Monclure v. Dermott, 38 U.S. 345 (1839)

Syllabus

U.S. Supreme Court

Monclure v. Dermott, 38 U.S. 13 Pet. 345 345 (1839)

Monclure v. Dermott

38 U.S. (13 Pet.) 345

Syllabus

An action of covenant was instituted by the executors of M.J. upon an obligation executed by A.R.D., under seal, to M.J., by which she agreed to pay a certain note or bond, loaned by M.J. to A.R.D., which had been sold by A.R.D. at a usurious discount and on a usurious contract. The bond or note of M.J. had been given to enable A.R.D. to raise money to pay a debt due by her, and for which the note of M.J. had been previously loaned to her. It was denied by the executors of M.J. that she had any knowledge of the usurious dealing in which the bond or note of M.J. was sold. The executors of M.J. were obliged to pay a large portion of the note or bond, and the action was instituted to recover so much as they had paid. A.R.D. set up the usury between her and the person to whom she had sold the note or bond, as a defense to the suit of the executors of M.J. It was held that the action on the covenant of A.R.D. could be maintained, and that the usurious dealing between A.R.D. and the purchaser of the note or bond of M.J., did not render the covenant of A.R.D. to pay the bond or note invalid. The court said the contract between the defendant and the purchaser of the bond, if embracing no other person than themselves, could affect no contract between other parties, previously made, and whether that contract was usurious depended on the intention of the parties to it. If it was made bona fide for the sale and purchase of the bond, although at a discount which would insure to the purchaser twelve percent a year for the money advanced, it would not be usurious. If, on the other hand, the sale of the bond was a mere cover for avoiding the statutes against usury, and the real intention of the parties was to make a contract for the loan of money at a higher rate than the legal interest, then the contract was usurious. But to involve M.J. in the usury and to extend its taint to the covenant of A.R.D., it must be shown by proof that M.J. executed the bond or note sold for the purpose of aiding A.R.D. to borrow money at usurious interest, and not to enable A.R.D. to raise money by selling it in the market. When the holder of M.J.'s. note threatened proceedings on it, it was not necessary that the executors of M.J. should give notice thereof.

No subsequent confirmation of a usurious contract nor any new contract stipulating to pay the debt with the usurious interest will make it valid.

It is the settled law of Virginia that the bona fide purchaser of a bond or note may take it at any rate or discount, however great, without violating the statute.


Opinions

U.S. Supreme Court

Monclure v. Dermott, 38 U.S. 13 Pet. 345 345 (1839) Monclure v. Dermott

38 U.S. (13 Pet.) 345

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR

THE COUNTY OF WASHINGTON IN THE DISTRICT OF COLUMBIA

Syllabus

An action of covenant was instituted by the executors of M.J. upon an obligation executed by A.R.D., under seal, to M.J., by which she agreed to pay a certain note or bond, loaned by M.J. to A.R.D., which had been sold by A.R.D. at a usurious discount and on a usurious contract. The bond or note of M.J. had been given to enable A.R.D. to raise money to pay a debt due by her, and for which the note of M.J. had been previously loaned to her. It was denied by the executors of M.J. that she had any knowledge of the usurious dealing in which the bond or note of M.J. was sold. The executors of M.J. were obliged to pay a large portion of the note or bond, and the action was instituted to recover so much as they had paid. A.R.D. set up the usury between her and the person to whom she had sold the note or bond, as a defense to the suit of the executors of M.J. It was held that the action on the covenant of A.R.D. could be maintained, and that the usurious dealing between A.R.D. and the purchaser of the note or bond of M.J., did not render the covenant of A.R.D. to pay the bond or note invalid. The court said the contract between the defendant and the purchaser of the bond, if embracing no other person than themselves, could affect no contract between other parties, previously made, and whether that contract was usurious depended on the intention of the parties to it. If it was made bona fide for the sale and purchase of the bond, although at a discount which would insure to the purchaser twelve percent a year for the money advanced, it would not be usurious. If, on the other hand, the sale of the bond was a mere cover for avoiding the statutes against usury, and the real intention of the parties was to make a contract for the loan of money at a higher rate than the legal interest, then the contract was usurious. But to involve M.J. in the usury and to extend its taint to the covenant of A.R.D., it must be shown by proof that M.J. executed the bond or note sold for the purpose of aiding A.R.D. to borrow money at usurious interest, and not to enable A.R.D. to raise money by selling it in the market. When the holder of M.J.'s. note threatened proceedings on it, it was not necessary that the executors of M.J. should give notice thereof.

