Clearfield Republican. [volume] (Clearfield, Pa.) 1851-1937, 1880-03-24
THE LAW or USURY.
AN IMPORTANT DECISION ny THE sU.
PREME COURT REGARDING INTEREST.

An important decision has just been
rendered by the Supreme Court in rO.
latiou TO the law Of usury. Usurious
contracts are treated much more liber.
ally than they were before the passage
of the act of 1858, and a contract in
which the debtor agrees to pay more
than the legal rate of interest is no
longer absolutely void. The question
determined by the Court arose in the
appeal OF Charles F. Lennig, in Pbila-
delphia, and the facts are as follows
Christian Mayer, the owner Of prop.
erty on Sixteenth street, below Mar
ket, mortgaged 1t TO Charles +. and
George G. Lennig, trustees under the
will OF Frederick Lennig, deceased.
This mortgage was recorded May 81,
1875. A second one, recorded June 2,
1875, was given TO the Twentieth
Ward Building Association. Mayer
died soon afterwards, and the first re.
corded mortgage was ioreclosed. A
writ was served against the dead man
and judgment taken for want OF an ap-
pearance. The property was put up
for sale and bought in by Messrs Len
mig for a sum little above the amount
of their judgment and costs. The
Sheriff made return that the purchas-
ers being frst-lien creditors he had
taken their receipt for the amount Of
their Judgment as part payment of the
purchase money. To this return ex.
ceptions were filed by the second lien
creditor, the building ASSOCIATION, who
claimed that the first recorded mort
gage had been given for $3.50 in excess
of the sum actually received that this
$3.50 was a bonus over and above the
legal rate OF interest and was there
fore usurious.
This sum was claimed by the build
ing association. An Auditor was ap
pointed, who decided against the
claim but exceptions being taken by
the building association to the report
of the Auditor, the Court of Common
Pleas, No /, sustained the exceptions
and directed the bonus money to b,
paid to the building association. An
appeal was then taken by the Messrs
Lennig TO the Supreme Court, Thai
tribunal in an elaborate opinion goei
over the whole ground of decisions
from the earliest reported cases TO the
latest, and finally decide in favor o
the appealing parties and against thC
claim OF the building association to the
$3.50. In substance the Court sayi
that before the act of May 2S, 1858
the taking of usurious interest was un
lawful and sometimes considered al
fraudulent, and though the act mad,
a radical change in the law the adjudi
cations made before its passage wer,
not quickly eflaced from the judicia
mind, but that late decisions hav,
settled "that the mere fact that |
debtor has paid or agreed to pay il
good faith and in the usual course o
business more than 6 per cent. inter
est, it is not enough (of itself to es
tablish fraud upon creditors, and tba
it is only where an usurious contrac
is entered into collusively as a schem
to hinder and delay creditors that th
latter have any standing to contest
judgment entered upon such usuriou
contract since the act of 1858. at !
not, therefore, now unlawful for
debtor to pay and creditor TO receiv
more than 6 per cent The debto
may refuse to pay the excess, but h
is not bound TO repudate it. Deere
reversed and the $3.50 be appropriate
to the judgment Of Lennig ct. al