No. 291.

PRICE 18.

I occurs sometimes that men who have been for a long course of years engaged in a particular profession, and who while so engaged are unaware, partly it must be presumed from their minds being engrossed with the transaction of business, and partly by reason of their Own pure and disinterested feelings, of the existence of any tendency in the practices of their profession, to warp the conscience and place men in a position in which the auri sacra fames may taint their souls, or the breath of suspicion may blight their reputations, we say that it will sometimes occur, that when such men have, by the exercise of their talents, lifted themselves to a height so far above their quondam professional brethren, that they can stand as it were surveying from afar the field of their former labours, then a mist falls from their eyes. The abominations through which they, favoured by fortune, have passed unscathed, are revealed to their astonished vision, they perceive with a pious horror the dangers which once beset their honesty, and shuddering at the perils they have avoided, they determine to use their utmost endeavours to save from similar temptation, those who may not possess strength to resist as they have done.

A discussion took place lately in the House of Lords on the subject of allowing counsel to appear at the Bar of that House for or against bills depending there, who should be members of the Lower House, (see ante, p.262); and in the course of that debate, much curious light was thrown upon the springs of action that impel the Bar. It is stated to have been argued, that it was inexpedient to permit members of the House of Commons to appear as counsel in respect of bills which either had been or might come before that House, because the fee to the barrister might bias the judgment and vote of the legislator. Suppose, said a noble and learned Lord, "the case of a bill introduced into the House of VOL. VL DD

Commons, on the merits of which it would be necessary that counsel should be heard at their Lordships' Bar, and that before the bill came into the House of Commons a retainer was left at the chambers of a barrister being a member of that House, to engage his support for the bill at their Lordships' Bar; and he was called on in the House to exercise his judgment on the bill, and support it or oppose it as an independent member, was it to be supposed that in no case and in no degree his judgment would be biassed by the fee he had received?"

We confess we, in our ignorance, should have thought in no instance. We have been led to believe, taking first what may be termed the mammonite view of the question, that a fee is a quiddam honorarium for a specific service; that if a fee is delivered with a brief, it is paid for the service of the barrister in reading that particular brief, and arguing to the best of his ability on the particular subject-matters set forth in it; and we certainly have not been taught, (shame on the careless preceptor who so suffered us to go forth in ignorance!) that a fee to counsel to address the House of Lords as such, is to be considered by him as a fee to do that and something more, viz. to speak or vote against his belief as a member of Parliament. We should have as soon thought, that, if we had hired a boat to take us to Westminster, the boatman would consider his fee a payment of his fare to Windsor. Surely, surely, barristers are not so ignorant of the value of money as to sell their consciences for nothing!

But again, considering the question under another aspect. We will admit with the noble and learned Lord, who takes this original view of the potency of a fee, that "barristers are men, and are not to be unnecessarily or extravagantly lauded;" but still we have been taught that they are men educated, carefully, sedulously trained to cultivate and cherish a nice sense of honour; we have been led to conceive that that honour was to the barrister the breath of his nostrils, and

that he would not easily permit a paltry fee to obliterate his sense of it. We have known instances in abundance of barristers refusing fees rather than break in upon some comparatively trivial rule of etiquette, and surely the breach of a high political duty must be thought as stringent on the sense of honour of a barrister, as the mere etiquette of his profession.

We had thought even that we could name instances where counsel had been so placed, that their duty of expressing and recording their opinions as Members of the Legislature conflicted with their duty as counsel, and yet they had done both. We had fancied we had read of a late celebrated trial for high treason, in which a great lawyer was retained to defend, as a lawyer, men whose acts and doctrines, as a man and a legislator, he notoriously abhorred. And we had fancied that the result of that transaction was, that the eminent individual to whom we allude, did his duty both to his clients and the public.-But we must have been mistaken. A barrister, it seems, when he accepts a retainer, is bought body and soul. The gold is to his honour what nitro-muriatic acid is to the gold, an irresistible

solvent.

