author: Scott, J.

text:
    William W. Corcoran and George W. Riggs v. Benjamin Powers, Hosea Williams, and others.
    Where H., for the purpose of raising funds, proposes to C. &R., bankers at Washington City, to sell them three drafts, each for $6,666.66, to be drawn by him on the post-office department, at Washington City, and made payable, one at six, one at nine, and one at twelve months from date, out of the pay which may become due to the drawer under his contracts for mail transportation, and to take for said drafts the sum of $16,000 — the drafts to be made payable to the order of V., and their payment at maturity secured by his accommodation indorsement, as well as by a power of attorney to be executed by H., in favor of C. & R., authorizing them, upon the dishonor of the drafts, to sell and transfer 145 shares of bank stock, owned by H.; and C. & R., accept the proposal, advance the $16,000, and receive the drafts and securities; the transaction is at least prima facie a loan, and nót a sale.

    The validity of such agreement depends upon the lex loci of the contract, and under the statute of Maryland, in force at Washington City, such contract is utterly void for usury.
    The form of a contract is by no means decisive .of its real character. The question in such case is not what did the parties call it, but what do the facts and circumstances require the court to call it.
    In such cases, the distinction is well taken between business and accommodar lion paper.
    Collateral securities taken on a contract void for usury are .also void in the hands of the usurer.
    Where H. makes an absolute general assignment and transfer of such securities, for full consideration, to P. & W., though they receive the same with full knowledge of the claim of C. & R., the assignees may set up the defense ':;:'of usury to a bill subsequently filed against them and H., by C. & R., [20 seeking to subject the securities thus assigned to the payment of a balance due on the drafts.
    Nor will this right of the assignees be affected by a stipulation which H., after suit brought, filed in the cause, waiving the defense of usury.
    It is sufficient if the usury proved be substantially, the same with that averred in the pleading.

      In chancery. Eeserved in the district court of Franklin county
    The facts are sufficiently stated in the opinion of the court.

      Swan & Andrews, and P. B. Wilcox, for complainants.

      N. H. Swayne, and Finch & Jones, for the defendants, Powers & Williams.
    The Eeporter has not been able to find the original argument of Swan & Andrews.

      N. U. Swayne. The second ground of defense relied upon is usury.
    The answer avers that the contract was made at Washington City, and to be performed there; that at the time of the making of the contract, and for a long time before, and ever since, the following statutory provisions were in full force there as law
    “ That no person upon any contract shall exact or take, directly or indirectly, for loan of any money above the value of six pounds for the forbearance of one hundred pounds for one year; and so after that rate for a greater or less sum, or for a longer or shorter time.”
    “ That all bonds, contracts, and assurances whatever, made for the payment of any principal money lent, or covenant to be per-. 21] formed upon or for any usury, whereupon *or whereby there shall be received above the rate of six pounds in the hundred for money, as aforesaid, shall be utterly void.”
    “And that any person taking more than the rate aforesaid shall be liable to pay treble the value of the money lent, to be recovered by action of debt, bill, plaint, or information; one-half to the informer,” etc.
    1. If the complainants are entitled to a decree for anything, it can only be for the unpaid balance of the amount advanced by them and interest. Ch. on Bills, 667, 668; Sedgwick Dam. 241; Wiffin v. Roberts, 1 Esp. 251; Braman v. Hess, 13 Johns. 52; Cram v. Hendricks, 7 Wend. 569.
    2. Whether the facts. make a case of usury is to be determined by the lex loci of the contract. If the contract be void there, it is void everywhere. All securities tainted with the usury ai’e void. Story’s Confl. of Laws, 202; 2 Kent’s Com. 461; DeWolf v. Johnston, 10 Wheat. 367; Chapman v. Robertson, 6 Paige, 627; Morgan
      v. Tipton, 3 M’Lean, 345; Loyd v. Scott, 4 Pet. 228; Panning v. Dunham, 5 Johns. Ch. 136, 142; 3 Gill & Johns. 123, 482; 5 Ib. 23.
    3. Receiving or reserving usurious interest, sufficient evidence of an usurious' agreement. Bank of Utica v. Wager, 2 Cow. 769; Powell v. Waters, 8 Ib. 696; Bank United States v. Owens, 2 Pet. 538. Usury paid, or promised to be paid, is the same thing. Hammond v. Hoping, 13 Wend. 505.
    4. If there be usury, the intention of the parties, ignorance of the legal effect, and usage are immaterial. Manhattan Bank v. Osgood, 15 Johns. 152; 13 Johns. 40; N. Y. Firemen’s Ins. Co. v. Ely, 2 Cow. 672; Bank of Utica v. Wager, Ib. 712; 1 Vesey, 527, note; 11 Paige, 660; 3 Sandf. 215; Ib. 315; 7 B. & C. 430; 9 Mass. 55.
    *5. Usury defined — where it exists any shift, device, or pre [22 tense unavailing to protect the usurer. Bank United States v. Owen. 2 Pet. 537; Loyd v. Scott, 4 Ib. 205; Floyer v. Edwards, Cowp. 112.
    6. Where usury is charged, and the paper is claimed to have been sold, the test as to usury is, whether before the holder took the paper, a suit could have been maintained upon it as between the prior parties to it. In other words, whether the paper was of any validity before it was transferred to the alleged usurer.
    According to this principle, the facts of this case make out a clear case of usury. Munn v. The Com. Co., 15 Johns. 55, 56; Bennet v. Smith, Ib. 356; Powell v. Waters, 17 Johns. 181; S. C., 8 Cow. 607; Wilkin v. Roosevelt, 3 Johns. Ch. 68; Churchill v. Suter, 4 Mass. 156; Knight v. Putnam, 3 Pick. 184; Ely v. McClung, 4 Porter, 383; Sock v. Parker, 2 McCord Ch. 383; Fleming v. Mulligan, Ib. 174; Holman v. Hobson, 8 Humph. 127; Nat. Fire Ins. Co. v. Fitch, 11 Paige, 660; Anderson v. Rapelye, 9 Paige, 483; S. C., 4 Hill (Cowen’s opinion), 472; Yanke v. Lockhart, 4 J. J. Marsh. 277; Belden v. Lamb, 17 Conn. 441, 452; Cutler v. Johnson, 8 Mass. 266; 2 Denio, 24; 7 Blackf. 540; 10 Eng. C. L. 75; Mitchell v. Winston, 2 Story, 639; Woodworth v. Sherman, 3 Ib. 174; Price v. Ridger, 4 Price, 50; Bernard v. Young, 17 Vesey, 43.
    7. See the following cases, decided under the statute relied upon in this case: Sauerwine v. Bruner, 1 H. & G. 477; Nichols v. Fearson, 7 Pet. 103.
    The holders of the stock in question have a right to make this defense.
    The cases of Post v. Dart, 8 Paige, 639; Lloyd v. Scott, 4 Pet. 205; and Trumbo v. Blizzard, 6 Gill. & Johns. 18, will be found conclusive on this subject.
    See also Brooks v. Avery, 4 Comst. 225; Cummins v. *Ware, 2 Halst. Ch. 73; Doub. v. Barnes, 1 Md. Ch. Dec. 127.
    The case of DeWolf v. Johnson, 10 Wheat. 367, cited by the complainants’ counsel, does not affect this case. • Here there is no new •agreement purging the usury, and creating a new obligation to pay the amount equitably due. Here the defendants are not the purchasers of a mere equity of redemption. They are the absolute alienees of the stock, for a full consideration.
    Aftpr the transfer of the stock to the defendants, Hinton could do no act which can affect their rights.
    The doctrine upon this subject will be found fully discussed in the cases cited from 8 Paige, and 6 Gill & Johnson.
    Where usury statutes exist, questions arise under them as to two classes of paper — first, business paper, and, secondly, accommodation paper.

    The general rule upon the subject of usury is laid down in the Bank of the U. S. v. Owen, 2 Pet. 536.
    As to the transfer of business paper, the rule is clearly laid down in Yanke v. Lockhart & Burton, 4 J. J. Marsh. 277.
    The samo principle is fully recognized in the case of Anderson v. Rapelye, 9 Paige, 483, and in S. C., 4 Hill, 472.
    For the rule as to paper other than business paper, see Munn v. The Com. Co., 15 Johns. 43. See also 1 Hill, 10.
    The point mainly relied upon by the counsel for the complainants is, that the drafts in controversy were an equitable'assignment pro tanto of Hinton’s mail pay, and, as such; might be sold at the market rate of such paper without reference to the usury statute. To this view of the subject there are several answers:
    1. There was nothing to assign. There could not be an assignment without there was something to be assigned.
    2. This argument, if it prove anything, proves too much. Every bill of exchange which is not a fraud, so as to dispense with the necessity of demand and notice, is an equitable assignment pro tanto of the funds of the drawer, which it presupposes to be in the hands of the drawee.
    3. The rule upon which we insist recognizes no such exception or qualification. No trace of anything of the kind is to be found in the books. Wherever the fact exists, that the paper had no validity until transferred, that fact fixes the character of the transaction, and is conclusive. The transaction is ipso facto usurious, and the paper in the hands of tho usurer void.
    If the court should desire to examine the learning upon the subject of assignments, I refer them to Comyn’s Digest, tit. Assignment, chap. 1-3.; Williams v. Everett, 14 East, 582; Clayton, v. Fawcet, 2 Leigh, 184; Leppard v. Vernon, 2 Ves. & B. 54; Brainerd v. Benton, 5 Vt. 97; Hagman v. Sempeyrack; 2 La. 154; Bradley v. - Bridge, Ch. Cas. 194; Mandeville v. Welch, 5 Wheat. 277; Malcolm v. Scott, 1 E. L. & E. 84.

