CHAPTER THE THIRTY-SEVENTH. Usury is a contract for exorbitant use of money. OF USURY AND ILLEGAL BROKERAGE. It was anciently holden that the taking of any kind of consideration for the loan or forbearance of money was an offence of interest for the ecclesiastical cognizance, punishable by severe censures and forfeitures: (a) but this notion, which appears to have proceeded from a mistaken construction of some passages in the Mosaical law, (b) has long given way to the more reasonable doctrine that there is nothing improper in taking a moderate interest for the use of money. Any large and immoderate consideration for such use has, however, been justly deemed prejudicial to the welfare of society; and the contract to receive any such exorbitant increase is that which is now generally understood by the odious appellation of usury. Offence at common law. Offence by statutes. It seems that, at common law, no indictment for usury could be supported, unless it were of such an exorbitant kind as that taken by the Jews. Accordingly, it is laid down in the books, that usury, such as the Jews took, namely, forty per cent. per annum, or more, was an offence at common law; and that, upon conviction, the usurer forfeited his goods to the king, and his lands to the lord of the fee, but that no other usury was so prohibited. (c) Different rates of interest have been established by different nations. In this country also they have been regulated by the Legislature; and have varied and decreased for two hundred years past, according as the quantity of specie in the kingdom has increased by accessions of trade, the introduction of paper credit, and other circumstances. By the 37 Hen. 8, c. 9, the rate of interest was fixed at 10. per cent. per annum, which the 13 Eliz. c. 8, confirmed; and ordained that all brokers should be guilty of a præmunire who transacted any contracts for more, and that the securities themselves should be void. The 21 Jac. 1, c. 17, reduced interest to eight per cent.; and it having been lowered in 1650, during the usurpation, to six per cent., the same reduction was re-enacted after the restoration, by the 12 Car. 2, c. 13; and now by the 12 Anne, st. 2, c. 16, it is reduced to five per cent. A contract, therefore, to take more than five per (a) 1 Hawk. P. C. c. 82, s. 4. (b) Exod. c. 22, v. 25. Levit. c. 25, v. 36, 37. Deuter. c. 23, v. 19, 20; and see 1 Hawk. P. C. c. 82, s. 7. 2 Blac. Com. 455. (c) 2 Roll, 800. 3 Inst. 151, 152. 6 Com. Dig. tit. Usury, (A), Anon. Hardr. 410. It is, however, stated that a very eminent barrister, in the year 1814, advised that, in a case of clear and palpable usury, a party may be indicted at common law. 2 Chit. Crim. L. 549, note (a). cent. is at this time usurious, and by the statute of Anne totally void; besides which, the lender is made liable to the forfeiture of treble the money borrowed. interest. void. bonds, &c., for a greater interest shall be Persons taking above 51. for the forbearance year shall forfeit treble This statute of Anne enacts, "that no person or persons what- 12 Anne, st. 2, soever, upon any contract, take, directly or indirectly, for loan c. 16, s. 1, no of any monies, wares, merchandize, or other commodities what-person shall soever, above the value of five pounds for the forbearance of one per cent. hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter time;" and that all bonds, contracts, &c., whereby there shall be reserved or taken above the rate of five pounds in the hundred, as aforesaid, shall be utterly void; (cc)" and that all and every person or persons whatsoever, which shall, upon any contract, take, accept, and receive, by way or means of any corrupt bargain, loan, exchange, chevizance, shift, or interest of any wares, merchandizes, or other thing or things whatsoever, or by any deceitful way or means, or by any covin, engine, or deceitful conveyance, for the forbearing or giving day of payment for one whole year, of and for their money or other thing, above the sum of five pounds for the forbearing of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter term, shall forfeit and lose for every such offence the treble value of the monies, wares, merchandizes, and other things so lent, bargained, exchanged, or shifted." By sec. 2," all and every scrivener and scriveners, broker and brokers, solicitor and solicitors, driver and drivers of bargains and contracts, who shall take or receive, directly or indirectly, any sum or sums of money, or other reward or thing for brokage, soliciting, driving, or procuring the loan, or forbearing of any sum or sums of money, over and above the rate or value of five shillings for the loan or forbearing of one hundred pounds for a year, and so rateably, or above twelve pence, over and above the stamp duties, for making or renewing of the bond or bill for loan, or forbearing thereof, or for any counterbond or bill concerning the same, shall forfeit for every such offence twenty pounds, with costs of suit, and suffer imprisonment for half a year; the one moiety of all which forfeitures to be to the Queen's most excellent Majesty, her heirs and successors, and the other moiety to him or them that will sue for the same in the same county where the several offences are committed, and not elsewhere, by action of debt, bill, plaint, or information, in which no essoign, wager of law, or protection shall be allowed." By the 3 & 4 Wm. 4, c. 98, s. 7, certain bills of exchange and promissory notes were excepted from the statutes for the prevention of usury, and that act was extended by the 7 Wm. 4, & 1 Vict. c. 80, which is also extended by the 2 & 3 Vict. c. 37, which enacts, that "no bill of exchange or promissory note made payable at