Fisher, J.,
delivered the opinion of the court.
This is an appeal from a decree of the Superior Court of Chancery.
The bill was filed by Archibald McLaurin, as administrator, and Virginia Mielke, as administratrix, of the estate of Edward C. Mielke, deceased. The object of the bill was to enjoin a threatened sale, under a deed of trust, executed by the intestate, in his lifetime, upon certain lots, in the city of Vicksburg, to secure the appellant, Norcum, in the payment of two promissory notes, and accruing interest thereon, payable in one and two years from date. The facts are briefly as follows: Mielke was a banker in the city of Vicksburg. He and Norcum, in the autumn of 1841, entered into an agreement, to the effect, that the latter should deposit his money with the former, and should receive upon the money thus deposited, interest at the rate of ten per cent, per annum, until it should be paid out on Norcum’s checks. It appears, that during the years of 1842, 1843, and 1844, sundry deposits were made by Norcum. That interest accounts were at sundry times made out, showing a balance of interest in his favor, which was also passed to his credit, as so much money. That some time before the notes in question were given, the parties had a settlement, when it appeared that Mielke, on account of their numerous transactions, was indebted to Norcum in the sum of $6000, a portion of which consisted of the interest which had accumulated under the. above agreement, at ten [307] per cent, per annum ; that Mielke then gave Norcum three certificates of deposit, payable at different times, for the above sum, upon which interest appears to have been calculated at ten per cent, per annum, and added to the <$6000. The notes in question, to secure which the deed of trust was' executed, were given to take up these certificates of deposit. The bill alleges, that the larger portion of the debt thus secured, consists of the illegal interest agreed to be paid by Mielke to Norcum, and that there is really but a small balance due upon the notes.
It is further alleged, that Mielke’s estate has been regularly declared insolvent, by the Probate Court of Warren county; and it is under this showing, that the complainants insist that they ought, as administrators, to be allowed to maintain this bill, to restrain a sale of the real estate under the deed of trust.'
On behalf of the appellant, it is insisted in the first place, that under the terms of the agreement entered into between the parties, in the autumn of 1841, he was entitled to receive interest on his deposits, though made after the Act of 1842 took effect, at the rate of ten per cent, per annum.
Secondly. That on the death of Mielke, his real estate descended to his heirs at law, and that as it is not shown that the complainants, as administrators, have obtained an order of the Probate Court for the sale of such real estate, they cannot maintain this bill; and,
Thirdly. That the money secured by the notes is due to Norcum, as administrator of the estate of McNeill, and not to him individually.
As to the first point, it is insisted that the agreement of 1841 can be upheld under the exception made by the Act of 1842, changing the rate of interest, which exception is as follows: “ The provisions of this Act shall not affect contracts entered into previous to its passage.” Hutch. Code, 643. If the contract were one which by its terms could bear interest, or upon which the law would allow interest as the consequence of its violation, the position assumed would doubtless be correct.
But such is not the nature of the contract. It is not a contract evidencing the loan of money, but only, at most, an agreement to make loans at a future day. If either party could maintain an [308] action for its violation, it would certainly not be for any definite or specific sum upon which interest could be calculated, but for unliquidated damages; and even if interest could be calculated, it would certainly not be interest arising from the agreement of the parties, but only such as the law would give for the non-performance of the contract.
To determine whether the transaction can be sustained under the agreement of 1841, we must determine whether the interest accrued alone in virtue of that agreement; for the only question is, what contract produced the interest? If there had been no deposit of money with Mielke, there would have been no interest due to Norcum. Interest accrued, and was allowed on the deposit, and not on the contract of 1841. Money deposited on the first day of June, 1842, was money on that day, for the first time, placed at interest. And the inquiry must be, what contract could the parties then legally make, as to the rate of interest to be paid by one, and to be received by the other, on account of the money that day deposited. Each deposit must, so far as the interest is concerned, be regarded as a separate contract; for it is this contract which creates the. obligation to pay interest. The question is at once settled, when the contract which bears the interest is ascertained.
