CHAPTER V.

OF THE PUNISHMENT OF USURY.

The

WHETHER or no an indictment lies at common law for the offence of usury, is a question upon which the English books do not rightly agree. No indictment, as far as appears from the reports, has been prosecuted since the seventh year of the reign of Queen Anne. Queen v. Dg. 11 Mod. 174. And as that occurred five years before the passage of the statute now in force, and was then quashed as bad, it is hardly to be expected that the courts will ever again be called upon to speak as to the validity of an indictment for usury. Comyn.

It will be seen that the statutes of several of the United States contain a provision for punishing the usurer by indictment, but such provisions remain for the most part a mere dead letter, no action being taken upon them.

OF AN ACTION QUI TAM FOR USURY UNDER THE STATUTE OF ANNE.

[From Comyn's Work on Usury.]

SECTION I.

Of the accruing of the action.

By the statute of Anne, the lender, in case he takes more than £5 per cent., forfeits the treble value of the monies, wares, merchandizes, and other things, lent, bargained, exchanged, or shifted, half to the king, and half to the prosecutor, which penalty is to be sued for in the county where the offence is committed, and not elsewhere, by action of debt, bill, plaint, or information, in which no essoign, wager of law, or protection, shall be allowed.

This action, like other penal actions, must be brought within a

year after the offence is consummated; and therefore it is always material to consider when the consummation of the offence takes place, so as to charge the usurer in, proper time.2

According to the earlier cases, the very making of the usurious contract, subjected the lender to the penalties of the statutes, although he never received one farthing;3 and in Hedgeborrow v. Rosenden,* (which was a case on a gaming security,) it was said, that if one contracts for more interest than the statute allows, if the creditor request it, though he never does request it, yet it is within the statute of usury.

But the rule laid down by these cases is unsupported by other decisions; and though it is said in Mallory v. Bird, that if one contracted to have £20 upon the loan of £100, if he took nothing of the £20, he should not be punishable by the statute; but if he took any thing, if but one shilling, this was an affirmance of the contract, and made him liable for the whole. The rigour of this doctrine is considerably softened by an interpretation of Mr. Justice Aston, thatby one shilling is meant one shilling beyond the legal interest. And the learned judge's interpretation is strongly confirmed by an early case, in which it is said, that if A borrow of B £80, and be bound in an obligation to pay him £90 at the end of the year; yet, if he take but £80, although the obligation be void, this would not be usury to make a treble forfeiture."

But where a premium is paid for the loan, which coupled with the interest, exceeds the legal rate, the action does not accrue till the interest is received.

As, where a sum of money was lent upon an agreement to pay legal interest and a premium over and above was paid at the time of the money's being advanced, such premium in itself not exceeding the legal interest, the question was, whether the penalty was incurred at the time of the receipt of the premium, or whether it did not accrue

By the Stat. 31 Eliz. c. 5, s. 5, the common informer is limited to a year after the offence is committed; and if no suit is so brought, then the king may sue any time within two years after the end of the first year. And after the first year, when the suit is lapsed to the crown, the Court of King's Bench will not grant a qui tam information. Rex v. Hendricks, Str. Rep.

1234.

2

Lloyd, qui tam v. Williams, Bl. Rep. 793. Same case, 3 Wils. 250.

3 Whinton, qui tam v. Marine, Dyer, 95, 6.

4

1 Ventr. 254.

5 Cited Cro. Eliz. 20.

Stated by Mr. Justice Buller, in Fisher v. Beasley, Dougl. 362.

7 Brown v. Fulsbye, 4 Leon. 43. And see Martin Van Henbeck's case, 2 Leɔn. 38.

until the interest was paid. The sum lent was £100; the premium £2 2s.; and at the end of six months, when the principal was repaid, £2 10s. was also paid for interest; the action not having been commenced till above a year after the payment of the premium, but within a year from the payment of the interest. Lord Mansfield, at the trial, nonsuited the plaintiff, upon the ground that the penalty was incurred upon the payment of the premium; and that the action, not having been commenced within a year from that time, was now barred. But afterwards, upon a motion for setting aside the nonsuit, the whole court were of opinion that the penalty did not accrue till the receipt of the interest, and consequently that the plaintiff was in time with his action.

1

So where A had borrowed £600 of B, paying him ten guineas premium; and at the end of the half year, A paid £15 for interest; it was urged, that till the whole year was expired there was a locus pænitentiæ, and that the premium being entire, and received for a year, it could not be apportioned and tacked to the half year's interest. But the court overruled the objection, and held that the usury was complete at the payment of the half year's interest.

2

But where A lent B £500, paying immediately a premium of £50, and paying interest on the £500 at the rate of £5 per cent. for five years, at the end of which time a qui tam action was brought, the Court of Common Pleas held that the loan could only be taken as a loan of £450, because £50 had been returned at the time of the loan; and that, as the interest received at that rate, as on £500 for the last year, was usurious, the action was not barred by lapse of time.3

Though the usury is complete as soon as the lender has received the interest in money or money's worth, yet the mere taking of a promissory note for payment of the sum lent, with usurious interest, does not complete the usury, unless the bill be paid; for, until it be paid, the lender has received nothing.1

So where money is lent by a check, it is not a loan within the statute till the check is cashed.5

And although it be not punishable to make an usurious contract, if such usurious contract be not carried into effect, yet it is said by Baron

Fisher, qui tam v. Beasley, Doug. 235.