or within twelve months after the date thereof, or not having more than twelve months to run, nor any contract for the loan or forbearance (cc) The 5 & 6 Wm. 4, c. 41, s. 1, repeals so much of this act " as enacts that any note, bill, or mortgage shall be absolutely void," and provides that every note, bill, or mortgage that would have been void by virtue of the 12 Anne, shall be of 1004. for a the value of the monies, &c. Sec. 2, no scrivener, &c. above 58. for 100% for a shall take year for brokage, &c. ; nor above 12d. besides stamp duties for renewing any making or bond, &c.; on penalty of 201 imprisonment for six months. and costs and Bills of Exchange and contracts for loans or forbearance of money above 10. not to be affected by usury laws. 2 & 3 Vict. c. 37. Five per cent. to be considered the legal rate of interest, except, &c. As to an in sustainable upon the statute of Anne. any of money, above the sum of ten pounds sterling, shall, by reason of interest taken thereon or secured thereby, or any agreement to pay or receive or allow interest in discounting, negociating, or transferring any such bill of exchange or promissory note be void, nor shall the liability of any party to any such bill of exchange or promissory note, nor the liability of any person borrowing any sum of money as aforesaid, be affected, by reason of any statute or law in force for the prevention of usury; nor shall any person or persons, or body corporate drawing, accepting, endorsing, or signing any such bill or note, or lending or advancing or forbearing any money as aforesaid, or taking more than the present rate of legal interest, in Great Britain and Ireland respectively, for the loan or forbearance of money as aforesaid, be subject to any penalties under any statute or law relating to usury or any other penalty or forfeiture; anything in any law or statute relating to usury, or any other law whatsoever in force in any part of the United Kingdom, to the contrary notwithstanding: provided always, that nothing herein contained shall extend to the loan or forbearance of any money upon security of any lands, tenements, or hereditaments, or any estate or interest therein." (d) By sec. 2, "nothing in this act contained shall be construed to enable any person or persons to claim, in any court of law or equity, more than five per cent. interest on any account or on any contract or engagement, notwithstanding they may be relieved from the penalties against usury, unless it shall appear to the court that any different rate of interest was agreed to between the parties.' By sec. 3, the act does not repeal or affect any statute relating to pawnbrokers. By sec. 4, the act was continued in force till the 1st of January 1842, and by the 3 & 4 Vict. c. 83, till the 1st of January, 1843, and by the 4 & 5 Vict. c. 54, till the 1st of January 1844. The provisions of the 12 Car. 2, c. 13, were similar to those of dictment being the statute of Anne, which have been just cited, except that the rate of interest was fixed by them at six per cent.; and it is reported to have been decided that no indictment would lie upon the statute of Car. 2, and that it was necessary for the party prosecuting to sue for the penalties in a penal action; as being the method of proceeding prescribed by the statute. (dd) But upon the principles which have been stated in a former part of this Work, as to an indictment being sustainable where there is a general prohibitory clause in a statute, though there be afterwards a particular provision and a particular remedy given, it should seem that an indictment will lie upon the statute where an usurious transaction has been carried into effect. (e) An indictment for usury has not, however, been a frequent mode of proceeding, as the party prosecuting has, in general, been contented to sue for the heavy penalties given by the statute: and it is clear that an indictment cannot be maintained for a corrupt agreement only; as where such (d) See Connop v. Meaks, 2 A. & E. 326. Vallance v. Siddell, 6 A. & E. 932. Holt v. Miers, 5 M. & W. 168; and Berrington v. Collis, 5 Bing. N. C. 332, as to the construction of these acts. (dd) Reg. v. Dye, (7 Anne,) 11 Mod. 174. The case is very shortly reported, and does not state upon which section of the statute the question was raised; but the editor of the reports, (ed. 1796,) has cited many authorities in support of the decision, as to the applicability of some of which qu. Reg. v. Dye is however cited as law in Bac. Abr. tit. Usury, (1). (e) Ante, 49, et seq. And see 2 Chit. Crim. L. 549, note (a) an agreement was stated in an indictment for usury, without any loan, or taking excessive interest in pursuance of it, judgment was arrested. (f) diction on an It was holden, that justices of the peace at their quarter ses- The sessions sions had no jurisdiction upon an indictment on the 12 Car. 2. (g) have no jurisAnd with respect to an information on the 12 Anne, it has been indictment for holden that the Court of King's Bench will not grant it after the usury. time has elapsed within which the common informer should institute his proceedings; on the ground that where a penalty has As to an inforvested in the crown only, the Court have no power to grant an in- mation in the formation, but must leave it to the attorney general to file one if he Court of K. B. shall think proper. (h) It is said that an indictment for usury, (supposing it to be sus- Form of intainable,) must contain all the requisites of a declaration for dictment. usury. (i) If the transaction were effected by means of some device, or Evidence. colourable pretence, it must be left to the jury to say whether the sum taken, though ostensibly for another purpose, was