Schermerhorn against Talman and others

Schermerhorn against Talman and others. Where on an application for the loan of money, the borrower in lieu thereof and in exchange for his own obligation receives the negotiable obligations of the lender for the amount, which the parties intend shall be and which are used by the borrower to raise the money, the transaction is a loan .vithin the usury law's. And if by the obligations exchanged the amount ultimately to be paid by the borrower is greater than that to be paid by the lender the transaction is usurious. Otherwise, if the obligation of the lender is at a premium and the amount agreed to be paid to him is not greater than its cash value in the market with legal interest thereon. Per Denio, C. J. Contra per Selden, J. Sundry questions and distinctions touching usurious agreements discussed and pointed out by Selden, J. The value of the pound sterling in federal money stated by Denr, C. J. The general rule is that courts will not grant one party to an illegal transaction affirmative relief against the other. But there are cases where a party, although a pa/rticeps criminis, is not in pari delicto, and in such cases he may bave'tbe relief. Per Selden, J. Affirmative relief against a contract on account of usury will not be denied, notwithstanding it appear on the face of the bill that the contract was con. nected with a transaction which violated the statute forbidding unauthorized banking. The term borrower in the act to prevent usury (Laws of 1837, 486, § 4), does not embrace the-grantee of property covered by an usurious incumbrance. And where the borrower incumbered his property to secure the payment of an usurious debt, and was afterwards discharged from his debts under the bankrupt act, and subsequently re-acquired title to the property by a purchase from the assignee in bankruptcy; on a bill filed by him to have the incumbrance cancelled on account of the usury; Held, that ho was not entitled to relief without paying the amount actually loaned and interest. It seems that the clerks of the United States courts are not authorized to take ' affidavits out of court. But the certificate of discharge in bankruptcy and the recitals in the assignee’s deed are, by force of the bankrupt act, sufficient evidence that the petition in bankruptcy was verified in open court, where the only evidence to the contrary is that the verification is in the form of an affidavit purporting to have been sworn to before the clerk. The issuing of negotiable certificates of deposit for ¿61000 each, payable with interest at a distant day and in a foreign country, is not a violation of a statute forbidding the issue of certificates for circulation as money. But where it is proved that such certificates were issued for the purpose of being loaned as money, it is a violation of the statute as to unauthorized banking. (1 R. S., 712, § 6.) On the 1st of October, 1836, parties known as the Holland Land Company, of the one part, and Abraham. M. Schermerhom, Trumbull Cary, George W. Lay, Jared L. Kathbone, and William H. Seward, of the other part, made a contract under seal, by which the former contracted to sell and the latter to purchase all the Chautauque county property owned by the company, consisting of unsold lands, land contracts and bonds and mortgages, at the price of $919,175.59, payable in instalments, the last of which became due the 31st of December, 1837. The contract prended that the title, possession and control of the property should remain in the company until the purchase price was paid; and that in the meantime Mr. Seward should act as agent for the company and also for the associate purchasers, in selling the lands, collecting money on the securities, and applying them on the contract. The purchasers being in want of money to pay up the contract, Mr. Seward in 1837, on behalf of himself and his associates, applied to the American Life Insurance and Trust Company, and informed its officers of the desire of himself and his associates to raise the amount and the purpose for which it was needed. He received encouragement that the Trust Company, on perfecting arrangements as to agencies in London, would advance the amount required by its certificates. While the ai rana'ement which was afterwards consummated was under negotiation, and in October, 1837, the company issued to Mr. Seward and his associates certificates for ¿£12,000 sterling, each certificate being for ¿£1000, and in the following form: ‘Principal, ¿£1000 sterling. ‘Period, 20 years. ‘ Rate of interest, 5 per cent. Cartfficate of Trust, .M. “United States op America. “ These may certify that William H. Seward has deposited with the American Life Insurance and Trust Company the sum of one thousand pounds sterling, for the period of twenty years, commencing on the 1st of January, 1838, and ending on the 1st of January, 1858, and irredeemable for that period. Interest to be paid thereon by the said company half yearly, on the first days of January and July, at the rate of five per centum per annum, to the said William H. Seward or his order, upon the presentation of the annexed warrant at the agency office of the company in London. At the end of the term of deposit the said principal sum, with the interest then due, to be paid to the said William -H. Seward or his order, at the said agency office, upon the. surrender of this certificate. “ In witness whereof, the said company have caused this .certificate of trust to be attested in their behalf by their president and secretary, at Baltimore, this thirtieth day of September, in the year of our Lord one thousand eight hundred and thirty-seven. “P. Macaulay, President. “M. Robinson, Vice-President. “ R. Wilson, Secretary.” Attached were forty warrants, each for six months’ interest. The following is a copy of one of them: “ Warrant for twenty-five pounds sterling, payable at Prescott, Grote, Ames & Co.’s, London,' for half yearly interest due on 1st January, 1858, for Certificate, No. of the American Life Insurance and Trust Company. “¿£25. ' N. Thurston, Ass’. Secretary.” The company received for these certificates the bond of Mr. Seward and his associates in the penalty of $120,000, conditioned for the payment of $60,000 on the 1st of April, 1839, with interest thereon, payable semi-annually. This bond was executed and received as-a temporary security for the certificates then issued, it being understood that the latter should be estimated at the rate per pound sterling hereinafter stated, and that they should form a part of the advance and be secured by the arrangement to be after-wards consummated. These certificates were, at or about the time they were issued, hypothecated by the associates to Nicholas Biddle, who advanced to them money upon them. In July, 1838, the arrangement was perfected. The Trust Company then issued to the associates certificates to the amount of =£135,700 sterling. They were payable in London, the principal in twenty years, and interest at the rate of five per cent, per annum, semi-annually ; and were in the form of the one above set out, except that they stated that “ N. Thurston, assistant secretary,” made the deposits and were payable, to his order, and they were endorsed by him in blank. At the same time the associates, in consideration of these certificates and those for ¿£12,000 before issued, and of $745.10 paid in cash by the Trust Company arising from an adjustment of the interest account upon the certificates previously issued, executed to the Trust Company their several bonds, amounting in the aggregate to $696,809.' These bonds were for different sums, corresponding with the interest of the respective obligors in the Chautauque county property; and were conditioned for the payment of the principal in ten years, with interest at ■ the rate of seven per cent, per annum, payable semi-annually. No place of payment was specified. The bond executed by Schermerhorn was for $151,933.44; and each of the bonds contained a covenant and declaration that the sum thereby secured was and should be a charge upon the obligor’s estate.and interest in the Chautauque county property. The associates also assigned the contract with the Holland Land Company to Messrs. Duer, Robinson and Seward; and an agreement was entered into between the associates, Messrs. Duer, Robinson and Seward, and the Trust Company, providing for a partition of the Chautauque county property among the associates, and specifying the particular property to be allotted to each, and by which they consented that the Land Company should convey the property to Messrs. Duer, Robinson and Seward in trust to sell the lands and collect the mortgages and contracts allotted to each associate, pay his bond to the Trust Company with the proceeds, and then execute the partition by conveying to each associate the residue of his share; the Land Company executed to Duer, Robinson and Seward a deed purporting to convey the Chautauque county property to them absolutely; and they executed a declaration of trust, referring to the agreement for partition, &c., and specifying in accordance with the terms of that agreement the purposes for which the property was conveyed to them. In consummating the arrangement and fixing the amount of the bonds executed by the associates to the Trust Company, the pound sterling mentioned in the certificates, including those issued in 1837, was rated at a fraction less than $4.71; it was estimated at six per cent advance on $444f-, and the bonds of the associates to the Trust Company were for the aggregate of the certificates thus estimated. Before these certificates were issued the associates had arranged to dispose of them and also those issued in 1837, absolutely to Mr. Biddle, who was to advance for them a sum sufficient to pay the balance due the Land Company, and this was known to the officers of the Trust Company. In accordance with this arrangement the certificates were negotiated by the associates to Mr. Biddle at considerably less than the amount at which they were received by them, and with the proceeds the balance due to the Land Company was paid. At the time the certificates were negotiated for and issued their market value was less than the amount at which they were received by the associates, and they could not be readily disposed of for cash, and this was known to the officers of the Trust Company as well as the associates, The Trust Company is a corporation created by the State of Maryland in 1833. Its business was to be managed by a president and directors. It was empowered to receive endowments of real, personal or mixed property for a term of years or for life or lives in trust; to grant annuities ; to contract for reversionary payments ; to receive deposits of money in trust; to make all kinds of contracts in which the casualties of life and interest of money were involved ; to make insurance on lives or property, and to provide for the investment of its funds in such stocks and mortgages in such manner as should be deemed most safe and beneficial The original charter contained a provision that nothing in the act should be construed to authorize the company to issue and put in circulation any negotiable notes payable to bearer, or notes in the nature of bank notes, or to guarantee in any manner whatever the payment of any chose in action. In December, 1837, the legislature of Maryland revised, amended and consolidated the charter and several acts amending it. The amended charter contained a provision that it should not be construed as authorizing the company “to issue for circulation as money any of its own promissory notes, or notes in the nature of bank notes or certificates of deposit payable to bearer ; or to guarantee in any manner whatever the payment of any chose in action other than promissory notes or bills of exchange previously discounted or purchased and then held by the companybut the prohibition contained in the original charter against issuing negotiable notes payable to bearer was omitted in the amended charter. The company had an office in Baltimore, and in 1835 it established and thence continued an office in the city of New-York. The negotiations between the associates' and the company were had, and the arrangement in question consummated and the certificates issued in New-York; and the vice-president and a portion of the directors lived there. Before and during the negotiation, and after its completion, the company issued in New-York other certificates in the form of those above mentioned, some of which were negotiated in this country and others sent to London and there sold. In 3842, the Trust Company being embarrassed, transferred its effects, including the bond of Schennerhorn and all his interest in the Chautauque county property, to Messrs. Taiman