, within a reasonable time, as there expressed, we must add an implied obligation upon the holder to give notice to the indorser, we may surely claim the indulgence (in analogy to the expression used by the legislature) of giving that notice in a reasonable time. If the legislature have so far relaxed the law-merchant as to substitute a reasonable time for demand, in lieu of the very day, may we not claim that they have substituted a reasonable time for giving notice, in lieu of the very day, or the day following ?

      If the statute had specified notice as a duty of the holder, we may suppose section 5 would read as follows: “ If any indorsee, etc., shall prove a demand made of the maker at the time the note became due, or within a reasonable time thereafter, and shall also prove that within a reasonable time after such demand he gave notice thereof to the indorser, it shall be adjudged due diligence,” etc. We suppose that the counsel for the defendant read the statute in that way, and we proceed to argue this question of diligence as though that were its express language.
    No one, we presume, will contend but that a want of demand and notice may, under some circumstances, be excused. If a notice be put in the post-office, directed to the indorser, at his 60] usual place of residence, though the mail be robbed, and *he never receive notice in fact, he will still be chargeable. If the note be drawn for the accommodation of the maker, and the indorser be fully indemnified, he will be chargeable, though no demand and notice. If, the day before the note falls due, the indorser tells the holder that he need make no demand or give notice, he is liable without demand and notice. We cite these instances to show that a literal compliance with the statute is not required. To comply with it substantially, to fulfill its object and spirit, is all that is required. This position might be illustrated by reference to other statutes and the construction given them by the courts. But to proceed. This note, allowing days of grace, fell due on the 13th of April. On the 19th a regular demand was made of the maker’s wife, and regular notice given. Can the court say that six days is an unreasonable time ? Bub under what circumstances did the note fall due? We prove that just before the note became due the maker had absconded to defraud his creditors, and that the defendant knew it. Why, then, make a demand at all ? No demand could be made of the defendant personally. Should we demand it of his wife at his last place of residence? Why? Is it usual for a man who absconds for the purpose of avoiding the payment of his debts to leave money with his wife and family to pay those debts ?
    It is evident that the demand would have been an idle, useless beremony, which the law never requires to be done. Our position is this: that demand on Wall was unnecessary, and that if, without going near his house, the plaintiff had, upon the 14th day of April, notified the defendant that Wall had absconded, and that the note remained unpaid, we should have been entitled to recover upon the strict mercantile law. Putnam v. Sullivan, 4 Mass. 45.
    Suit by indorsee against indorser of a promissory note, dated December 1, 1804, payable in ninety days with grace. By the law of Massachusetts that note fell due on the 3d day of March. The note being left in the Boston Bank for .collection, notice was left at the lodgings of the promisor, by the messenger of the bank, on February 28, 1805, and on the 3d of March following the defendant was notified that the note was unpaid. It was also in evidence that the promisor had absconded before the note fell due, and that this fact was known to all the parties at the time. In this case the only demand was made before the note became due, and was a mere nullity, *and is so treated by the court. Upon these [61 facts the court says (and it is the great Parsons who speaks) : “It appears that before the note became due the promisor had absconded ; this was known to the parties, and when the note was payable he was not to be found. The condition on which the indorser of a note is holden is, that the indorsee shall present the note to the promisor when due, and demand payment of it, if it can be done by using due diligence. Now, it appears that when the note in this case was due it could not be presented to the promisor for payment, and that there was no neglect in the indorsees. We are all, therefore, satisfied that the indorsers are holden on their indorsement in this case, notwithstanding there was no demand on the promisor.” See also Duncan v. McCullough, 4 Serg. & Rawle, 480; Gist v. Lybrand, 3 Ohio, 307.
    Having, we think, disposed of this part of the diligence incumbent on the plaintiff, namely, the demand, it only remains to inquire : Had the defendant sufficient notice ?
    An indorser is entitled to notice, say the books. Notice of what? That the note has not been paid. But the defendant knew everything which he could communicate to him by notice, and we say, therefore, that notice was unnecessary. Upon this point, we ask to be excused lor again pressing upon the court, that notice'is not required by express legislative enactment, though the legislature have acted upon the very subject. May we not ask the tribunal which imposes upon us the necessity of notice, to give to their rule that reasonable interpretation which would dispense with the notice, when it evidently would have communicated nothing new to the defendant.