There is, it must be observed, some little discrepancy between the different portions of the argument of the noble and learned lord who is so desirous to protect the public against the weakness of the Bar, and the Bar against their own weakness. He is reported, in another part of his speech, to have said, that, ". as a member of the Legislature, counsel ought to act in conformity with his own opinion. As a counsel, his private opinion was of no importance whatever; he was to be governed by the instructions he had received from his client, and was to do the best he could for the interests of his client." Now, if this is the doctrine, and we do not dispute it, it seems to assume, that the client bargains merely for the legal services of the barrister, without any reference to his private opinions. And on what ground then is he, by giving a retainer to a barrister to plead for or against a bill before the House of Lords, to assume, that the barrister is to be influenced by that retainer in any thing beyond the specific legal service for which it is given? If he knows that his counsel has two duties, and if he knows, as he certainly does, that the retainer is primâ facie merely a retainer to perform one of those duties, on what ground is he to assume or expect, or how can it be supposed that he does in fact expect, that, by giving it, he binds the counsel not only to perform the one, but to neglect the other? It strikes our apprehension, that the doctrine thus stated by the learned lord puts him out of court as to his other implied doctrine; for if the party paying for a particular service has no ground to expect, and is not in fact supposed to expect from the party paid, some other particular service, where is the pressure, the inducement to the payee to do that other particular service for which he is not paid? The noble and learned lord may be right in his apprehensions, that barristers cannot set their honour against the glitter of a fee; though, if he is, we think the sooner the Bar is entirely swept away from the face of society the better.-He may be right in thinking that they cannot resist temptation; but we think he has failed in shewing, that, in the particular case to which his motion was addressed, there is any temptation for

them to resist.

ON SECURITIES ON LAND IN CONNEXION WITH BILL TRANSACTIONS AND THE USURY LAWS.

Many of our readers are aware that attempts have of the usury laws which is still in vigour, and which been made and are making to evade that small remnant prohibits the taking of usurious interest upon real security; and they are also aware that serious doubts have been entertained as to the legal success of such attempts. The device most in favour, and that to which but the use of a name that stands well in the money we shall confine our remarks, is to borrow, not money, market, and to give an indemnity against the conse quences of lending it by security upon real estate; and then to carry that name into the market and obtain advances upon such terms as can be made. Thus A (whose name ranks "A. 1" on the Exchange) agrees with B. to accept his bills, on condition that B. underA. title deeds, or gives him some other real security* takes to provide for them when due, and deposits with for the performance of his undertaking. The bill thus obtained is of course discounted on much more favourable terms than would have been obtained had B. relied on his own credit alone. The proceeding is sometimes varied in a manner that is supposed to make it safer, by making A. place his name upon the bill, not as acceptor, but as indorser; so that the bill is good in the first instance, whatever may be the legality of the subsequent proceedings. We will first discuss the simpler case, where the security is given to the acceptor at the time of his acceptance.

In the supposed case, the intention may be, either that the drawer shall provide for the bill when due, or that he shall not. If the first course is intended, the commission paid to the acceptor will be a remuneration for his trouble, and may also be supposed to include an insurance against the risk which he runs, that the Is this usury? The stat. 2 & 3 Vict. c. 37 has sus drawer will not be able to perform his engagements. pended the usury laws, with a proviso that nothing therein contained "shall extend to the loan or forbearance of any money upon security of any lands, tenements, or hereditaments, or any estate or interest therein." So that every contract in which a security upon land is involved remains subject, as to the question of usury, to the old law, and may be discussed as if the stat. of Victoria had never passed. The stat. of Anne enacts, "that no person upon any contract take, directly or indirectly, for loan of any monies, wares, merchandize or other commodities, above the value of 51. for the forbearance of 100%. for a year; and that all bonds, contracts, and assurances whatsoever, for payment of any principal or money to be lent on covenant to be performed upon or for any usury, whereupon or whereby there shall be reserved or taken above the rate of 51. in the 1007. as aforesaid, shall be utterly void." Now the transaction under consideration is obviously no loan in terms of the contract are broken; and it seems to be the first instance, and can never become so unless the clear that no commission that is paid to the acceptor can be usurious, anymore than a payment to a person in consideration of his joining as surety in a bond is usu rious. Nothing is lent but the name of the acceptor.