      Finch & Jones. As to usury:
    The contract in-this case was made in the District of Columbia, and is governed by its laws.
    By the law in force there on the subject of interest, all contracts in which a greater sum than 6 per cent, per annum is agreed to be paid for the use of money loaned are utterly void.
    We insist that this contract is clearly usurious and void.
    Under this statute usury may be defined to be any agreement to give and receive for the use of money a greater ^compensation [25 than 6 per cent, per annum. It is true the words of the statute are “for money lent; ” but the above definition of usury implies a loan; for a money loan is any agreement for the use- of money for a stipulated time, at the end of which it is to be returned or replaced with a compensation for its use; and a usurious loan is one in which tho compensation agreed upon is greater than the legal rate.
    The essence of a usurious agreement, therefore, is the undertaking to pay and receive too great a compensation for the use of money.
    But it is contended by the complainants that here was a fair sale of these drafts for their full value, and that such sale is not obnoxious to the imputation of usury; that in such cases discount beyond legal interest may be made on account of risk of insolvency.
    We recognize fully the doctrine that a mere sale of a note or hill, or chose in action, may be made at a greater discount than the legal •rate of interest, and not be usurious, but it must be in fact as well as in form a sale.
    The sale of a note is nothing but a transfer of the right to receive its proceeds, if it shall be paid, or to collect it if collectible. And danger of the insolvency of the maker very properly enters into the estimate of the value of a note; and in such case it is impossible to say that the transaction involves a usurious intent, because it is not susceptible of proof how much of the discount was intended to cover risk.
    But, though there is necessarily, in all loans, more or less risk of ■loss, yet it is obvious that no allowance can be made for this in questions of usury; or, if permitted, forbearance and risk can, together, never be estimated higher than the legal rate of interest, for if this were allowed, usury could never be established, as it would 26] be impossible’*to prove how much of the discount was, in the minds of the parties, set down to the account of risk and how much to forbearance.
    We have said “a note may be sold,” etc. What do these other-words imply? Clearly two things:
    1. ’ That the note has been signed and delivered; for till that is done, it is not a note.

    2. That the proposed seller owns it, has a title to it, and a right to claim and collect the amount of it from a third party.
    It would, therefore, be a perversion of language to say that a man might sell his own note, for it only becomes such by its negotiation.
    With these limitations, then, a sale may be made of a note or other similar claim at a greater discount than the legal rate of interest, and not be usurious, always remembering, however, that the note, etc., so to be sold, must not be the obligation of the party selling; for it is obvious, that if this were allowed, the usurer and his victim would have only to agree to call the giving a note or drawing-an order for the payment of borrowed money a selling of the note or order, and the law would successfully be evaded.
    Hence it has been uniformly hold in New York, and everywhere else where usury laws were in force', that if a note is made only to raise money upon, and is not to become effective until it is negotiated, its negotiation is treated as a loan, and too great discount is, prima facie, usurious; and it makes no difference that the note has been indorsed for the accommodation of the maker. See Belden v. Lamb, 17 Conn. 441; 2 Denio, 621; Jones v. Hake, 2 Johns. Cas. 60; Walker v. Roosevelt, 3 Johns. Cas. 69; S. C., 3 Johns. Cas. 206; Bennett v. Smith, 15 Johns. 335; Munn v. Commission Co., Johns. 44; Yanke v. Lockhart, 4 J. J. Marsh. 277; 9 Cowen, 647.
    *In these cases (as well as many others) this doctrine is so ably argued and so fully sustained, as not to need further argument or illustration.

      Again : though a note, etc., may be sold at any price that may be fairly agreed upon' by the parties, yet if sold at a greater discount than the legal interest, and the seller at the same time agree that the purchaser shall be reimbursed the full face of the instrument sold, this is usury; for this is, in substance and fact, a loan ; and it makes no difference how the purchaser is to be reimbursed, whether by the maker or indorser, or partly by each ; the material matter is, that the seller undertakes that the full sum is positively to be paid. N ow here the usury is not in the sale but in the absolute undertaking for full payment. True, there is a class of cases in which the New York courts have held that the indorser of a note sold at a discount is only liable to his immediate indorser for the amount he received for it and interest, and not the full face of the note sold; and that, therefore, such indorsement is not necessarily usurious; that is, they have refused to presume that the parties intended by such indorsement, etc., a greater liability than the law imposes; and in these cases it will be observed, that the plaintiff only claimed the amount paid by him, with legal interest.
    Such are the cases of Bramin v. Hess, 13 Johns. 52; Cram v. Hendricks, 7 Wend. 569; Mazuzan v. Mead, 21 Wend. 285; 4 Hill, 472.
    Now it is to be observed that in all these cases, the ground on which the courts ruled that the contracts were not usurious, was, that it did not appear that there was any usurious intent, that is, that the parties understood that they were contracting for the payment of anything more than the face of the note sold and interest.
    But in this case, on the contrary, complainants and *Iiinton [28 both understood when the contract was made, that not the $16,000 advanced, with the legal interest, but the full' .$20,000 was to be paid ; and such is the legal effect of these bills or orders.
    The result of this analysis, and of the authorities cited, is, that in all cases, whatever may be the name or form of the transaction, if there be an agreement for the advance of a sum of money for a stipulated time, at the expiration of which it is to be returned or rejilaced in full, together with a compensation for its use greater than the legal rate of interest, the transaction is usurious.
    To this proposition there are no exceptions.

      Bwan & Andrews, in reply:

      The substance of, the transaction was a sale and assignment protanto, of a certain amount of Hinton’s mail pay.
    As to the legal questions arising in this case, we claim:
    1. That the quarterly payments, to become due from time to-time, to Otho Hinton upon his mail contract with the government, were a salable article, and that drafts drawn by him, for them, in favor of the purchaser, would vest in the purchaser the right to such payments, as they should become due. There can be no doubt on this point. 1 Vesey, 280; 5 Paige, 640.
    If there had been no mail contract between the government and Hinton, but the whole transaction had been a mere sham, got up-by the parties, the test, referred to by defendant’s counsel, might be applicable; but it has no application to this case. This test does not apply to a bill of exchange drawn in good faith. See 3 Edw. Ch. 146; 2 Call, 98. See, also, 4 Conn. 156; 2 Hen. & Mun. 14; 2 Munford, 36.
    . It is claimed, however, that if, in making such a sale, any secur 29] ity, whatever, is given to the vendee, that the ^payments to become due from the government shall be in fact made, in such cáse, the sale must be at a discount not greater than the legal rate of interest; amd that, if such sale be at a discount greater than the-legal rate of interest, it is necessarily usurious and void. We have referred the court to the following authorities: 3 Edward’s Ch. 143, 424; 7 B. & C. 458.
    We have also cited 1 Clark, 432; 3 B. Mon. 67; 7 Pet. 110. These authorities are to the point that a sale of a note on credit, with a guaranty or indorsement, if made in good faith, is valid. The case in 7 Peters, 110, arose in the District of Columbia, under the statute relied on in this case, upon the sale of a promissory note, indorsed by the vendor. These authorities, and some others, are collected and commented on in the note to 1 Vesey, Jr. 527.
    The question in all such cases is: Was as a sale, in good faith, contemplated and intended by the parties? If so, the law will not infer something that was not intended. In some cases where the' parties intended a loan of money, but supposed the rate of interest to be lawful, when it was in reality unlawful, courts have held that the parties must abide by their acts, and that the intention can not relieve a party from the consequences of such acts. But no case,, we think, can be cited where the parties intended, in good faith, a purchase and sale of a salable commodity, and a court, against tha intention of the parties, has held that the transaction was impliedly a loan. There' can be no such thing as a sale in reality honest, as between fhe parties', but which is at the same time technically, and in the eye of the law, corrupt, usurious, and void.

    See 4 Hill, 472; Nickols v. Fearson et al., 7 Pet. 103; 17 Conn. 443; 14 Ib. 605; 3 Pick. 186; 2 Day, 483.
    In the ease of Archibald v. Thomas, 3 Cow. 290, it is laid down as a rule, in the construction of contracts claimed *to be usurious, [30 that where a contract admits of two significations, that ought to be adopted which renders it opersitive, rather than that which renders it null and void..
    ■ As to the right of these defendants to raise this question of usury, we have cited De Wolf v. Johnson, 10 Wheat. 367. This case is full to the point, that the holder of an' equity of redemption can not avail himself of this defense, whether he purchased with or without notice.
    See also Sands v. Church, 2 Seld. 347.
    P. B. Wilcox, in substance:
    1. The usurious contract .set out in the answer is substantially different from that proved; the variance is fatal; the defendants must prove the usury as laid.

      “ The rule is established, that any pleading which sets up usury, either as ground of defense, in a plea or answer, or a substantive cause of action, shall set it up in clear and distinct terms; and the terms of the usurious contract and the quantum of the usurious interest or premium must be specified and distinctly set out. The defendant must also prove the usury as laid; and any substantial variance between the allegations and proof is fatal to the defense.” 12 Barb. S. C. 602; 4 Paige, 526; Clarke’s Ch. 362; 8 Paige, 457; 11 Ib. 17; 3 Hill, 565; 2 Sandf. Ch. 15; Comyn on Usury, 203.
    Thus, in 3 Term, 531, a plea of usury stated the forbearance, absolutely till the first of September, 1785. The proof showed that, in one event, the forbearance was to be till that day, but in another event, it was to be till the first of January, 1786. And Lord Hen-yon held the variance to be fatal.-
    So, in 4 Paige, 526, the chancellor held the contract of usury sot out in the answer to be substantially different from that proved, and so held the variance fatal.
    *And in 3 Sandf. Ch. 564, the same rule is applied. In that case [81 the answer, in setting up a usurious contract, alleged that Hetfield advanced $2,000 of the money loaned, and Dayton $600. The proof showed the whole $2,600 advanced by Hetfield. And this the chancellor held to be a fatal variance.
    Sc, in Cowp. 671, the pleading set out the usurious contract as mado on the 21st December, 1774, and the day of payment, December 23, 1776. There was but one witness to prove the contract, and he said the contract was mad,p on the 23d, instead of the 21st December, and was for two years.
    Mr. Davenport argued, “ that, supposing the contract was made on the 23d December, and the forbearancd to be for two years, it was equally usurious, and, therefore, the variance was immaterial.”
    But, “ by Lord Mansfield, there is no color for the plaintiff’s recov- • ering upon this count. The usurious contract must be proved as laid; whereas, the' contract, proved in this case, is totally different from the contract stated in the declaration.”
    So, in 6 Gratt. 287, it is held, “ that a party who pleads usury must prove it; and the burden does not shift to the other party, by proving some circumstances tending to show it.”
    And the reason of the rule is thus given: “It is reasonable that strictness should be required in this, inasmuch as the effect of such pleading, if sustained, is to set aside the entire contract, and to deprive the party lending the money, of even the monev lent.” 12 Barb. S. C. 601.
    See Catlin v. Gunter, 1 Duer, 253, where the cases of variance are reviewed.
    2. But there was no loan at all.
    *The original contract between the government and Hinton being a valid one, and Hinton being allowed by it to draw bills on the post-office department, to be there registered and paid, on condition that Hinton faithfully performed his contract; the subsequent transaction between Hinton and the complainants was not a loan of money, but a sale and transfer of a part of Hinton’s interest in the concern. Western Reserve Bank v. Potter, 1 Clarke’s Ch. (N. Y.) 432.
    See Mumford v. American Life Ins. Co., 4 Comst. 463, where the leading authorities are collected.
    Comyn on Usury, secs. 3, 22.
    The stock was to be transferred in Ohio. The laws of Ohio are, therefore, to govern, because the contract is to be performed in Ohio. Burge on Surety, 74-79; Davis v. Coleman, 11 Iredell, 303.
   Scott, J.