and others, in trust to pay creditors. In 1843, Schennerhorn applied for and obtained a discharge in bankruptcy from the district court of the United States for the northern district of New-York. His petition, as contained in the record of the proceedings in bankruptcy, purported to have been verified, as follows: “ The above described Abraham M. Schermerhorn this day appeared before me and in my presence subscribed the foregoing petition, and by his oath duly administered by me to him verified the same. Auburn, January 30th, 1843. Aurelias Conkling, Dejnity Clerk.” The assignee in bankruptcy, in January, 1844, sold at auction the title and interest of Schermerhorn to the Chautauque county property, and the latter became the purchaser at the sum of $2; and the title and interest sold wnre conveyed to him by the assignee. In January, 1848, Schermerhom commenced this action in the supreme court iniquity against Messrs. Duer, Robinson and Seward, the Trust Company, its assignees for the benefit of creditors and others. The complaint stated the foregoing facts, except those in reference to the bankruptcy of the plaintiff and his subsequent purchase from the assignee. As to these the complaint merely stated that it was pretended by the Trust Company that the plaintiff had by bankruptcy parted with his interest in the Chautauque county property, and that the plaintiff, without admitting this to be true, averred that if it were, he subsequently and before the commencement of this suit reacquired and became reinvested with his title to the satire.' The complaint charged that the certificates were issued to and received by the associates in lieu and as a substitute for money; that the transaction was in fact a loan of money by the Trust Company, and was usurious; that the company was not empowered by its charter to issue the certificates, and that for this reason they were void; that the issuing of the certificates by the company was a violation of the laws1 of this state as to unauthorized banking, and illegal; and prayed that the plaintiff’s bond be declared void, that the trustees release to him his portion of the Chautauque county property, and that the proceeds realized therefrom be paid to him. The plaintiff made no offer by the complaint or otherwise to pay any amount to the Trust Company or its assignees. The Trust Company, its assignees, and Messers. Duer, Robinson and Taiman answered the complaint, denying the alleged usury and illegality. The assignees also set up the bankruptcy of Schermerhorn, and alleged that he had no title to or interest in the Chautauque county property except that derived by the sale and conveyance of the assignee in bankruptcy. Proofs were taken before a referee. The facts above stated were proved or admitted. The record of the proceedings in bankruptcy was objected to by the plaintiff’s counsel, on the ground that the district court did not acquire jurisdiction of the case for the want of a proper verification of the petition; it not appearing that the same was verified, except as above stated, and the plaintiff’s ■counsel insisting that the deputy clerk had not authority to administer the oath to the petitioner. The record was received, subject to such objection. The cause was heard on pleadings and proofs at a general term of the court in the 8th district. The court made a decree declaring the bond of Schermerhorn void, and directing it to be canceled; it also declared so much of the agreement between the parties, and of the declaration of the trust made by Messrs. Duer and others, which provided for the payment of the bond out of the plaintiff’s share of the Chautauque county property, void and discharged as against the plaintiff, and directed the plaintiff’s share of the property and proceeds held by the trustees at the commencement of this suit to be released and paid over to the plaintiff. The defendants appealed to this court. N. Hill, Jr., for the defendants among other things insisted: I. Schermerhorn’s relation to the property in question, arising out of the acts done with his concurrence in July, 1838, is such that if the transaction is simply canceled or its enforcement prevented he can recover nothing. He therefore invokes affirmative relief. II. Schermerhorn shows by his bill that he is not entitled to such relief. For he avers that all the instruments creating and connected with the trusts were in furtherance of a transaction which was illegal on other grounds besides usury, and that he was a participant. (1 R. S., 712, §§ 1 to 3 ; Laws of 1837, p. 14, §§ 1 to 3; Taylor v. Bruen, 2 Barb. Ch. R., 301; Stoney v. Am. Life, &c., Co., 11 Paige, 636.) 1. Courts of equity will not grant affirmative aid to a participant in such a transaction, either by canceling what is executed, or enforcing what is executory. (Bartle v. Nutt, 4 Peters, 184; Nellis v. Clark, 20 Wend., 27; S. C. in Error, 4 Hill, 424; Bolt v. Rogers 3 Paige, 154; McCoun, J., 4 Comst., 463; 1 Story's Eq. §§ 61, 296, a; Norris v. Norris, 9 Dana, 317; Brackenbury, &c., 2 Jacob & Walk. 391; Moor v. Adams, 8 Ohio, 372, 374, 5; Cowles v. Raguet, 14 Ohio, 54 to 56; Batty v. Chester, 5 Beavan, 103; Staples v. Gould, 5 Sandf, 411, 418; S. C., Seld. Notes, April, 1854, 66; Lay v. Amer. L. Ins. & Trust Co., MS.) 2. Nor will they cooperate in his efforts to secure any of the fruits of it, though as between him and his confederates he will not be dispossessed. (Bartle v. Nutt, 4 Peters, 184; Nellis v. Clark, 20 Wend., 27 to 37; Bolt v. Rogers, 3 Paige, 154; New Hope, &c., 25 Wend., 648; Perkins v. Savage, 15 Wend., 412; De Groot v. Van Duzer, 20 Wend., 393; Stewart v. Kearney, 6 Watts, 453; Yates v. Foot, 12 Johns., 1, 11 to 16; Smith v. Hubbs, 1 Farif, 71; Moor v. Adams, 8 Ohio, 372, 374, 5; Cowles v. Raguet, 14 Ohio, 54 to 56; Holmes v. Johnson, 1 Cowp., 343; Life & Fire Ins. Co., &c., 7 Wend., 31.) 3. The reason is, that courts do not sit to “ extricate rogues from their toils,” and sound policy requires that they should be left to the hazards of their devices, and at the mercy of each other. (6 Watts 453, 4, 5, Gibson, C. J.; Bartle v. Gould, 4 Peters, 184; 20 Wend., 27, 8, Cowen, J.; 1 Coup. 343, per Ld. Mansfield; 1 Story's Eq., §§ 61, 296, a; 3 Paige, 157, 8, Walworth, Ch.; 21 Verm., 15, 16, Red-field, J.; see cases cited supra, subd. 1, 2.) 4. This policy is especially favored and enforced where the objection, as here, is not raised for the benefit of a confederate, but by an assignee in trust for creditors. (Stewart v. Kinney, 6 Watts, 342; Talmage v. Pell, 3 Seld., 328; see cases cited, supra, sub. 1 to 3.) III. The reasons for a rigid enforcement of this policy are none the less applicable here, even if it be true that the parties in violating public law and policy have also violated the law against usury. (Bolton v. Rogers, 3 Paige, 154; point second, subd, 1, ct seq., and cases.) 1. The usury law contemplates cases where the court can act in accordance with its terms, without overthrowing other laws and fundamental principles. (Laws of 1837, 486, 487; 1 R. S., 712; Henry v. Bank of Salina., 1 Comst., 83; Bolt v. Rogers, 3 Paige, 154; 2 Cranch, 390, Marshall, C. J.; 11 Wend., 334 to 336, Sutherland, J.) 2. It applies therefore only to cases where the party invoking aid is supposed to come into court “ with clean handsnot to promote iniquity or secure its fruits. (Point second, subd. 1 to 3, and cases.) 3. Laws against usury are not to be extended by construction, but should be confined to the cases plainly contemplated, i. e., transactions usurious merely. (1 Comst., 280, Bronson, J.; Lovett v. Cowman, 6 Hill, 224 to 226; Beach v. Fulton, 3 Wend., 573, 585, 586; 11 Wend., 334 to 336, Sutherland, J.) IV. The alleged illegality being a part of the case made by the bill, Schermerhorn cannot get rid of its effect by resorting to the evidence or any of the proceedings on the part of the defendants. 1. The objection when arising thus is fatal in any stage of the cause, even on appeal, irrespective of the answer or proofs. (Bolt v. Rogers, 3 Paige, 154; Baker v. Biddle, 1 Bald., 394; Cowan v. Price, 1 Bibb, 173; Bersett v. Oliver, 7 Gill & John., 207, 208; Thomas v. Warner, 15 Verm. R., 110: Peacock v. Tompkins, 1 Hump., 135; Lingan v. Hendeson, 1 Bland's Ch., 236; West v. Hall, 3 Harr. & John., 221; Knox v. Peyton, 4 How., 298; Edward v. Massy, 1 Hawk, 359.) 2. The rule even in ordinary cases is, that allegations in pleading conclude him who makes them, and he cannot recover by disproving them. (3 Greenl. Ev., § 373; 1 Greenl. Ev., §§ 97, 136, 205; and see the cases above cited.) 3. This is so, a fortiori, where.public policy is concerned, for the court will then take the objection, if the defendant does not. (Bartle v. Nutt, 4 Peters, 184; Nellis v. Clark, 20 Wend., 27 to 37; Evans v. Richardson, 3 Meriv., 469; Egerlon v. Turzeman, 1 Carr. & Payne, 613; Bolt v. Rogers, 3 Paige, 154; Woodhouse, &c., 1 Jac. & Walk., 225; Philson v. Bamfield, 1 Brev., 202; Hyman v. Cook, 4 Denio, 201, 202, 203; see cases cited, point second, subd. 1, 2, 3. ) V. The awkward attempt of Schermerliorn to evade this objection by pretending ignorance of the illegality, cannot avail him; for if it existed, as he alleges, he is chargeable with it, at least for the purposes of this suit. 1. His claim to enforce the transaction and secure ■ its fruits obliges him to adopt it, and he cannot otherwise make the semblance of title to relief. (Lay v. American Life Ins. and Trust Co., MS.; Perkins v. Savage, 15 Wend., 416; Paley on Agency, 64; Dexter v. Adams, 2 Denio, 646; Carter v. Hamilton, Seld. Notes, April 30, 1854; Rawson v. Lumpman, 3 Seld., 456; Stoney, &c., 11 Paige, 636.) 2. The bill concedes that Mr. Seward, who acted in behalf of the associates, had full knowledge.of the nature of the entire transactions. (Perkins v. Savage, 15 Wend., 416; Dexter v. Adams, 2 Denio, 646; 1 Durnf. & East, 16, Ashhurst, J.; Parsons on Contract, 62, 63, and notes; Bank Commissioners v. Van Rensselaer, 3 Seld., 513.) 3. If the objection for illegality can be obviated by showing that the agent only was aware of it, the rule is practically worthless. (1 Durnf. & East, 16, Ashhurst, J.; Perkins v. Savage, 15 Wend., 416.) 4. Besides, all are chargeable with the knowledge of the powers and locality of the Trust Company, and of the restraining laws of this state. (1 Story's Eq., § 111, er seq.; Root v. Goddard, 3 McLean, 102; Root v. Wallace, 4 McLean, 8; Salem Bank, &c., 17 Mass. R., 289; Smith v. Strong, 2 Hill, 241 to 245; 7 Eng. Law and Eq. R., 505, 508, Jarvis, C. J.; 8 Peters, 281, Story, J.; 1 Pet. C. C. R., 416, 417, Washington, J.; 1 Dods. R., 387, 392, Sir Wm. Scott.) VI. ' But if no illegality had been alleged except usury, the case made by the bill would not have authorized, the court to act in affirmance of any part of the transaction, but only in disaffirmance : i. e., by canceling, restraining, &c. (Laws of 1837, 486, 7, §§ 1 to 5; Moore v. McKay, 2 Molloy's R., 134.) 1. Equity only gives effect to the statute. It therefore stops when it has made the transaction void, and restored the borrower to his prior condition. (Laws of 1837, 486, 7, §§ 1 to 5, Moore v. McKay, 2 Malloy, 134.) (1) No case can be found where a new right has been given under pretext of relieving against usury. (Moore v. McKay, 2 Molloy, 134.) (2) The law of 1837 made no alteration in the relief, but only in the terms of granting it. (Laws of 1837, 486, 7, §§ 1 to 5; Minturn v. Farm. L. I. & T. Co., 3 Comst. R., 398, 500.) 2. The most, the court could properly do, therefore, was to disaffirm the transaction, leaving the parties to their original rights, with liberty to act accordingly. (Subd. 1 of this point, and cases cited.) The associates could not then have been compelled to make the partition which the decree enforces. (2 Story's Eq., § 750; Adams' Doct. of Eq., 174, 5; Rasberry v. Jones, 7 Iredell's Eq. R., 146.) VII. But Schermerhorn has no right to raise the question of usury without offering to do equity, he having purchased the property in question from the assignee in bankruptcy, subject to the debt of the Trust Company. 1. All his right to tlie property, whatever it was, passed to the assignee in bankruptcy, and he has no interest except such as he subsequently purchased. (5 U. S. Stat. at Large, 442, 3, § 3, Carr v. Hilton, 1 Curtis' R., 230.) 2. He should therefore be treated as a mere purchaser subject to the trust, and not entitled to affirmative relief against the alleged usury without doing equity. (Murray v. Sands, Oct. 7, 1853, Seld. Notes, 3; Wells v. Chapman, 1 Sandf. Ch. R., 312; S. C. on appeal, 13 Barb. R., 561; Post v. Bank of Utica, 7 Hill’s R., 391; Rexford v. Widger, 3 Barb. Ch. R., 640 ; S. C. on appeal, 2 Comst. R., 131; Stoney v. Am. L. I. Co., 11 Paige, 635.) 