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bill plaint or information, in which action bill plaint or information no 37 H. VIII. wager of law essoin or protection shall be admitted or allowed. VI. Provided alway, and be it enacted by the authority aforesaid, That this Act nor any thing therein contained shall not in any wise extend to any lawful obligation indorsed with a condition, nor to any statute or recognizance made and to be made for the payment of a lesser sum, so that the same obligation statute or recognizance be made for a true just and perfect debt or for the performance of any other true covenants made or to be made upon a just and true intent had between the parties,

To what Lands and Assurances this Statute extendeth not.

(h) As to Annuities for Years.

(i) On Contracts of Hazard.

The purchase of an annuity for years with a power of redemption does not fall within the Statutes of Usury if bona fide made, and there is no obligation to re-purchase, although the annuity may exceed the legal rate of interest. Thus, where D. had agreed to purchase a lease for 40 years, subject to the rent of 51. and not having the money, B. by agreement with him, paid the 3001. and took an assignment to himself, and then demised the premises to B. for 39 years at the rent of 351. of which the original rent was to be part; and D. covenanted to pay the rent, &c.; and B. agreed, that if D. should pay him 3007. at the end of four years, the rent should cease, and he would reconvey the estate. By Hale, C. J. this was not Usury within the Statute, for D. was not obliged to pay the 3001, but at his election might pay it if he choose, and thereby determine the rent and have the term, so that in effect it was only a bargain for an annuity of 301. for 39 years, to be secured in this manner, but determinable sooner if the grantor pleased; but the grantee had no remedy to recover the 3001. if the grantor did not think proper to pay it; but if B. had any security for the re-payment of the money, or by any collateral agreement it was to have been repaid, that had been Usury-Rex v. Dury, 2 Lev. 7; and in Tanfield v. Finch, Cro. Eliz. 27, it was held, that the giving 5661, for an annuity of 1201. for twenty-three years was no usury, where there was no previous communication to have any consideration for the loan of the 5664.; but Bell, Chief Baron, said, that if two men speak together, and one desireth the other to lend him 1002 he will give him above 101. per annum, and for an evasion of the Statute they invent this practice, that he shall grant to the other 30l. per annum out of his land for 10 years, this is Usury, although he never have his 100%. again. But if bona fide one buyeth an annuity of 401. for ten years for 1007. this is no Usury, if the first communication was not corrupt-see Symonds v. Cockerill, Noy. 151. cited, 3 B. & P. 160, to the same effect.

It is a settled point, that if the principal sum advanced is by the terms of the contract fairly put in hazard, no Usury is incurred by taking more than the legal rate of interest, but that the Usury is not prevented by a hazard which only affects the interests, or as it is laid down by Dodderidge, C. J. in Roberts v. Trenayne, Cro. Jac. 507. if I lend 100l. to have 120l. at the year's end upon a casualty; if the casualty goes to the interest only, and not to the principal, it is Usury; for the party is to have the principal again come what will; but if the principal and interest are both at hazard, it is then not Usury.

The reasonableness of this distinction is not quite evident, for if the chances are equal upon which double the interest is to be paid, and the whole interest is to be lost, it would seem to be a fair wager of the amount of the interest, but it is a distinction which is always recognised and acted upon.

Upon the general doctrine of placing the principal in hazard, it was ruled, in the famous case of Lord Chesterfield v. Janson, 2 Ves. 125. 1 Ath. 301. 1 Wils. 286. that a post obit bond on receiving 5000l. to return 10,000l. if John Spencer the obligor survived his grandmother, the Duchess of Marlborough, was not usurious. Upon this principle all bottomry contracts are supported. So an agreement in consideration of 100l. to pay 80l. to each daughter of a person having five who shall be living at the end of ten years-Bedingfield v. Ashley, Cro. Eliz. 741.

But a mere colourable hazard will not take the case out of the Statute. Thus, in the preceding case, the Court held, that if the contract had been that he should pay at the end of one or two years 3004. if any of the children were alive, that had been Usury-so in Mason v. Abdy, Carth. 67; and by the name of Mastin v. Abdee, Show 8. Holt, C. J. said, that dying within six months was no hazard, and therefore usurious-and see Richards v. Brown, Cowp. 770.