No subsequent confirmation of a usurious contract nor any new contract stipulating to pay the debt with the usurious interest will make it valid.

It is the settled law of Virginia that the bona fide purchaser of a bond or note may take it at any rate or discount, however great, without violating the statute.

The plaintiffs in error, executors of Mary James, instituted an action of covenant against the defendant on the following instrument of writing:

"Whereas Mary James has executed her bond or note, dated the 28th day of November, 1828, payable to me on demand, for the sum of twenty-six hundred and twenty dollars, which said bond or note was merely loaned to me for the purpose of raising money upon, and whereas, I have, since the execution of the said bond or note as aforesaid, assigned it to Philip Alexander, of Fredericksburg, for value received of him, I do therefore hereby bind myself, my heirs, executors, and administrators, to pay and discharge the said bond or note, with all interest that may accrue thereon, when the same shall become due and payable."

"Given under my hand and seal, this 12 August, 1829."

"ANN R. DERMOTT [SEAL]"

Page 38 U. S. 346

The evidence showed that the note of Mary James, which had been assigned to Philip Alexander, was not fully paid by Ann R. Dermott, and that a large portion of the same remained unpaid at the death of Mary James, who had executed a deed of trust to secure the payment of it, and that her executors, Philip Alexander having ordered the deed of trust to be enforced by the sale of the land and negroes conveyed by the deed, paid the same out of the funds of the estate in their hands.

The defendant alleged usury in the transaction for the loan of the money, and by an agreement between the counsel for the plaintiff and the defendant, usury was allowed to be given in evidence as if specially pleaded.

On the trial of the cause, certain bills of exceptions to the ruling of the court were filed by the counsel for the plaintiff, and the jury, under the charge of the court, gave a verdict for the defendant, upon which the circuit court gave judgment. The plaintiffs prosecuted this writ of error.

The case, and the whole of the plaintiffs' bills of exceptions, are fully stated in the opinion of the Court.

Page 38 U. S. 350

MR. JUSTICE McKINLEY delivered the opinion of the Court:.

The plaintiffs brought suit against the defendant in the court below upon a covenant executed by the defendant as follows:

"Whereas Mary James has executed her bond or note, dated 28 November, 1828, payable to me on demand, for the sum of twenty-six hundred and twenty dollars, which said bond or note was merely loaned to me for the purpose of raising money upon, and whereas I have since the execution of said bond or note assigned it to Philip Alexander, of Fredericksburg, for value received of him, I do therefore hereby bind myself, my heirs, executors and administrators, to pay and discharge the said bond or note, with all interest that may accrue thereon, when the same shall become due and payable. Given under my hand and seal, this 12 August, 1829."

"ANN R. DERMOTT [SEAL]"

To this suit the defendant pleaded nonassumpsit, with leave to give usury in evidence.

At the trial it was proved that the testatrix became principal in a bond to Thomas Poultney & Son, of Baltimore, bearing date 31 March, 1826, for the sum of three thousand six hundred and thirty-three dollars, it being for the payment of a debt due by the defendant, who also signed the bond, payable on 23 November, 1828, and that the testatrix executed a deed of trust upon her land and negroes to secure and save harmless William C. Beale, John Moncure, and Thomas Ledden, who had become sureties to said bond at the request of the testatrix, and that the reason why she gave her own bond for the debt of the defendant was because the defendant could not give satisfactory security to the sureties; that in the spring of the year 1828, the defendant applied to John Moncure to aid her in borrowing money to pay off the bond to Poultney & Son, who informed her that he did not believe that money could be borrowed in Fredericksburg at legal interest and advised her to procure the note of the testatrix, who was her aunt, and sell it in the market. Several conversations took place between that time and the next November between Moncure, acting as agent of the defendant, and Philip Alexander, of Fredericksburg, in relation to the sale of a bond or note of the testatrix, when finally Alexander agreed that he would buy the bond provided he could make at the rate of twelve percentum a year upon his money, and obtain security for its final payment by a deed of trust upon the land and negroes of the testatrix. While these negotiations were pending, the testatrix addressed a letter to Alexander, dated 25 November, 1828, in which she stated that her