3. By his proceedings in bankruptcy, moreover, his relation to the Trust Company was changed, so that he ceased to be the “ borrower” within the intent of the usury law. (Laws of 1837, 487, § 4; 5 U. S. Stat. at Large, 442, 3, §§ 3, 4; Carr v. Hilton, 1 Curtis, 234; Rexford v. Widger, 3 Barb. Ch. R., 640; S. C. on appeal, 2 Comst., 131; and. see point second and its subds.) VIII. Should it be held, however, that Schermerhorn can raise the question of usury without offering to do equity, the court below mistook the nature of the transaction in the following particulars: 1. They erred in assuming that the bond secured six per cent more than was warranted by the actual par or metallic value of the pound sterling here. The bond was taken at $4.71 to the pound sterling, i. e., only six per cent more than $4.44. The undisputed evidence shows that the pound sterling was at least nine and one-half per cent more than $4.44, i. e., $4.86. (1 Hunt’s Merck. Mag., 535, 6; 4 Comst., 473, McCoun, J.; 3 Comst., 348, 357 Gardiner, J.; 3 Comst., 371, Cady, J.; 3 Kent’s Com., 116, 117, and note, 7th ed.) 2. They erred in assuming that the true value of the pound sterling was fixed by law at $4.44, and in disregarding all the evidence given on that subject. (1.) The assumption rests on cases which do not so decide, and which have been overruled. (Grant v. Healy, 3 Sumn., 523; Grant v. Dash, 12 Johns., 17; Smith v. Shaw, 2 Wash. C. R., 167, 8; 3 Kent’s Com., 116, 117, and note, 7th ed.; 3 Comst., 348, 357, Gardiner, J.; 3 Comst., 371, Cady, J,; 4 Comst,., 437, McCoun, J.) (2.) And also on an act of Congress which was altered before the transaction in question. (1 U. S. Stat. at Large, 41, 167, 673 [1789, 1790, 1799]; 4 U. S.. Stat. at Large, 593, § 16 [1832]; 5 U. S. Stat. at Large, 496, § 12 [1842] ; Index to 5 U. S. Stat, at Large, 813, tit. “ Coins," and the gold acts there referred to ; 1 U. S. Stat. at Large, 300, note.) (3.) The value in our coin expressed by the words pound sterling, is to be ascertained by evidence. (Thompson v. Sloan, 23 Wend., 74, 5; 2 Greenl. Ev., § 161; U. S. v. Hardyman, 13 Peters, 176; 4 Comst., 473, McCoun, J.; 3 Comst., 348, 357, Gardiner, J.; 3 Comst., 371, Cady, J.) 3. They erroneously assumed that the certificates were made payable at London as a pretext for securing six per cent usury in the name of exchange. (1.) The premium, so called, was part of the" real or par value of the pound sterling here; not exchange or usury. (1 Hunt's Merch. Mag., 536 ; Subd. 1 of this point, pl. (2), and cases; 2 Kelly's Univers. Cambist, 13, 14; Story on Bills, § 30, note; McCulloch's Comm. Dict., “Exchange." (2.) This is the customary mode of expressing the difference between the old and false par, and the true one. (1 Hunt's Merch. Mag., 536; fols. 1606, 7; 2 Kelly's Univ. Cambist., 13, 14.) 4. They erred in holding that the obligation of the certificates could be discharged by a tender here at the false par, i. e., $4.44 to the pound sterling. (1.) the holder might legally claim at least $4.86 to the pound sterling, i e., its true par value. (Subd. 1, 2, 3; of this point) (2.) And he might legally claim the additional cost of paying in London at the times designated. (Andrews v. Pond., 18 Peters, 65 ; Delegal v. Naylor, 5 Moore & Payne, 443; Grant v. Healey, 3 Sumn. R., 523; Scott v. Beavan, 2 Barn. & Adolph., 78; Smith v. Shaw, 2 Wash. C. C. R., 167, 8; Graves v. Dash, 12 Johns. R., 17; 1 R. S., 771, § 18, subd. 4; 11 Paige, 635, 6, Walworth, Ch.; Cuyler v. Sextons, 13 Barb., 339; Woodhull v. Wagner, 1 Bald., 296; Lee v. Wilcocks, 5 Serg. & Rawle, 48.) IX. The transaction was in reality a special contract authorizing the associates to raise means by using the credit of the company instead of their own ; not a loan of money, nor a usurious device. (3 Comst., 366, 7.) 1. The company intended only to authorize the use of the certificates as a means of available credit; not to loan money. 2. The sale of the certificates to Biddle does not prove an illegal intent, for usury must be the gain of the lender;. not that of a third person, or the loss of the borrower. (Hetfield v. Newton, 3 Sandf. Ch. R., 564; Rice v. Mather, 3 Wend., 62; 4 Comst., 474, McCoun, J.; Cuyler v. Sanford, 13 Barb., 344; Law v. Sutherland, 5 Grattan, 327; Stevens v. Davis, 2 Metc., 211; Cobb v. Titus, Seld. Notes, 53, April, 1854.) X. There is no equity in the plaintiff’s case which should induce the court to aid him by intendment, or give him the benefit of discretionary power ; especially without compelling him to do equity. (1 Story’s Eq. R., §§ 300, 301; 3 Wend., 573, 585, 6; 3 Paige, 408, 9; 6 Hill, 223.) Jno. L. Talcott for the plaintiff, among other things insisted: I. The transaction between the Trust Company and the plaintiff and his associates was usurious. (2 Hill, 295; 3 Comst., 19; id., 361; 19 How., 218; 2 Peters, 527.) Where the profit and loss are apparent and certain, and in contemplation of the parties at the time of the loan, it is usury per se. When the known object of the applicant is to raise money, the advancing of something else at a price greater than its value to the lender, or than the borrower can reasonably be expected to realize, is usury. (Wick’s case, Bacon’s Ab., “ Usury,” C.; Lowe v. Waller, Douglass, 736; Barker v. Van Somer, 1 Bro. Ch. R., 149; Doe v. Barnard, 1 Esp., 11; Hargreaves v. Hutchinson, 2 Adol. & Ellis, 12; Pratt v. Willey, 1 Esp., 40; Clague & al. v. Their Creditors, 2 Louisiana, 114; Anonymous, 2 Dessausure, 333; Stribling v The Bank of the Valley, 5 Rand., 132; Train v. Collins, 2 Pick, 145; Fitch v. Hamlin, 1 Root, 110; Dyer v. Lin coln, 11 Vermont, 300; Moore’s Exrs. v. Vance, 3 Dana, 362—7—9; Deming v. Bristol, 1 Root, 171; Archer v. Putnam, 8 Smedes & Marsh., 286; Rose v. Dickson, 7 John., 195; Eagle-son v. Shotwell, 1 J. Ch. R., 536; Beach v. Fulton Bank, 3 Wend, 573, 582 ; Pratt v. Adams (U. S. Bk. claim), 7 Paige, 636; Cleveland v. Loder, 7 Paige, 557; Seymour v. Strong, 4 Hill, 255; Gillett v. Averill, 5 Denio, 85; Smith’s Law of Contracts, 154; Gardiner, J., in Dry Dock Co. v. Am. Life Ins. and Trust Co., 3 Comst., opin., 361.) And in these cases, usury is presumed. (Davis v. Hardacre, 2 Campb., 375; Byles on Bills, 235.) Nor is it material even that the application should be for a loan of money,- if the object was, and was understood to be, to raise money. (Barker v. Van Somer, 1 Bro. Ch. R., 149; Parker v. Ramsbottom, 3 Barn. & Cress., 257; White v. White, 3 Barn, & Cress., 273; Barnard v. Young, 17 Vesey, 44; Dry Dock Co. v. Am. Life Ins. and Trust Co., 3 Comst., 344; Carroll v. Farmers’ Loan and Trust Co., 5 Barb., 613.) The transaction in question was, also, in principle analagous to the usurious annuity transactions. The Trust Company, by means of the difference of interest, secured to itself without compounding or re-investment, an annuity for ten, and probably for twenty years, of over $13,000 per annum, over and above the sum which it had become liable to pay for principal and interest. (Richards v. Brown, Cowper, 776; Scott v. Lloyd, 9 Peters, 418.) Where this appears upon a calculation, it is always usury per sc. (Ferreday v. Wightwick, 1 Russ. & M., 45 S. C.; 1 Tamlyn, 250; Chillingworth v. Chillingworth, 8 Simons, 404.) And the very case of a loan of post notes has been adjudged usury whenever presented. (Matthews, qui tam, v. Griffith, Peake's Cases, 200; Hutchinson v. Parker, 4 Tauuton, 810; Par v. Eliason, 1 East. 92; State Bk. at Elizabeth v. Ayres, 2 Halasted, 130; Gaither v. F. & M. Bk. of Georgetown, 1 Peters, 37; Approved in Nichols v. Feasson, 7 Peters, 103; and in Pratt v. Adams, 7 Paige, 636; Pratt v. Adams, 7 Paige, 615; Knox v. Goodwin, 26 Wend., 643; Lane v. Losee, 2 Barb., S. C., 56.) The precise point in this case has been repeatedly decided in this state. (Beach v. Fulton Bank, 3 Wend., 582; Dry Dock Co. v. Am. Life Ins. and Trust Co., Sandf. Ch. R., 215; Gillett v. Averill, 5 Denio, 85; Farmers' Loan and Trust Co. v. Carroll, 5 Barb., 613; Dry Dock Co. v. Am. Life Ins. and Trust Co., 3 Comst., 361; N. Y. Life Ins. and Trust Co. v. Beebe, 3 Selden, 364.) II. The issuing and loaning of. the post notes was not within the powers of the Trust Company, but was foreign to the objects of its charter. The first ¿£12,000 were “ negotiable notes,” and were within the prohibition of the charter as it stood at the time. The power to make all kinds of contracts involving the casualties of life and interest of money, relate to life insurance and annuity transactions. Besides, there was no casualty of life or interest of money involved in this transaction. (Smith v. Alabama Life Ins. and Trust Co., 4 Ala. R. [new series], 558; Atty. Gen'l v. Life and Fire Ins. Co., 9 Paige, 470; and Report of Referees in that case, 473, 4.) The want of power in the corporation renders the contract invalid; itself can so insist, and a fortiori the other party. The bond and trust to secure it, are for this reason void. It cannot be objected to this that the plaintiff was in pari delicto. If there was any delictum, it was not on the part of the plaintiff. No law, no public policy of this state was violated. It is a mere want of power on the part of the Trust Company. (Ohio Life Ins. and Trust Co. v. Merchants' Ins. and Trust Co., 11 Humphrey's Tenn. R., 1; Southern Loan Co. v. Morris, 2 Barr's Penn. R., 175; Bank of Chillicothe v. Dodge, 8 Barb., 233.) III. The transaction was a violation of the restraining act. It was issuing evidences of debt upon loan. (N. Y. Life Ins. and Trust Co. v. Beebe, 3 Seld., 364.) It has been urged in regard to this point, that as to it the plaintiff is in pari delicto, and therefore not entitled to relief. This has been said in certain cases, but, as is submitted, without sufficient consideration. The principle does not apply to this case. 1. This stands on the same ground as the case of usury. The lender is prohibited from lending at over seven per cent-under the same kind of penalties and forfeitures as those under which he is prohibited from loaning evidences of debt. In the case of usury the borrower is relieved on the ground of public policy (1 Sch. & Lefroy, 312; id., 182), and also because the borrower is said to be in vinculis, i. e., forced by his necessities for money to enter into the transaction. The same principles apply with' at least equal force in this case. 2. In most if not all the cases of constructive fraud against public policy, courts of equity relieve against the instruments and contracts. (See Story’s classification of the cases in which equity interferes to set aside instruments, Story’s Eq. Juris., § 694.) In the examination of the question it is necessary to distinguish between cases of actual fraud and, constructive fraud against public policy, also between those cases which proceed in affirmance and those which proceed in disaffirmance. Nor does this question involve the discussion of the terms on which relief is to be granted in such a case, but whether the plaintiff can be relieved on any terms. Story’s third class is, cases of constructive fraud against public policy, and the plaintiff has participated, but public policy would be defeated' by allowing it to stand. (1 Eq. Ca. Ab., 89; Morris v. McCulloch, 1 Ambler, 482 ; 2 Vernon, 392; Whittingham v. Burgoyne, 3 Anstruther, 900; Lord St. John v. Lady St. John, 9 Vesey, 535; Hannington v. Du Chastel, 1 Bro. Ch. R., 113. [A more correct report of this case in note b. to Davis v. Duke of Marlborough, 2 Swanst., 113; and see other cases cited in same note]; Hatch v. Hatch, 9 Vesey, 300, Boston ed.; note 18 Vesey, 382; Wynne v. Callandar, 1 Russ., 293; Earl of Miltown v. Stewart, 3 Mylne & C., 18, 24; 2 Mad., 356; Op. of court in Ohio Life Ins. and Trust Co. v. Merchants' Ins. and Trust Co.; 11 Humphrey, 1, before cited.) Story’s fourth class are cases of constructive fraud by both parties, but they are not in pari delicto, not equally guilty. Usury falls within both third and fourth class. So borrowing contrary to the restraining act. (1 Maule &S., 160; Dow & Ry. N. P. C., 27; 4 Baing N. C., 407; 11 Meeson & W., 492; Cowper, 790; 1 Ld. Rayn, 89.) Within the fourth class also fall those cases where the prohibition of the statute is only upon one of the parties; as upon the lender in case of violation of the usury or restraining law. (Illegal insurer of Lottery Tickets; 2 Blackst., 1073; 5 T. R., 405; 1 H. B., 65; 8 East., 377; Mount v. Waite, 7 John., 440; White v. Franklin Bank, 22 Pick., 181.) Again, the maxim in pari delicto melior est conditio possidentis, does not apply to cases where the money or property held as security for, or devoted to the performance of, the illegal contract, is in the hands of a third party, intervening between the parties to the illegal contract. (10 John., 24, and cases cited; 5 Wend., 250; 9 East., 49; 4 Barb., 524; Smith on Con., 190; Chitty on Con., 621; 3 East., 222, 224.) IV. Independent of all questions affecting the validity of the contract, the trust for the benefit and security of the corporaiion is void. (1 R. S., 791, § 7; id., 598, § 51; id., 559, § 54.) The statutes above referred to prohibit such a corporation from becoming a cestui que trust as to any estate real or personal in this state. And it is submitted that corporations of the character referred to, and doing their business in this state, though deriving their charter from another, are entirely within the spirit and mischief of the act. V. The result of the foregoing propositions is: 1. That the bond executed by the complainant to the Trust Company is void for illegality, and also for want of power in the corporation to enter into the transaction. 