*We may remark that the dictum of Lord Cottenham in Whitworth v. Gaugain (ante, vol. 5, p. 523) has materially diminished the confidence which was placed in equitable mort gages; while the doctrine of Jones v. Jones, (ante, p. 61), while material advantage over incumbrancers on equitable interests in uncontradicted, gives to incumbrancers upon personal estate a realty.

the risk of losing the principal is interest; but here, the risk + Where there is a loan, anything paid in consideration of is, not that the money will be lost, but that it will be lent; a very different thing.

If there is usury, there must be a rate of interest for the forbearance of money for a certain time; but here there is nothing like interest; and if the commission is to be treated as interest, there are no data from which to calculate the rate. It is obvious that the inconvenience and risk to the acceptor may be greater in proportion as the date of the bill is shorter; and that he would be likely (except under special circumstances) to charge a higher commission for accepting a bill at two months, than for a bill at twelve. It is impossible therefore to say, that the commission is a remuneration for forbearance in respect of time. Now, suppose that in fact the drawer of the bill fails to provide for it at maturity, and that the acceptor having paid the bill does not receive his money back before the expiration of a year, and that he then receives it with interest at 57. per cent. The right to interest for the time subsequent to the maturity of the bill (assuming for argument's sake that the transaction is lawful) being a legal consequence of the contract, may be treated as part of it, and as being bargained for, just as much as the commission is bargained for. But it is evident that the commission cannot be added to the interest so as to increase it beyond the legal amount; for the commission is not to depend at all upon the time of payment; it is to be paid in any event, even although no loan whatever takes place; and it is not to be increased, although the loan should in the result continue for six years. There is therefore no contract for a payment of excessive interest in consideration of the forbearance of money; what is paid is not paid in consideration of forbearance in any sense. Is the case altered by supposing that the nonpayment of the bill by the drawer was expected by both parties in the first instance; and that the amount of commission was greater than it would have been had this temporary insolvency not been anticipated? Suppse a premium of 5l. given to A. for accepting a bill drawn by B. for 100l. at three months. Here, the evident expectation is, that A. will advance money for some time at any rate to the use of B.; and however short or however long a time A. may allow to elapse before he enforces payment, he will receive more than 5 per cent. for the use of his money, if the law allows him to recover it at all. Suppose that A. recovers the amount of the bill from B. at the end of six months from the time of his paying it, he will then, deducting a commission, say of 11. per cent., for trouble, have received rather more than 147. per cent. upon the advance: certainly as hard a bargain as the clearest case of usury could be. By enforcing an earlier payment, he would gain a still more extravagant rate of interest. But the hardship of the case does not make it usury; a post obit bond, the purchase of an annuity, or even the sale of a suit of clothes, may be much harder than any transaction within the statute of Anne, and yet be perfectly legal. Indeed, it is peculiar to such laws as these that they generally give rise, by evasions which it is impossible to prevent, to impositions and dealings far more oppressive than those against which they are directed. This conclusion from general reasoning appears to be consistent with the general course of the authorities, among which (with the exception perhaps of Kent V. Lowen, to be noticed presently) there is no case to be found deciding that that is usury where the supposed borrower may be called upon to return the principal at any moment, while the supposed lender receives the same consideration whether he leaves the money outstanding a year or only an hour. Wherever the usury laws have been held to apply, either the borrower has stipulated for a certain period of accommodation, or, if the period has been left to the will of the lender, his forbearance has been secured by an agreement to pay usurious interest in proportion to the time. On the other hand, there is no distinct authority in favour of the legality of such a transaction as that under con