It is clear that the hazard must be one arising out of the terms of the contract itself, and not the common hazard, that the contract may not be performed from the insolvency of the borrower; and upon this ground it was ruled, that a loan upon which the lender was, beyond legal interest, to receive a certain portion of the profits of a trade, was usurious, although it was objected that by receiving a share of

other than in cases of usury interest corrupt bargains shift or chevisance; ne yet shall extend to any recovery fine feoflment release confirmation or grant made or to be made upon condition with a true intent, other than to such recoveries fines feoffiments releases confirmations and grants as shall be made upon condition extending to usury interest corrupt bargains shifts or chevisance; any thing in this statute contained or any law statute or ordinance heretofore had used or made to the contrary notwithstanding.

the profits he would, with respect to third persons, render himself liable for all the debts and losses-Morse t. Wilson. 4 T. R. 353.

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The stipulating by a factor for a higher commission, beyond legal interest, on his (k) Of Loans advances of money than he would have had if he had not furnished the money, was ruled accompanied by by Lord Ellenborough, at Nisi Prius, to be usurious-Harris v. Boston, 2 Campb. 348 Services. An assignment of a contract for the purchase of timber to secure certain advances with charges, and 2001. as a compensation for trouble in the business, was ruled not to be usurious on the face of it, it not appearing that any part of it was intended as an additional bonus for the advance of the money-Palmer v. Baker, 1 M. and S. 56.

In Burton's case, 5 Co. 69. b. it is laid down, that an agreement to pay 201, a year (1) Of Penalfrom Michaelmas next, if 1007. is not paid by Michaelmas, is not usurious, for the ties in Case of party may repay it before Michaelmas without interest, if this was the true intent, Non-payment and there are several other authorities to the saine effect. Mr. Plowden mentions of the Princithe case of Moore v. Battie, before Lord Keeper Henley, Amb. 371, as overruling pal. this doctrine; but the case was not apparently considered in that view by Lord Henley himself, nor does any such inference result from it, there being no intention in that case that the borrower should at any time repay the money without interest. I should entertain, however, very little doubt that it is an agreement against which a Court of Equity would relieve upon the payment of the principal and legal interest, and the contract would be regarded with much suspicion in a Court of Law, as furnishing evidence of an actual intention for the payment of usurious interest.

With respect to the interest or other compensation to be paid, in Barnes v. Wor- (m) Of the Inlich, Cro. Jac. 25. Yelv. 30. 1 Roll, 510. Moor 644, (by the name of Worley's case, terest. and see Dalton's case, Noy. 171,) a question was raised, whether it was usurious to stipulate for the payment of interest at the full rate allowed by Statute for half a year. The ground of the doubt was, that for the space between the end of the half year and the end of the half year interest might be made on the interest, so that more than the rate allowed would be made on the whole sum for the year; and the importance of this consideration would become very manifest by reversing the case, and reflecting that a repayment of principal with simple interest, at the end of ten years, would be a very moderate compensation, supposing the legal interest to be the actual value for a loan or forbearance for one year. The decision was in favour of the legality of the contract; but it was said, that if the lender had agreed to take his money for the forbearance instantly when he lent it, that had made the assurance void, for there he had not lent the entire sum for one year, and the other had not the use of his money according to the intention of the law.-See ex parte Bevan, 10 Vesey, 223, as to stipulations for half-yearly settlements, and charging interest in the balance in mercantile transactions. In Lloyd v. Williams, 3 Wils. 252. 2 Bl. 792, it appears, by the later report, that Sir Wm. Blackstone was of opinion, that interest might as lawfully be received beforehand for forbearing, as after the term is expired for having forborne, and that it should not be reckoned as merely a loan of the balance, else every banker in London, who takes five per cent. for discounting bills, would be guilty of Usury.

The deducting, in the first instance, the full legal rate of interest, upon the discount of bills and notes, is fully agreed not to be usurious. But in Marsh v. Martindale, 3 B. & P. 154. it was considered that that doctrine arose merely out of the course of trade, and Lord Alvanley, in delivering the judgment of the Court, said, "If nothing more has been done in this case than what has always been done by way of accommodation among merchants, the transaction was not usurious; but the rule must be confined strictly to that sort of transaction, for if discount be taken in an advance of money, without the negociation of a bill of exchange, it will amount to usury, as appears clearly from the cases which were cited in the agreement," (viz. Barnes v. Worledge, and Dalton's case above cited,) and in the principal case it being agreed, that 50001. should be paid at the end of three years, for advances, amounting to 42501. or in other words, that three years' interest of 5000l. to be paid at the expiration of that time, should be deducted in the first instance, the case

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(n) How far

the Question of

Usury depends upon the Intent of the Parties, as a Question of Fact.

was holden to amount to usury. In a preceding part of this note, the case has been mentioned with reference to the question, whether the nature of the transaction was such as to render the law of usury properly applicable.