2. That the trust attempted to be created to secure the payment of the bond is void, because it is a trust for a purpose not authorized by law, and because a trust for the benefit or security of such a corporation is prohibited. VI. The relief granted by the court, i. e., ordering the bond to be canceled, and requiring the trustees to relinquish the property in their hands to the plaintiff, is correct in form. As to ordering the bond to be canceled, it admits of no discussion, under the act of 1837. It may be that if the bond stood alone, and was simply conditioned for the payment of money, and did not purport to create a cloud on the title, that an objection taken to the jurisdiction on the ground of an adequate remedy at law would have been sustained. But it is well.settled that such objection must be distinctly taken by plea, demurrer, or answer, which was not done. (Underhill v. Van Cortland, 2 J. Ch. R., 339; Grandin v. Le Roy & Smith, 2 Paige, 509; Fulton Bank v. N. Y. and Sharon Co., 4 Paige, 127; Cumming v. Mayor of Brooklyn, 11 Paige, 596.) 1. It has been argued that, on the case made, the declaration of trust is wholly void; and that this leaves the absolute deed standing alone. It and the deed are, in effect, one instrument, and as it contains, besides the- illegal provisions, other lawful objects [i. e., to convey to the paintiff,] the doctrine of cy pres applies, and it is void only as to the illegal purposes, and valid as to the residue. (Karling v. Rogers, 22 Wend., 494; Kane v. Gott, 24 Wend., 665,666; Willard on Eq. Jur.) This principle has been repeatedly applied to deeds, where one of the purposes was illegal and a deed to accomplish it declared void. (Chitty on Con., 693; Doe v. Hawthorne, 2 B. & A., 96; ib. v. Waterton, 3 B. & A., 149; ib. v. Pitcher, 6 Taunt., 359, 2 Marsh, 61; 1 Johns. R., 362; Redshaw v. Baldeis, 4 Taunt., 57, 105, 113, 553; Howe v. Synge, 15 East., 440; 1 Williams, Saunders, 66, a, note; 8 East., 231; 1 B. & C., 327; 5 Bing. N. C., 86; 2 Dow. & R., 499; 6 id., 176; 8 Term R., 411; 2 Barn, & Adol., 734; 5 Taunt., 727; 4 M. & S., 66; Doe v. Braimock, 10 Iredell, 428; Leavitt v. Palmer, 3 Comst., Opin., 37.) 2. It has been argued that because the bill and the evidence disclose that the transaction was illegal on grounds other than usury, and as to which, it is claimed that the plaintiff was in pari delicto, therefore he is not entitled to relief on the ground of usury. It has been insisted under the second and third points (supra) that the maxim in pari delicto, &c., ' does not apply in this case. But', whether the position thus taken is correct or not, there is no warrant for saying that the lender has, by violating the restraining law, protected the contract from the consequences of the usury, and evaded the act of 1837. The violation of the restraining act was disclosed by the bill, and by the proofs in the case of The Dry Dock Co. v. Am. Life Ins. Trust Co. (3 Comst, 361), and this court of course knew the law applicable to the facts, yet relief was granted. (3 Comst., 498.) 3. It has been claimed that the plaintiff is entitled to relief only upon terms. This claim of course is inapplicable, if the contract is usurious, and to be relieved against under the statute, except so far as the argument is based on the alleged bankruptcy, in which aspect it will be hereafter considered. The principle of doing equity, as sought to be applied in this case, is to impose such terms as will protect the Trust Company from legal liability on the .post notes. Quere. Whether this court has not affirmed the doctrine that a negotiable note, given by a corporation without authority, cannot be enforced, even in the hands of a bona fide holder for value. (Halsted v. Mayor, &c., of New-York, 5 Barb., 218; affirmed, 3 Comst., 430.) But these post notes contain sufficient on their face to put parties upon inquiry. The first ¿£12,000 were void on their face, because the Trust Company was at that time prohibited from issuing negotiable notes, and these were such. (Atty.-Gen. v. Life & Fire Ins. Co., 9 Paige, 470; Root v. Goddard, 3 McLean, 102; Leavit v. Palmer, 3 Comst., 19.) As to the ¿£35,700 loaned in July, they contained on their face sufficient to raise the inquiry, and thus in legal effect to amount to notice. VII. The alleged proceedings in bankruptcy constitute no defence in behalf of the Trust Company, or its voluntary assignee. 1. Independent of the act of 1837 the plaintiff is entitled to relief, because the Trust Company is not liable on the post notes. 2. He is entitled to relief under the act of 1837. All the cases proceed upon the ground that the word “ borrower,” as used in the statute, is intended as a designado persona, descriptive of the individual who borrowed, embracing those who represent his person, but having no reference to the property on which the security is given, and therefore not embracing mere privies in estate. (Livingston v. Harris, 3 Paige, 528; S. C. affirmed, 11 Wend., 329; Post v. Bank of Utica, 7 Hill, 391; Rexford v. Wedger, 2 Comst., 131; Vilas v. Jones, 1 Comst., 274.) 3. The proceedings in bankruptcy were coram nonjudice and void. To give jurisdiction under the act of 1841, the petition must be duly verified. The petition in this case was not duly verified, for the deputy clerk cannot administer an oath. Such is the opinion of the then judge of the court in which these proceedings took place. (Conkling’s Treatise, 2d ed., 295.) This case was decided at March term, 1856. [MAJORITY — Selden, J. Denio, C. J.] Selden, J. The most prominent question involved in this case, and that which I deem it expedient first to con sider, is whether the transaction between Schermerhom and his associates and the Trust Company was usurious. It will facilitate our inquiry and tend to give distinctness to the precise question which the case presents, to bring into view at the outset the most common forms under which the question of usury has arisen; and to notice some of the distinctions in regard to it which have been recognized and established by judicial decision. We shall thus separate this, case from some which it may seem to resemble, but from which it essentially differs. To constitute usury there must be a loan of money or its • equivalent. (Dry Dock Bank v. Am. Life Ins. & Trust Co., 3 Comst., 361.) The common expedient resorted to, therefore, to evade the statute, is to give to the transaction the form of a sale, instead of a loan: a disguise which, whenever it can be discovered, is stripped off by the courts and the transaction declared usurious. Goods are frequently purchased upon a credit and immediately resold at a sacrifice for cash for the purpose of raising money. To establish the allegation of usury in such a case, it is necessary to prove that the price agreed to be paid to the original vendor was more than the value of the goods; and, also, that a loan was intended under the form of a sale. These two facts must co-exist or there is no usury. It is obvious, therefore, that the price at which the goods are resold is of no importance except so far as it may bear upon the other questions involved. However great the sacrifice upon such resale, the transaction will not be usurious, unless the original vendor is by the contract to receive more than the actual market value of the goods. It is equally plain that however exorbitant the price agreed to be paid to such vendor, if he be ignorant of the purpose of the purchase, and the sale be not intended by him as a mere cover for a loan, there is no usury. So if one purchases of a bank the bills or notes of some other bank, which are depreciated in the market, and give his own notes for more than their market value, the same questions arise. Whether usurious or not depends upon tire question whether the transaction was in reality a sale or a loan, and this is to be gathered from the situation of the parties and all the facts and circumstances of the case. But suppose instead of the notes of another bank, he receives the notes of the bank to which he applies, and these are depreciated, but he nevertheless gives his own note for them at par, can any such question arise in that case? Gan usury be predicated of such a transaction ? Clearly not. Ho question as to the value of the notes can arise, as between the bank and the borrower; because, whatever may be the value of the notes in the market, the bank is bound to redeem them at par; and it cannot be said that the bank has made a profit by taking a note for precisely the same sum that it has obligated itself to pay. Frima facie, at least, such a transaction is a loan ; because, a bank cannot, make a sale of its own promises to pay; which are of no value so long as they remain in the possession of the bank. It is not until they have passed into other hands that they acquire a value and become possessed of the attributes of property. It would seem hardly to require either authority or argument to prove that a person cannot sell his own promises to pay. It necessarily results from the very definition of a sale, in which all writers agree. Chancellor Kent says: “ A sale is a contract for the transfer of property from one person to another for a valuable consideration.” (2 Kent's Com., 468, 5th ed.) Bouvier, in his Law Dictionary, defines a sale to be “ an agreement by which a man gives a thing for a price in current money.” He adds: “ To constitute a valid sale there must be a thing sold.” Long says: “ Three particulars are included in a valid sale, viz : a thing which is the subject of it, a price, and the consent of parties. If the subject of the intended sale have no exist- • ence, actually or potentially, there can be no valid sale.” (Long on Sales, 3.) It is plain that the giving, of one’s own promise to pay to another, for any consideration, cannot be brought within these definitions of a sale. It is impossible to call such a transaction a transfer of property from one person to another, as the promise is not property in the hands of the promisor. One who executes and delivers such a note thereby makes a valid contract, viz., a contract to pay according to the tenor of the note. All that he does, i. e., both the execution and the delivery are essential to the completion of this contract; which certainly is not a contract of sale, but is supposed to be the subject of such contract. If then there is a sale, it is made by the same acts which create the thing sold. This is not only repugnant to every just definition of a sale, but logically absurd. If then it be clear that neither individuals nor corporations can sell their mere promises to pay, the doctrine which has been deduced from the contrary assumption, viz., that upon an exchange of notes, the parties may put what relative value they please upon their respective obligations, without affecting their validity, unless it is proved by extrinsic evidence that they intended the transaction as a mere cover .for usury, falls to the ground. The basis upon which that doctrine rests is, that such an exchange is prima facie a mutual sale of the notes; and that evidence is required to rebut this legal presumption. The trae rule on this subject I hold to be this : that whenever the question of usury arises, no value can be put upon the promises or obligations of either party different from that which they import upon their face. This is universally conceded in respect to the obligations of the borrower. If a lender advances $90 in money, and takes a note for $100, with interest, he cannot defend himself against the charge of usury by showing that the responsibility of the borrower is doubtful, and that his notes would be worth less than par in the market. The question is to be determined upon the face of .the transaction. It is usury per se. Upon what principle, then, can one who instead of the $90 in money, gives • his note for $90, allege that the note he takes in return is worth less than its face? The only