Case ID: mass_160/html/0237-01.html
Source: Caselaw Access Project
Author: {"author": "Allen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fred W. Reed vs. Boston Loan Company.
    Suffolk.
    November 15, 1893.
    November 29, 1893.
    Present: Field, C. J., Allen, Holmes, Morton, & Barker, JJ.
    
      Loan of Money at high Rate of Interest — -Statute — Action.
    
    The St. of 1888, c. 388, providing that loans of less than one thousand dollars shall be dischargeable by the debtor upon payment of the principal sum actually borrowed and interest at the rate of eighteen per cent, does not authorize a recovery back of any sum which has been paid in excess thereof, nor make such payment illegal.
    Contract, for money had and received. The declaration, as amended, was' as follows:
    “ And the plaintiff, defining more particularly his cause of action, says that on or about the twenty-ninth day of June, 1888, the plaintiff gave the defendant two notes of $50 and $100 respectively, to bear interest each at the rate of four per cent per month, and secured by two mortgages upon the personal property of the plaintiff, the plaintiff receiving in return for said notes and mortgages the sum of $150, less certain amounts paid for expenses. That the plaintiff, during a period of three years from the dates of said notes and mortgages paid to the defendant $216 as interest upon said notes. That on May 22 of said 1888 an act of the Legislature of said Commonwealth, numbered chapter 388 in the published acts for 1888, was approved, which act declared that ‘ all loans hereafter contracted for less than one thousand dollars shall be dischargeable by the debtor upon payment or tender of the principal sum actually borrowed, and interest at the rate of eighteen per centum per annum from the time said money was borrowed, together with a sum for the actual expenses of making the loan and securing the same not exceeding ten dollars. . . . And all payments in excess of said rate shall be applied to the discharge of the principal, and the borrower shall only be obliged to pay "or tender the balance of the principal and interest 'at said rate due after such application.’ ”
    The defendant demurred to the declaration, because it did not state a legal cause of action substantially in accordance with the rules contained in Pub. Sts. c. 167.
    In the Superior Court, the demurrer was sustained, and judgment ordered for the defendant; and the plaintiff appealed to this court.
    
      JR. 8. Sail, for the plaintiff.
    
      S. S. Anderson, (G. W. Bartlett with him,) for the defendant.
   Allen, J.

The amended declaration fails to show what the plaintiff seeks to recover. We understand, however, from the briefs and the oral discussion at the bar, that he has paid no more than he agreed to pay, but that by virtue of St. 1888, c. 388, he seeks to recover back some part of what he has paid, on the ground that he has paid more than the principal sum due, and interest at the rate of eighteen per cent per annum. The statute comes to the relief of borrowers of less than one thousand dollars at very high rates of interest, by authorizing them to discharge their debt by the payment of the principal sum actually borrowed and interest at eighteen per cent; but it does not authorize a recovery back of any sum which has been paid in excess thereof, nor make such payment illegal.

Judgment affirmed.