The taking of excessive interest is usurious, although taken in the form of rent, at the rate of 501. for half a year for a house worth only 20. a year-Bedo r. Jackson, Cro. Jac. 440; and see the observation of Lord Hardwicke to the same effect, in Adlington v. Cann, 3 Atk. 154; see also Jetson v Brooke, Cowp 793.

In Morisset. King, 2 Bur. 821. in consideration of 1001. advanced by M. to be repaid without interest at the end of four years, K. agreed to board the daughter of M. and that she should be co-partner with his wife, in the business of a milliner, &c. the contract was ruled not to be usurious, as K. might receive so much advantage by the partnership as to be worth the consideration.

The question of usury often depends upon the particular intent of the parties to the contract, so as to reduce the point in dispute to a mere question of fact for the decision of the jury, whether it was or was not intended to take a greater interest than the law allows upon the loan or forbearance of money. It has been already stated as an established principle, that if the real nature of the transaction, as founded on the intention of the parties, be found by the jury to be an usurious loan, no form or colour, which may be given to it, will prevent the law for restraining such transaction from having its full operation, and several cases were referred to as supporting and illustrating that proposition. In the case of Hamnett v. Yea, 1 Bos. & P. 144. where upon discounting a bill, bills at thirty days and smaller periods were charged as cash, Eyre, C. J. observed to the jury, that the bills appeared to be in the nature of a remittance of the borrower's money to London, and if the plaintiffs had not taken more than a reasonable compensation for their trouble, unless indeed the mode of payment had been made a term on which alone the bills would be discounted, it was not usury; and the jury having found the transaction not to be usurious, his Lordship, upon application for a new trial, said that whether more than 51. per cent. was intentionally taken upon any contract for forbearance, was a mere question of fact for the consideration of the jury, and must always be collected from the whole of the transaction as it passes between the parties-and he was of opinion, that it never could be determined that any particular fact constitutes or amounts to usury till all the circumstances, with which it was attended, had been taken into consideration-and, in the course of his judgment, he repeatedly expressed himself to the same effect, shewing that under the circumstances there was just ground to warrant the conclusion which the jury had drawn; and, the other judges concurring in the same doctrine, a new trial was refused.

Where the intention of the parties was not to commit usury, but the deed was so drawn by mistake of the scrivener as upon the face of it to be usurious, it was held that the statute did not attach. The agreement was on the 23d of May for a loan for a year, and the bond was made for payment of the principal and a year's interest, on the 24th of May next ensuing, and there was a question whether this should be construed to mean the 24th of the same May, or the 24th of May in the following year, but all the Court held, that although it should be expounded to refer to the same month and year, which was the next day, yet as the agreement was found to be to make the loan for a year, and that the assurances were for payment at the end of the year, and by the scrivener's mistake it was made payable the next day, it was not usury within the statute, for there was not any corrupt agreement betwixt them, but a true and absolute agreement, and the act of a stranger should not bring the party within the danger of the statute-Buckley v. Guildbank, Cro. Jac. 678; so where the plaintiff by his replication alleged that the agreement was for forbearance for a year, and by the scrivener's mistake it was made payable at the half year's end, and he not knowing thereof accepted the bond, the Court ruled that such an allegation might be well made; for it was the shewing of the true agreement, that no interest was to be paid by the said agreement but such as stood with the law-Nevison v. Whitley, Cro. Car. 501; and where the plaintiff replied, that it was agreed that he should lend to the defendant 501. at 51. per cent. and that the scrivener should take a lawful bond, with condition to pay interest at 51. per cent. and that the scrivener, in the absence of and without the notice of the plaintiff, took the bond whereby, by the mistake of the scrivener, 24. 10s. was inserted for six months, and traversed the corrupt agreement, it was ruled to be the same case with the preceding-Bush v. Buckingham, 2 Vent. 83; so a bill given for excessive interest, by a mistake of calculation, was held available for the sum really due.-Glassfurd, v. Lang, 1 Camp. N. P. 149.