The facts of this case, essential to a proper understanding of the points considered and determined by the court, are substantially these:

About the 1st of'May, 1846, Otho Hinton, of Delaware, Ohio, who then was, and for some years prior thereto had boon, extensively engaged as a contractor for carrying the mails of the United States, being in want of funds, applied to the complainants — who are bankers- — at their office in the city of Washington, for the purpose of raising money, and submitted to them, in writing, the following proposal:,

“ Messrs. Corcoran & Riggs : — I want to sell you three drafts upon the department, of $6,333 each, in all $20,000 — first, 1st of November, second; 1st of February; third, 1st of May, 1847 — for which
I will take $16,000, as follows : First,
*1 want, 12th inst.............................................$1,224 80
One draft or certificate of deposit, payable at June..... l-,600 00
Do. one certificate of deposit, payable 14th June............. 1,500 00
Do. one certificate payable 14th June........................... 2,500 00
Do. one 15th July..................................................... 2,500 00
Do. one for certificate in favor of the Bank of Delaware,
Delaware, Ohio (1st July).................................... 5,000 00
Do. cash, Virginia or western paper............................ 675 00
Do. one sight draft upon New York............................. 1,000 00

Considerable negotiation followed,- but finally, about the 20th of May, 1846, the parties came to an agreement, in pursuance of, which three drafts were drawn by Hinton on P. G-. Washington, auditor of the post-office department, Washington City, each calling for $6,666.66, and payable'out of his pay for transportation of the United States mails. One of these drafts was dated May 14, 1846 • and was payable to complainants, November 1, 1846 ; the other two were drawn in favor of, and indorsed by Peter Voorhes, and were payable respectively on the 1st February and 1st May, 1847. Voorhes was a mere accommodation indorser. It was, at the same time, agreed that Hinton should further secure the payment of these drafts at maturity, by giving the complainants a lien upon 145 shares of the capital stock of the Delaware County Branch of the State Bank of Ohio, for which he held a certificate, and on which he had paid $9,000. The three drafts were then delivered to complainants, and Hinton received from them, in consideration of the px’emises, $16,000, partly in cash, and partly in certificates of deposit, and drafts payable at sight, or on short time, and at such points as his convenience dictated.

Early in June, 1846, Hinton, in pursuance of the agreement for further security, transferred to complainants his said certificate of stock, and also executed and delivered to thejn a power of attorney, authorizing them to sell and transfer said stock on the books of the 34] bank, with a condition *of defeasance, upon the payment of the drafts at maturity. The Delaware County Bank, of which the defendants, Powers and Williams, then were, and still are, directors, and Powers also cashier, had previously consented that Hinton might transfer his stock to complainants, and had caused an entry to that effect to be made on its books; and had also given Hinton a certificate, under date of June 1, 1846, signed by said cashier, and which Hinton exhibited to complainants, setting forth that Hinton was owner of said stock, had paid $9,000 thereon, that he had full power to transfer it, that, according to the charter and by-laws of the bank, stock could be transferred by power of attorney, that the directors had knowledge that a transfer was about to be made to Corcoran & Riggs, and had made an entry on their books of their consent thereto, and that, on jmesentation at the bank of a power of attorney for that purpose, a transfer would be made on their books and a now certificate of stock issued. Some correspondence ensued, shortly afterward, between complainants and the bank, in which, by way of answer to inquiries on that subject, complainants were informed by the cashier, that the bank had full knowledge of their power of attorney,, and that complainants could, under it, at any time, obtain a transfer of the stock to themselves, by directing the bank to enter the same on its transfer books.

The drafts payable February 1, and May 1, 1847, were each protested at maturity for non-payment, and due notice was given to charge the parties. Hinton failed early in 1847, and is still hopelessly insolvent.

On the 22d of February, 1847, Hinton transferred on the boobs of the bank, and with its assent, and for a good and valuable consideration, the said 145 shares of stock, to the defendants, Powers and Williams, in pursuance of an agreement made by him with 35] them in December, 1846, when *they became sureties for him in large sums, on promissory notes. After the dishonor of the-drafts, complainants forwarded Hinton’s stock certificate and power of attorney to the defendant, Powers, as cashier of the bank, and requested him to transfer the stock to them, which Powers declined doing, and claimed, for himself and Williams, to hold said stock under Hinton’s absolute assignment and transfer to them.

Complainants thereupon filed their bill in the court-of common-pleas of Franklin county, against Powers and Williams, the Delaware Bank, Hinton, and Yoorhes, seeking mainly to subject this-bank stock to the payment of' a large balance still due them on the two protested drafts. Answers were filed by Powers and Williams, and by the Delaware Bank. Hinton failed to answer, and, during the pendency of the cause in the common pleas, filed a stipulation waiving the defense of usury and all other defenses, and consenting that a decree might be taken against him for the sum which might be found due on the drafts. Such decree was accordingly rendered at the March term of said court, 1849.

The answer of the defendants, Powers and Williams, among other matters of defense, avers that the contract between complainants and Hinton was made at Washington City, and to be performed there; that at the time of the making of the. contract, and for a long time before, and ever since, the following statutory provisions were in full force there as law:

“ That no person, upon any contract, shall exact or take, directly or indirectly, for loan of any moneys, above the value of six pounds, for the forbearance of one hundred pounds for one year; and so after that rate for a greater or less sum, or for a longer or shorter time.”
“ That all bonds, contracts, and assurances, whatever, made *for the payment of any principal money lent, or covenant [36-to be performed upon or for any usury, whereupon or whereby there shall be received above the rate of six pounds in the hundred for money, as aforesaid, shall be utterly void,” etc.

The answer charges that Hinton gave the three drafts before-mentioned, amounting, in the aggregate, to $20,000, for a loan of $16,000; that the contract of the parties was corrupt and usurious, in providing for the payment of interest on said loan at a rate-greater than that of six per centum per annum, and was therefore, by force of said statute, utterly void.

After the decree was taken*against Hinton, his deposition was* taken in this cause by the defendants, and on the hearing, complainants obtained a decree in their favor, from which the defendants, Powers and Williams, appealed, and the case was reserved by the district court for decision here.

. We do not deem it necessary to consider any of the points made by counsel in the case, except such as arise from the defense on the ground-of usury. The first and main question arising from this branch of the defense, is, was the contract of complainants with Hinton usurious ? By the statute of Maryland, in force at Washington City, and which, being the lex loci of the contract, must govern the case, all bonds, contracts, and assurances, whatever, whereby there shall be reserved an interest above the rate of six per cent, on money loaned, are declared to be “ utterly void.” Now it can not be doubted that, if the $16,000 was loaned by the ■complainants to Hinton, the contract is void for usury; for the drafts, having an average time of but nine months to run, were discounted at the rate of 25 per cent. — equivalent to 33-J- per cent, per annum. The subject of inquiry, then, is, what was the real 37] character of this transaction ? *Was it a purchase of three bills of exchange, or a loan of money?

The form which the parties may have seen proper to give to their ■contract is by no means conclusive of its real character; for the ■statute may not be evaded by any artifice or device of the parties. The question is, not what-have they called the transaction, but, what do thq facts and circumstances require the court to call it?

In determining the character of contracts of this kind, a distinction is well taken between business and accommodation paper. A bill or note valid in its inception, and furnishing a good cause of .action as between the original parties to it, may be sold as a marketable commodity, at such rate of discount as the parties may think proper, without subjecting the purchaser to the imputation of usury. But it is otherwise, where the bill or note claimed to have been sold is mere accommodation paper, void in its inception, fictitious in its -character as between the original parties, and on which no action could be maintained till after its transfer to a third party. Such is the test established in the courts of New York (15 John. 55), sanctioned by the general current of authorities in other states, and recognized and approved by the Supreme Court of the United States in Nichols v. Fearson, 7 Peters, 103.

Let us apply this test to the case*-under consideration. Hinton is in urgent need of funds; his credit will not enable him to borrow money at the legal rate of interest; and his necessities are such that he is willing to submit to the payment of interest at the rate of 33J per cent. He has no choses in action or evidences of indebtedness-against the post-office department to sell — that department owes-him nothing. He applies to complainants (from whom, as the evidence shows, he has been in the habit, for years, of obtaining advances in a similar manner), and *to procure'$16,000 from them, [38 he proposes to draw and sell to them three drafts on a fund which has no present existence, and which, it is quite possible, may never exist. These drafts are created at the time and for the occasion; they are made payable' to Voorhes, who neither has, nor is expected to have, any beneficial interest in them, for the sole purpose of placing Yoorhes in the legal relation of indorser, and thereby furnishing additional security for the payment of the sums named in the drafts; and the complainants are fully apprised of the fictitious character of the bills as between Hinton and Yoorhes. .

We are satisfied that the application of the test referred to, and which we regard as sanctioned both by reason and authority, requires us to pronounce this transaction at least, prima facie, a loan of moneys, usurious, and, as a contract, “ utterly void ” by the statute. It is, in effect, and in truth, a borrowing of $16,000, for which the borrower and a surety engage to return $20,000, in three equal payments, at six, nine, and twelve months from date; these payments being secured by giving the-lender a lien upon a large amount of bank stock, and what counsel call an equitable assignment ” of the pay which may become due to the borrower for future services, to the extent of $20,000.