Page 38 U. S. 351

niece, the defendant, had informed her that she intended selling and assigning to him the bond of the testatrix for $2,880, payable on demand, and proposing, if he would give her time for the payment of the money, she would give a deed of trust upon her land and negroes to secure its payment. These negotiations were protracted until the money to Poultney & Son was so nearly due that there was not time sufficient to complete the arrangements in relation to the bond and security, and Alexander agreed to advance the sum required, $2,340, upon an undertaking on the part of Moncure and Beale that they would refund the money to him if the defendant failed to assign the bond and the testatrix to execute the deed. On 1 December, 1828, the defendant assigned to Alexander the bond of the testatrix for twenty-six hundred and twenty dollars, and on the 10th day of the same month the testatrix executed the deed of trust, in which it was stipulated that the bond was to be paid at the end of two years, with legal interest.

During all this time, the testatrix and the defendant lived together in Virginia, some distance from Fredericksburg. The defendant afterwards removed to Washington, where she resided when this suit was commenced. From the month of April, 1831, to the month of May, 1832, she made several payments to Alexander on the bond, and by letters to the testatrix expressed her anxious desire to pay it off, that the testatrix and her property might be released from further responsibility on her account. After the death of the testatrix, Alexander put the bond into the hands of the trustee with directions to sell the trust property unless within a reasonable time the plaintiffs paid the balance due.

The plaintiffs prayed the court to instruct the jury that it is not competent for the defendant in this action to deny, by plea or otherwise, the validity of the note of 28 November, 1828, recited in the covenant on which this suit is brought, and that she is estopped from setting up in this action any alleged usury as affecting the validity of said note; that the plaintiffs are entitled to recover in this action the sums which the jury are satisfied from the evidence were paid by the plaintiffs to Philip Alexander, on the bond dated 28 November, 1828, unless the defendant proves to the jury that before such payments the plaintiffs were notified that the bond of 28 November, 1828, was tainted with usury, and instructed to dispute the same, which the court refused. And then further prayed the court to instruct the jury as follows: that if the jury should believe from the evidence, that the note of Mary James to the defendant, assigned by Alexander, dated 28 November, 1828, was made on an usurious agreement entered into between said defendant and said Alexander, but that the plaintiffs had no knowledge of such usury at the time they were called upon to pay the balance due on the note, nor at any time before, and paid the same under the belief that the same was bona fide due, and without any knowledge that there was any objection to the validity of said note, and without any notification or communication from the defendant, then the plaintiffs

Page 38 U. S. 352

are entitled to recover; unless the jury should be satisfied from the evidence, that the said Mary James knew of the said usurious agreement, under which the said note was given and assigned as aforesaid, which the court also refused. And further prayed the court as follows: that if the jury should believe from the evidence that the note of Mary James, the defendant, assigned by her to Alexander, dated 28 November, 1828, was made on an usurious agreement entered into between said defendant and said Alexander, but that the plaintiffs had no knowledge of such usury at the time they were called upon to pay the balance due on the note nor at any time before, and paid the same under the belief that the same was bona fide due, and without any knowledge that there was any objection to the validity of said note, and without any notification or communication from the defendant, and if the jury believe from the evidence the defendant waived and abandoned all objection to the validity of said note, and assented that the same should be considered as a valid and legal obligation, then the plaintiffs are entitled to recover. And it is competent for the jury to infer such waiver and assent if they shall believe from the evidence that the defendant, after obtaining said money, made payments of interest as the same became due, and expressed her desire and intention to pay the said note, and her anxiety to save her aunt's property from sale under the said deed of trust; which the court also refused. To all which refusals by the court to give the several instructions as prayed, the plaintiffs except.

And the plaintiff's counsel then further prayed the court as follows: that if the jury believe from the evidence that there was no loan of money from Alexander to defendant secured by the bond of 28 November, 1828, but that the said bond was bona fide purchased by said Alexander of defendant at a discount exceeding the legal rate of interest, the said Alexander not knowing when he purchased said bond that the same was loaned by Mary James to the defendant solely to raise money on, the transaction is not usurious and the plaintiffs are entitled to recover in this action the moneys paid by them to Alexander on said bond, and further, if the jury should believe that Philip Alexander, when he paid the money and took the note as aforesaid, intended to buy the said note for the amount given on it, not knowing that the note was made by Miss James to defendant, in order to raise money on it, and did not mean, by disguising the advance under the form of a purchase, to evade the statute of usury, then such purchase was lawful, which prayers the court gave as prayed, and to which the defendant excepts.

