Case ID: scl_16/html/0372-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Mr. Justice Mott.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles Fowler, vs. Rorert Word.
    
      Defendant and one Jl, signed a note of hand for $ 100, pay able at four months, which JL. passed to plaintiff, for a loan of ‡ 50; with a verbal stipulation that if the ‡ 50 were re-paid within the four months, the note should be given up. The declaration contained a count on the note and one for money lent. Verdict for plaintiff, $50 and interest. Mew trial granted; the court holding that if the note was not usurious, the plaviiiff must recover the ‡ 100 as a penalty; there was no pretence of a loan to defendant.
    
    This was an action of assumpsit. The declaration contained two counts; one on a promissory note for one hundred dollars; the other for fifty dollars lent to the defendant. It appeared in evidence that B. H. Allen procured the defendant to join him in a note for one hundred dollars, for the purpose- of raising money upon it. It was made payable to , four months after date. The plaintiff, Charles Fowler, lent Allen fifty dollars, and his name was inserted in the note, as payee. At the same time a verbal stipulation was entered into, that if Allen would re-pay the fifty dollars at the expiration of the four months, the note should be given up, otherwise it should be forfeited to the pa}'ee. The presiding judge instructed the jury that if they should be of opinion that it was a bo-aa fide loan of fifty dollars, intended to be secured by the hundred dollar note, without any intention to exact any thing more than lawful interest, the additional fifty dollars migh' be considered as a penalty and would not vitiate the agreement. In that view of the subject, they might find a verdict for the fifty dollars with interest. If however, they should be of opinion that it was a mere disguise, to cover the corrupt agreement, the contract was void and they rnnst find for the defendant.
    The jury found a verdict for the plaintiff, for fifty dollars, with interest thereon.
    This was a motion for a new trial, on the ground that the verdict w.as contrary to law and evidence.
   The opinion of the court was delivered by

Mr. Justice Mott.

Usury is defined to be the taking or contracting for exorbitant interest, for the forbearance of the principal.” Exacting unlawful interest, u&der whatever veil it may be disguised, if the intention can be discovered, will vitiate the most solemn contract. The bona fide loan of money, the re-payment of which at a future day is secured by a penalty, is not usury. But in such case the penalty itself is recovered, and the party can have relief only in equity, except in the case of a common money bond, where he is relievable in a court of law by statute. Two of my brethern are clearly of opinion that the note in question is usurious, and I am much disposed to concur with them in opinion. There is no condition on the face of the note; it is an unconditional promise to pay one hundred dollars at the ■expiration of four months, for the loan of fifty dollars, which would amount to an hundred percent, upon the sum borrowed, and fourteen per cent, interest upon it after that period. If therefore the jury had found a verdict for the defendant, í should have been very well satisfied with it; but as they have found for the plaintiff, I will express no opinion upon that question. I am nevertheless of opinion the verdict is erroneous and ought to be set aside. If they intended to find a verdict on the first count in the declaration, they should have found for the full amount of the note. If they meant to bottom their verdict on the second count, then it is wrong because this defendant was no party to the contract. The money was lent to Allen and not to Word; he merely subscribed his name to the note and sent it out to find a market where it could. He knew nothing of the verbal contract. The motion therefore, must bf granted.

P. Farrow, for motion.

Q’jfeal, and Irby, contra