The legal presumption which arises from the admitted facts in this case, is confirmed by the testimony of Hinton, whose competency as a witness is not questioned. If any credit can be given to his testimony, there is no room for doubt as to the'character of the transaction. If, then, as we hold, the contract itself be void for usury, it is well settled that the securities, being tainted with usury, are also void.

But it is claimed that the defense of usury is personal to Hinton, and can not be interposed by the present defendants, his assignees. We do not think the objection well taken. *This is not the case [39 of the purchase of a mere equity of redemption,- in which the purchaser, by recognizing in the terms of his purchase the incum ■ brance of the mortgage, may be estopped from afterward questioning its validity. But here the assignment is general and unqualified. The defendants claim, under Hinton and in privity with him; and -the contract itself being void for usury, the collection of the tainted -securities can not be enforced either against him or against others who succeeded by assignment or otherwise to .all his rights in the premises. The authorities cited by counsel for the defendants .abundantly sustain this position. Nor is the right of the assignees to set up this defense affected by the fact th.at they took the assignment with full knowledge of complainants’ claim. A contract void for usury can confer on the complainants no rights to be enforced in this court or respected by any one.

We think it clear, upon principle, that the act of Hinton, after the suit brought, in waiving, as to himself, the defense of usury can not affect these defendants, who claim under him by a prior purchase and transfer.

We have only to add, as to the question of variance presented by ■counsel,,that we think the usury proved is substantially the same with that averred in the answer.

The bill must be dismissed.

Brinkerhoee and Bowen, JJ., concurred.

Bartley, C. J., and Swan, J., having formerly been of counsel in this case, did not participate in its decision.


source: Caselaw Access Project

author: Bartley, C. J.

license: Public Domain

text:
    *The State of Ohio, on the relation of the Attorney-General, v. Christian C. Neibling.
    'The period for the termination of the office of clerk of the court of common pleas, held by simple appointment to fill a vacancy, is not fixed by the. constitution, but subject to legislative regulation.
    By the statute of the 31st of January, 1852, relating to clerks of the courts, the office of clerk pro tempore of the court of common pleas terminates whenever the successor, elected at the regular election, shall have qualified himself, by a compliance with the law, in giving .bond and taking the oath of office.
    In case of a vacancy in the office of clerk of the court of common pleas, the successor, elected by the electors of the county, is elected for the full .term of three years, which will commence from and after the day of his election.

      Information in the nature of a quo warranto.

      H. H. Hunter and The Attorney-General, for the plaintiff.

      Jones & Smith, and Rage & Renick, for the defendant.
   Bartley, C. J.

This proceeding was instituted to contest the right of the defendant to hold the office of clerk of the court of ■common pleas in Pickaway county, as against D. W. McPherson; who had been duly elected to said office and qualified. It appears that a vacancy occurred in said office in June, 1854, by the death of Silas J. Ambrose, who had been elected to the office in October, 1851. And on the 8th day of June, 1854, the commissioners of Pickaway county appointed the defendant, Neibling, to fill the vacancy. who accepted the appointment, and entered upon the discharge of its duties. On the second Tuesday of October, 1854, D. W. McPherson was duly elected to said office, and, after having given bond and taken the oath *of office, and in „all respects [41 qualified himself as the law directs, proposed to enter upon- the discharge of the duties of the office ; but the defendant refused to surrender the same and permit him so to do, claiming to hold the same by virtue of his appointment until the second Monday of February, 1852, at which time, and not before, as he claims, the-term of office, of McPherson would commence. '

The case presents the question of the constitutionality of a provision in the act of the general assembly of the 31st January, 1852, in relation to the election of clerks of courts. The 6th section of the act (see Swan's Rev. Statutes of Ohio, 174) contains the following : “ In case a vacancy shall happen in the office of clerk, in any county in this state, by death, resignation, or otherwise, the commissioners of said county are hereby authorized to appoint a clerk pro tempore, who shall hold his office until the October election next ensuing such appointment, and until his successor shall be elected and qualified: Provided said appointment shall have been made at least fifteen days prior to said October election; otherwise said clerk, so appointed, shall continue in office, under and by virtue'of his said appointment, until the October election to be held in the year next thereafter, and until his successor shall' be elected and qualified.” The legislature h.as thus expressly provided, that the office of clerk of the court, held by appointment, shall terminate as soon as the successor shall have been elected at the regular October election, and qualified. This statutory enactment settles the controversy in this case, if the statute be not plainly in conflict with some provision in the constitution of the state.

The term of office of a clerk of the court, elected by the electors of the county, is, by the 16th section of the 4th article of the con-42] stitution, expressly limited to the period of three tyears. And although the constitution has fixed the periods for the commencement and termination of many of the offices, yet in regard to the clerk of the court, no invariable peripd of the year is prescribed. The provision of the'schedule in the constitution, is limited to the official terms of the clerks elected at the first election after the constitution took effect. The words of the schedule (see section 4) are: “ The first election for clerks of the courts of common pleas, shall be held on the second Tuesday of October, 1851; and the official term of said clerks, so elected, shall commence on the second Monday of February, 1852.”

As the official,, term is a specified number of years, it would, in future, date from the day of the month (which was the 9th day of February), and not the day of the week in that month, named for the commencement of the first term. And should no vacancy over arise in the office, and each clerk elected from the first, serve out his full term, the 9th day of February would continue to be the time for the commencement of each successive term. But the constitution does not make this period the time for the commencement of the term of office of each succeeding clerk ; neither does it provide, that, in case of a vacancy in the office, before the expiration of the regular term,' the successor, whether appointed or elected, shall serve or hold the office for the remainder of the unexpired term. In regard to the office of judge of the Supreme.Court, and of judge of the court of common pleas, the constitution provides, that, in case of vacancy before the expiration of the regular term, the vacancy shall be filled by appointment by the governor, until a successor is elected and qualified; and that such successor shall be elected for the unexpired term. But the constitution contains no such provision in regard to the office of clerk of the coux’t. It sim43] ply provides for *the élection of the clerk by the electors of the county, and fixes the term of the office at three yeax’S, and until his successor- shall be elected and qualified. And it does not fix the time for the termination of the office of the clerk of the court, who holds his office by appointment to fill a vacancy. But it is provided in the 20th section of. the second article of the constitution, that “ The general assembly, in cases not provided for in this constitution, shall fix the term of office,” etc. Now, the case of a clerk of the court holding his office by appointment to fill a vacancy, is one of the cases in which the constitution has not fixed the term of office, but left that to be done by the legislature. In regard to the office of judge of the Supreme Court, and of judge of the common pleas, held by appointment to fill a vacancy, the constitution has provided, that the office shall continue until a successor shall be elected and qualified, whose election shall take place at the first annual election that occurs more than thirty days after the vacancy shall have happened. Section 13, article 4.

That the general assembly had the power to provide that the office of the clerk of a court apjiointed to fill a vacancy should continue until the 9th of February, Or some other convenient day, after the time of the election of the successor, and that the term of the successor elected by the people should commence from such specified time, would, perhaps, not be controverted. But instead of so doing, the general assembly has followed the analogy of the provision contained in the constitution, in regard to the office of judge held by appointment to fill a vacancy, and provided that the clerk- of the court appointed to fill a vacancy shall hold his office until the next ensuing October election, at which the successor shall be elected, and thereafter until he shall have been qualified. It does not appear, therefore, that this legislative enactment is in ^conflict with any provision of the constitution ; on the con- [44 trary, it appears to fall within one of the express powérs conferred on the legislature.

It is urged, on behalf of the defendant, that by legal interpretation the statute does not authorize the person regularly elected after a vacancy has occurred in the office of clerk to enter upon the duties of the office prior to the second Monday of February, upon the .alleged ground that the term “ qualified,” in the statute, imports that the period fixed for the commencement of the term of office has arrived. This is giving too enlarged a meaning to the term “ qualified,” which imports nothing more than that the person elected has complied with the requisitions of the statute, by giving bond and taking the oath of office; so that, by the true interpretation of the statute, the clerk elect has -the right to the office as soon,, after his election is legally ascertained, as he can .qualify.himself, by giving bond and taking the oath'of office.

It is proper, in connection with the subject, to add that the person elected clerk of the court can not prolong the term of his pre•decessor at discretion, and then, after qualifying, have his full term ■of three years. If this could be so, one clerk could, by prolonging "the term of his predecessor, intrude, at discretion, on the appropriate term of his successor. Where, after the first election under "the present constitution, a vacancy has occurred in the office of ■clerk of the court of common pleas, and a clerk has been regularly ■elected, by the electors of the county, to fill the vacancy, his term ■of three years must date from and after the day of the election.

Judgment against the defendant.

Swan, Brinkerhoee, Bowen, and Soott, JJ., concurred.


author: J. R. Swan, J.

text:
    *The Stark County Bank v. Archibald McGregor, Auditor of Stark County.
    Under the 19th section of the tax law of April 13, 1852 (Swan’s Rev. Stat. 906), all the assets and resources of a bank, whether specie or balances in other banks, must, if employed in any manner whereby the bank obtains or reserves a per cent., premium, profit, or a consideration, be averaged for taxation. Specie unemployed, not on hand for sale, and from which the bank derives no profit, etc., is not required to be returned to the assessor. So balances due from other banks, upon which no interest, profit, or consideration is reserved or received, are hot required to be returned to the assessor. »
    'The forms and instructions of the auditor of state, made out in conformity to law, must be used by the revenue officers.
    If the auditor of state direct statistical, financial, or other items of information not required by law, to be made out by a tax-payer, the auditor can not enforce the performance of such a burden by rejecting the return of such tax-payer duly made out in conformity to law.
    The Stark County Bank demands a preremptory mandamus ■Against the auditor of Stark county, commanding him to accept the return of the bank, made under the act of April 13, 1852, for the assessment and taxation of property.
    The facts of the case are stated in the opinion of the court.

      Mason & Estep, and S. J. Andrews, for applicants.
    The Attorney- General, for defendant.
   J. R. Swan, J.