And the defendant's counsel thereupon prayed the court as follows: if the jury find and believe from the evidence aforesaid that for several months before the execution and assignment of the bond or note mentioned and described in the covenant on which the suit is brought, there were such negotiations and propositions pending between said John Moncure (acting in behalf of defendant) and

Page 38 U. S. 353

said Philip Alexander as are mentioned and set forth in said affidavits of Moncure and Alexander and in the papers and exhibits therein referred to, that the true and genuine nature and object of such negotiations and propositions, and of the successive arrangements and understandings resulting from them, as really contemplated by both parties, were that said Alexander should make an advance of money to defendant upon a future bond or note of said Mary James, payable to defendant, and by her to be assigned to said Alexander under the name and form of a sale of such bond or note at a discount, above legal rate of interest, that such discount, from the amount of such bond or note should be so adjusted, as that the difference between the full amount of the bond or note and the sum advanced on it, should be equivalent to an interest at the rate of twelve percent per annum on the sum actually advanced for the time of forbearance, to be given on such bond or note; that all the said preliminary negotiations, propositions, and arrangements, were, just before the execution and assignment of the bond or note referred to in the covenant set forth in the plaintiffs' declaration (such bond or note being the same note under seal, or bill obligatory, above given in evidence by plaintiffs, with the said covenant, and annexed to the said original affidavit of said J. Moncure, as aforesaid) terminated in an arrangement so modifying the before pending propositions and arrangements aforesaid, as that said Alexander should immediately advance the defendant 2,340 dollars, and that defendant should assign to him a note or bond thereafter, to be drawn and executed by said Mary James, for such amount as should make the difference between the sum so advanced and the sum to be ultimately received by him for the principal and interest of such bond or note, equivalent to an interest of twelve percent per annum on the sum so advanced, according to the principle on which said Alexander, in his letter, a copy of which is on the record, to said Moncure, insisted that the profits of the transaction should be calculated and secured, and that the payment of such bond or note should be collaterally secured by a deed in trust of the land and slaves of said Mary James.

That the said Alexander, in pursuance and execution of such arrangement and understanding, did advance the said 2,340 dollars to defendant or for her use; that the said Mary James, in the pursuance and execution of the same arrangement and understanding on her part, did afterwards, on 28 November, 1828, execute and deliver the said note under seal or bill obligatory of that date, and afterwards, on 10 December, 1828, duly execute and deliver to said J. Moncure and P. Alexander the said deed in trust bearing that date, as above given in evidence by defendants, and annexed to the said cross-examination of said Moncure, a copy of which is on the record, and that the defendant, in the pursuance and execution of the said arrangement and understanding, did assign the said bill obligatory to said Alexander immediately on the execution of the same by said Mary James; that the amount of said securities, and the time with which said Mary James was indulged

Page 38 U. S. 354

by said deed, in trust for payment, were knowingly and designedly calculated and adjusted by and between said Alexander and said Moncure in behalf of defendant, so as to produce in the end a yearly interest of twelve percent on the sum advanced during such time of indulgence, and that the principal and interest secured by the said instruments were intended and designed by both parties to amount, and did in fact amount, to greatly more than the sum so advanced with legal interest for such time of indulgence as aforesaid, and did in fact substantially secure to said Alexander, a yearly interest of twelve percent on the sum so advanced by him.

Then the jury, if they find such facts as aforesaid satisfactorily proved, and fairly deducible from the evidence aforesaid, may properly infer from such facts and fairly presume that the transaction was substantially a loan within the meaning of the statute against usury, notwithstanding it may appear to have been made in the form and name of a sale of the said Mary James' bond or note, and then the jury may, from the same facts and circumstances, if proved and deduced as aforesaid, also properly infer and well presume that the sum of money deducted and retained by said Alexander, from the nominal amount of said bond or note, was substantially usurious interest under another name for the forbearance of the money so lent or advanced, which the court gave as prayed, to which the plaintiffs except and pray the court to sign and seal this bill of exceptions, as well as the granting of the said defendant's prayer, as to the refusal to grant the prayer aforesaid of said plaintiffs, which is accordingly done this 24 May, 1838. And the said defendant, by her said counsel, having excepted, as aforesaid, to the said instructions given by the court at the request of the plaintiff as aforesaid, also prays the court to sign and seal this her bill of exceptions to the said instruction, so given at the request or prayer of the plaintiff, which is also done this 24 May, 1838.