reason ever given is the one which has, I think, been refuted, viz., ' that the latter transaction is a sale, and not therefore within the statute. So, if the borrower choose to receive the promissory notes of the lender instead of money, he cannot, I think, upon the question of usury, take the ground that such notes are depreciated in the market. If he gives his own obligations for no greater nominal amount than that for which he. receives the obligations of the lender, there can be no usury. To constitute usury, the lender must take or receive, or contract to take or receive, more than the legal rate of interest; and such a project cannot be predicated upon the assumption that he will fail to redeem his own obligations. It may be said that, admitting a mere exchange of obligations not to be a sale, neither is it a loan; and hence that it is entirely without the statute of usury, unless brought within it by extrinsic evidence that an evasion of the statute was intended. It is trae that literally, the transaction is neither a sale nor a loan, but an exchange. I apprehend, however, that legally, in reference to the question of usury, it must be regarded as one or the other. No other distinction has ever been applied to such transactions by the courts. If, then, it is either, it clearly results from the principle already stated which estimates the respective obligations at their nominal value, that it resembles a loan far more than a sale. This estimate is entirely incompatible with the idea of a sale, but perfectly consistent with that of a loan. Such an exchange has been sometimes said to be a “loan of credit, and as such within the statute of usury. But the opinion of Judge Gardiner in The Dry Dock Bank v. The Am. Life Ins. Co. (3 Comst., 344), shows conclusively, 1. That credit cannot be loaned; and 2. That the statute of usury applies only to loans of money or its equivalent. It may seem to follow from the course of reasoning here adopted that the transaction between Schermerhorn and his associates, and the Trust Company, should be treated upon the mere face of the contract, independent of all extrinsic evidence, as a loan, within the provisions of the statute. " It is, however, unnecessary so to hold. The supreme court has found that it was “in substance and effect a loan of money ” by the Trust Company, i. e., of its certificates of deposit or post notes, as a substitute for, and in lieu of money; a finding which I think fully warranted by the evidence; indeed I think it is not possible to come to any other conclusion. The whole object of Schermerhorn and his associates was to raise money by way of loan, and this was well known to the officers and managers of the Trust Company. The bargain for the sale of the certificates to Mr. Biddle was made with the full knowledge of Mr. Duer, the vice-president of the Trust Company, before the certificates were issued No case, I apprehend, can be found of an exchange of obligation's under such circumstances, which has not been held to be a loan; and if a loan at all, it must be a loan of money or its equivalent, as is shown by Judge Gardiner in his opinion before referred to. He says: “ Every transaction of the kind, when analyzed, will be found to be a loan of money, ■ whether disguised or not under the form of an exchange.” If extrinsic evidence is necessary where the parties have exchanged then personal obligations, to prove that a loan was intended, nothing more can in my view be required than to show that the object of one of the parties was to raise money, and that this was known to the other. It being established then that the transactions between these parties was substantially a loan of money, i. e., of the certificates or post notes of the Trust Company received by the complainant and his associates as money, the next inquiry is, was it usurious 1 This question is to be determined in view of the principles already advanced. It follows from those principles, that the question of usury depends in no degree upon the price at which the certificates were sold by the complainant. However great the sacrifice upon such sale, no part of the profit made enured to the benefit of the Trust Company. Nor does it depend upon the value in the market of the certificates loaned. That question arises as we have already seen, only when a loan is made under cover of a sale. The transaction here was clearly not a sale. But it depends entirely upon the relative amount of the securities exchanged, estimated at their face respectively; and in making this estimate any difference in the interest has the same effect as a difference in the principal. The position assumed by Welles, J., on this subject in The Farmers’ Loan and Trust Co. v. Carroll (5 Barb., S. C. R., 616), is, I think, sound. He says: “I hold it to be law, that in all cases of a loan, where it appears upon the face of the transaction that the lender is, in any manner, to receive inore than the legal rate of interest as a compensation for forbearance upon the thing loaned, it is usury yer se.” This is said in reference to the precise case presented here. The certificates loaned to Carroll ran twenty years, and bore interest at five per cent, while Carroll was to pay interest to the company at the rate of seven per cent. Any difference in the nominal amount of the securities exchanged has been repeatedly held in England to constitute usury per se. (Matthews v. Griffiths, Peake's N. P. Cases, 200; Maddock v. Hammet 1 Bos. & Pul., 154; Parr v. Eliason, 1 East. 92.) It makes no difference whether the discrepancy is in the principal or the interest. If it appears that, at the end of all the payments, the lender will have received more than his principal with lawful interest, the contract is usurious. The rule which has been applied in England to grants of annuities for years, in consideration of a certain sum received, is strongly analogous in principle to that contended for here, and rests upon a similar foundation. Such an annuity is simply an agreement to pay a specific sum in instalments, and is not a sale for the same reason that the giving of a promissory note is not a sale. It has accordingly been frequently held, that in such a case the qestion of usury depends upon computation merely. In the case of Doe v. Gooch, (3 Barn. & Ald., 664); Bailey, J., in reply to' the counsel who 'had referred to the case of an annunity for life, said: “ In that case the principal is in hazard from the uncertain duration of life. Here it is in the nature of an annuity for years, and there is no case in which an annuity for years has been held not to be usurious, where on calculation it appeared that more than the principal together with legal interest is to be received.” In Fereday v. Wightwick also (Russ. & Myl., 45), where an annuity of ¿£664.18 had been granted for the term of eleven years and a half, in consideration of the sum of ¿£4000 received, the master of the rolls said : “ This in effect is an agreement to repay the principal sum of ¿£4000, with interest, in twenty-three instalments, and as it appears that the interest thus paid will exceed legal interest, the transaction is plainly usurious.” In this case an annuity for years is placed upon the same footing as any other contract to pay a certain number of instalments; and the principle asserted is, that whenever it appears on the face of the transaction that at the close of all the payments more than the sum advanced, with legal interest thereon, will have been returned, the contract is usurious. Although such a transaction is called the purchase of an annuity, yet no evidence is required to show that it is intended as a- cover for a loan; because the annuity being simply an engagement by the party himself to pay a certain number of instalments, it is impossible that it should be, in the eye of the law, a sale. The question was again presented in the case of Ferguson v. Sprang (1 Ad. & El., 576), where in consideration of ¿£200 received, an annuity of ¿£20 had been granted for sixty years. Lord Denman seemed to think that a question arose as to the value of the annuity, independent of its nominal amount; and that if the jury should find, “ looking to the value of the annuity granted, that the transaction was a Iona fide contract for an annuity,” it might stand ; but the other three judges all agreed that it was a mere matter of calculation, and that it should be submitted to a jury simply to “ calculate the excess.” The same doctrine was reiterated by the vice-chancellor in the case of Chillingworth v. Chillingworth (8 Simons, 494), in which the case of Ferguson v. Sprang was reviewed. I consider these cases as resting upon a firm basis of principle, and as tending to establish the doctrine contended for here; that whenever the question of usury arises between the parties to any transaction, the obligations of the parties themselves cannot be estimated otherwise than at their nominal amount; and that consequently, upon every exchange of notes or other obligations, the question of usury becomes one of mere computation. Assuming this doctrine to be correct, it is unnecessary to go into anv minute examination of facts or calculation of ° o amounts; for if the certificates be estimated at the full commercial value of the pound sterling, and to this the Trust Company is clearly entitled, including the usual rate of exchange between New-York and London on all funds which it will be necessary to remit to meet them, there w’ould still be a very considerable difference, as is shown by the proof, between the amount of the certificates and that of the bonds taken in exchange for them, growing out of the difference of two per cent in the rate of interest; and there can be no risk in inferring that this difference constituted the inducement on the part of the Trust Company to enter into the arrangement. I deem the conclusion inevitable, therefore, that the transaction was usurious. It follows that the complainant is entitled to some, portion at least of the relief which he asks; unless he is jrrecluded upon the grounds assumed on the part of the appellants. It is urged by the appellants’ counsel, that it appears from the bill itself that the complainant was a participator in violating the banking laws of the state; and that while the facts alleged might constitute a good defence, were the Trust Company seeking to enforce the payment of his bond, the court will not grant affirmative relief to one who shows himself to have been concerned in an illegal transaction. There is no rule better established than that wdrich refuses the active interposition of a court of equity in favor of one who is particcps criminis; but like most other rules it admits of exceptions. There are certain cases where the party seeking relief, although particcps criminis, is not in pari delicto, to which it does not apply. This distinction seems to have been first taken by Lord Mansfield, in the case of Smith v. Bromley (2 Doug., 696, note to Jones v. Barkley). The exception was there applied only to cases where the law violated was intended to protect one of the parties from particular acts of oppression or extortion by the other; as for instance the statute against usury. Subsequent cases however, show that the principle is not confined to that class of cases. The next case in which the question arose, was that of Jacques v. Golightly (2 Win. Bl., 1073). The plaintiff had paid to the defendant money as a premium for insuring lottery tickets, a transaction prohibited by statute, and the action was brought to recover it back. It was insisted for the defendant, that the plaintiff being particeps criminis, could not recover. But the action was sustained. Blackstone, J., said it was not like the stockjobbing act; “ because there both parties are made criminal, and subject to penalties.'' Browning v. Morris ( Cowp., 790), was another case of the same kind. Lord Mansfield there draws the distinction between acts which are mala in se, such as bribery, and those which are merely prohibited by statute; and in the course of his opinion remarks that, “ it is very material that the statute itself by the distinction it makes has marked the criminal; for the penalties are all on one side; upon the office keeper.” A similar question afterwards arose in the case of Williams v. Medley (8 East, 378), where it was very elaborately examined by Lord Ellenborough, who confirmed the doctrine of the previous cases. The principle of these cases is so obviously just, that no argument seems necessary to sustain it. To say that in every transaction prohibited by positive enactment, the parties concerned are necessarily in pari delicto, would in many cases be manifestly absurd ; and the test adopted by Lord Mansfield and Mr. Justice Blackstone, by which to determine the