The Stark County Bank, by her president and cashier, tendered to the auditor of Stark county, in May, a. d. 1854, the following return of the assets of the bank for taxation:

“ To the Auditor or Stark County, Ohio : The following is a statement of the average amount of notes and bills discounted or purchased by the Stark County Bank at *Canton, in said [46 county, including all the loans or discounts of said bank, during the year ending May, 1854, whether originally made or renewed during the year aforesaid, or at any time previous; whether made on bills of exchange, promissory notes, bonds, mortgages, or any other evidence of indebtedness (at their actual value in money); whether due previous to, during, or after the period aforesaid, and on which said bank has at any time reserved or received, or is entitled to receive, any profit or other consideration whatever, either in the shape of interest, discount, exchange, Or otherwise. And, also, of the average amount for the year aforesaid, ‘of all moneys, effects, or dues,’ which, for the period aforesaid, is $25,573.84, which, by law, the said bank is required ‘ at all times to have on hand,’ and whi'eh is not loaned, invested, used, or employed, with a view^ to profit. Parker Handy, President.
“ H. B. Huribut, Oashier.”

[Here follows, in the return, a statement of the assets referred to in the affidavit.]

The return by the bank of its assets for taxation was made out under the 19th and 20th sections of the act of April 13, 1852, (Swan’s Rev. Stat. 906); which provide as follows:

“ Sec. XIX. It shall be the duty of the president and cashier of every bank or banking company that shall have been, or may hereafter be, incorporated by the laws of this state, and having the right to issue bills for circulation as money, to. make out and return under oath, to the auditor of the county in which such bank or banking company may be situated, in the month of May, annually, a written statement containing:
“ 1. The average amount of notes and bills discounted, or purchased, by such bank or banking company, which amounts shall in-47] elude all the loans or discounts of such *bank or banking company, whether originally made or renewed during the year aforesaid, or at any time previous; whether made on bills of exchange, notes, bonds, mortgages, or any other evidence of indebtedness (at their actual value in money), whether due previous to, during, or after the period aforesaid; and on which such bank or banking company has at any time reserved or received, or is entitled to receive, any profit, or other consideration, whatever, either in shape of interest, discount, exchange, or otherwise.
“ 2. The average amount of all other moneys, effects, or dues of every description, belonging to such bank or banking company, loaned, invested, or otherwise used or employed with a view to profit, or upon which such bank or banking company receives, or is entitled to receive, interest.
“ Seo. XX. To ascertain the amount of the notes and bills discounted and purchased, and all other moneys, effects, or dues, of every description, belonging to such bank or banking company, loaned, invested, or otherwise used or employed, with a view to profit, or upon which such bank or banking company receives, or is entitled to receive interest, to be returned as aforesaid, there shall be taken, as a criterion, the average amount of the aforesaid items for each month during the year next previous to the time of making such statement, if so long such bank or banking company shall have been engaged in business; and, if not, then during such time as such bank or banking company shall have been engaged in business, and the average shall be made by adding together the amount so found belonging to. such bank or banking company in each month so engaged in business, and dividing the same by the number of months so added together.”

The return of the bank is in the precise language of the statute. 48] By its positive affirmation it precludes any inference *t.hat anything required by the law to be returned had been omitted.

It is, however, claimed by the auditor of the county, acting under the instructions of the auditor of state : 1. That specie remaining in the vaults of the bank, and not held for sale or exchange, or otherwise employed for profit, should be returned for taxation; and, 2. That balances due from other banks, not on interest and unemployed with a view of profit, should also be returned for taxation.

If the legislature had intended to make the intrinsic value of the .property of a bank tbe basis of taxation, they would simply have required the assessors to return the amount and the market value >of the stock. This would have represented, in general, the true value of the franchise and the property of the stockholders in the corporation. But it is obvious that the market value of the stock oi a bank is altogether disproportioned to the amount of business done. A bank that obtained interest or profit only on an amount equal to its capital stock, or the market value of its capital stock, would yield very meager profits to stockholders.

Besides, the most valuable franchise of a bank is its power to issue bank-bills, making its credit a substitution for coin, and thus enlarging its resources and means of profit. Hence the constitution and general assembly have rejected what a bank really owns, and taken, as the basis of taxation, what it employs.

This rule has probably originated in the artificial character of the effects of a bank,' from which it derives its profits, as distinguished from those of individuals.

A bank that borrows money upon which it pays interest, is competing with its customers, and engaged in operations quite foreign from the object of its organization. Legitimate banking is lending, and never borrowing, on interest. *A bank uses its [49 circulation, a safe margin of its current deposits and other artificial resources at a profit; but pays no interest on the means it employs. These means possess all the elements oí capital or money. In the ordinary course of business, therefore, there is this difference between a bank and an individual: while the former can use its own notes, its circulation and other credits as money, and at a profit without any deduction from, or charge upon, those profits on account of interest upon what it owes, an individual must, in general, pay interest on his own notes and on his borrowed capital.

Hence, if a bank were assessed for taxation, on the average amount of its resources employed at a profit, and without deduction, and an individual were assessed for taxation on the amount of his personal assets, whether employed at a profit or not, after deducting his debts upon which he paid interest, practically there would be so little inequality between the two, that both would, probably, insist that they bore too large a share of the burdens of the state.

But it is our province to simply interpret the legislative will. The law under consideration recognizes every operation of a bank whereby it obtains or reserves a per cent., premium, or consideration, to be returned to the auditor of the county for taxation. Not what it owns, but what it employs at a profit. This is the substance of the statute, and so clearly expressed that no other interpretation can be given to it.

A bank keeps specie in its vaults for the purpose of redeeming its circulating bills. The circulation is used for profit, and is represented in loans and discounts and other financial operations, through which the circulation is taxed.

While the specie thus remains in the vault of the bank, and no consideration or profit is derived from its remaining there, we can 50] not perceive how it can be said that it is money *used or employed with a view to profit, any more than money laid away by a citizen, in his safe, for the purpose thereafter of paying debts, can be said to be employed while in the safe with a view to profit. We should have more readily apprehended the views of the defendant upon the construction of the 19th section of the tax law, if the statute had required a return of such moneys as were not used or employed with a view to profit.

But it is insisted that a bank should also make a return and be assessed upon all its banking property: that is, it should pay a tax on its personal property, like individuals, and then pay a tax on the same property when used or employed with a view to profit. It would require a very explicit and clear expression of legislative will to induce us to suppose that the general assembly intended to tax property invested in banking twice. The constitution of the state intended to provide that banks should p>ay, on such of their resources as were employed in banking, the same tax that individuals pay on their property. The 19th section of the tax law expresses more fully and clearly the same rule. Hence the statute says nothing about the amount of property owned by a bank, or the value of its stock. It looks to the use it makes of its property, and its daily operations, for the basis of taxation — a basis much larger, and demanding a greater tax, than a. mere property valuation.

Specie, therefore, in the vault of a bank, not used for sale or profit, or otherwise employed, is not required, by the statute, to be returned to the assessor. And for the same reason, balances due from other banks not on interest and unemployed, do not come within the provisions of the statute. Specie, however, kept for sale, and balances due from, or deposits made in other banks, which are on interest, are dues employed with a view to profit and are required to be assessed. So drafts upon balances or deposits not on interest, *sold or otherwise disposed of at a profit, come [51 within the provision of the law.

The return of the Stark County Bank is in accordance with the requirements of the law.

It is insisted», however, that, inasmuch as the statute authorizes the auditor of state to furnish general forms and instructions to the auditors of counties (Swan’s Rev. Stat. 75, sec. 19), and as the auditor of state has furnished a form which demands of banks a return of the specie in their vaults, etc., it is the duty of the banks to comply with this requisition of the form.

The forms furnished by the auditor of state, so far as they comply with the requirements of the statute, must undoubtedly be used. This is necessary to give uniformity to the returns of assessors, and to prevent confusion in the fiscal offices of the state. But if the auditor of state requires citizens or banks to make up statistical, financial, or other items of information, not required of them by law, it is clear that the auditor of state can not enforce the performance of such a burden by rejecting the return of a citizen or a bank duly made out according to law. Indeed, the statute specifically requires the forms and instructions of the auditor of state to be made out in conformity with the laws in force.”

A peremptory mandamus is granted.

Brinkerhoee, Bowen, and Scott, JJ., concurred.

Bartley, C. J., dissented.


author: *J3 artley, C. J.

text:
    The United States, on the complaint of J. W. Fitch, U. S. Marshal, v. James Collier.
    Where a party has failed in his suit, on account of having mistaken the form of his remedy, the court will not set aside the judgment, and allow him to amend by substituting a form of proceeding under the code of civil procedure, for a form of proceeding not instituted under the authority of the code.
    Motion to amend proceedings in certiorari.

      D. O. Morton, U. S. district attorney, for the United States.

      William Kennon, for defendant.
   *J3 artley, C. J.

The original proceeding was a writ of habeas [62 corpus, under which a judge of the court of cpmmon pleas in Jefferson county, discharged James Collier from arrest under a warrant issued by the U. S. district judge for the district of Ohio. The attorney for the United States sought to reverse this proceeding of the state judge, by a writ of certiorari issued, after the code of civil procedure in this state had taken effect, whereby the writ of certiorari was abolished. This court having dismissed the proceeding in certiorari for want of jurisdiction, the attorney for the United States now asks leave to amend, by substituting a petition in error for the proceeding in certiorari.

The stretch of power and enlarged exercise of discretion under the statutes of jeofails and amendment, asked in this case, are justified only by the urgency and magnitude of the subject-matter in regard to which they are invoked. The learned attorney for the United States has been frank enough to inform us, that if the amendment be allowed to be made, he will be content to have the case decided against the United States; his object being simply to-have a judgment in this court, which he can use as a basis for an appeal to the Supreme Court of the United States, with a view of having that tribunal settle the law of this country, for the instruction and guidance of the judicial officers of the state, in the exercise-of their powers under the writ of habeas corpus, in cases of arrests-on jDrocess issued by the authority of the federal <- courts. It is thought, that such a decision from the central judicial power of the Union, would have a very salutary regulating influence, in producing uniformity of decision, and preventing conflict of authority.. We are not insensible to the importance of uniformity of decision, and an overruling, regulating power to produce harmony in the exercise of authority by the federal and the state courts. But. 63] while some of us have some scruples, *and others even more than scruples, about the supervisory power of the federal courts over the state courts, wo are none of us enabled to perceive how it would tend to the furtherance of justice, to allow a party to amend a proceeding in this court, with a simple view of placing himself in a condition to invoke the exorcise of an alledged supervisory power, in the Supreme Court of the United States, over this court. Amendments at common law rested in the discretion of the court, and were allowed only in furtherance of justice. And under the code of civil procedure, we do not find any authority extending this discretion so far as to enable a party, after he has failed in his action, and judgment has been entered against him, to amend by substituting a form of proceeding, under the code, for a form of proceeding not instituted under the authority of the code. And if any warrant could be found for' such a stretch of authority, certain it is, it would never be exercised except in a very clear and strong case, demanding it in the furtherance of justice.