sideration. In an action upon the statute of Anne, to recover penalties for usury, the declaration stated, that the defendant forbore a sum of money from the 20th April; but it appeared, that, on the 20th, the loan was made, by sending bankers' cheques by the post, without any agreement to consider them as money, which cheques were not received until the following day. Lord Ellenborough held that the variance was fatal-" For civil purposes, the loan might be complete on the 20th, but in a criminal proceeding, can we say that the defendant forbore the money from that day, when it was then uncertain whether it ever would be received? Suppose he has charged for what he never lent, he may be liable for a fraud, not for usury. Perhaps he was not wrong in claiming interest from the 20th for commercial purposes, but before the forbearance begins which is to subject a man to penalties for usury, cash notes advanced must have become available, the money must have been grasped by the person to whom it is forborne. When I accommodate a man with a cheque upon my banker, there may be a loan for which interest is due. Till the money is actually received under it, there is no forbearance within the meaning of this statute." A rule for a new trial on the ground of misdirection was refused. (Brooke v. Middleton, 1 Camp. 445). Lord Ellenborough's distinction between civil and penal actions is not very intelligible. The only distinction recognised in other cases has been that which is expressed by the statute itself, namely, that an agreement to pay usurious interest is sufficient to avoid the entire contract, while, to constitute the offence, there must be, besides the corrupt agreement, an actual taking of the interest. (See Ferrall v. Shaen, 1 Wms. Saund. 249, 395). A subsequent case before Lord Ellenborough raised the exact point, but the circumstances enabled his Lordship to place his decision on a different ground. In that case, (Masterman v. Cowrie, 3 Camp. 488), Brome, a merchant in London, applied in October, 1811, to the plaintiff's bankers in London to accept bills for him at short dates, for which he was to provide when due; and it was accordingly agreed, that such bills should be drawn by some person procured by him; that the plaintiffs should accept them; that Brome should always provide for them before they became due; that as security he should deposit with the plaintiffs good bills at long dates to a larger amount; and that the plaintiffs should receive a commission of 58. per cent. upon the bills accepted and paid by them, for their trouble. After some dealings on those terms, the plaintiffs expressing themselves dissatisfied with the manner in which the bills were drawn, and requiring them to be drawn by some respectable person in the country, Brome agreed that W. M., a banker in Yorkshire, named by the plaintiffs, should draw the bills, and that he would allow him a commission of 1s. per cent. for so doing. The bills so drawn were always provided for by Brome until he became bankrupt in September, 1812. Afterwards, the plaintiffs were obliged to take up bills accepted for him, and for which he had not provided funds. The question arose upon their seeking to prove for the amount of bills deposited by Brome as security, against the estate of the bankrupt acceptors; and an issue was directed by the Chancellor to try the question of usury. A verdict was given for the plaintiffs. Lord Ellenborough said "The first question is, whether there was a contract for a loan. If there was, there may be usury to vitiate the debt, or to cut down the securities, although no advance took place till after Brome's bankruptcy, upon which no interest was charged. There must be an actual loan and a receipt of usurious interest to render a party liable to penalties, but if there be a stipulation for more than 57. per cent. upon a contemplated advance, the agreement is usurious, and no transactions under it can bar the foundation of a valid debt. Here however nothing appears to have been anticipated

to be done by the plaintiffs beyond the acceptance and payment of the bills. They never were in advance to Brome till after his bankruptcy, and there seems no reason to suppose that a loan of money was ever in their thoughts. If so, the commission of 5s. per cent. could not be for forbearance, and could not be the foundation of usury. The only question arising out of the 1s. allowed to the drawer is, whether that was a colour for usury. If it was bonâ fide applied to W. M.'s use it cannot be usurious, and may be entirely removed from the consideration of the case. Then may not the 5s. be accounted for on the score of the trouble which the plaintiffs had in accepting and paying the bills, in receiving the funds for that purpose, and in taking care of the securities deposited with them? It has been decided, that country bankers may charge a commission beyond the 57. per cent. for the money advanced. Instead of the expression country bankers,' I prefer a description of the thing done. Before all mercantile transactions were carried on by means of a paper circulation, country bankers were at a great charge in procuring cash. It was a sort of foreign commodity which they had to import, therefore in conveying and insuring it they incurred a great collateral expense. If, under these circumstances, they were allowed only 51. per cent. on the whole transaction, they might have received only 4. 10s. for the forbearance of the money advanced. A similar expense may be incurred every where, by keeping clerks and a counting-house on purpose to accept and pay bills with funds provided by the persons for whom the business is done. In all these cases it is necessary to detach the trouble of keeping accounts from the interest for the forbearance of money. I remember an issue being tried by this court at Chester, whether 58. per cent. was a fair commission upon the discount of bills there, and it was found to be so. I agree with what the Chancellor is stated to have said in directing the present issue, that unless there be an eventual advance of money contemplated, there can be no usury. Here the advance of money was not the substance of the contract. It was never mentioned among the parties, and never happened till the close of the transactions, when no interest was charged upon it. Had an advance been made, I should have left it to the jury whether the commission was a shift for obtaining more than legal interest for the forbearance of the money. But if an advance was neither made nor contemplated, the commission can be considered only a compensation for services performed."