relative guilt of the parties, viz., to see' upon which party the penalty is imposed, would seem to be just. . These cases have been several times reviewed and approved by the supreme court of Massachusetts. In the case of Inhabitants of Worcester v. Eaton (11 Mass. R., 368), Ch. J. Parker after referring to the cases of Smith v. Bromley and Browning v. Morris, supra, says: “ This distinction seems to have ever been afterwards observed in the English courts, and being founded in sound principle, is worthy of adoption as a principle of common law in this country.” The same question afterwards arose in the same court, in White v. The Franklin Bank (22 Pick., 181), and was there very fully discussed. The suit was brought to recover money which the plaintiff had deposited with the defendant, under an agreement that it should remain for a certain specific time, in violation of an express statutory provision, which prohibited the bank from making contracts “ for the payment of money at a future day certain.” The action was held to lie, and the principle of the English cases to which I have referred was emphatically sustained by the unanimous opinion of the court. (Lowell v. Boston & Lowell R. R. Co., 23 Pick., 24; Atlas Bank v. Nahant Bank, 3 Met., 581.) It was said upon the argument, that the modern cases are opposed to this doctrine ; but I am very firmly persuaded that the doctrine is sound and the distinction upon which it rests one which exists in principle and in reason. It applies no less in equity than at law, its foundation being that the parties, although joint participators in an illegal transaction, are not equally criminal. ' In the present case the penalty for violating the statute is imposed upon the Trust Company alone. It is unnecessary, however, to decide what would be the rights of the complainant were he seeking some kind of relief on the ground of a violation by the Trust Company of the restraining law. The question is, whether he is precluded from all relief against the usury, because the usurious contract was connected with a transaction which was within the prohibition of the restraining act. I see no just ground for thus holding. The usury and the violation of the restraining law are entirely distinct offences. The statutes are distinct and the penalties distinct. The one offence depends upon circumstances having no necessary connection with those which establish the other. The complainant in the eye of the law is one whom the statute of usury was designed especially to protect; and why should he be deprived of this protection because, in connection with the usury, there was another violation of law ? If instead of an act entirely innocent in itself, and only wrong because prohibited on grounds of public policy, the complainant had participated in the commission of an offence malum in se, involving deep moral turpitude, there might seem to be a moral if not legal propriety in depriving him of the remedies which the law affords by way of penalty for his crime. The case of usury being an admitted exception upon principle to the rule which denies relief to onq who is particeps criminis, I do not see how it is brought within that rule by being connected with another offence involving on the part of the complainant, at least, no greater degree of moral guilt. No authority other than those which establish the general rule was cited for the position, and I think none can be found to sustain it. This rule, therefore, affords in my view no obstacle to the relief sought by the bill. To what relief then is the complainant entitled ? This depends in some measure upon the question whether he is to be regarded as a borrower within the provision of § 4 of the act of 1837, which provides, “ that any borrower of money, goods .or things in action,” may file a bill for relief against usury, without offering to pay any part of the sum loaned; and that the payment of the whole or any part of such sum shall not be required as a condition of granting. the relief. If Schermerhorn, under the proof in the case, is not entitled to relief as a borrower within the meaning oi this provision, then, according to the settled principles of equity, he must “ do equity” before the court will interpose in his behalf. The supreme court held that Schermerhorn was to be regarded as a borrower notwithstanding the bankruptcy, on the ground that the word borrower in the statute is intended as descriptio persones, and that the complainant comes within that description. Judge Marvin, who delivered the opinion of the court, on this subject, says “The plaintiff is certainly within the letter of the statute.” It describes him. He was the “ borrower.” This is no doubt true. But is it not necessary, in order to give him the benefit of the provision, that he should be entitled to relief, in his character of borrower? Is not the true question, whether he comes into court as the borrower, whether he represents the title and interest which the statute wras designed to protect, and whether, if relieved at all, he is to be relieved as the borrower, or as the purchaser at the sale in bankruptcy ? In the cases of Post v. The Bank of Utica (7 Hill, 391) and Rexford v. Widger (2 Comst., 131), it was held, that the term borrower did not include purchasers from the borrower. What is the complainant here but a purchaser? It is said that he had never parted with his entire interest; that he would have been entitled to an account from the assignee ; and that if his debts had been discharged without a resort to this property, it would have revested in him. But the answer is, that by the sale, every vestige of his original interest was cut off. He acquired by the purchase the same rights that would have been acquired by a stranger, and none other. It is by virtue of the title acquired, at the sale alone, that he comes into court, and the circumstance that he is the same person who was once entitled to relief as a borrower is a mere accident, which cannot affect his rights. He can claim the same relief to which the assignee in bankruptcy, or any other purchaser under him, would be entitled. If he asks equity, therefore, he must do what equity requires. But it is insisted on the part of the complainant, that the post notes issued by the Trust Company are void ; that the company is not liable for their payment; and hence, that equity does not require any provisions to be inserted in the j udgment for its benefit or protection. Whether these notes are void or not is a question between the Trust Company and the holders. It has never yet been decided in this state, so far as I am aware, that a hanking company can set up its own violations of law as a defence against its negotiable promissory notes, in the hands of a bona fide holder for value; and that decision will hardly be made for the first time, upon a collateral presentation of the question, in a case to which the holders of the notes are not parties. What then does equity require in this case? Plainly, that the bond of Schermerhorn should be canceled, and that he should be put in possession of the property purchased of the Holland Land Company, and its proceeds, upon payment of the sum actually borrowed of the Trust Company, with interest to this time. In ascertaining that sum, we are not to be governed either by the amount which the complainant and his associates received for the certificates, or by their market value at the time of the loan, but exclusively by the amount of the obligation which the Trust Company assumed upon the face of the certificates ; in other words, the amount which the company must pay to redeem them. The relief granted to Schermerhorn, therefore, should be upon condition that he pay the principal sum loaned, estimating the pound sterling at its value in London where the certificates are payable, and interest upon that sum to the time of payment; with a rebate, however, of the difference in interest of two per cent for the whole time the certificates have from their dates to run. It was insisted orally upon the argument, that the effect of declaring the contract between the complainant and his associates and the Trust Company usurious would be to, render void not only the bond of the complainant, but every other part of the transaction, including the deed of the Holland Land Company to the trustees; thus leaving the title to the land, and other property in question in the last mentioned company. But Chancellor Walworth in his printed argument concedes that this consequence would not necessarily follow unless relief is granted to the conn plainant as a borrower under the act of 1837. He say : “ The case is different where the complainant comes into court to do equity. By making such an offer he waives the forfeiture; and the court in such a case instead of setting aside the transaction is authorized to confirm it, so far as is necessary to do equity between the parties; and to mould and regulate the interests of all parties therein, so as to do perfect equity. In such a case the court confirms such parts of the transaction as ought to be confirmed, and sets aside or corrects such parts thereof as ought to be corrected.” This is a clear and accurate statement of the rule, except that the power of the court so to arrange the different parts of the entire transaction as to accomplish what equity demands, is not confined, I apprehend, to cases where the complainant offers in his bill to do equity, but exists in every case in which the court is called upon to adjust the rights of the respective parties upon purely equitable principles. Formerly when bills of this character were filed to obtain a discovery as well as relief, unless the complainant offered in his bill to do what equity would require, upon the facts alleged in the bill itself, the defendant might demur ; not because the court could not, if the facts were esstablished, grant the relief to which the complainant was equitably entitled, but because a discovery would not be compelled without such offer. If, however, the defendant voluntarily answered instead of demurring, and the allegations in the bill were proved, the books are full of cases in which relief was granted upon such terms as to the court seemed just. (Livingston v. Harris, 3 Paige, 528; Fanning v. Dunham,, 5 John. Ch. R., 122.) In this case, there can be no difficulty in adjusting the • equities of the parties, because no part of the transaction need be avoided except the bond of Schermerhorn. The deed of the Holland Land Company and the partition among the associates should be confirmed; and the trust in favor of the Trust Company should be permitted to stand until the actual indebtedness of Schermerhorn to the company is paid. It should be referred to a referee to compute the amount due to the Trust Company upon the principles here indicated, and to take and state an account between the trustees, the Trust Company, and the complainant, mutually and respectively ; and the judgment should provide that the complainant pay the balance, if any, which may be found due to the Trust Company, with interest; that the proceeds of the trust property continue to be applied to the payment of such balance until the same shall be fully paid; and that upon payment thereof in full, either by the complainant or by the trastees from the proceeds of the trust property, the complainant shall be entitled to a conveyance and assignment from the trustees of all the trust property remaining in their hands or under their control, or in the hands or under the control of their agent or agents. The judgment of the supreme court must be modified accordingly, and the proceedings must be remitted to that court with instructions to carry out the principles herein set forth. No costs are to be allowed to either party in this or in the supreme court. Denio, C. J. The claimant based his claim for relief in the supreme court upon several grounds: First. That the arrangement of 11th July, 1838, was infected with usury; Second. That it was void for want of power in the American Life Insurance and 'Trust Company, under its charter, to issue the certificates of deposit mentioned in the pleadings and proofs; and Lastly. That the issuing of these certificates was, under the circumstances, a violation of the laws of this state relating to unauthorized banking. That court pronounced the judgment appealed from, on the assumption that the arrangement referred to was usurious, and that the plaintiff could be relieved against it in this action though he had not paid or offered to pay the sum really owing, without examining the other questions. It will, therefore, be convenient to examine the case in reference to the alleged usury in the first instance. It was well settled; prior to the enactment of the Revised Statutes, that a