■ Whatever may have been the merits of the original proceeding in the federal court, under which Collier was arrested, we have been unable to perceive in this proceeding in error anything calling for any unusual exercise of discretion by this court in the furtherance of justice. But the consideration upon which the plaintiff in error acts, goes far beyond this case, and seeks a decision by the supreme federal tribunal, for the government and instruction of state judges- and state courts, in the exercise of their authority under the writ of habeas corpus generally. This may be a matter of very great importance. But it is unnecessary here to consider the extent of the great conservative and supervisory power of the supreme judicial power of the United States over the state tribunals. As there is nothing in this case requiring it, wo feel no disposition SO' far to enlarge our views in furtherance of justice, as to exercise an ^unusual discretion of at least questionable authority,' for the [64 mere purpose of furnishing an occasion to invoke the interposition of the judicial power of the United States.

Motion overruled.

Swan, Brinkerhorr, Bowen, and Scott, JJ., concurred.


text:
    Humphrey H. Leavitt and Thomas Lee, Executors of the last Will and Testament of Hans Wilson, deceased, v. David Morrow.
    An accord and satisfaction, moving from a stranger or person having no pecuniary interest in the subject-matter, if accepted in discharge of the debt, constitutes a good defense to an action to enforce the liability against the debtor.
    Petition in error, to reverse the judgment of the district court of Jefferson county.
    The original action was assumpsit instituted by the defendant in error against the plaintiffs in error, in the court of common pleas of Jefferson county, in November, 1852.
    The declaration contained simply the common counts. The executors, besides the plea of non-assumpsit, with the usual notice of set-off, filed the following special plea in bar:
    “And for further plea, the said defendants say that, after the ^making of said supposed promises in the declaration men- [72 tioned, and after the decease of said Wilson, viz., on the.2d day of June, 1852, Jane Wilson, the widow of said Hans Wilson, deceased, and a devisee and legatee under his last will and testament, at the special instance and request of the said plaintiff, and as an accord and satisfaction of his'supposed claim against the estate of said Wilson deceased, at said county, caused and procured to be conveyed by William Kelly and Maria his wife, a part of the south half of section 11, township 7, and range 2, in Jefferson county, to one Benjamin McFarland, a trustee selected by the said David Morrow, to have and to hold the same in trust for the use of the said David Morrow and Rebecca his wife, during their joint lives and the life of the survivor, and at the death of the survivor of the said David and Rebecca, to convey the estate to the heirs at law of said David Morrow, being the persons who would have taken the same by descent, in the case that said Morrow had died seized and intestate. And the said David Morrow then and there accepted the conveyance in trust, in full accord, satisfaction, and discharge of his said supposed claim against the estate of the said Hans Wilson, deceased; and this they, are ready to verify. Wherefore they pray judgment,” etc.

      At the May term, 1853, a demurrer was filed to the special plea, assigning as causes:
    1. That the facts as stated-do not amount to an award and satisfaction.
    2. That the said Jane Wilson had no interest in the subject-matter.
    3. That the said plea is in other respects informal and insufficient in law.
    At the same term the demurrer was argued and overruled.
    The plaintiff then replied as follows:
    “And said David Morrow says that, by reason of anything 73] *by the defendants in their plea secondly above pleaded, he ought not to be barred from having his action against the aforesaid defendants, because he says that he did not accept or receive the said conveyance in trust, as in said plea set forth, in full satisfaction and discharge of the said several promises, or either of them, or of the damages sustained by him by reason of the non-performance thereof, in manner and form as the said defendants alleged; and this he prays may be inquired of by the country,” etc.
    Upon this issue the case was tried in the common pleas, and verdict and judgment being for the defendants, Morrow, the plaintiff, appealed. Iii the district court, at the August term, the cause was again tried, and the verdict and judgment was for the plaintiff, for $897.75, and costs of suit; to reverse which this writ of error is brought.
    It appears by the bill of exceptions taken on the trial, that in the fall of 1848, Wilson, the testator, inquired of Morrow whether he had got a place to suit him. He answered he had not, and Wilson then said: “ You had better give me the money; I will put it out at interest, and whenever you call or get a place to suit you, you shall have the money.” It was $700. Wilson said not to be in a hurry; there would soon be plenty of places. The plaintiff, thereupon, rested.
    The defendants then gave in evidence the will of Hans Wilson, and the record of the election of Jane Wilson, the widow, to take the provision made for her in lieu of dower.
    The defendants also gave in evidence a deed from Nelly and wife to McFarland, as trustee of said tract of land in the plea described, and upon the trusts in the special plea mentioned; and it was admitted by the plaintiff as in evidence, that the money to pro■cure the aforesaid deed was advanced and paid by Jane WilsonT widow of Hans Wilson, and that McFarland, the trustee named therein, was selected by the plaintiff below, for that purpose.
    *The defendants thereupon called Samuel Wilson, a witness, [74 who testified that in May or June, 1852, after the death of Hans Wilson, he saw the plaintiff, and said he understood he had got •some money from Mrs. Wilson. He replied, that he had got some ■money from her, which was in lieu of $700 ho had got from Mr. Wilson, and which Mr. Wilson had got back. He said ho had bought land with the money — land on Island creek — from a man by the name of Kelly.
    And no further evidence having been given, the court charged the jury as follows:
    “ That if they found, from the testimony, that Wilson received money from the plaintiff, which Wilson had previously given to him, absolutely, the law implies a promise to repay it; but, if.the money was given by Wilson to .the plaintiff, to be invested by him in any particular way, and that investment failing to be made, and the money returned by the plaintiff to Wilson, then the law raises no promises on his part to repay it.
    “ If the jury find that Wilson had received the money of the plaintiff, the plaintiff was entitled to recover, unless the defense set up had been established.
    “ They will then inquire whether Jane Wilson, the widow of Hans Wilson, agreed with the plaintiff to accept money or land) in satisfaction of his claims against the estate of the said Hans Wilson, and whether the money or land was actually given by her and received by him, in satisfaction of said claim.
    “ And, if they so find, they will then proceed to inquire whether the said Jane Wilson had a pecuniary interest in making said arrangement and satisfaction, and that it was for the benefit of her own estate, that the claim against the estate of Hans Wilson should be satisfied and discharged: then the plaintiff would not be entitled to recover.
    *“ But if they should find the agreementbetween J ane Wilson [75 and the plaintiff to give, and the actual giving by her and acceptance by him of money or land in satisfaction of the plaintiff’s claim against the estate of Hans Wilson, it would not bar the right of the plaintiff to recover in this action, unless she had such pecuniary interest to make such arrangement for the settlement of the claim. against her husband’s estate; and she would without such interest be a mere stranger; and satisfaction by a stranger to the estate of said Hans Wilson would be no bar to the plaintiff’s recovery.”
    After verdict a motion was made for a new trial, on the ground of error in the instructions of the court to the jury; which motion was overruled, and a bill of exceptions taken. It is now assigned for error, that the court erred :
    X. In refusing to set aside the verdict and grant a new trial.
    2. In charging that accord and satisfaction could not be made by a stranger.
    3. In charging that Jane Wilson, the widow of the testator, was a stranger, unless she had a pecuniary interest in discharging the debt to the plaintiff.
    4. In submitting to the determination of the jury the question whether Jane Wilson, under the will of her late husband, was, or was not, pecuniarily interested in discharging the debts against the estate.

      Stanton & McCook, for plaintiffs in error.

      Miller & Sherrard, for defendant in error.
   Bartley, C. J.

The main question presented for determination in this case is whether an accord and satisfaction accepted in discharge of a debt, but coming from a stranger or person having no pecuniary interest in the subject-matter, is a legal defense to an 76] action against the debtor, or his *legal representatives. The charge of the district court to the jury was in the negative of this proposition ; and if the court erred in this the judgment must be reversed.

It requires powers of discrimination looking far beyond the justice of the case to see the reason of the rule that accord and satisfaction, although moving from a stranger, yet accepted by the creditor, and set up in the plea of the defendant as a discharge of the debt, does not constitute a legal defense to the action. It is said, in some of the early adjudications touching this subject, that the reason of the rule is that the person from whom the accord and satisfaction comes is not privy to the contract giving rise to the debt. This reason might give just cause to the creditor to refuse to receive the. satisfaction from a stranger or third person, not hnown in the transaction of the parties even as agent of the debtor. But where the creditor has actually received and accepted the con tribution in satisfaction of the debt, to allow him to maintain En-action on the same debt afterward would seem to shock the ordinary sense of justice of every man. It is urged, in support of the rule, that one man can not make another his debtor without his consent; that one can not make a gift or donation to another, unless the latter consent to receive it; and that it may be possible that a debtor may, on account of cross-claims, matters of set-off, or in view of other circumstances, be unwilling that a stranger should step in, and, by voluntary contribution, satisfy the claim of his creditor. All this may be very true,'and not affect the controversy in this-case. And it is said that exceptions may exist to all general rules— indeed, that exceptions sometimes prove the rule. It may be laid down as incontestible, as a general thing, that where one man is indebted to another and a third person steps in and pays the debt, in the absence of all circumstances tending to show the contrary, the rational inference *would be that the act done, being for [77 the debtor’s benefit, was done with his consent, or, if without his knowledge at the time, that it would, as a matter of course, be ratified by him afterward. If in such a case the creditor should subsequently bring suit against the debtor, and the debtor should appear in the action and plead the satisfaction in discharge of his liability, I can not conceive upon what just and rational ground the creditor could be allowed to reply that his debt was not discharged because the satisfaction which he had accepted in discharge of it was without the consent of the defendant. The very fact of the satisfaction being set up in the action by the defendant in discharge of the debt, would, of itself, seem sufficient to conclude the plaintiff from denying that it had received the defendant’s consent or ratification.