      R. Stillwell, contra, argued as follows :
    It is not readily discovered, from the plaintiff’s argument, whether he relies on the demand at the house of Wall, and notice given to the defendant on the 19th of April, or on the absconding of Wall; it will, therefore, be necessary for the defendant to examine both points.
    And he contends, that in this case, the statute has not altered the commercial rule, as to the steps necessary to charge an indorser on a promissory note. It is certaintly a bold step, as the counsel for the plaintiff remarks, to question the necessity o'f notice. So long 62] a practice under the law, the universal consent *of the profession and men of business generally, and the practice of the courts under this law, would seem to have settled the point. It is not, however, necessary to discuss, in this case, the question made by plaintiff, whether notice of demand or non-payment is necessary to charge an indorser. The question then is, where all the parties reside in the same town, and are all traders, is a demand, on the sixth day after the last day of grace, sufficient to charge an indorser? By the commercial rule, it clearly is not;' and the defendant contends, that the words “ reasonable time thereafter,” mentioned in the statute, applies only to cases where there are peculiar circumstances in the case, which dispenses with the strict rule ; and that it was not intended to apply to cases where the holder might as readily have made the demand on the day the note became due as on any subsequent day; and that a correct paraphrase of the statute would be: “ In cases where the holder, by the use of reasonable care and diligence, could not make the demand on the day the note became due, he should be entitled to recover, if he use reasonable care and diligence to make a demand within a reasonable time thereafter.” This is certainly giving as favorable a construction to the statute as the plaintiff can require. Was there anything to prevent the plaintiff, in this case, from making the demand on the day the note became due? Was there anything to prevent him from making the demand on the next day ? By the use of the words “ on the day the note falls due,” the statute certainly contemplates that the demand should be made on that day, unless there are circumstances to excuse it. So far from there being anything to prevent the demand, on the 10th or 11th of April, and again on the 16th, the plaintiff sent to the house of Wall to inquire about the note, and received such information as seems to have satisfied him that Wall would pay the note, and he was willing to rely on Wall alone. Having taken this course, he can not, on the failure of these expectations, turn round, after so great a lapse of time, and throw the loss on the defendant.
    The defendant contends, that the plaintiff can not recover on the ground of the absconding of Wall; because notice, if given at all, was not given within the time required. It would appear from the testimony, that on the 19th of April, the defendant gave notice of the demand and not of the absconding, and did not then claim to hold the defendant on the ground of Wall’s obsconding. Admitting that if given in time, the ^notice on the 19th [68 was sufficient to charge the defendant, on the ground of absconding, yet it was not given within the time required. I presume it will not be contended, that the holder of a note is not bound to give notice to the indorser, when he seeks to charge him, on the ground of the maker absconding. By the very strict construction of the statute, urged by plaintiff, it might be argued that the plaintiff could not recover in any case, without a demand of the maker. But we do not so contend, but admit that the absconding of the maker dispenses with a demand. But where the holder asks to recover, on the commercial rule, independent of the statute, he must bring himself within the rule, and that notice of the absconding of the maker and of the non-payment must be given to the indorser within a reasonable time. That is, where no peculiar circumstances intervene on the day the note becomes due, or the next day. There was nothing to prevent giving this notice immediately; the defendant lived in the same town. Should it be suggested that the plaintiff was not aware of the absconding of Wall, I reply that then he is not excused from making the demand at the house of Wall.
    It has not been held, in any case, that the absconding of the maker dispenses with notice to the indorser. In the ease cited by plaintiff, 4 Mass. 45, notice was given to the indorser that the note was unpaid.
    Known insolvency of the maker would furnish as strong ground to dispense with notice as absconding, yet known insolvency does not dispense with notice. The death, bankruptcy, or known insolvency of the drawer, or his being in prison, constitute no .excuse, either at law or in equity, for the neglect to give due notice of non-acceptance or non-payment. Russell v. Langstaff, Doug. 497, 515; Eisdale v. Sowerly, 11 East, 114; ex parte Wilson, 11 Ves. 412; Whitfield v. Savage, 2 Bos. & Pul. 279; Thackary v. Blarket, 3 Camp. 165; Haynes v. Borks, 3 Bos. & Pul. 601; Edwards v. Thayer, 2 Bay. 217; Pierce v. Young, 1 Nott & McCord, 438; Clair v. Barr, 2 Marsh. 256. There are numerous other casos which might be referred to, but these are presumed to be sufficient. It is not competent to the holder to prove that the delay in giving notice has not in fact been prejudicial. Eisdale v. Sowerly, and Russell v. Langstaff, ut supra; Bickerdike v. Bollman, 1 Term, 408; De Berdt v. Atkinson, 2 H. Black. 336; Warrington 64] *v. Furbor, 8 East, 24-5-247; Cory v. Scott, 3 B. & A. 623; Nicholson v. Gouthit, 2 H. Black. 612.