party, seeking in a court of equity to set aside a contract or conveyance on the ground of usury, was bound to pay or at least offer to pay the creditor the amount owing him, deducting the usurious premium. This was upon the ground that the principles of the court did not allow it to lend its aid to enforce a penalty or forfeiture—its jurisdiction being to relieve against such claims upon equitable'considerations. A provision in the Revised Statutes dispensed with this condition, in favor of the borrower, where relief only without a discovery was sought. The usury act of 1837 went further, and provided that “ whenever any borrower of money, goods or things in action, shall file a bill in chancery for relief or discovery, or both, against any violation of [the Revised Statutes respecting usury, or] this act, it shall not be necessary for him to pay or offer to pay any interest or principal on the sum or thing loaned; nor shall any court of chancery require or compel the payment or deposit of the principal sum or interest, ór any portion thereof, as a condition of granting relief or compelling a discovery to the borrower in any case of usurious loans forbidden by said title or by this act.” (Laws of 1837, 487, $ 4.) The question immediately arose, whether the dispensation thus provided for was limited to suits prosecuted literally by the borrower, or whether that term was used in a general sense to denote the party claiming to be aggrieved by the alleged usury; whether he was the original party to the loan or one representing him by privity of estate. The limited construction was finally adopted by the courts; and that construction has been established by the tribunal of last resort. (Post v. The President, &c., of The Bank of Utica, 7 Hill, 391; Rexford v. Widger, 3 Barb. Ch. R., 640; S. C., 2 Comst., 131.) If, therefore, Mr. Schermerhorn had sold his interest in the lands in question to another, or, if his assignee in bankruptcy had disposed of his interest in them to any other person than Schermerhorn himself, the purchaser in either case could not have had relief except upon the condition of paying the sum really due, with legal interest. But the assignee in bankruptcy sold the estate in question to Schermerhorn, who was the borrower upon usury if there was an usurious loan; and hence it is argued by the counsel for the respondents, that as he answers the description of the party whom the act intended to favor, he is entitled to the benefit of the dispensation provided for such party. Under the same proceedings in bankruptcy Schermerhorn. received a certificate and discharge from his debts, so that, although he was once a borrower, he is not now personally chargeable in consequence of such a relation. He sustains, moreover, the same relative situation towards the property that any other purchaser under him would have done. So far as there is any substantial distinction between the situation of a person who has mortgaged, his own property for the payment of a loan, and one who has become the owner of such property by a conveyance from another mortgagor—Schermerhorn occupies the 1 after position. His title to the property is not at all affected (unless it be in the particular under consideration) by the fact that he was once before the owner of the same property. He is no way burthened with the debt which he seeks to avoid, except that if it constitutes a valid incumbrance upon the land, it impairs the value of his interest in it to the same extent, and in the same manner, in which it would have operated against any other purchaser under him. We are bound to assume, that the discrimination which the statute has made between the party to the loan and one who has purchased the property incumbered by a former owner, was based upon some substantial reason. It is the theory of the laws against usury that the borrower is under a species of moral ■ duress, and hence his consent and cooperation in the illegal transaction does not prejudice him. But one about to purchase property incumbered by an usurious lien is under no such coercion, but is as free to abstain from the purchase as to avoid entering into any other transaction. The defence of usury is not, however, personal to the borrower. As all contracts and conveyances infected with that vice are absolutely void, any person holding property apparently incumbered with such contracts and conveyances made by his predecessor in the title, may show the fact, upon which the law adjudges that the property is unaffected. When, however, the legislature came to provide new and increased facilities for establishing an allegation of usury, the remedy was given to the victim of the usury alone, to the exclusion of parties holding derivative titles under him. It may be safely affirmed that the motive for the discrimination was the supposed meritorious character of the former, as compared with the latter. The new remedy was extended to a party whose person and estate, or both, vrere burthened with an obligation which he had been coerced to create; and it was denied to all other parties, I hough according to the antecedent laws they were entitled to avoid liens upon their property by complying with the conditions which such laws imposed. The position occupied by Schermerhorn when he filed this bill was not the one contemplated by the legislature. Though he had been a borrower, he had divested himself in a manner authorized by law of all the consequences of that condition. His present relation to the property and to the litigation which was commenced by the bill was that of a volunteer purchaser of the subject of the litigation. His prior connection with the subject was altogether immaterial. His right would have been precisely the same if some other person had been the party to the arrangement of the 11th July, 1838, and if such person had become bankrupt, and the property had passed into the hands of the assignee, and Schermerhorn had purchased at the sale. Quoad the debt, the property and the incumbrance, as they existed when the bill was filed, Schermerhorn was not a borrower, but a purchaser. In my judgment it would be as reasonable for one who was a borrower of the party, sued by a collateral contract not connected with the loan sought to be avoided, to claim the benefit of the statute, on the ground that he was literally a borrower, as for Schermerhorn, under the circumstances of this case to claim it. It may be said that he is within the letter of the act; but he is not at all within its spirit or intention. Qiii hceret in litera hceret in cortice. This view of the case was sought to be avoided by the complainant’s counsel by the allegation that the proceedings in bankruptcy were coram non judice and void, because the petition in bankruptcy was not, as it was said, sworn to before an officer authorized by the laws of the United States to take affidavits; and I have been unable to find any act of congress authorizing clerks of courts to administer oaths out of court. As to oaths taken in court, it is well known that they are usually administered' by the clerk or his deputy. The first order in the bankrupt proceeding which directs the publication of notice to show cause, and the order or decree of bankruptcy, both recite that the petition was duly verified. These orders were granted at the instance of the petitioner, and are some evidence against Mm that the verification was in all respects according to law. The deed to Schermerhorn recites the decree of bankruptcy, and the order appointing the assignee; and the defendants gave in evidence, in addition to the deed, certified copies of these orders. The fifteenth section of the bankrupt act provides “ that such recital [in a deed executed by the assignee], together with a certified copy of such order, shall be full and complete evidence both of the bankruptcy and assignment therein recited.” The defendants also gave in evidence the discharge of Schermerhorn from Ms debts. The fourth section of the act declares that the certificate and discharge, when duly granted, shall be conclusive evidence in itself in favor of the bankrupt. I am of opinion, however, that any party may show that the district court did not obtain jurisdiction to make these orders; and that affirmative proof that the petition was not legally sworn to would be fatal to the proceedings. (Seaman v. Stoughton, 3 Barb. Ch., 344; Ruckman v. Cowell, 1 Comst., 505, per Bronson, J.) The oily question then is, whether the jurats attached to the petition and schedules afford sufficient evidence to overcome the presumption afforded by the deed and the several orders above mentioned. The language of the jurats, it must be admitted, is more appropriate to set forth an oath taken before a clerk alone than to a statement that the oath was taken in court. They do not, however, state positively that the oath was not taken in court. Knowing as we do that the clerk had no authority to administer an oath out of court, but that his power to administer one as the immediate officer of the court and in its presence was ample; that this oath was administered on the same day that the petition was presented, and that the court is declared to be always open, and applying the principle—ut res magis ualeai quam per eat—to this case, X am inclined to the opinion that it should be held that the papers were duly verified. I will in the next place state briefly the conclusions of my mind upon the question of usury : First, the value of a pound sterling was not over estimated when it was received as equivalent to $4.71; but assuming that exchange was at par it was undervalued by about sixteen cents. An act of congress, passed in the year 1834 (4 U. S. Statutes at Large, 700), fixed the value of foreign, and among others of British gold coins, in federal money, by reference to the fineness of the gold and the weight. According to this authentic stan dard, which was in force when the transaction in question took place, the British sovereign, which is a coin representing a pound sterling is equivalent to about four dollars and eighty-seven cents. (Treatise on Banking by J. W. Gilbert, General Manager of the London and Westminster Bank, 5 Heman’s Banking Magazine, 902; 1 Hunt's Merch. Mag., 535, 6; 34 id., 345.) The difficulty which embarrassed the supreme court arose out of the early practice of considering a Spanish silver dollar the equivalent of four shillings and sixpence sterling, and the act of congress of 1799 respecting the collection of duties on imports and tonnage, by which the pound sterling of Great Britain was required to be reckoned in the calculation of ad valorem duties on imports at $4.44. (1 Story's Laws U. S., 226, 861.) The subject was further complicated, by calling the difference between the standard thus adopted and the real value of the pound sterling at any given time in our money, as a premium of exchange. Thus, when exchange on England is said to be 9-ff per cent, above par, it is really at par, for the addition of that amount per cent to $4.44 will produce the sum which precisely represents the value of the sovereign.. If exchange rises still higher, it indicates that the balance of trade is against this country, and if the difference is sufficient to pay the expenses of exporting the precious metals, gold will be sent to England in preference to bills of exchange purchased aj; the current rate. If this was the only difficulty in the arrangement of July 11, 1838, it would cause no embarrassment. Second. But the certificates of deposit which Mr. Schermerhorn and his associates received bore an interest of only five per cent per annum, while they secured to the company an amount of money intended to be equivalent to the sum of English money represented- by the aggregate of the certificates of deposit, with seven per cent interest. Then the certificates had twenty years to run, and assuming, as we must do, upon a question of usury, that our legal rate of interest represents the true value of the use of money, the associates would sacrifice the amount of the two per cent per annum, upon the whole sum of the certificates for each of the ensuing twenty years. When the transaction :s really a loan, and the borrower receives some security or promise to pay money instead of the money itself, the first question is whether the paper received calls for a sum equal to the amount which the borrower engages to pay. There is no difference in principle between a case where the security advanced by the lender is for a less nominal amount than the borrower’s undertaking for repayment, and this case, where the difference is produced by an adjustment of the rate of interest. If one upon a negotiation for a loan gives his note for $1000 for the lender’s note, upon which to raise money, for $800, the transaction is