We will now proceed to consider the second point urged by counsel.
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Fisher, J.,
delivered the opinion of the court.
This is an appeal from a decree of the Superior Court of Chancery.
The bill was filed by Archibald McLaurin, as administrator, and Virginia Mielke, as administratrix, of the estate of Edward C. Mielke, deceased. The object of the bill was to enjoin a threatened sale, under a deed of trust, executed by the intestate, in his lifetime, upon certain lots, in the city of Vicksburg, to secure the appellant, Norcum, in the payment of two promissory notes, and accruing interest thereon, payable in one and two years from date. The facts are briefly as follows: Mielke was a banker in the city of Vicksburg. He and Norcum, in the autumn of 1841, entered into an agreement, to the effect, that the latter should deposit his money with the former, and should receive upon the money thus deposited, interest at the rate of ten per cent, per annum, until it should be paid out on Norcum’s checks. It appears, that during the years of 1842, 1843, and 1844, sundry deposits were made by Norcum. That interest accounts were at sundry times made out, showing a balance of interest in his favor, which was also passed to his credit, as so much money. That some time before the notes in question were given, the parties had a settlement, when it appeared that Mielke, on account of their numerous transactions, was indebted to Norcum in the sum of $6000, a portion of which consisted of the interest which had accumulated under the. above agreement, at ten [307] per cent, per annum ; that Mielke then gave Norcum three certificates of deposit, payable at different times, for the above sum, upon which interest appears to have been calculated at ten per cent, per annum, and added to the <$6000. The notes in question, to secure which the deed of trust was' executed, were given to take up these certificates of deposit. The bill alleges, that the larger portion of the debt thus secured, consists of the illegal interest agreed to be paid by Mielke to Norcum, and that there is really but a small balance due upon the notes.
It is further alleged, that Mielke’s estate has been regularly declared insolvent, by the Probate Court of Warren county; and it is under this showing, that the complainants insist that they ought, as administrators, to be allowed to maintain this bill, to restrain a sale of the real estate under the deed of trust.'
On behalf of the appellant, it is insisted in the first place, that under the terms of the agreement entered into between the parties, in the autumn of 1841, he was entitled to receive interest on his deposits, though made after the Act of 1842 took effect, at the rate of ten per cent, per annum.
Secondly. That on the death of Mielke, his real estate descended to his heirs at law, and that as it is not shown that the complainants, as administrators, have obtained an order of the Probate Court for the sale of such real estate, they cannot maintain this bill; and,
Thirdly. That the money secured by the notes is due to Norcum, as administrator of the estate of McNeill, and not to him individually.
As to the first point, it is insisted that the agreement of 1841 can be upheld under the exception made by the Act of 1842, changing the rate of interest, which exception is as follows: “ The provisions of this Act shall not affect contracts entered into previous to its passage.” Hutch. Code, 643. If the contract were one which by its terms could bear interest, or upon which the law would allow interest as the consequence of its violation, the position assumed would doubtless be correct.
But such is not the nature of the contract. It is not a contract evidencing the loan of money, but only, at most, an agreement to make loans at a future day. If either party could maintain an [308] action for its violation, it would certainly not be for any definite or specific sum upon which interest could be calculated, but for unliquidated damages; and even if interest could be calculated, it would certainly not be interest arising from the agreement of the parties, but only such as the law would give for the non-performance of the contract.
To determine whether the transaction can be sustained under the agreement of 1841, we must determine whether the interest accrued alone in virtue of that agreement; for the only question is, what contract produced the interest? If there had been no deposit of money with Mielke, there would have been no interest due to Norcum. Interest accrued, and was allowed on the deposit, and not on the contract of 1841. Money deposited on the first day of June, 1842, was money on that day, for the first time, placed at interest. And the inquiry must be, what contract could the parties then legally make, as to the rate of interest to be paid by one, and to be received by the other, on account of the money that day deposited. Each deposit must, so far as the interest is concerned, be regarded as a separate contract; for it is this contract which creates the. obligation to pay interest. The question is at once settled, when the contract which bears the interest is ascertained.