    Nor will the circumstance that the drawer had informed the drawee before the bill became due that it would not be paid, excuse notice. Nicholson v. Gouthit, 2 H. Black. 612; Eisdale w. Sowerly, 11 East, 117.
    It may also be observed that there is no evidence of the fact that the defendant knew that Wall had absconded at the time the note became due, or even as late as the 19th of April. Wall had not been absent an unreasonable time. All the suspicion that existed arose from the statement of Ballentine, who did not himself think it sufficiently certain to act upon. The family of Wall stated that they expected him to return. The plaintiff, by his frequently sending to inquire, and on the 19th of April making a demand of payment, showed that he did not at that time consider Wall as having absconded, and that he relied on this demand and notice of non-payment as the circumstance on which to charge the defendant. The defendant, also, when notified of the demand and non-payment, entertained the opinion- that Wall had not absconded. It would be unreasonable, then, to charge the defendant with the knowledge of the absconding on the 13th of April (admitting that this would charge him), when all the parties expected him to return as late as the 19th of April;
    Under these circumstances, it was the duty of the plaintiff to make demand at the house of Wall at the time the note became due. Pierce v. Young, 1 McCord, 339. Admitting that defendant had notice of the absconding of Wall, and non-payment of the note, it was not given by plaintiff or any person interested in the note. The earliest eases held that a notice of the dishonor of a note would not charge the indorser, unless given by the holder or his agent. Tindal v. Brown, 1 Term, 170. The rule, however, has-been relaxed, and it is now sufficient if given by any party to the bill or note. But it has never- been suggested that notice from a stranger is of any avail. Due diligence is matter of law for the-court. It is unnecessary to go into the reason of this rule; it is so perfectly obvious that if left to the jury in each case, there would be no rule, and the decision would be variant in every case. It is matter of little moment to the community in what manner the rule is settled, but of great moment that it should be settled. By considering it as matter of law, the rule is fixed and determinate in each *case. By submitting to a jury, each case must [65 depend on the ignorance or caprice of the jurors. After much discussion and examination, the rule was finally established in England that it is matter of law. Tindal v. Brown, 1 Term, 168;. Derbyshire v. Parker, 6 East, 3, 9, 10, 12; Haynes v. Brooks, ut supra. Although the cases cited for the plaintiff from Pennsylvania differ from this rule, yet in that state the law is now otherwise settled. McKean, Chief Judge, in delivering his opinion in the case of Bank of North America v. McKnight, 1 Yeates, 145,, states the law as it is now settled to be, that due diligence is matter of law. So in New York, as stated in plaintiff’s argument. So in Massachusetts, Hussey v. Freeman, 10 Mass. 84. So in Kentucky, Doge v. Bank of Kentucky, 2 Marsh. 616. So in Maryland, Philips v. McCurdy, 1 Har. & J. 187. So in New Hampshire, Haddock v. Murray, Adams, 140. So in Vermont, Nash v. Harrington, 2 Aik. 9. And this is nothing more than the power the-court possesses in all civil cases.
    The jury find the facts, and the court determine the law from those facts. In this case, there was no dispute as to the facts, at the time of the trial; the defendant examined no witnesses, and admitted all the testimony to be true. It is argued by the plaintiff, that the words “reasonable time thereafter,” in the statute, were intended to withdraw the question of due diligence from the court. This is not correct. Where the last indorser receives notice from the holder that a bill or note is dishonored, in order to charge a prior indorser, he is bound to give notice as soon as he reasonably can. Now, if this argument of the plaintiff were correct, this reasonable time would be a question for the jury. But according to the cases collected in the ease of Derbyshire v. Parker* 6 East, 6, 9, 12, it is a question of law depending nevertheless on the circumstances of each case.
    We contend that the words “ reasonable time ” shall receive the .same construction in both cases.
    Goddard, in reply:
    The evidence is, that the defendant, before the note became due, knew that Wall had absconded in fraud of his creditors; and knowing this, he knew a demand of payment would be unavailing, and he knew all that notice from the holder of the note could communicate to him.
    The demand has then been made, in the language of the statute, “within a reasonable time;” that is,- the demand and notice were 66] just as beneficial to the defendant as they would have *been if demand had been made and notice given at an earlier period.
   Judge Wright