Upon the judgment of the circuit court on the several prayers for instruction to the jury, by the plaintiffs and the defendant, these questions arise: 1. Does proof of usury, in the contract between the defendant and Alexander, per se, make void the bond assigned to Alexander, and the covenant, also, upon which the suit in the court below was founded? 2. If the testatrix had no knowledge of the usurious agreement between the defendant and Alexander, and the plaintiffs were also ignorant, and knew nothing of such usurious agreement, when they were called on to pay the balance due on the bond, and they paid it under the belief that it was a bona fide debt, and without any notice to the contrary from the defendant, were they entitled to recover in the court below?

The contract between the defendant and Alexander for the purchase of the bond, if embracing no other party than themselves, could affect no contract between other parties previously made, and whether that contract was usurious depended on the intention of the parties to it. If it was made bona fide for the sale and purchase of the bond, although at a discount which would insure to Alexander

Page 38 U. S. 355

twelve percent a year, for the money advanced, it would not be usurious. If, on the other hand, the sale of the bond was a mere cover for the purpose of evading the statute against usury, and the real intention of the parties was to make a contract for the loan of money at a higher rate of interest than six percent, then the contract was usurious. But to involve the testatrix in the usury and to extend its taint to the bond as well as to the assignment, it must have been shown by proof that she executed the bond for the purpose of aiding the defendant to borrow money at usurious interest, and not to enable her to raise money by selling it in the market.

As the third prayer of the plaintiffs is materially different from the first and second, we will examine it first. If the first member of it had been presented alone, it would in our opinion have been proper for the court below to have granted it; but as it was inseparably connected with the latter member, it presented a very different question. The objectionable part is in these words:

"And if the jury believe from the evidence the defendant waived and abandoned all objection to the validity of said note and assented that the same should be considered as a valid and legal obligation, then the plaintiffs are entitled to recover, and it is competent for the jury to infer such waiver and assent if they shall believe from the evidence that the defendant, after obtaining said money, made payments of interest as the same became due and expressed her desire and intention to pay the said note and her anxiety to save her aunt's property from sale under the said deed of trust."

This reasoning proceeds on the assumption that a bare promise to pay an usurious debt or a partial payment of it would take the contract out of the statute against usury. No subsequent confirmation, nor new contract stipulating to pay the debt with the usurious interest, will make it valid. Notwithstanding, therefore, the defendant may have declared her determination to pay the debt and did actually pay a part of it, she had nevertheless a perfect right afterwards to avail herself of the plea of usury; therefore, the court below did right in refusing the instruction.

The first and second instructions prayed for by the plaintiffs, and that prayed for by the defendant, may well be considered together. Jointly they embrace the whole case, and present the two questions before stated. The facts stated in the prayer of the defendant, if found by the jury, taken alone and unconnected with the facts stated in the prayers of the plaintiffs, would oppose no legal bar to the plaintiffs' action, unless, indeed, an usurious contract between the defendant and Alexander could impart its usurious taint to the bond assigned and the covenant sued on. The court below having decided, by refusing the prayers of the plaintiffs, that knowledge on the part of the testatrix of the usurious contract was not necessary to subject the two contracts between her and the defendant to the taint of usury.

They therefore put the case upon the express ground that proof

Page 38 U. S. 356

of usury in the contract between the defendant and Alexander did per se make void the bond assigned and the covenant sued on. If the testatrix had no knowledge of the existence of usury in the contract between the defendant and Alexander, the bond which she gave to the defendant, although without valuable consideration, was not usurious. There must be a loan, and the taking of more than legal interest or the forbearance of payment of a preexisting debt upon a contract for illegal interest to constitute usury. Barclay v. Walmsley, 4 East 57. The fact of knowledge in the plaintiff's testatrix is very material first, to show whether the bond which she executed to the defendant was usurious, and secondly to show whether the contract between the defendant and Alexander was usurious. If the bond was free from usury in its inception, no subsequent transaction between other parties could invalidate it. Nichols v. Fearson, 7 Pet. 106. Although this bond may have been executed without valuable consideration, in the hands of a bona fide purchaser without notice of that fact it would be good against the obligor. It is the settled law in Virginia that the bona fide purchaser of a bond or note may take it at any rate of discount, however great, without violating the statute against usury. Hansborough v. Baylor, 2 Mun. 36; 5 Rand. 33. If the testatrix was neither a party nor privy to the contract between the defendant and Alexander, it was a very material fact for the jury to consider when inquiring whether there was usury in the agreement between the defendant and Alexander, because if the testatrix had no knowledge of the usurious contract between them, it was impossible that she could have been party or privy to it. Suppose the jury had found specially that the testatrix was neither party nor privy to the contract between the defendant and Alexander and that Alexander had no knowledge of the fact that the bond which he purchased from the defendant had been executed by the testatrix without valuable consideration; the contract of assignment would have been entirely free from usury, and the testatrix liable upon the bond. But that liability has never been questioned. Viewing the case in this aspect, the defendant would have had no pretext for pleading usury against the plaintiffs in this cause.

