Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1915-08-31
Justice Haley Deals
Blow to Moneylenders
In Law Court Decision


The above rule has been approved by
all text writers and courts to the
present day.
Inadequacy of consideration is
strong evidence of fraud; as stated in
Story's Eq. sec. 246. but that such
unconscionableness for such inadequa-
cy should be made out as would Ito
use an expressive phrase) shock the
conscience, and amount in itself to
conclusive and decisive evidence Of
fraud. And where there are other
ingredients in the case Of a suspicious
nature or peculiar relations between
the parties. gross inadequacy Of price
must necessarily furnish the most
vehement presumption Of fraud"
THE doctrine is settled by a con-
sensus Of decisions and dicta that
even in the absence Of all other cir
cumstances, when the inadequacy OF
conscience and furnishes satisfactory
and decisive evidence of fraud, it will
be sufficient ground for cancelling a
conveyance or contract whether exc
cuted or executory." Pomroy Ed.
sec. 927; Kerr on Fraud and Mistake,
1877.
The inadequacy as stated by Lord
Thurlow, must be an inadequacy so
strong. gross and manifest, that it
must be impossible to state it, to a
man Of common sense. without pro-
ducing an exclamation at the Unequal
ity Of it,"
Many other authorities cited in Pru-
dental Life Insurance Company v.
LaChance. are to the same effect.
Was this contract so ineQuitable as to
be unconscionable? The loan, al
though the note states it as $14.50.
was for ten dollars. The plaintiff tes-
titled that the $3.50 was bonus, that
it was the rate he usually charged. In
addition there was to be paid the sum
of $3.50 a month for three months,
making another $3.50. which was to be
paid for the use of the ten dollars. IT
the note had been paid according to
its terms. the plaintiff would have re-
ceived for the use Of Ave dollars for
one month and five dollars for two
months the sum Of nine dollars, or at
the rate of s54 per year: but he did
not pay. as it was not to be supposed
that man earning such small wages
as this case shows he earned, viz, be-
tween nine and ten dollars a week
when he worked. would be able to pay.
The note not having been paid accord
ing to its terms. the plaintiff then was
entitled. according to the contract to
bonus which amounted as interest to
$50 per cent, and three months inter-
est of $3.50 per month, which amount
ed to another $50 per cent. and by
bringing a suit he was entitled to s2o
attorney fee, or 1000 per cent, so that
it was in the power of the plaintiff,
when the defendant defaulted. to re-
cover his money and 1860 per cent. in
terest. 1t may be said that at the
hearing before me. Mr.. Scribner- waiv-
ed the claim for attorney fee; but the
court can only pass upon the contract
as it was. II 1t was an unconscion-
able contract the plaintiff could not
waive some Of its Objectionable parts
and recover on the balance Of the con-
tract. If it was unconscionable, the
whole contract was void: no part Of it
was valid. The oppression of the
contract appears from the conduct of
the parties after the note was due. On
January 14th the plaintiff executed an
assignment to himself Of the defend
ants wages. and on January 90, 1914,
drew from his wages 1910. leaving
due then on the principal of the loan
the sum Of thirty cents. and, by the
terms Of the contract. and at the hear
ing before me the plaintiff insisted
upon his one dollar and half a
month for the use or interest Of the
thirty cents. In other words, there
was due of the principal the sum Of
thirty cents, and the plaintiff comes
into a court of equity and says that
equity and good conscience demand
that his contract be enforced and
that he be paid $3.50 month for the
use Of thirty cents until paid. in addi-
ton to the thirty cents. making the
interest upon the thirty cents at the
rate Of 5000 per cent? And by the
terms Of the contract the plaintiff was
entitled to s25 as an attorney fee. for.
although he did not claim it at the
hearing. the contract specifies he shall
receive it. 1t would seem that the
plaintiff would not insist upon such an
inequitable contract, but he did insist
upon 1t. and brought this bill in equity
to try and obtain payment according
to the above terms. The loaning Of
money being the business Of the plain
tiff, by managing his contracts as he
managed this and as he testified was
his usual way of doing, with few
hundred dollars loaned and carefully
attended to, he would reap fortune
each year.
Fraud does not consist only in de-
ceit Misrepresentation. concealment
or duress for the taking advantage of
the necessity Of another. even at the
request Of the other, to obtain a con-
tract that shocks the morals Of honest
men, is constructive fraud that
equity will relieve from. One is al
lowed to use his property or ability
for his own enrichment. and when
loans Of money are made the parties
may agree what the borrower shall
pay for the use Of the money loaned
provided the parties are competent to
contract; but when the greed and
avarice Of the money lender demands
and receives from the borrower a con-
tract or agreement to pay such an ex-
orbitant rate Of interest that. consid-
erine the condition n fha y,artfes the