Case Name: Fitch v. Hamlin
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1789-10
Citations: 1 Root 110
Docket Number: 
Parties: Fitch v. Hamlin.
Judges: 
Reporter: Connecticut Reports
Volume: 1
Pages: 110–112

Head Matter:
SUPREME COURT OF ERRORS,
OCTOBER, A. D. 1789.
Fitch v. Hamlin.
In a loan of final settlement notes, an agreement to secure the repayment of said final settlements at a future day, in notes of the same tenor, date and value, with the lawful interest; and to give a note for a further sum in good money for the loan of said final settlements, is a corrupt agreement and will render hath notes given in pursuance of such agreement usurious, and void by the statute. ,
EeeoR to reverse a judgment of tbe Superior Court rendered at Windham, March term, A. D. 1787; reported in Kirby, page 260; which judgment was reversed for the following reasons, viz.
Hamlin sued Fitch upon a note given by Eitch and Campbell on the 1st of March 1784, for $16,839 16-90 in final settlement notes, received to be repaid in notes of same tenor, dates and value, in six months and lawful interest.
In bar of which action, the defendant plead the statute against taking unlawful interest, and that more than lawful interest was included in and secured by said note by the corrupt agreement of the parties, etc. upon which the parties were at issue to the jury — who found the following verdict, viz.
Hamlin v. Fitch. In this case the jury find, that on the day of the date of the note on which, etc. it was corruptly agreed, by and between the plaintiff and said Campbell and the defendant; that said Campbell and the defendant, should execute the note on which, etc. to the plaintiff; and it was also agreed, that said Campbell should give to the plaintiff his note for $1,000 lawful money, for the loan, interest and forbearance of the sum loaned and secured in the note on which, etc. for the' term of six months, over and above the lawful interest; and that the defendant and said Campbell did in pursuance of said corrupt agreement, and as part and parcel of the same, contract, make and execute to the plaintiff the note on which, etc. and the said Campbell did make and execute his note to the plaintiff for the sum of £300 payable in six montlis; and that there is included in and secured by said two notes, the sum of $1,000 in silver, for the loan, interest and forbearance of $16,839 16-90 dollars in said certificates, over and above the lawful interest, at the rate of 6 per cent, per annum, by the corrupt agreement of said parties, and for no other cause or consideration; all in maimer and form as the defendant in his plea and rejoinder lias alleged, and therefore find for the defendant his cost — which verdict found the defendant’s plea in bar in the very terms of it, to be true.
Upon which, Ilamlin moved in arrest of judgment, 1st. That the issue is immaterial; 2d. That said note is for final settlement securities, in a depreciating condition, and subject to a total loss in the course of six months, or to more than the value of £300! lawful money.

Opinion:
Judgment — That the motion in arrest is sufficient, and a repleacler ordered. Upon a repleacler the pleadings were in substance the same as before; to which a demurrer was given by the plaintiff, and the same exceeptions taken as in the motion in arrest. Judgment — That the plea in bar is insufficient. The judgment of the Superior Court was reversed, for the following reasons, viz. The point of a loan, and a corrupt agreement between the parties and William Campbell, was upon the first trial, put directly in issue to the jury, by the most correct and approved forms of pleading; and by them found for the plaintiff in error, in the very terms of the issue joined; the arrest of judgment goes upon the ground, that no corrupt agreement could exist in a case of this nature, when the thing loaned, was in a depreciating condition arid of a perishable nature, and where the depreciation was at the risk of the lender.
1st. The jury were the proper judges not only of the fact, but of the law, that was necessarily involved in the issue; not only that there was in fact reserved by the agreement for loan and forbearance, more than at the rate of 6 per cent. per annum-; but also of tbe legal deduction, that it was reserved by corrupt agreement; if tbe circumstances of tbe thing loaned were such, that no corrupt agreement could arise out of tbe transaction, tbe jury should have found for the defendant in error, whatever sums were secured by tbe notes; but as they have found a corrupt agreement, it is too late for tbe court to say there was no such corrupt agreement; tbe point being determined by tbe proper judges.
2d. That tbe thing loaned, was in a depreciating condition and of a perishable nature, does not appear from tbe pleadings; and tbe court would not determine tbe fact By an inquiry in pais, nor by any matters dehors tbe record, upon tbe motion in arrest; this fact therefore, which was tbe sole ground of arresting tbe judgment, tbe court assumed without proof.
3d. Had there been evidence of tbe fact, it would not have justified tbe court, in arresting tbe .judgment, or for giving-judgment for the defendant in error on tbe demurrer; for there is no article whatever that can be loaned, but what may and frequently does, change its relative value, not excepting gold and silver coins; and if it be lawful for tbe lender to reserve more than at tbe rate of 6 per cent, per annum, to secure him from a possible loss, arising from a depreciation in one thing, be may in all; but this would destroy tbe statute against taking unlawful interest and render it of no effect.
4th. Whether at tbe time of tbe contract, in tbe present ease, tbe article loaned would depreciate or appreciate, was perfectly uncertain, and a contract which in its creation, was usurious, could never be saved by a subsequent contingent loss in tbe value of tbe principal loaned.
5th. This contract was not a bargain of hazard as in tbe case of money lent on bottomry bonds, where tbe lender, by tbe act of lending, is exposed tó tbe loss of bis whole principal; but in this case tbe securities-loaned were equally liable to loss by depreciation in whosoever bands they were, and the lending did in no measure increase tbe risk.