Court Opinion

ID: 3880837
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:12:23.644315+00
Date Added: 2024-06-11T07:45:48.594585
License: Public Domain

February 29, 1944.
I respectfully disagree with the construction of Section 6740 of the Code of 1942 which the Chief Justice proposes to put upon it in this case. (Such is the only question involved in the appeal, and he has sufficiently stated the facts.)
It can be more conveniently considered and analyzed if reproduced in full: "Any person or corporation who shall receive, or contract to receive, as interest any greater amount than is provided for in section 6740 (6738?) shall forfeit all interest, and the costs of the action and such portion of the original debt as shall be due shall be recovered without interest or costs, and where any amount so charged or contracted for has been actually received by such person or corporation, he or she, or they shall also forfeit double the total amount received in respect of interest, to be collected by a separate action or allowed as a counterclaim in any action brought to recover the principal sum."
It was Section 2 of the comprehensive act upon the subject of interest rates and usury approved February 10, 1898, No. 467 of the session of the General Assembly of that year. XXII Stat., 749. The apparent reason for the enactment, interesting but not especially helpful here, was *Page 229 
a prior decision (or decisions) of this Court construing the pre-existing laws unsatisfactorily to the representatives of the people, the Legislature.
The meaning of the section is clear enough to me if it be considered as a whole, and authority need not be cited for the propriety, indeed necessity, of such consideration for the purpose of construction. It plainly covers the two cases of the (1) contracting for usurious interest and (2) the receipt of such interest. In the first case the intended taker shall forfeit (forego) all interest and costs (both of which he would be entitled to recover except for his violation of the law), and in his suit he will be permitted to recover principal only. And in the other case (2, above), when the usurer has actually received interest above the legal rate, he shall forfeit (pay over) double the amount received as interest, which may be collected by the victim by separate action or by counterclaim in any action brought to recover the principal.
It was unnecessary for the Legislature to use the word "receive," or any equivalent, in the first line, but they did so and I do not think its presence necessitates the distortion of their apparent intention. Undoubtedly, such first use of the word "receive" is related to the second use of it, where reference is made to actual receipt of illegal interest.
In the second paragraph above after the word "forfeit" there are inserted the two different meanings of it as it is used in the statute, and I think upon consideration, the two meanings will be found to be accurately indicated. It is not unusual for a word to have more than one meaning. Reference to the second edition, 1939, of Webster's New International Dictionary, Unabridged, G. . C. Merriam Company, discloses the two meanings referred to. As a transitive verb the first, preferred, meanings of forfeit are: "To lose, or lose the right to, by some error, fault, offense, or crime; to alienate the right to possess, by *Page 230 
some neglect or crime; to have to pay as a forfeit." (Emphasis added to the second meaning.)
The following is copied from the circuit judgment in this case, which I think should be affirmed:
"It is perhaps unfortunate that the Legislature used the word `forfeit' in both the first and latter parts of the section, as the word has two definitions. Used in one sense it means to lose, or to prohibit the exercise of an existing right, or, as applicable to this situation, to prohibit the right of collecting interest provided for by contract. In the second sense the word means, to pay back, or to pay a penalty in the nature of a disbursement. 26 C.J., 891 [37 C.J.S., Forfeit, page 1]:
"`Forfeit. In General. A word of well established meaning in the law. Its meaning is to be determined by the connection in which it is used. * * *
"`As a verb. In its primary use, to lose; and this is also its legal meaning. It has also been defined variously as meaningto lose by some breach of condition; to lose by some offense; * * * to pay; to pay money as a mulct, orfor a default or wrong; * * * also to become by one'sown act or omission liable to be deprived of. * * *'
"The proper construction of the section and use of the word `forfeit,' is that the first `forfeit' was used as meaning the loss of a right, or a prohibition against recovery; while the second `forfeit' was used in the sense of incurring a penalty, or to disburse funds as payment for an offense."
The decision in Hardin v. Trimmier, 30 S.C. 391,9 S.E., 342, 343, is supposed to have moved the Legislature to pass the Act of 1898 although ten years elapsed between them. Opinion was by Mr. Justice McIver, without dissent. The governing statute then was the Act of 1882, XVIII Stat. 36, which was not materially different in respect to the point under consideration (the difference between (1) and (2) hereinabove) from the present Section 6740. Judge Wallace on trial instructed the jury, in this connection, as *Page 231 
follows: "The section that I have read to you provides that if a man make a stipulation in regard to interest that is unlawful, why the person to whom the money is coming cannot collect more than the sum loaned — cannot collect any interest at all. But here is a section that goes on and provides, suppose he does collect it. Suppose the debtor pays it, what then? Here is what the Act says: `That any person or corporation who shall receive as interest any greater amount than is here provided for * * * shall, in addition to the forfeiture herein provided for — that is, the forfeiture of all his interest so as not to collect any of it, shall forfeit also — he shall not only lose all his interest, but he shall forfeit double the sum so received as interest to be collected by a separate action or allowed as a counterclaim * * *.'"
The only error found in the quoted charge, in the exhaustive opinion of the Court, was that the second forfeiture exacted by the law was double the amount of the excess
interest only, so it is plain judicial recognition of the propriety of the construction of the present law which is herein advanced. Indeed, the lawmakers seem to have adopted the interpretation of Judge Wallace, made his language a little more formal and incorporated it in the new law, the Act of 1898, now Sec. 6740 of the present (1942) Code.
There is certainly nothing contrary (to what has been said) in the able opinion for this Court by Mr. Acting Associate Justice Lide in Jones v. Godwin,187 S.C. 510, 198 S.E., 36, 42. Instead, I think there may be appropriately quoted therefrom the following: "And besides, the usury statute being highly penal it must be strictly construed, and the case must be clearly shown to come within its terms. Butler v. Butler, 62 S.C. 165,40 S.E., 138; Peoples Bank v. Perrit, 114 S.C. 362,103 S.E., 711."
Reverting to Hardin v. Trimmier, supra, and the charge of the trial Judge there, it seems to me that explanation is easily found for use of the word "all," *Page 232 
of such strong influence upon the Chief Justice. The rule of Hardin v. Trimmier was that the usurer was penalized by being made to forfeit double the excess of interest received; he was entitled to interest at the lawful rate but required to disgorge double the excess. The law is now quite clear that, upon contracting for illegal interest, the usurer forfeits all interest, that which he may have contracted legally to receive and the excess as well; and should he actually receive usurious interest he is made to forfeit (pay back) double the total amount received. In this light it does not seem to me that the significance can be properly attached to the word "all" which the Chief Justice gives it. His result is a quadruple penalty upon the usurer who actually receives unlawful interest, for he is not only unable to collect interest at the legal rate, but must disgorge doubly under the second provision of the Act (2 above), and the proposed judgment reversing this case would cause him to forfeit the same sum again, which I do not think is justified under the law, particularly in view of the strict construction of usury statutes (because they are penal) under the former decisions of this Court. "All interest" in the statute means the total of the interest at a legal rate and the illegal overplus.
One more thought: The "first penalty" part (1, above) of the statute, that immediately here involved, expressly allows recovery of the "original debt * * * without interest or costs." How can it in reason be reduced by the amount of interest contracted for (but not received) without doing violence to the statute? I do not think it can.
The foregoing, having been concurred in by a majority, is the judgment of the Court; the exceptions are overruled and the judgment of the Circuit Court is affirmed.
MR. ASSOCIATE JUSTICE FISHBURNE and CIRCUIT JUDGES WM. H. GRIMBALL and L.D. LIDE, ACTING ASSOCIATE JUSTICES, concur.