2 Ind. 631 | Ind. | 1851
The appellee, in 1847, brought an action of debt against the appellants on a promissory note. The note is as follows:
“ $500. For value received, we, or either of us, promise to pay to Tabitha Lockhart, on or before the 19th of February, 1841, the sum of 500 dollars, lawful money; and, in case of her death, to be paid to her heirs; and if not paid at the expiration of the time, the interest thereon to be paid at the rate of 10 per cent, per annum; as witness our hands and seals this 19th of February, 1840. (Signed) Cole and Parker, John C. Parker, Jefferson Carr.”
There are some payments indorsed on the note.
The declaration is in the usual form. Plea, the general issue.
The cause was submitted to the Court; and judgment rendered for the plaintiff for the sum of 573 dollars and 32 cents.
The following are the facts: The consideration of the note was as follows: The said Cole and Parker applied to the plaintiff for a loan of 500 dollars, and offered to pay interest in advance at the rate of 10 per cent, per annum. The plaintiff acceded to the proposition and made the loan accordingly; paying said Cole and Parker 450 dollars, and retaining 50 dollars for advance interest.
The Circuit Court calculated interest on the note from the time it fell due at the rate of 10 per cent, per annum,
The statute of 1838, which was in force when the note was executed, enacts that no person shall, on any contract afterwards made, directly or indirectly, take or receive for-the loan of money above the rate of 6 per cent, per annum, unless the stipulation to pay a higher rate (not to exceed 10 per cent, per annum) be made in writing. R. S. 1838, p. 336.
The only ground relied on by the defendants to show the note to be usurious is, that the amount of the legal interest for the time the note had to run was taken in advance.
The authorities are not uniform as to the question involved in this cause. In a very early case under the statutes of Henry the 8th, and of Elizabeth, the Court 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.” Barnes v. Worlich, Croke James, 25. But subsequently, it was said by Justice Blackstone that, “under the statute of Anne, 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 5 per cent, for discounting bills would be guilty of usury. For, if upon discounting a 100/. note at 5 per cent., he should be construed to lend only 95/., then, at the end of the time, he would receive 51. interest for the loan of 95/. principal, which is above the legal rate.” Lloyd v. Williams, 2 W. Blacks. R. 792. There is a case to the following effect: The grantor of an annuity having agreed with the grantee to redeem, drew a bill of exchange for 5,000/. for three years, which the grantee discounted in the following manner : he took 4,083/. 6s. Qd. as the amount of the purchase-money and arrears, advanced 166/. 13s. id. to the grantor in cash, and took 750/. as interest for three years upon 5,000/. It
It does not appear that the respective statutes, upon which said decisions were made, differ materially, as to the matter in question, from that of 1838, to which we have referred.
We have heretofore decided that, under said statute of 1838, where an insurance company, authorized by its charter to discount or loan money, had discounted a promissory note payable one hundred and eighty days after date, the contract was not usurious merely because the interest was taken in advance when the note was executed. Haas v. Flint, 8 Blackf. 67.
After examining the above cited cases, with some others on the subject, we have come to the conclusion that the taking of the interest in advance, in the case before us, did not necessarily render the note usurious. The Court, placed in the situation of a jury, have found the note not to be usurious, and we do not think that their finding should be disturbed.
The judgment is affirmed with 1 per cent, damages and costs.