It is claimed, however, on behalf of the defenda/nt in error, that the question, in this case, depends upon a rule of law which was-decided many years ago, and which has been recognized and acquiesced in, by the sages of the law, for nearly two hundred years that the common- law settles the question — which has been fined and refined by an infinite number of grave and learned men, through a succession of ages, until, by long experience, it has-grown to such perfection, that, in the language of Lord Coke, “ no-man of his own private reason, ought to be wiser than the law." It is true, that the doctrine, that an accord and satisfaction, moving from • one who was a stranger, and in no sort privy to the condition of the obligation, could not be pleaded in bar by the obligor, which was reported by Coke to have been laid down in Grymes v. Blofield, Cro. Eliz. 541, and which appears to have been affirmed in Edgecomb v. Rodd and others, 5 East, 294, and recognized as law in some of the other English decisions, as well as in some of the •elementary books, and abridgments, has been followed in a 78] *number of the reported cases in this country. In the ease of Clow v. Borst et al., 6 Johns. 38, and the case of Stark’s Adm’r v. Thompson’s Ex’r, 3 Monroe (Ky.), 303, the rule'appears to have been adhered to ; and in the case of Daniels v. Hollenback, 19 Wend. 410, it was recognized with some qualification.

But mere precedent alone is not sufficient to settle and establish forever, a legal principle. Infallibility is to be conceded to no human tribunal. A legal principle, to be well settled, must be ■founded on sound reason, and tend to the purposes of justice. The maxim communis error facit jus, has a limited application. Otherwise, it could never be said that law is the perfection of reason, and that it is the reason and justice of the law which give to it its vitality. When we consider the thousands of cases to be pointed out in the English and American books of reports, which have been overruled, doubted, or limited' in their application, we can appreciate the remark of Chancellor Kent in his Commentaries, vol. 1, page 477, that “ even a series of decisions are not always evidence of ■what the law is.” Precedents are to be regarded as the great storehouse of experience; not always to be followed, but to be looked to as beacon lights in the progress of judicial investigation, which, although, at times, they be liable to conduct us to the paths of ■error, yet, may be important aids in lighting our footsteps in the road to truth.

The doctrine that satisfaction is no defense, if it accrue from a .stranger, appears to have taken its origin from the case of Grymes v. Blofield, Cro. Eliz., above mentioned, and which, according to Croke, was decided by two judges only, “cceteris justiciariis ab.sentibus.” And, although the ease purports to.be reported from the rolls, yet the report is manifestly inaccurate : for it is reported .as having been decided on demurrer to the plea, “ at.Trinity term, 79] 36 Elizabeth;” *and “afterward, in Eastern term, 31 Elizabeth,” was finally adjudged for the plaintiff: so that, according to the report, the final adjudication of the case was five years befoi’e the decision of the question on the demurrer to the plea. And it is not a little remarkable, that this same case is reported by Rolle, in his Abridgment, as having been decided exactly the other way, and in favor of the defendant, and referred to as a decision at Trinity term, 39 Elizabeth, 1 Rol. Abr. 471 (Condition F). It is also worthy of remark, that the decisions of the English courts touching this question, have not been entirely consistent with Croke’s report, of this case. In the case of Hawkshaw v. Rolling, 1 Strange, 24, it was held that, “ although payment by a stranger be not a legal discharge.> yet acceptance in satisfaction is.” And in the case of Thurman v. Wild, 39 Eng. Com. Law, 148, Lord Denman, C. L, strongly questions the authority not only of the case of Grymes v. Blofield, but also the case of Edgcombe v. Rodd, 5 East; and, in reference to the former, says : “ But the reporter, in a note, observes truly, that in RoIIe’s abridgment of the same case, the judgment is. stated exactly the other way — to have- been for the defendant, and that the plea was good. This circumstance,” adds Ch. J. Denman, “ and some inaccuracies which are manifest in Croke’s report, certainly detract from the authority of the case in East (Edgcombe v. Rodd), as to this point, which depends on the report in question,”’ of Grymes v. Blofield.

Some doubt is thrown over the subject, in New York, by the remarks of the judge, in delivering the opinion of the court in the-case of Daniels v. Hollenback, 19 Wend. Although the decision in the case of Clow v. Borst, 6 Johns., is cited and recognized, yet Mr. Justice Bronson adds: “ The best and most secure form of pleading-such a defense is by way of satisfaction. The very point of the plea is *that the plaintiff accepted the thing in satisfaction. [80 Had it been alleged that the plaintiff accepted and received the stones in satisfaction, it may be that the jury, on proof of the faetsstated in the pleas, would have been warranted in finding the issue in favor of the defendants.” These remarks of the judge, although their consistency with other parts of the opinion is not very manifest, fully sustain the plaintiff in error in the defense which he attempted to set up in the district court, in the case before us.

The Supreme Court of Alabama, in the case of Webster & Smith v. Wyser, 1 Stew. 184, held that an accord and satisfaction, coming from a third person, and accepted by the plaintiff in discharge of the defendant’s liability, is a bar to an action.

Mr. Chitty, in his valuable treatise on the law of contracts, says-that the correctness of the doctrine that an accord and satisfaction by a stranger is not a good bar, has been doubted; and that “ the better opinion would appear to be that satisfaction made by a stranger to a third party having a cause of action, and adopted by the party liable to the action, is a good bar to an action for such •cause.” Chitty on Contracts, 779. The same doctrine is laid down, in Parsons on Contracts, a still more modern elementary work. See Parsons on Contracts, 200.

From an examination of the whole subject it appears that the • case of Grymes v. Blofield, as reported by Croke, in which the doctrine originated that a plea of accord and satisfaction, moving from a stranger, was not a good plea in bar, is,'to say the least of it, of doubtful authority; and in the cases in which it has been followed, both in ■ England and in this country, it appears to have been .adopted with little or no inquiry into the reason or justice of its application. The rule laid down is purely technical; and the rea81] son assigned, that the stranger is not privy to the condition *of the obligation, loses all its reality when we consider that the satisfaction must have been accepted by the plaintiff, and assented to or ratified by the defendant. It would seem, therefore, that a rule which in its tendency is calculated to foster bad faith and defeat ■the purposes of justice, ought not to be adhered to simply on ac- ■ count of its antiquity.

We are unanimous in the opinion that there was error in the in.structions of the district court to the jury.

Judgment reversed, and cause remanded for further proceedings.

Swan, Brinkerhoée, Bowen, and Scott, JJ., concurred.


text:
    George Irwin and others v. The Bank of Bellefontaine.
    •Steps taken by filing an appeal bond to vacate a judgment of the court of common pleas, and to transfer the action for trial to the district court, is a proceeding in an action; and the 137th section of the code, which authorizes courts to permit an amendment of a mistake, in any respect, in any proceeding, is applicable to appeal bonds; and mistakes therein may, by consent of sureties, be amended in the appellate court, or a new bond, by way •of amendment, may be filed.

      Motions reserved by the district court of Bogan county.
    The facts are stated in the opinion of the court.

      William, Lawrence, for plaintiffs:
    The motions reserved for determination in this court present ■two principal questions for decision, to wit:
    I. Is the alleged bond sufficient?
    II. If not, has the district court, to which the defendant intended to appeal, power to allow ah amended appeal bond to be filed?
    *1. The appeal bond (so called), is not a bond within the [82 meaning of the law, and is insufficient.
    The statute regulating appeals (Swan, 717) provides that the party desirous of appealing, “ shall give bond with one or more sufficient sureties.”
    This term “bond” must be the instrument of that name as defined by the common law, except as it may be modified by statute.
    The so-called bond, in this case, fails to comply with the legal requisites in the following particulars :
    1. The obligors do not bind themselves to the obligees to pay, etc., but bind themselves that the bank shall pay. This is not the obligation of the legal instrument which the law defines a bond, but only a covenant, which is a different instrument, requiring a different mode of pleading, proof, and averments, on which to recover. 1 Bouv., Just. 346; 2 Bla. Com. 340; 11 Ohio, 421; Bouv. Dic., tit. Bond.
    The statute prescribes some of the requisites of an appeal bond. .It shall be “in the penalty and with the condition provided.”
    2. This so-called bond is defective, because the makers are not bound in a fixed sum.

    3. The omission of the word “ dollars,” is a fatal defect, and can not be supplied by intendment or construction.
    The words “five hundred” do not necessarily mean dollars, any more than pounds, cents, etc.

    State for use of Rosette v. Boring, 15 Ohio, 516; Wright, 583; Saterlee v. Stevens, 11 Ohio, 421; 20 Ib. 96, and authorities.
    4. The condition of the so-called bond is not to abide the order of the appellate court, but of the district court only: that is not sufficient.
    5. The so-called bond is void for uncertainty in not describing 83] the suit it is taken in. Saterlee v. Stevens, 11 Ohio, *420; 20 Ib. 97; State v. Medary, 17 Ib. 565; 2 Ohio St. 2.
    6. The bond is void as against sureties, because it is not to the proper parties by proper name. One of these parties named in the petition, is Moses S. Edmison — in the bond, Moses S. Edmiston. The contract which binds a party, must all be collected from the-writings, verbal testimony not being admissible to supply any defects. 1 Greenl. Ev., 318; 20 Ohio, 93; Gould’s. Pl. Ch. V., secs. 100, 271; 1 Greenl. Ev., sec. 69, note; sec. 64; Waters v. Mace, 2 B & Ald. 756.
    7. The so called bond is not in a penal sum, but for damages.

    II. The district court has no power to allow an amended appeal-bond to be filed in this cause, because:
    1. There is no bond-to amend, and the power to amend is not a. power to create. See 11 Ohio, 420; 6 Ohio, 490.
    2. There is no statute now in force, which authorizes the amendment of appeal bonds, or filing new ones to supply defective bonds.
    The whole power on this subject is dependent on statute. 11 Ohio, 421.
    The 137th section of the code does not authorize a defective appeal bond to be supplied with a new or amended one, because :
    1 That section only applies to “ pleadings, process, or proceedings ” authorized by the code, and not to other statutory remedies, as appeals, etc.
    2. This section does not, ex vi termini, apply to appeal bonds.
    3. The section was adopted under a judicial construction, which, denied that it could mean to apply to appeal bonds.

