Court Opinion

ID: 3994012
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:52:59.392707+00
Date Added: 2024-06-11T07:44:26.618543
License: Public Domain

The able argument by which the majority reaches its conclusion upon the vital question in this case does not carry conviction to my mind.
The purpose of our usury law is shown by Rem. Comp. Stat., § 7300, which permits contracting for and receiving interest up to twelve per cent per annum and forbids taking or receiving, directly or indirectly, any greater compensation for the use of money. Section 7304 is designed to carry out the policy announced in § 7300, and provides that, upon proof that a greater rate of interest has been taken or reserved, the holder of the note shall recover only the principal "less the amount of interest accruing thereon at the rate contracted for," and if interest shall have been paid, provides a penalty. This latter part of § 7304 we need not consider here, as no interest was paid.
Having in mind the common law right of freely contracting, and that, except for the statute, any rate of interest contracted for might be recovered, it is apparent that the statute must be strictly construed, notwithstanding the crying need for such an enactment. *Page 93 
Certainly no penalty should be applied except as the statute plainly directs.
It seems to me that the logical construction of the two sections taken together is that the greater rate of interest is forbidden, and if contracted for, but not actually paid, such contract is void, which would mean that, in any action on a usurious instrument, the illegal part of the instrument would be eliminated and the holder would recover on the contract the amount actually loaned. However, in the case of Libert v.Unfried, 47 Wash. 186, 91 P. 776, the court, without very much discussion, held that the amount of the usurious interest contracted for, but not paid, should be deducted from the money actually loaned. I do not feel at liberty to disregard that holding, notwithstanding my personal views as to the construction of the statute, and, feeling bound thereby, must concur in the holding that it is the law of this state that the usurious interest contracted for, though not paid, must be deducted from the amount actually loaned. *Page 94