not in reality taken as usurious interest. (k) 53 Geo. 3, demeanor. The 53 Geo. 3, c. 141, repeals the 17 Geo. 3, c. 26, except as to annuities or rent-charges granted before the passing of the act; and after providing for the due enrolment of the deeds, &c. whereby any annuity or rent-charge shall be granted, makes all contracts for the to grant purchase of any annuity or rent-charge, with any person being annuities a misunder the age of twenty-one years utterly void; and then enacts, (s. 8.) " that if any person shall either in person, or by letter, agent, or otherwise howsoever, procure, engage, solicit, or ask, any person being under the age of twenty-one years, to grant or attempt to grant any annuity or rent-charge, or to execute any bond, deed, or other instrument for securing the same, or shall advance or procure, or treat for any money to be advanced to any person under the age of twenty-one years, upon consideration of any annuity or rentcharge to be secured or granted by such infant, after he or she shall have attained his or her age of twenty-one years; or shall induce, solicit, or procure, any infant, upon any treaty or transaction for money advanced or to be advanced, to make oath, or to give his or her word of honour or solemn promise, that he or she will not plead infancy, or make any other defence against the demand of any such annuity or rent-charge, or the repayment of the money ad (ƒ) Rex v. Upton, 2 Str. 816. See note (n), post, p. 463. (g) Reg. v. Smith, (4 Anne,) 2 Salk. 680. 2 Lord Raym. 1144, S. C. (h) Rex v. Hendricks, 2 Str. 1234. By the 31 Eliz. c. 5, s. 5, the common informer is limited to a year after the offence committed; and, if no such suit is brought within a year, then the crown may sue at any time within two years after the end of the first year. In (i) 2 Chit. Crim. L. 549, note (a). an action for usury, the averment of the quantum of the excess taken is material. But some of the reasons for that accuracy, namely, that the penalty is apportioned to the value, and that the judgment depends upon the quantum taken, do not apply (k) Per Grose, J., in Rex v. Gillham, 53 Geo. 3, c. 141. Acting as solicitors, &c. in such cases a vanced to him or her when under age, or that when he or she comes of age, he or she will confirm or ratify, or any way substantiate such annuity or rent-charge, every such person shall be guilty of a misdemeanor; and being thereof lawfully convicted in any court of assize, oyer and terminer, or general gaol delivery, shall and may be punished for the said offence by fine, imprisonment, or other corporal punishment, as the court shall think fit to award." By sec. 9, "all and every solicitors and solicitor, scriveners and scrivener, brokers and broker, and other persons or person, who shall misdemeanor. ask, demand, accept, or receive, directly or indirectly, any sum or sums of money, or any other kind of gratuity or reward, for the soliciting or procuring the loan, and for the brokerage of any money that shall be actually and bona fide advanced and paid as and for the price or consideration of any such annuity or rent-charge, over and above the sum of ten shillings for every one hundred pounds so actually and bond fide advanced and paid, shall be deemed and adjudged guilty of a misdemeanor; and being lawfully convicted of such offence in any court of assize, oyer and terminer, or general gaol delivery, shall and may for every such offence, be punished by fine and imprisonment, or one of them, at the discretion of the court: Competency of and that the person or persons who shall have paid or given any sum or sums of money, gratuity or reward, shall be deemed a competent witness or witnesses to prove the same." witnesses. Proviso for Scotland or Ireland, and annuities granted by will, &c. On an indict Geo. 3, c. 26, it was not necessary to prove the exact sum laid, and This act is not to extend to Scotland or Ireland, nor to any annuity or rent-charge given by will or by marriage settlement, or for the advancement of a child, nor secured upon freehold or copyhold, or customary lands, of equal or greater annual value than the said annuity, (over and above any other annuity, and the interest of any principal sum charged or secured thereon, of which the grantee had notice at the time of the grant) whereof the grantor is seised in fee simple or fee tail in possession, or the fee simple whereof in possession the grantor is enabled to charge at the time of the grant, or secured by the actual transfer of stock in any of the public funds, the dividends whereof are of equal or greater annual value than the said annuity; nor to any voluntary annuity or rent-charge granted without regard to pecuniary consideration or money's worth; nor to any annuity or rent-charge granted by any body corporate, or under any authority or trust created by act of Parliament. (1) It may be here mentioned that in a case of an indictment upon ment on the 17 the repealed statute 17 Geo. 3, c. 26, s. 7, for taking more than ten shillings in the 1007. for brokerage, &c., it was objected at the trial that the evidence did not sustain the indictment; the charge being that 3221. 10s. was paid for brokerage of the sum of 2450, the jury were and the evidence being that the defendant, at the time of the money being paid, said that 100%. was for the writings, (he being an attorney and having produced them,) 100%. by way of present, and 57. per cent. on the whole sum, viz., 1227. 10s. Lord Kenyon, C. J., overruled the objection; and, upon the whole case, directed the jury to consider whether the transaction were not a mere de to consider whether the monies were taken as a fair charge, or as a device to avoid the statute. (1) Sec. 10. |