confessedly usurious ; and it is not less so if the principal named in the security is equal, but the difference in the amount ultimately payable is produced by the insertion of different rates of interest in the two securities. It is upon this principle that the advance of post notes by the lender, the borrower undertaking to pay the same amount with legal interest, is usurious. (Dry Dock Bank v. The Amer. Ins. Co., 3 Comst., 361; N. Y. Life Ins. Co. v. Beebe, 3 Seld., 364.) There is, however, a principle upon which, in the case last supposed, the loan would be free from usury. If the paper advanced by the lender instead of money, has a fixed market value, it may, I think, be safely loaned at such value, though the money secured by it may be mathematically less than that'which the lender agrees to pay. Such is the case with public stocks. They may be, and frequently . are, worth more than par, though the interest which they bear is lower than the current rate of interest upon other securities, or than the legal rate. A holder of such stocks may legally advance them to a borrower upon the negotiation of a loan, at their market value, and take his obligation payable on time with legal interest; and so, I doubt not, an. individual or corporation thus fortunately situated as to credit, may issue its own paper and receive security therefor payable on túne for the market value of the paper thus issued. So in the case of an application bona fide made for securities, payable at a future day for remittance or other lawful use, the transaction would not be objectionable though the arithmetical value of the paper thus purchased should be less than the obligation given to secure the payment, even if the last mentioned securities had no market value. In such case the object would not be to effect a loan, but to purchase exchange or the like. But in the absence of any such artificial or market value, and where the transaction is really a loan, and the borrower has bound himself to pay more money than the securities which he has received from the lender will oblige the latter to pay, the difference is an usurious premium. Without going over the evidence in this case, which, however, has been carefully examined, I am quite satisfied that the transaction between the associates and the Life and Trust Company was a loan by the latter to the former. The associates wanted money or something which would immediately produce money. They did not desire to purchase exchange or to procure an investment. The company had not indeed any ready money to loan, but they had credit, w'hich enabled money to be raised on their engagements, and they consented to issue such engagements, upon being secured, by means of the difference of interest, considerably more than the amount which these engagements would require them to pay. Their credit, however, was not só good as that their paper of this description would command a premium in the market. On the contrary, it was considerably below par. They could not, therefore, loan such paper for more than its real value, and that value must be measured, as has been already stated, by the amount of money which it would oblige them to pay. I am, therefore, of opinion that the transaction of July, 1838, was void for usury; and if Schermerhorn could be considered as a borrower he would be entitled to relief against the securities executed to effect that arrangement, without the performance of any condition. At the time the arrangement in question was consummated, the defendants’ charter was embraced in the act of the general assembly of Maryland passed in. December, 1837. The sixth section contains a limitation of the powers of the, company, in these words : “ This act shall not be construed to authorize the said company to issue for circulation as money, any of its own promissory notes, or notes in the nature of bank-notes, or certificates of deposit payable to bearer.” The certificates issued in 1838, though not in terms payable to bearer, were such in effect. They were payable to the order of Mr. Thurston, an officer of the'eompany, and endorsed by him in blank, so that they would pass by delivery. But it cannot be said that they were issued for circulation as money. The large amount of each certificate, the distant day at which they were payable, the fact that they bore interest and were payable in foreign money and in a foreign country, would entirely prevent them filling the place of currency. They resembled in their maim features, so far as this question is concerned public stocks more closely than circulating notes. They wmuld, doubtless, answer some of the purposes of money, and so would state stocks or any other good bonds or secu rities, but they are quite destitute of the qualities which would fit them for circulation in the manner which money circulates. They were not, therefore, forbidden by the act of incorporation. The prohibition in the 4th section of the original act of incorporation, passed in 1833, was broader, and prohibited the company from issuing and putting in circulation any negotiable note. ¿£12,000 of the certificates, which were eventually secured by the arrangement of 1838, were issued while the last mentioned act was in force. The issuing of them was a violation of the charter of the company. That charter however was not matter of municipal law with us. Its only effect was to regulate and define the power of the corporation, and when the company executed an act forbidden by it, the result of the transaction in the view of the courts of this state would be that the act was without authority. When, however, this particular restriction was repealed by the new charter of December, 1837, it was competent for the parties who had received the benefit of the unauthorized certificates, to secure the company the amount agreed to be paid for them. These considerations have led me to the conclusion that the transaction in question is not invalid on account of the alleged violation of the charter of the company. The 6th section of the title of the Revised Statutes relative to “ unauthorized banking and the circulation of certain notes and evidences of debt issued by banks,” declares that “no person or association of persons or body corporate, except such bodies corporate as are expressly authorized by law, shall keep any office for the purpose of receiving deposits or discounting notes or bills, or issuing any evidences of debt to he loaned or put in circulation as money; nor shall' they issue any bills or.promissory notes or other evidences of debt as private bankers for the purpose of loaning them or putting them in circulation as money unless thereto specially authorized by law.” (1 R. S., 712.) This provision was modified by an act of 1837 (ch. 20), as to the business of receiving deposits and discounting bills, but the' change did not affect foreign corporations. I am of opinion that the evidence establishes the position that all these certificates were issued for the purpose of being loaned as money by the corporation. It is not necessary that they should have been capable of circulating as money; it is" enough to constitute an offence against the statutes that they should be issued to be loaned. The evidence of Mr. Seward shows that this was the object for which they were made and delivered, and the general scope of the arrangement corroborates this position. The bargain therefore in all its parts was a violation of the laws of this state. The executory- stipulations .of the several parties were consequently void, and neither of them could maintain an action against any other party to compel a compliance with these stipulations. It does not, however, follow, that any of the parties can sustain a suit in equity to rescind the arrangement or to set aside any of the deeds by which it was consummated. The parties were all participants in the transaction, and each is deemed to have consented to all the stipulations contained in the papers. It is manifestly impossible to discriminate in favor of those who were less actively engaged than the others. Those who took the more active part in the arrangement acted as the agents of the other parties, and notice to them is imputable to all the associates. It is an established principle of law that the courts will not entertain a suit to enforce an executory contract made in contravention of a statute of the state. If such a contract has been executed, an action will not lie in disaffirmance of it. In this class of cases the law will not extend its aid to either of the parties. It will not listen to their complaints against each other, but will leave them where their own acts have placed them. (Yates v. Foot, 12 John., 1; Nellis v. Clark, 20 Wend., 27; S. C. in Error, 4 Hill, 424; Staples v. Gould, 5 Sandf. S. C. R., 411; S. C. in Court of Appeals, April Tr., 1854; Talmadge v. Pell, 3 Seld., 328.) In this case Schermerhorn caused the title to the land in controversy to be conveyed to trustees for the benefit of the Life and Trust Company. That was an executed conveyance. If valid it operated, in connection with the papers constituting the defeasance, by way of mortgage, and vested a defeasable title in the trustees. The plaintiff seeks to dis-affirm and rescind this conveyance and have the premises conveyed to him on the ground that it was part of a transaction entered into in violation of a statute of this state. The principle of law referred to is fatal to the suit in this aspect of it. If the plaintiff was in a situation ,to avail himself of the act of 1837, respecting usury, I am of opinion that he would not be precluded from his remedy in that view of the case, by the consideration that the certificates were also a violation of the restraining act. The 5th section of the act of 1837, positively directs that where usury is shown, the usurious securities shall be set aside. It is not an answer to a prayer for relief under this provision that the particular transaction is illegal in-other respects. It is said, that to sustain the judgment of the supreme court, we must go further than we are required by the terms of the section referred to. In my opinion, the statute should be construed more liberally or rather more reasonably than this objection assumes. Its object was effectually to relieve the party who had given usurious securities. To do this in the case before us, we must require the trustees to convey to the plaintiff the land which he has pledged for an usurious loan. The original proprietors have been paid the consideration money of the purchase, and nothing stands in the way of the plaintiff’s enjoyment of the subject purchased, except the usurious arrangement by which that subject has been mortgaged to the Life and Trust Company. As to usury, the statute has abrogated the equitable maxim that the plaintiff, to entitle himself to relief, must do equity. He can now claim relief in cases within the act, without conforming to that maxim, and-in such cases he' should have the same full and ample remedy which he would have been entitled to if he had paid the real debt with legal interest. If the plaintiff should be confined strictly to the case made by the complaint, the result of those views would be that the suit should be dismissed with costs, for the reason •that no offer to pay anything is made by the plaintiff, and that he is not entitled to the benefit of the act of 1837. But, a majority of the court, while concurring substantially in the foregoing positions, are yet of the opinion that relief may and should be granted to the plaintiff on condition of payment of the sum equitably due to the Life and Trust Company, or its assignees ; and, in looking into the books, I find that courts of equity have been accustomed to grant relief in such cases upon equitable terms, though the bill contained no offer to pay the principal and legal interest. (Fanning v. Dunham, 5 J. C. R., 122, 144, 146, and cases cited.) I concur, therefore, in that disposition of the case. The value of the certificates of deposit which were issued for the use of Schermerhorn must be ascertained by reference or otherwise, and, upon payment of that amount, the unsold land belonging to the complainant must be conveyed to the present plaintiffs. Should they neglect to make such payment within a period- to be fixed by the decree, the complaint should be dismissed with costs. As the plaintiff did not intimate a willingness to submit to equitable terms until the argument of the appeal, he ought not to recover the costs of the litigation. The judgment will be settled before Judge Selden. All the judges except Mitchell, J., who was of opinion that the transaction was not usurious, and Comstock, J., who took no part in the decision, concurred in the result of the foregoing opinions. Judgment accordingly.