Court Opinion

ID: 6609097
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:16:46.238174+00
Date Added: 2024-06-11T15:58:17.478526
License: Public Domain

By the Court.
It appears from the verdict, in this case, that for a loan made the 28th day of February, 1785, of $16,839 in final settlement certificates, or certificates of balances due from the United States, it was agreed to give, and there was in fact, given, the note now sued, being for the repayment of the like sum, and kind of certificates, at the end of six months, with lawful interest thereon; and also another note for £300 lawful money: — Which agreement, the jury find, -was usurious, within the statute; — whether it could be so, is a question of law now moved in arrest.
To bring a contract within the statute, and the mischief it was made to prevent, it must be clearly for the repayment of a greater value than the amount of the loan, with an advance thereon, at the rate of six per cent, per annum. That it be of a greater quantity, though of the same kind of article, is not sufficient: If the article be of a fluctuating value, and from such change or diminution of its value, as from its nature, or the course of trade, it is subject to, — it may not, at the time of repayment, be worth more, or so much. A loan of one hundred bushels of salt, for example, in the year 1783, when it was at twelve shillings, to repay double the quantity at the end of one year, when it might have been worth but four shillings, would not come within the statute, be the price what it might at the year’s end: Nor would it make a difference, if it was to repay 106 bushels of salt, and a sum of money besides, provided both' of them might not amount to more than the value of the *262loan, and sis per cent, interest thereon.- — -With regard to the final settlement certificates, said to be loaned in this case; it is matter of public notoriety that they were, at the time of the contract, in a state of rapid depreciation, and that having no funds to rest upon, for principal or interest, it was wholly uncertain how low they would fall, and whether, at the end of six months, they would, if considered as merchandise (as they must be, to bring them at all within the description of the statute) be worth half so much as they were when loaned: In which case the plaintiff, instead of gaining £300, would lose that sum, and the defendant gain it. The loss by the depreciation was at the plaintiff’s risk: As he received in the £300 a premium for the risk, the rule of damages upon this note^ would be the market value of the certificates, at the time they were to be repaid.— So was the case of Lathrop v. West, determined in this county, where the loan was of depreciating continental bills, and a sum in hard money was taken as a premium for risking the depreciation upon them. There the depreciation happening to exceed the premium, the plaintiff lost the whole interest, and part of the principal, as might have been the case here. The contract in this case, though in the form of a loan, was really in nature of a speculation, and bargain of hazard: It depended upon a contingency, viz. that of depreciation, whether all, or how much of the principal, or value loaned, should be repaid, and which of the parties the speculation, should ultimately favor; which takes the contract entirely out of the statute. See case of Morriset v. King, 2 Burrow’s Report, 891; also Mason v. Abdey, Show. 8; Comb, 125; Holt, 738.— Though it may leave a question, how far the premium taken *263for the risk in this case, was unconscionable, and could be relieved against in equity.— Judgment was, therefore,, arrested.