delivered the opinion of the court:

We are unanimously of opinion that there was no error in the charge of the court. The question of diligence is one of law, and for the court in all cases where the facts are ascertained. When the facts are contested, the legal question is mixed with the facts, .and goes to the jury under instructions from the court, upon the law arising upon the various hypothetical state of facts claimed to be made out in evidence. On the trial of this case there was no dispute about the facts; they were conceded, and we all think, with the judge who gave the cause to the jury, that the circumstances in proof did not establish the use of that diligence required by law of an indorsee of a note to enable him to recover of an indorser, nor excuse the omission.

Section 5 of the act of 1820, making certain instruments of writing negotiable, 29 Ohio L. 217, provides that if in suits by an indorsee against an indorser the plaintiff shall prove a demand of the maker, when the note became duo, “ or within a reasonable time thereafter, it shall be adjudged due diligence." Counsel have examined at length what is the reasonable time mentioned in this provision, in the hope of eliciting from us a construction of the law as a rule of practice. We admit the importance to community of a construction of this act. As it respects paper strictly commercial, such as is on its lace made negotiable at banks, we think our law has made no innovation upon the rule of the law merchant. As to other descriptions of negotiable paper, we have not been able to unite our minds, or those of even a majority of us, upon a construction of the statute that would carry into execution the meaning or intention of the legislature.

New trial refused, and judgment on the verdict for the defendant.


author: Judge Wood

text:
    *Richmond Cheadle v. Perez B. Buell.
    A charge that A. B. received a letter to convey, containing money, giving himself a false name at the time, and promised to deliver the letter, instead of which he broke open the letter and used the money, is a charge of larceny and actionable.
    A eull statement of this case is given in the opinion of the court by Judge Wood.
    Gage, for plaintiff.
    Goddard and Converse, for defendant.
   Judge Wood

delivered the opinion of the court:

This case was tried on the last circuit, in the county of Morgan, and a verdict found for the plaintiff. The defendant’s counsel filed a motion for a new trial, and assigned for cause, that the verdict of the jury was against the evidence and the law of the case; also, a motion nisi, in arrest of judgment. Both motions were reserved for decision in this court. The cause was tried on the first count of the declaration, the pleas of the general issue, and a justification.

The words laid to have been spoken were: “1. He (the plaintiff meaning) represented himself to Colonel Stone, of Point Harmar, to be a man by the name of Seely, whereby he obtained of said Stone a letter containing money, which he was to deliver to the owner; but instead of doing so, he (the said plaintiff) broke open the letter and used the money himself.

“ 2. .He (the plaintiff meaning) took money in a letter from Col. Stone to a man by the name of Elliott, which money belonged to Elliott, and he (the plaintiff) broke open the letter, and put the-money to his own use.

“3. He (the plaintiff meaning) represented himself to Col. Btone lo be a man by the name of Seely, by which means he obtained a letter, directed to one Elliott, containing money belonging to said Elliott, which said money and letter he agreed to deliver to said Elliott, but instead of doing so, he broke open the letter and used the money.

“4. He (the plaintiff meaning) has been guilty of obtaining money by false pretenses.

“ 5. He (the plaintiff meaning) falsely represented himself to ■be one Seely to Col. Stone, whereby he obtained of said Stone money belonging to one Elliott, which he converted to his own use.”

*The first, in order, to be considered, is the motion for a .new trial. Is the verdict against the evidence which was given ? Two issues are presented in the record : 1. The defendant denies the speaking of the words. 2. He admits the words were spoken, and avers that they were true. When two issues are presented in this action, as in this case, not guilty and a justification, each is to be disposed of in the same manner as if it stood alone on the records. Dewit v Greenfield, 5 Ohio, 225.

If the jury find either issue against the evidence, or clearly and manifestly against the weight of the evidence, a new trial will follow. Bac. Abr., New Trial.

To prove the first issue, the plaintiff called one Keyes, who testified that the defendant said to him that the plaintiff went to Col. Stone’s, assumed the name of Seely, and by that means got a letter to Elliott, with fifty dollars in it; broke open the letter, used the money, and afterward replaced it.

A second witness of the same name, and a third by the name of Davis, proved the same words, nearly, spoken by the defendant. The rule is laid down in 2 Stark. Ev. 844, in reference to libels, thus: “ The same strictness (perhaps on the ground of convenience) does not apply in actions for words; for if some of those, being actionable, be proved, an omission to prove the remainder of the words laid in the context with them, or a variance from the latter, will not be material, provided the words proved do not differ in sense from those alleged, considering the whole context.” In other language, if part of the actionable words be proved, substantially, as laid, the plaintiff shall recover for them. The evi■dence of each witness appears to us to have proved the speaking of all the words, at least, substantially, as laid in the declaration.

The defendant then read the deposition of Col. Stone, and called two witnesses to prove the second issue.