But upon what ground is it that usury is set up by the defendant against her covenant of indemnity? If that covenant had been given to Alexander and the first contract was usurious, he would have been in no better condition, because, the consideration being the same, the taint of usury would have attached to it at once. But the case is very different between the defendant and the testatrix. The latter had lent her note to the defendant and conveyed her land and negroes to a trustee to secure the payment of it. She was not party to the usury, and she had given a full and valuable consideration to the defendant for the covenant of indemnity. The circuit court, by refusing to permit the jury to inquire into the fact of knowledge on the part of the testatrix, in relation to the usury, thereby admitted

Page 38 U. S. 357

her ignorance of that fact. Therefore, as between these parties, the whole transaction was legal, and the covenant free from all taint of usury. Cuthbert v. Haley, 8 Term 390.

Upon the second question it will only be necessary to examine the point whether the defendant was bound to give notice to the plaintiffs of her intention to plead the statute against usury in bar of the debt due to Alexander, the other points having been fully examined on the first question stated. It is obvious from the evidence in the cause that the defendant commenced the negotiation with Alexander for the sale of the bond of the testatrix and conducted it to its final conclusion, and that she was bound to know every fact and circumstance connected with the whole case. In Ford v. Keith, 1 Mass. 138, the case was of a surety who had paid the debt, knowing at the time that it was founded on an usurious contract. He brought suit against the principal to recover the amount paid, to which he pleaded the usury between him and the payer of the note. Judge Strong, who delivered the opinion of the court, said:

"The defendant says it is true the money was borrowed for me; I received it, and had the benefit of it; I requested you to become my surety and sign the note, and you have paid the contents; yet as I had a legal right to avoid the note, you shall not recover of me. Will the law permit the defendant to get rid of the present action on such grounds? He presumed it would not. No man is bound to take advantage of a penal law and avoid a contract which it equity he ought to perform, and nothing could excuse the defendant but his giving express notice to the plaintiff that he, the defendant, did not mean to pay the note."

The present is a much stronger case for the plaintiffs than the one just quoted. The defendant, as before stated, knew all the facts of the case; she had paid, at different times, parts of the debt; nearly five years had elapsed from the date of the contract till its final payment; there was no evidence that the executors had any knowledge of illegality in the contract; the suit was not brought on the contract said to be tainted with usury, but upon the covenant of the defendant, stipulating to indemnify the testatrix against the payment of the debt, which the plaintiffs had been compelled to pay under these circumstances. She sets up the alleged usury between her and Alexander to defeat her bond of indemnity, and insists that she is entitled to the benefit of it unless the plaintiffs prove that they gave her notice before they paid the debt. That she was bound to give notice of her intended defense has already been shown, and to remove all doubt on these points, we refer to 8 Wend. 452 to show that she was not entitled to notice.

To permit the defendant to avail herself of the plea of usury under the circumstances of this case would be to encourage the grossest fraud and injustice. The plaintiffs paid the balance of the debt to Alexander in the regular discharge of their duty as executors, without knowledge or notice of the alleged usury. We therefore think that the circuit court erred in refusing the first and

Page 38 U. S. 358

second instructions prayed for by the plaintiffs and in granting the instructions prayed for by the defendant. Wherefore the judgment of the circuit court is

Reversed and the cause remanded for further proceedings to be had therein not inconsistent with this opinion.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia holden in and for the County of Washington and was argued by counsel. On consideration whereof it is ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby reversed with costs, and that this cause be and the same is hereby remanded to the said circuit court with directions to award a venire facias de novo and for further proceedings to be had therein in conformity to the opinion of this Court.