Lord Ellenborough's opinion, therefore, was distinctly against the legality of any such agreement, where, either from the fact of an advance being made, or from the excessive amount of the sum paid under the name of commission, it must be inferred that the commission was not intended wholly as a remuneration for services performed, but partly as something in addition to legal interest for a contemplated advance.

Stoveld v. Eade, (12 J. B. Moore, 277), where a country banker gave his draft on his London agent, payable at two months, in exchange for a country bill of the same date, deducting, in the name of commission, a sum equal to 4l. per cent. for the time the bill had to run. It was held clearly not usurious. Park, J., said, "It appears to me, that there was no loan in this case, but a mere exchange of bills; the plaintiffs were clearly entitled to a commission for their trouble and risk in remitting cash to London." But Best, C. J., said, "If they had taken more than 57. per cent., it might have been a question whether the transaction was not a colour for usury; but as only about 41. per cent. was taken, there is no pretence for saying that it was within the Statute of Usury." If it was not a loan, how could the amount of the commission make any difference in the nature of the transaction? The party who took the draft might have legally paid 57. per cent. to a third person for discounting it; and if one person might receive that discount, any other person might do so. Suppose the draft to have been taken the next day to the drawers of it, might they not legally have discounted it, and received 51. per cent. for doing so, (Barclay v. Walmsley, 4 East, 57), making, with their previous commission, 97. per cent.? This is not any argument against the dictum of Best, C. J., but it shews how much the question of usury is governed by the form, and how little by the substance of the transaction.

Upon the authorities, therefore, the validity of the transaction we have supposed, as between the parties themselves and all others having notice, seems to be at least doubtful. In the hands of innocent holders the bill would of course be good, (Stat. 5 & 6 Will. 4, c. 41); and, as we have said, upon principle it would seem to be equally good between the parties themselves.

When the commission is paid and the landed security given upon the loan of a name by way of indorsement, instead of by acceptance, the remedy upon the bill of course remains unaffected, while the question as to the validity of the security, and the claims of a subsequent indorsee with notice, is the same as that which we have already discussed.

Emperial Parliament.

HOUSE OF Lords.
Tuesday, Aug 2.

S.

The Insolvent Debtors Bill was read a third time and passed. The Limitation of Actions Extension Bill passed through

HOUSE OF COMMONS.
Monday, Aug. 1.

The Bankruptcy Law Amendment Bill went through committee pro forma. The report to be received on Wednesday. The Court of Chancery Offices Bill was read a second time. The County Courts Bill was read a second time.

up.

Thursday, Aug. 4. The report of the Court of Chancery Offices Bill was brought Third reading fixed for the 5th.

PUBLIC GENERAL STATUTES.

5 VICTORIA.-SESSION 2.

(Continued from p. 269.)

CAP. XXXIX.

to Agents intrusted with Goods.

[30th June, 1842.]

Whereas by an act passed in the 6 Geo. 4, [c. 94], intituled "An Act to alter and amend an Act for the better Protection of the Property of Merchants and others who may hereafter enter into Contracts or Agreements in relation to Goods,