1. The deposition of Col. Stone, who testified a letter was placed in his hands, said to contain twenty-five dollars, from Ambrose Elliott, addressed to him, Elliott, with a request that the witness would transmit it to Mrs. Elliott, at Olive Green, some twenty miles distant; that he gave the letter, sealed, to the plaintiff, who lived a few miles from Olive Green, and desired him to leave it at McIntosh’s store, but two or three miles from Mrs. Elliott’s, at his, Elliott’s, residence.

*2. Ambrose Elliott testified that he inclosed twenty-six dol- [69 lars in a letter, which he sealed with care and sent to Colonel Stone, to be forwarded tohiswife; that he learned, two or three weeks afterward, the letter had not been received; that he went to Marietta and inquired of Colonel Stone concerning the letter; that Colonel Stone did not then recollect by whom he had sent it; but wrote him, six or eight weeks afterward, that it was by the plaintiff; that the witness then went to the plaintiff and inquired of him if he had brought a letter from Colonel Stone, to be left at McIntosh’s for Ambrose Elliott, to be sent to his wife, Mrs. Elliott. This was at the plaintiff’s store; that the plaintiff denied any knowledge of such letter; witness then handed him Colonel Stone’s letter; plaintiff, after reading it, admitted some indistinct recollection of it, and sent witness to the house to inquire of his wife for it; that he went to the house; Mrs. Cheadle searched for the letter, but could not find it; that he returned to the store, and the plaintiff then went with him to the house, looked .in the chest, which had been previously examined by Mrs. Cheadle, and handed witness the letter; witness could not tell whether the plaintiff took the letter from the chest or not; plaintiff asked witness if he did not wish a knife to open the letter; that he, witness, said not; that the letter opened without an effort, and he thought the seal had been broken; that the letter contained the same amount of money he inclosed; but he ■could not say whether it was the same or not.

Enoch S. McIntosh testified, that the plaintiff was twice at his store, during the time the letter must have been in his possession; that his store was the place at which the letter was to be left. This evidence, on the part of the defendant, was not attempted to bo denied nor impeached; and the peculiarly frank, apparently candid, and intelligent manner in which Elliott testified, is still fresh in the recollection of two members of this court.

The court entertain the opinion, that the first set of words, laid in the declaration, amount to a charge of larceny. There is no mystery in the definition of this offense. It is the felonious taking and carrying away the personal goods of another. In other language, it is a taking and conversion of another’s property, in a secret and clandestine manner, and with the intention, by secrecy and fraud, to deprive the owner of his remedy to recover his goods. Did the defendant’s evidence prove this offense to have been com-70] mitted? If so, this issue should have *been found for the defendant. Let us look a moment at the proof.

1. The plaintiff received the letter sealed, with the knowledge that it contained twenty-five dollars.

2. He was to leave it at the store of McIntosh.

3. He was twice at the store, while the letter was in his possession, but he did not deliver it.

4. He kept it more than ten weeks.

5. When Elliott inquired of him about the letter, he denied all knowledge of it, until Elliott delivered him the letter of Colonel Stone.

6. He pretended to find the letter in the chest, which had been examined by his wife previously, without his knowledge.

7. He offered Elliott a knife to open the seal, when it was already broken, as the witness believed.

Can there be any reasonable doubt entertained, but what this evidence proves the secret and clandestine taking and conversion of the money to his own use, with the intention to deny to Elliott all remedy to recover it ? We think not. Our opinion is, therefore,, that the jury found this issue for the plaintiff, against the evidence given on the trial.

We can arrive at no other conclusion than this: that Cheadle opened the letter and took out the money, with the intention to convert it to his own use; that he supposed, as Elliott was in Pennsylvania, and he himself a stranger to Colonel Stone, the letter would probably never be traced to his hands. To guard against accidents, however, he kept the letter in his possession; and while Elliott was sent to his house, to inquire of his wife, he, the plaintiff, was replacing either the same, or other money in it, at the store. That the seal was broken, is proved by Elliott, and the very unusual inquiry put by Cheadle, in relation to the knife. Having taken the money from the letter, with the intent to steal it, the offense was complete, although- the same money might have been afterward replaced.

Suppose, however, the crime of larceny was not fully proved, the circumstances were such, in mitigation, that the law would give but nominal damages. A man who comes into court, with hands nnclean, his reputation stained and polluted by his own depravity, is entitled to nothing more than his naked legal rights ; he is not to be encouraged with anything beyond these. It is the man who comes, like the complainant, in chancery, having done and prepared to do equity, who brings a character unpolluted *and [71 worthy of protection, that receives the indulgent and willing attention of the court.

In giving a verdict for more than nominal damages, the verdict is against the Jaw of the case on the first issue, and a new trial must be granted. Defendant to pay the costs of the term.

This decision makes it unnecessary to say anything on the motion in arrest of judgment.