We will now proceed to consider the second point urged by counsel.
It is true, as argued, that Mielke’s real estate, upon his death, descended to his heirs at law; but it is nevertheless true, that it was chargeable with the payment of his debts, in the event of the personal estate proving insufficient for that purpose. The declaration of insolvency was virtually a declaration that the real estate should, within a reasonable time, be subjected to the payment of the debts owing by the intestate, for the reason, that the court, in pronouncing this judgment, acted with reference to the actual or supposed value of the real estate. The declaration of insolvency is, to say the least, a judgment that the debts can only be paid by converting the realty into money for that purpose. The administrators are, by this act, clothed with authority to make the application for an order of sale, which, without the declaration of insolvency, or insufficiency of the personal estate, or that the interest of the [309] estate would be better promoted by a sale of the realty, than by a sale of the slaves, they could not exercise. Unless the heirs-at-law can make a sufficient showing to the contrary, the order of sale after the declaration of insolvency, would follow, as a matter of course, for the reason already stated, that the main fact, that of a necessity for such sale, has been adjudicated. The case must be distinguished from that class of cases, where parties invoke the aid of a court of equity to recover property to which they allege they have a complete equitable title. It is not necessary, in the present case, that the complainants should show a title to the lots in question, to authorize the court to grant them the desired relief. The aid of the court is invoked, not to protect their title, but on the ground that they have a high moral and legal duty to perform, in regard to the subject-matter in litigation; and that if the threatened sale should be consummated, this duty, in the faithful performance of which creditors are interested, cannot be performed. The object of the bill is to protect property from sale under a deed of trust for a large sum, when it is insisted that only a nominal sum is due to the party urging the sale. And it may be supposed that the fund for the payment of the debts will be increased to the extent that the demand asserted by this creditor shall be diminished. The bill being certain, both as to the nature of the duty to be performed and as to the benefit accruing to the estate from its performance, ought to be sustained.
In regard to the third point, that the money secured by the notes belongs to the estate of McNeill, but little is required to be said.
The testimony shows, that this money was deposited by Norcum, to his credit; that it was brought under the same general business arrangement with Mielke, and that it was not a distinct business transaction, until made so in their settlement. Norcum could make no contract as administrator to loan the funds of McNeill’s estate, at a rate of interest which he could not make as an individual. Parties are absolutely essential to all contracts. Mielke was the party stipulating to pay, and Norcum the party agreeing to receive, the interest on this money, as upon all the other transactions of the parties; and the question must be, what it would be in any other case ? Was what one agreed to pay and the other to receive, [310] sanctioned, or rather was it not condemned by the law ? It is no answer for the party receiving the interest to say, that he does not intend to enjoy the benefit of it himself. The question is, was the contract which he made, and under which he received the interest, in violation of law ?
It is lastly insisted, that the bill can only be maintained for the purpose of avoiding the usury, or, in other words, the difference between ten and eight per cent, per annum.
Whatever the rule may have been once considered on this subject, it is now firmly settled otherwise in this court. There is nothing in the case at bar, presenting it in a more favorable light, than the cases in which the -rule has been settled. It does not present merely the question of usury in regard to the rate of interest provided for by the notes in controversy; indeed this question does not arise; but what is now the principal of the notes, was the interest which had accumulated under the illegal contract already noticed. The main object of the bill is. to reach the consideration of the notes, and to strike from them the amount which accrued under the usurious contract between Mielke and Norcum, and in virtue of which they made their settlement, and closed their business finally by the notes in question.
Thus viewing the question, it will at once be seen, that the case falls strictly within the rule established by former adjudications.
No objection appears to be made to the decree, so far at least as the amount is concerned. The trustee is at liberty to sell or not, as the creditor may prefer, for the balance found to be due, and this we consider proper.
Decree affirmed.