Year: 1873

as Lord Guernsey Was q years aad G months
old when he made the nsurious contract. The
Vice Chancellor held, however, that there is no
magic in tweaty-GrBt birthday which can In
stantly convert q slmpleton into rational be-
ing. OF course, this remark left the Judge open
to criticism for not defining the exact ago at
which experience may be assumed to make a man
responsible for agreeing to pay an e1orbitant
rate of interest. This would be e1-
tre1nely difficult to do The counsel
for the money -londer also insisted that the Vice
Chancellor, il he decided against Ills client,
should determine what rate Of interest, in tho
absence of laws fixing it, d money-lender might
charge a man Of lawful age.


In spite Of these rather embarrassing Bugges-
tions. the Vice Chancellor WAS not disconcorted,
but proceeded to give some good reasons why
Court Of Equity should exercise discretion in
determining the extent Of exorbitant interest.
In the case Of q financial crisis, commercial
man might reasonably pay rate of interest for
q day, a week, OF month, to bridge oEer tempo
ra1y difficulties, which would be absurd and sui
cidal to pay for term Of years. In the present
case, the money-lender did not expect to receive
his pay until the young Lord should come into
his fathers estate. The fnther was only A years
old, and might reasonably hare expected to live
many years more. At compound interest, &C
co1ding to the contract, young Lord Guernsey
would have owed quarter OF a million Tor the
use Of Ct. 800, il his father had lived ten years,
while his estate would have beon but G20, 600 q
year. Another point which tho Vico Chancellor
mado was, that the lender and borrower were not
On equal terms. Guernsey was obliged to borrow,
while Morris was not obliged to lend; and
Guernsey, though of legal age, was in pressing
circumstances that prompted him to make obi
cations which no man Of sound mind would
make with careful consideration. Tho Vice
Chancellor held, therefore, that it was the
duty Of money-lendors to inform them
selves whether man who agrees to pay an
exorbitant interest, to be compounded for d
number Of years, is doing SO with full
understanding OF the obligation. In other
words, it was held TINT money-lenderB have no
right to take outrageous advantage Of d bor-
rover who does not appreciate fully the nature
OF the contract be makes, whether by reason OF
imbecility OF intellect, tho inexperience OF
youth, or other sufficient cause. he acknowl-
edted that no definite rules could be laid down
to govern cases of this kind, but that each indi-
yidual case must be left to the Judgment Of the
Court.


The precedent thus established is an argument
in favor Of tho abolition Of usury laws. It is in
consonance with the idea that the rates OF in
terest should bo governed BY the circumstances
which affect the value Of money. A man pays
more rent for house one year than he would
pay another year, for the reason that rentable
houses arc ecarcer at ceztain times than
at others 80 man will and should pay moro
rent for the use Of money whom money is scarce
than when it is plenty. At the same time, the
English decision shows that the absence Of pro
hibitory lnws against usury will not enable
money-lende1s to take advantages that arc op-