2 Wade qui tam v. Wilson, 1 East's Rep. 195.

3 Scurry qui tam v. Freeman, 2 Bos. and Pul. 381.

Maddock qui tam v. Hammett, 7 Term Rep. 184.

5 Brooke qui tam v. Middleton, 1 Camp. 445. And see Borrodaile qui tam v. Middleton, 2 Camp. 53.

Gent, in Sir Wollaston Dixie's case, that if A lend B £100 without any contract for interest, and afterwards, at the end of the year, B gives him £20 for the loan thereof, the same is within the statute; for his acceptance makes the offence without any bargain or contract. For the statute refers as well to past as to future forbearance.*

The difference of the effect of the statute in the avoiding of the contract, and the accruing of the penalty, is therefore manifest. As soon as an usurious contract is made, it is ipso facto ab initio void. But the penalty does not arise upon the making of the contract. That is only incurred by the execution of the contract; or by the receipt of excessive interest without any previous usurious agreement.3

The time for bringing the action being settled, the next question is, as to the proceedings in the action. These I shall consider in their proper course.

SECTION II.

Of the process and pleadings in a penal action for usury.

A qui tam action on the statute of usury, to receive treble the value of the sum forborne, can only be brought in the Superior Courts at Westminster.

Therefore, where such an action was prosecuted in the Court of Ely, a writ of error was brought."

421.

' 1 Leon. 96. And see Anon. 1 Ventr. 38; and Rex v. Walter, 1 Sid.

2

Rex

v. Rant, Trin. 16 Car. B. R. cited Vin. Abr. Us. (1.)

3 Mr. Sergeant Hawkins, referring to some of the cases, concludes, that` if there be no contract, and the interest is only paid beforehand for convenience' sake, without any corrupt intention, it will not incur the penalty. Hawk. P. C. c. 82, s. 14. But quere, whether this is not carrying the notion of a want of a corrupt intention' to too great a length? The parties who enter into a contract not usurious in its terms, will not, as we have before seen, be prejudiced by a mere mistake in expressing the contract. Yet if they agree to do a thing which they believe to be legal, but which turns out to be usurious, this cannot be called a mistake, but is an ignorance of law, which affords them no excuse. The question must always be, Has the lender taken more than five per cent.? If he has, it will be an unavailing apology to say, that he did it for convenience' sake. All usury is committed for convenience' sake.

'Gardner v. Morefield, 1 Keb. 554, pl. 67; which cites Gregory's case and Barrington v. Kine, 1 Cro. This last reference is incorrect, as no such case is to be found in Croke. And see Anon. Hardr. 420.

The borrower of the money is as capable of suing for the penalties as a stranger;-but, it seems, that previously to the commencement of the suit, he must repay, or at least tender, all the money borrowed.'

And in commencing the action, it is no variance or irregularity if the plaintiff sues out the writ in his own name, and afterwards declares qui tam; for by this his demand is rather narrowed than enlarged.2

The action is local by the express words of the statute of Anne, and must be brought in the county where the offence was committed."

And in Sir Wollaston Dixie's case, it was said that the information3 need not show the place where the contract was made, but that it should show where the taking was; for the receipt is what is punishable by the statute, and not the contract: and it shall be tried where the taking was.

And in debt on bond made at S, the defendant pleaded a corrupt contract made at B; and on issue joined, and the venue awarded from B, it was moved that it should be by a jury from both places; but, by the court, the venue is well awarded."

So where a draft was given with usurious interest, and a receipt. taken for it in the county of A, and the draft was afterwards exchanged for money in the county of B; the usury being committed in B, it was holden that the venue must be laid there."

An information upon the statute of usury, for an usurious mortgage, charged the defendant, that he had taken more than lawful interest for the forbearance of one year; and that this taking was out of the issues, rents, and profits, which he received in Middlesex, of lands in Glamorganshire, that had been mortgaged to him. Manwood said, the taking of the issues ought to have been laid where the land was.

8

But in a case of much later date, where an usurious contract was entered into by deed executed in London, appointing A, the lender, to be the receiver of B the borrower's rents in Middlesex, with a pretended salary; and A accordingly received the rents in Middlesex, but settled the balance with B in London; the Court held that the venue

1

2

Fitzroy v. Gwillim, 1 Term Rep. 153.

Lloyd qui tam v. Williams, 2 Bl. Rep. 722. Same case, 3 Wils. 141. 3 And see Stat. 21 Jac. 1, c. 4.

* 1 Leon. 97, pl. 125. Toptcliff qui tam v. Waller, Dyer, 346, b. pl. 9, Same case, 1 And. 48, pl. 122.

The statute by "information" means an information qui tam. nard, 209.

1 Bar