1.-Usury can only attach to a loan of a certain kind, to interest of a certain quality, accompanied by certain motives.

2. The loan must be a loan, properly so called, i. e. a temporary letting for profit of the use of money, goods, &c. to be returned to the lender. It is this quality of its being returnable that constitutes a loan, and thereby excludes from usury all contracts including risks or contingency. Such contracts may indeed be unconscionable, and as such be matter of relief in courts of equity, but not as usury in courts of law.

3.-The quality of the interest to constitute usury must be, that it exceeds the rate allowed in the statute of Aune, in the country in which the contract is made, and be not within the privileges or exemptions granted by statute to particular corporate companies. The rate of interest in this country is 57. per centum. In Ireland, America, Turkey, and other countries, 61. 8. and 12l. per centum, all which therefore are allowed by our law, upon contracts made in those countries. Eikins v. East India

Company, 1 P. W. 395. 2 Black. Com. 464. Bodily v. Bellamy, 2 Burr. 1094. 1 Black. Rep. 267. Auriol v. Thomas, 2 T. R. 52. The corporations privileged to take interest beyond the statute of Anne are the Bank of England and the South Sea Company. 3 Geo. I. c. 8. § 9. 3 Geo. I. c. 9. § 16. Beyond these exemptions, the statute 12 Anne c. 16. says, "No person shall take, directly or indirectly, for the loan of money, &c. above the value of 5l. for the forbearance of 100%. for a year, and so after that rate for a greater or less sum, or for a longer or shorter time."

4.-The quality of the intention, in order to constituïe usury, must be, that it is wilful, or, in the words of the statute,

a corrupt agreement, and not upon a just and true intent.” Hence, where more than the allowed rate of interest was reserved in the security by the mistake of the person who drew it, and contrary to the intent of the party, it was decided not to be usury; usury being a penal act, and no man being criminal by mistake. Nevison. Whitley, Cro. Car. 501. Booth v. Cook, Freem. 264. Buckler v. Millard, 2 Ventris 107.

Indeed the very words of the

statute, "directly or indirect

ly, or by any shift, or by any deceitful way or means," seem to look straightly to the intentions of the parties; and it is accordingly upon these words that the Courts now exercise their discretion of examining what is the real substance of the transaction, and not what is the colour and form.

5. Therefore, all loans, properly so called, upon which more interest is taken than is allowed by the statute, and which interest is taken wilfully and corruptly, (i. e. with a usurious intent, no matter in what shape,) are usurious contracts.

6. But it being the intention of law, whilst protecting from usury, not to endanger or impair contracts, necessary to commercial dealing, and common in the intercourse of men, the words of the statute do not apply to cases where the principal and interest are put in hazard upon a contingency, and where there is a risk that the lender may have less than his principal. The reason is, because such contingency is the main characteristic of contracts of trade; and therefore, taking such advance of money out of the form of a loan, it renders it a new contract; and much mischief would ensue if

such contracts could be shaken; the Court, however, still exercising its discretion, with the assistance of a Jury, whether the contingency be good and bona fide, or a mere shift to elude the statute. Now the main qualities of such contingencies must be two:-1st, they must be lawful; and, 2d, being fair and reasonable, must rebut the presumption, that they are only covers for usury. Within this description such contingencies are not usurious, Martin v. Abdee, Show, 8. Chesterfield v. Jansen, 1 Atk. 301. and the cases there cited.

7. But though contingencies being real, and of good faith, whether as wagers against events, or mercantile bargains, are not within the statutes against usury, yet the mere circumstance of a contract; having the form of such contingency, will not exempt it from the scrutiny of the Court, who, under the words of the statute "directly or indirectly, or by shift and contrivance," are bound to exercise a judgment, whether such be a real contingency, or a shift and device to cover usury. Thus in Reynolds v. Clayton, 5 Co. 70. where the contingency on which the greater interest was received, was that the son of

the lender, a man in good health, should be alive at the end of six months. This was held to be an usurious contract; the contingency in fact being scarcely any contingency at all; and, therefore, in the contemplation of the parties, a mere shift to cover usury. In the case of Roberts v. Tremayne, Cro. Jac. 308. Dodderidge took these distinctions in cases of contingencies" First, if I lend 100%. to have 1207. 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 sure to have the principal again, come what will come. But if the interest and principal are both hazarded, it is not then usury: and it was, therefore adjudged in C. B. in Dartmouth's case, where one went to Newfoundland and another lent him 100%. for a year, to victual his ship, and if he returned with the ship he would have so many thousand of fish; and expresses at what rate, which exceeded the interest which the statute allows; and, if he did not return, that then he would lose his principal, it was adjudged to be no usury. Secondly, if I secure both interest and principal, if it be at the will of the party who

is to pay it, it is no usury; as if I lend to one 100l. for two years, to pay for the loan thereof 30%. and if he pay the principal at the year's end, he shall pay nothing for interest, this is not usury, for the party hath his election, and may pay it at the first year's end, and so discharge himself."-See 3 Wil. 395. In the same manner, on account of their contingencies, contracts of bottomry and respondentia are equally exempt from the imputation of usury.

8. The usage and custom of merchants exempt a contract from the quality of usury, though, by such custom, the interest be deducted from the principal, on discounting a bill of exchange, without waiting for the bill becoming due. Marsh v. Martindale, 3 B. and P. 154. In such cases the additional sum seems to be considered in the nature of a compensation for the trouble to which the lender is exposed; and, without such indulgence, it would not be worth while for a merchant to discount a bill. But the rule must be strictly confined to transactions of this kind, within the usage of trade; for if discount be taken upon an advance of money, without the negociation of a bill of exchange, it