      *Stanton & Allison, also for plaintiffs.

      Thurman & West, for defendant.
   J. R. Swan, J.

This case was reserved by the district court of Logan county, upon two motions :

The plaintiffs moved the court to quash the appeal, on the ground that the bond is defective. The defendant moved the court for leave to amend the bond, if defective.

A judgment was rendered in the court of common pleas of Logan county, in favor of the plaintiffs. The defendant, thereupon, gave notice of appeal, and the court fixed the amount of the bond, at five hundred dollars; and, for the purpose of perfecting the appeal to the district court, the defendant filed the following instrument, as an appeal bond :

“ George Irwin, Moses S. Edmison, Joseph' Kerr, and Peter S. Irwin, plaintiffs,
v.
The Bank oe Belleeontatne, a partnership company and eirm, not incorporated, defendants..
Logan common pleas.
Undertaking for appeal.
“Wo bind ourselves to the plaintiffs, George Irwin, Moses’S. Edmison, Joseph Kerr, and Peter S. Irwin, that the defendant, the Bank of Bellefontaine, shall pay to said plaintiffs, the damages, not exceeding five hundred dollars, which they may sustain, if default bo made by the defendant, in the condition following, to wit:
“ That the defendant, the Bank of Bellefontaine, shall abide and perform the order and judgment of the district court, within and for Dogan county, in the State of Ohio, and pay all moneys, costs, and damages which may be required of, or awarded against, the defendant by said district court.
“ June, 12, 1855. Approved by me,
“ Bond filed June 12, 1855.
“ B. R. Dureee, [seal.]
“P. S. Howe, =seal.]
“Anson Brown, [seal.]"
Jas. Leister, Clerk."
Jas. Leister,
Clerk District Court.”

*The statute in relation to appeals is as follows (Swan’s [85 Rev. Stat. 717, sec. 3):

“In all cases in which the judgment or decree is personal against any party for the payment of money only, the penalty of the appeal bond shall be double the amount of such judgment or decre.e; in all other cases, including cases in which the judgment or- decree is against any party for nominal damages and costs, or for costs only, the court shall, at the rendition of the judgment or decree, ascertain and fix the penalty of the appeal bond, to be given in the event of an appeal, at such reasonable amount as shall in the opinion of the court be sufficient to cover any probable- loss, damage, or injury, which the other party or parties may sustain by the delay, and the costs and damages which may be awarded in the appellate court. Each appeal bond shall be payable to the adverse party, or otherwise, as may be directed by the court, where the conflicting interest of the parties require it; and shall be subject to a condition, to the effect that the party appealing shall abide and perform the order and judgment of the appellate court; and shall pay all moneys, ■costs, and damages, which may be required of or awarded against .•said party by such court.”

That the instrument filed as an appeal bond is substantially defective, we entertain no doubt; and the appeal must be quashed, nnless the court have power to grant leave to amend.

In 1834, the Supreme Court, in the case of Bradley v. Smith, 6 Ohio, 490, say: “It has been repeatedly decided that the appeal bond, in due time and form, was necessary, under our system, to remove a cause by appeal from the common pleas; and whatever may ■he our individual opinions upon the expediency of those decisions, they 86] have *been made and acquiesced in, and it is improper for us to change them.”

In 1835 the general assembly interposed, and authorized a new .appeal bond to be taken, if upon exception the bond first filed should be found to be defective in form, or in any other respect. Swan’s Stat. 686. This law remained in force until repealed by the code, ■section 606.

It is'claimed that, notwithstanding the repeal of this law of 1835, by the code, section 6 of the act of April 30, 1852 (Swan’s Rev. Stat. 26), which preserves all remedies for suitors not inconsistent with the code, prevents the repealing clause of the code from operating upon the act of 1835. We do not think so. If it had been intended to save the act of 1835, the code would not have repealed it without some saving provision. It is much more reasonable to suppose that the code itself would contain some provision as á substitute for so salutary a law as the act of 1835.

The code provides that a mistake, in any respect, in any pro-needing, may be amended. Swan’s Rev. Stat. 641.

The provision is as follows:

“Sec. 641. The court may, before or after judgment, in furtherance of justice, and on such terms as may be proper, amend any pleading, process, or proceeding, by adding or striking- out the name ■of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect, or by inserting other allegations material to the case, or, when the amendment does not change substantially the claim or defense, by conforming the pleading or proceeding to the facts proved. And whenever any proceeding taken by a party fails to conform, in any respect, to the provisions of this ■code, the court may permit the same to be made conformable thereto, by amendment.”

The code requires its provisions to be liberally construed, with ^view to promote its object and assist the parties in obtain- [87 ing justice. Code, sec. 2. In adopting a new system of pleading’ and practice, and at the same time to give a narrow and rigid construction to the rules in regard to amendments, would not only be unwise and unjust to suitors, but contrary to the main object and general spirit of the code. Prominent among the objects of the code was to prevent the rights of a suitor, or the merits of his cause, from being sacrificed to technical rules, or to the omissions or mistakes of his attorney; hence the new rules, to test what is material and what is not, in pleading; and hence the section of the code in regard to the correction of mistakes, before and after judgment.

Is the filing an apjjeal bond a proceeding? The word is generally applicable to any step taken by a suitor to obtain the interposition or action of a court. Steps taken, by which the judgment of a court is vacated, and the cause taken to, and the appearance of the parties effected in another tribunal, is a proceeding, and a very important one, in the progress of a civil action. It is as clearly a proceeding by which the suitor takes steps to prosecute his action, or defense in an appellate court, as is the suing out of process at the commencement of an action, or the filing a petition in error with process served. Besides, the term proceeding is used in the section of the code referred to, to distinguish all other steps taken in an action from those embraced in the term pleading.

It is claimed that this provision of the code having been adopted in substance from the code of the State of Now York, and the courts of that state having determined, before the adoption of our code, that an appeal bond could not, under that provision, be amended, it is to be presumed that the code commissioners and general assembly adopted the provision with its construction. The New York decisions *upon th is question, however, like many [88 others under the code, are contradictoi’y. These decisions are very intelligibly stated in a note to Voorhies’ New York Code, thus:

“ It was held, at one time, that, although the court had power, by the revised statutes (2 Rev. St. 556, sec. 34), to amend a bond given on appeal, on'the application of the obligees, yet an undertaking under the code could not be so amended ; that it was not a ‘pleading or proceeding ’ within the section. Langley v. Warner, 1 Code, 111; 3 Pr. 363; and that, at most, it could only be amended on the application of the sureties. Ib. It was afterward held that the undertaking, in substance and legal effect, did not differ from the appeal bond required by the revised statutes, and was a. ‘ proceeding ’ within the meaning of that word in this section, and might be amended in furtherance of justice. Wilson v. Allen, 3 Pr. 369.
“And leave was granted to amend the undertaking in that case with the written consent of the sureties, to be annexed to and filed with the amended undertaking. And see Burns v. Robbins, 1 Code, 62.”

We doubt not our code commissioners had before them Yoorhies’ notes’to the New York code; and they would, surely, conclude-from this note, that a defective appeal bond could be amended under this section of our code, and would, under that belief, repeal the act of 1835.

The counsel for the defendant insists, that the case of Langley v. Warner, above referred to, is the better law; inasmuch as it was-decided by the court of appeals. However this may be, the subsequent decision seems to us founded on more satisfactory reasons; and we are not disposed to treat with more respect the decisions of the courts of New York, than seems to be entertained by their own tribunals. Indeed, the contradictory decisions, and, sometimes, 89] the manifest misconstructions of the code by the ^courts of New York, have shaken our confidence in their determinations, and rendered their decisions thereon of little weight, upon the construction of our code.

We are of opinion, that the steps taken to perfect an appeal is a proceeding; and that if a mistake be made, the section of the code under consideration, authorizes the court to permit the mistake to-be corrected.

The undertaking filed in this case is not a bond, but rather a covenant in the nature of a guaranty.

It is claimed that it is so defective, and the mistakes therein so-gross, that no amendment can be allowed; that, as the instrument is not a bond, there is nothing to amend by.

If this position be correct, an instrument in accordance with the statute, but omitting, by accident, a scrawl seal to the signatures, would be too defective for correction, it not being a bond. This is too narrow a construction of the power to amend. The code authorizes an amendment when the mistake goes to the substance of the pleadings or proceedings. It further authorizes an amendment of a mistake in any respect. Broader and more efficient language could hardly have been used to vest this power. The only limit seems to be to cases where an amendment would not be in furtherance of justice. While, on the one hand, courts will not visit upon :a suitor the mistakes of his attorney, by throwing his case out of court, they will, at the same time, carefully protect the party who objects to a defect in pleadings or proceedings from, suffering any unreasonable delay or injustice by the correction of mistakes. Cases, undoubtedly, will occur where it will not be in furtherance of justice, but a manifest and clear encouragement of a litigious spirit to permit an amendment; and probably, in such cases, the court will not interpose. Where, too, the defect in the proceeding is so gross, or is committed under such circumstances, as to indicate that the defect itself was *designed, and not simply a mistake, [90 the court would probably refuse permission to amend; for in such case no mistake has in fact been made. But in this; and in all other cases, we commit ourselves to nothing but the law upon the facts before us. We leave it to elementary writers, to comment upon the code authoritatively, and to eliminate rules from construction. Law drawn from a great number of cases, each settling a single question argued and considered in court, and practically applied to the ever-shifting circumstances of business, is better and •safer, than any theories or judicial abstract rules, even when inspired'by the wisdom of the bench. The construction of the code, like all just and practical rules of law, must be settled by cases as they arise, to make it work well and wisely.

The defendant in this case will have leave to amend within sixty -days, the defective instrument, with the written consent of the sureties to be annexed to, and filed with, the.amended appeal bond; or the defendant may file in the district court, by way of amendment, •a new appeal bond, approved by the clerk of that court.

Bartley, C. J., and Brinkerhoff and Scott, JJ., concurred.

Bowen, J., having formerly been of counsel in this case, did not participate in its decision.