In Le Grange v. Hamilton, 4 T. R. 613. a bond was given for payment of 1001. with interest, at 51. per cent. in payments of 201. yearly, by quarterly payments of 5. until the whole should be paid, and a memorandum was indorsed, that at the

end of each year the year's interest due was to be added to the principal, and then the 201. received was to be deducted and the balance remain as principal. Lord Kenyon thought the consideration was, that a year's interest should be charged on the whole, without allowing for the intermediate payments, which would be usurious --the other judges thought, that the memorandum was only for the purpose of adding the interest, which became due in the course of the year, to the principal, so as to make the whole carry interest till part of it was again reduced-and Ashurst and Grose J. held that if the Court could by any reasonable construction consider it not to be usury, they were bound to do so.

But if the agreement entered into is such as appears to the Court to be usurious, the case falls within the statutes, although the parties might not be aware that they were transgressing the law. Thus in Marsh v. Martindale, 3 B. & P. 154. already twice cited upon the principal points, Lord Alvanley said, "I stated to the jury, that if a man agree to take more than 51. per cent. the law declares that to be such an agreement as is corrupt, whether the party thought at the time he were acting contrary to the law or not, and though the jury have found, that the plaintiff did not think he was acting contrary to the law, there is nothing in that finding to prevent us examining the transaction, and declaring it to be corrupt if it appear to us to be so in point of law, without sending the case back to a jury to find the corruption.” And in Barnard v. Young, 17 Vesey, 44. already cited, where a contract to pay money or replace stock, at the option of the lender, was holden usurious, the master of the Rolls, after stating his opinion upon the contract, added “Therefore, though it was not probably so intended, this is in fact an usurious contract."

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In an action for the penalties the essential charge is, as has been observed, the Part II. On the taking usurious interest; for, however usurious the contract may be, no penalty is Penalties of incurred without taking such interest.

Whether the taking more than legal interest, without a previous contract for the purpose, does or does not subject the party to the penalty, seems not to be perfectly settled. In Rex v. Allen, Sir T. Raym, 196, Twisden, J. laid it down, that if the party do not contract for more than the Statute allows, and afterwards he will take more, the assurance shall not be avoided, but the party shall forfeit the treble value; as if a man, when money was at El. per cent. lends money and takes bond for the same, and the Statute 12 Car. II. is made, and he will continue the old interest upon that bond, the bond shall not be avoided by such acceptance of interest, but the party shall forfeit the treble value by the Statute, but no judgment was given.

With respect to the matter stated by Twisden, by way of illustration, it seems to be agreed, that a contract made before the Statute reducing the rate of interest is no way within the meaning of the Statute, and that it is still lawful to receive the former interest in respect of such contract.-See 1 Hawk. P. C. 22. sec. 12-Walter v. Peury, 2 Vern. 145. 1 Eq. Ab. 288. Whether the contract, otherwise than in respect of the penalties, continues as to the higher rate, is a point upon which the two authorities last cited seem to differ.

In an anonymous case, 1 Vent. 38. temp. 21 Car. II. the information was for taking usurious interest for three quarters of a year then passed, not averring, as it seems, any preceding corrupt agreement. Upon motion in arrest of judgment, on the ground that as the time of forbearance was past the party might give what he pleased in recompence, there being no preceding agreement, the Court overruled the objection, and said they would expound the Statute strictly-and if liberty were allowed in that case, the brokers might oppress the people exceedingly, by detaining the pawn, unless they would give them what they would please to demand for the time after failure of payment. In R. v. Walker, 1 Siderf. 421, (which is supposed by Mr. Plowden to be the same case) but is of Trin. 19 Ch. II. the Court upon the like objection are reported to have held, that if the case was not within the Statute 12 Ch. II. the taking was an offence at common law, and therefore they gave judgment of fine and imprisonment.

If, after an agreement for legal interest, a subsequent agreement is made for more interest, it is usury, and the penalty is incurred by taking such interest, but it does not avoid the original contract.-See Rcg. v. Lewel, 7 Mod. 119. In Brown v. Fullbey, 4 Leon. 43. it was the opinion of the Court, that although the usurious interest agreed upon was tendered and the lender did tell the same, yet, if he did not take and accept it, he did not incur the forfeiture.

In Mallory . Bird, cited Cro. Eliz. 20. it is said, if one contracts to have 201. for the loan of 1001. if he taketh nothing of the 201. he is not punishable by the statute; but if he taketh any thing, if but one shilling, this is an affirmance of the contract, and he shall answer for the whole contract. But Ashton, J. upon this case being cited, observed, that it meant one shilling above the legal interest; and such is

Usury.

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taches.

The Action

must be brought within a Year.

the construction which has always prevailed in practice-see Fisher t. Beasley, Doug. 235.

