Court Opinion

ID: 7091993
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:07:02.634778+00
Date Added: 2024-06-11T16:13:07.323718
License: Public Domain

Baldwin, J.
Judgment was rendered in favor of tbe State of Iowa, for tbe use of tbe School Fund, against defendants, for tbe sum of $42.10, being a forfeiture of ten per cent'per annum, upon tbe amount of a contract between plaintiffs-. and defendants, which the court ascertained to be usurious.’’ It is claimed by defendants that tbe judgment in favor of tbe State was for a sum greater than authorized by law.
Tbe sum of money borrowed by tbe defendants from plaintiffs was $230.30, and for tbe term of sixty days, and tbe judgment in favor of tbe State was for ten per cent upon that amount from tbe date of tbe contract until the date of tbe judgment — nearly two years. It is provided by section 5, chapter 37 of tbe Acts of 1853, “ that if it is ascertained, in any suit upon a contract, that a rate of interest has been contracted for, greater than is authorized by law,” “ tbe same shall work a forfeiture of ten per cent per annum upon tbe amount of such contract.” Tbe construction tbe appellants claim should be given to this law is as follows: “ That as tbe law says tbe amount of forfeiture shall be ten per cent per annum upon tbe contract sued on, *389that it means the contract which the parties have themselves made, and not the contract which the law may attach to the stipulations of the parties, in addition to those stipulations,” and that the judgment should be for ten per cent, only from the date of the contract until the day it became due. We think this is not the proper construction of this section. It is ten per cent per annum upon the amount of such contract that is forfeited to the State, when the contract is found to be usurious, It is the contract sum that shall bear ten per cent per annum, as long as such contract exists. Its usurious nature, or taint, does not cease when the note falls due, but continues until judgment. The lender is the one who is punished for his violation of the law, and the party borrowing is required to pay a reasonable compensation for the use of the money; but the law compels him to pay it to the School Fund instead of paying it to the usurer.
Judgment affirmed.