Court Opinion

ID: 8572923
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:12:57.563571+00
Date Added: 2024-06-11T16:53:56.835880
License: Public Domain

Opinion of the Court
Robert E. Quinn, Chief Judge:
The accused stands convicted of assault, in violation of Article 128 (Charge II and its specification), and two specifications alleging that he loaned money to fellow soldiers at usurious rates of interest, in violation of Article 134 (Charge I and its specifications), Uniform Code of Military Justice, 10 USC §§ 928, 934. Each of the latter alleges that the accused loaned money for a one-month period at “a usurious and unconscionable rate of interest.” In the first specification, the amount loaned was $30.00 and the interest was $30.00; in the second, the loan was $10.00 and the month’s interest $10.00. In each instance the borrower was another soldier.
Before the board of review, appellate defense counsel contended that usury contemplates interest in excess of a statutory rate. Military law, he said, prescribes no rate of interest and, consequently, the loan specifications do not allege any cognizable offense. The board of review rejected the argument. We granted review to consider the defense contention.
The Government maintains that lending money at an exorbitant and unconscionable rate of interest constitutes a breach of good order and discipline or reflects discredit upon the armed services in violation of Article 134, Uniform Code of Military Justice, 10 USC § 934. It argues that such conduct “has constituted a . . . military offense for nearly 150 years.” The argument is supported by an excerpt from Winthrop’s Military Law and Precedents, 2d ed, 1920 Reprint. In the *550text of his book, Colonel Winthrop says that conduct unbecoming an officer and gentleman may consist of “[ajbuse of authority over soldiers by fraud or exac-tions practiced upon them, or by requiring or influencing them to do illegal acts.” Ibid, page 716. Several footnote citations are provided in support of the text statement, among them is the following: “By exacting from soldiers excessive usurious interest, (25 per cent.,) on loans made to them — G.O. of Dec. 24, 1811: By exacting from soldiers double the amount, at the next pay day, for sums of money previously loaned. G.O. 4, Dept, of the Gulf 1866.” It is worth noting that the second illustration does not say the transaction is usurious; and the first citation does not show the absence of a statute or regulation defining the legal rate of interest. In any event, Winthrop’s statement refers to conduct unbecoming an officer and gentleman; it is arguable that such conduct does not necessarily equate to conduct to the prejudice of order and discipline or conduct reflecting discredit upon the services. See United States v Underwood, 10 USCMA 413, 27 CMR 487, dissenting opinion by Judge Ferguson. However, usury is recognized as an offense in the present Manual for Courts-Martial, United States, 1951. There is a separate form of specification for charging the loan of money at a usurious rate, and the Table of Maximum Punishments lists a specific penalty for the act.1 Earlier Army manuals contained similar provisions and the case books show several prosecutions based upon usurious transactions. United States v McNeil, 48 BR 287; United States v Freimuth, 25 BR 369; United States v Bawsel, 13 BR 249. But no provision of the Uniform Code specifically prohibits military personnel from demanding or receiving interest on a loan in excess of a specified rate. Also, our attention has not been called to any regulation on the subject and our own research has disclosed a provision applying only to Navy personnel. See United States Navy Regulations, Article 1260 (1948).
Whatever its ancient antecedents, in modern American law whether a particular rate of interest is usurious depends upon a statute. American Jurisprudence recites the rule as follows:
. . However, the doctrine that any interest is usurious was never adopted in this country, and in the absence of any statutory or local constitutional limitation upon the amount of interest which may be exacted, parties to a contract for the use of money may validly agree for the payment of interest at whatever rate they see fit.
“The common law of England, as adopted and approved in the United States, has never forbidden the exaction of usury on loans of money as a matter of general law or public policy, irrespective of statute, and at the present time usury must be regarded as merely malum prohibitum, resting entirely upon statutory regulation and prohibition, and not as malum per se.” [55 Am Jur, Usury, §3.]
Without some definite provision limiting the rate which the lender may receive, the rate charged cannot be called usurious. 55 Am Jur, Usury, §12; 91 CJS, Usury, § 5b. It follows, therefore, that since military law in general, and Army regulations in particular, provide no legal rate of interest, the exaction of any given rate cannot be described as illegal and, therefore, usurious. The interest alleged in the specifications here may indeed be unconscionable but it is not unlawful. As early as United States v Snyder, 1 USCMA 423, 427, 4 CMR 15, we pointed out that the military penal code does not “regulate the wholly private moral conduct of an individual.” See also United States v Gillin, 8 USCMA 669, 25 CMR 173; cf. United States v Sanchez, 11 USCMA 216, 29 CMR 32.
The findings of guilty of Charge I and its specifications are set aside and the Charge and specifications are or*551dered dismissed. The sentence is set aside and the record of trial is returned to the board of review for reassessment upon the basis of the remaining findings of guilty.
Judge FERGUSON concurs.

 Forfeiture of two-thirds pay per month for three months. Manual for Courts-Martial, United States, 1951, paragraph 127c, page 226.