As by statute 31 Eliz. c. 5. all actions and informations upon penal statutes must be commenced within the time prescribed after committing the offence, it is often a material question at what time thereby prescribed after committing the offence, it is often a material question at what time the act of taking usurious interest or comAt what Time pensation is complete. Upon this subject the following cases have occurred :the Penalty at- In Lloyd, q. t. t. Williams, upon a loan of 1001. for three months, it was agreed, that the borrower should give 61. 5s.; the 100l. was advanced, and the borrower immediately paid the 61. 5s. for interest by way of advance, and gave his promissory note for 100l. at three months; the court of C. B. held, that as the 1001. was actually lent by the defendant to the borrower, who received it with one hand and immediately paid the 6l. 5s, with the other hand, the offence was then completely committed, and the time being more than a year before the commencement of the action, the plaintiff could not recover. Gould, J. (according to the report of Blackstone, vol. 2, p. 794,) inclined to think that the original loan was only of 931. 15s, the 61. 5s. being taken thereout; but he agreed that the plaintiff could not recover upon that action, which was brought for 3001. or the treble 1007., the sum of 1007. alleged to be lent. The view of Gould, J. as to the question of loan, provided the declaration had been properly adopted to meet it, seems to accord with the opinions which have prevailed in the subsequent cases. In Fisher, q. t. r. Beasley, Doug. 235. J. S. borrowed 1007. of the defendant, for which he gave a bond, payable with legal interest at the end of six months, and also paid two guineas as a premium at the time when the money was advanced. At the end of six months the capital was repaid, with 24. 10s. for interest; and the Court were of opinion, that the offence was not complete till the half year's interest was received. In Maddock, q. t. v. Hammett, 7 T. R. 181. in an action for taking usurious discount on a note of 1000% it appeared that that note was discharged by giving another, still outstanding and unsatisfied. Buller, J. was of opinion at the trial, that the offence charged was not complete, for that, in order to constitute usury, there must be an usurious taking either of money or money's worth; whereas nothing had been taken by the defendants but only the note, which at present only gave them a right of action, and perhaps might never be paid; which opinion, upon an application for a new trial, was confirmed by the Court. Upon a loan of 5001. the borrower agreed to give something more than legal interest as a compensation, but no particular sum was agreed upon. After the execution of the securities and payment of the money, the parties went to another place, where 501. was given as a compensation, and interest at 5 per Cent. on the 500 was paid for several years. Such interest was adjudged usurious, in as much as the loan could only be deemed a loan of 4504-Scurry, q. t. v. Freeman, 2. B & P. 381. So it was held in Wade, q. t. v. Wilson, 1 East. 195, that where a premium was given at the time of the loan, and at the end of half a year interest was received (qua interest) for the money lent, the usury was complete when the half year's interest was received.

Of the Locality of the Action.

Of the Manner of alleging Usury.

An action for usury, like all other penal actions, must, by Stat. 21 James I. c. 4. be brought in the proper county. In the before-mentioned case of Scurry, q. t. t. Freeman, 2 Bc. p. 341, a draft was given to the defendant for the interest in Middlesex, and received by him as cash, but afterwards exchanged by him for money with a third person in London, the Court of C. B. ruled, that the venue was properly laid in London, as the draft was merely a promise to pay, and the actual receipt of the money and taking the usury was in London. Where rents were received in Middlesex, but the balance was settled in London, the venue was held to be well laid there; and Ashurst, J. seemed to think it might have been laid in either county-Scott, q. t. v. Brest, 2 T. R. 238. Qu. if the same opinion might not hold good in Scurry v. Freeman, and the draft be considered as money's worth received in Middlesex; it would often be impossible to shew where a draft had been actually passed away for value to a third person.

In 1 Hawk. c. 82. s. 24, it is laid down, that in pleading an usurious contract, by way of bar to an action, you must set forth the whole matter, especially because it lay within your own privity; but that in an information on the statute for making such a contract it is sufficient to set forth the corrupt bargain generally, because matters of this kind are supposed to be privately transacted, and such information may be brought by a stranger-see also to the same effect Bedo v. Sanderson, Cro. Jac. 440.

The declaration or information must set forth, 1. the Taking by corrupt Agreement, 11 Rep. 58, Rex v. Garth, Kel. 629—Woody's Case, Cro. Jac. 104; and if the declaration is upon two loans, one of which is alleged to be corrupt and the other not, the plaintiff shall have judgment for the part that is good, it being in the

nature of two several actions-id. ibid.