Court Opinion

ID: 6230085
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:19:53.582605+00
Date Added: 2024-06-11T08:57:49.785886
License: Public Domain

The opinion of the court was delivered by
Woodward, J.
It would be difficult to imagine a transaction more completely within the letter of our statute against usury than that which is described in the reserved point. Whether it was a new loan of $600 which Craig obtained of the defendant, or further forbearance on a former loan of that amount, $25 were demanded, paid, and taken for it, and as the time of the loan or forbearance was not more than six days, this was taking for the loan or use of the money a prohibited rate of compensation. Ac*273cording to the reserved point it was demanded and paid for the forbearance, no matter whether of a present or former loan, and that is exactly what the statute forbids.
Yet the learned judge held it not to be within the statute, and the ground assumed now by counsel in support of his opinion may be stated thus: When the contract of forbearance was made there was no stipulation as to the rate of compensation, and hence it was not a corrupt contract, and the taking more than six per cent, on that contract was not usury. In other words, a corrupt contract is indispensable to the offence of usury.
This idea of a corrupt contract, that is of a contract which expressly stipulates for more than six per cent., is derived from the English statutes which were never in force here. The statute of 37 Henry 8, cap. 9, which fixed the rate of interest in England at ten per cent.; the statute of 21 Jac. 1, cap. 17, which reduced it to eight per cent.; the statute of 12 Car. 2, cap. 13, which reduced it to six per cent., and the statute of 12 Anne, cap. 16, which reduced it to five per cent., all use the expression corrupt bargain, loan, or exchange, in defining the offence, and the adjudications .under these statutes are often quoted here without adverting to the fact that our statute contains no such expression. “No person shall directly or indirectly, for any bonds or contracts to be made after the publication of this act, take for the loan or use of money, or any other commodities, above the value of six pounds for the forbearance of one hundred pounds on the value thereof, for one year, and so proportionably for a greater or lesser sum.”
And then comes the definition of the offence — “ if any person or persons whatsoever do or shall receive or take more than six pounds per cent, per annum on any such bond or contract as aforesaid, upon conviction thereof,” &c.
There is not a word here about corrupt bargains or contracts. “ Any bonds or contracts” may be the subject of usurious payments. The offence consists not in bargaining for more than six per cent., but in taking it on any bond or contract. With us, usurious contracts are not void, but valid for the principal and legal interest, which could not be if they were the matter prohibited by the statute. Courts of justice would not lend themselves to enforce, in whole or in part, contracts made in violation of a plain statute.
The imagined necessity then of a corrupt bargain to complete the offence of usury, favoured as it no doubt has been by loose expressions of judges, is wholly without foundation in our statute.
Still, however, if the usury be received on the footing of a bond or contract, if it be a mere gratuity, or be taken by force or duress of the person, it would not be the statutory offence. The *274reserved point tells us expressly that “ the defendant demanded $25 for the forbearance, which the said Henry Craig paid.”
Now, forbearance stipulated for and granted, is a contract, and on that this usury was paid.
But if this be doubted, there can be no question that forbearance is a valuable consideration, and a demand of money on account of it, assented to by him to whom the forbearance is granted, makes a contract perfect in all its parts; and be it that the money was paid on this contract, it is of no consequence that the assent was subsequent to the forbearance and simultaneous with the payment. Subsequent assent was equivalent to a prior promise — and a promise to pay $25 for six days’ forbearance of $600, would have been not only a contract, but a corrupt one within the meaning of the English statutes. That the plaintiff did assent to the defendant’s demand is proved by the fact that he paid.
That what he paid was not a gratuity is proved by the fact that it was paid on demand; and that it was not obtained by force or duress, is proved by the fact that there was only a demand.
On all points, therefore, and in every light in which we can view the transaction, it was clearly within both the letter and the spirit of the statute, and, judging the case by the reserved point, we think the plaintiff should have had the judgment.
But inasmuch as counsel on neither side acquiesced in the terms of the reserved point, and on the part of the defendant it is said not to embrace all the material facts, we will, instead of entering judgment here, remit the record for a new trial.
The judgment is reserved and a venire de novo awarded.