43 Vt. 249 | Vt. | 1870
The opinion of the court was delivered by
The charge of the court that if Safford, in paying the money and taking the assignment of the notes and mortgages, acted in his own interest and behalf and not as the agent or in behalf of the plaintiff, the payment of the notes and interest computed at compound interest would not be the payment of usurious interest, was correct. A fund safely invested, even at interest not exceeding the legal rate,'is often regarded by the creditor of greater value than* the nominal amount of principal and accrued interest. This is more especially true of mortgage securities. The sale of such securities at a premium cannot subject the party to an action to recover back the premium on the ground of usury-. It makes no difference in such case whether the premium is computed in the contract of sale at a certain per centum in excess of the legal rate for the time past, or whether it is stated at a gross sum, or the result arrived at by computing compound interest. But in that part of the charge in which the court told the jury* that the only question was whether Safford
This portion of the charge is also erroneous in this, that it assumes as matter of law that the payment of compound interest is the payment of usury to the extent of the excess over annual interest, and that it can be recovered back. Although courts will rarely, if ever, as between debtor and creditor, enforce an executory contract for the .payment of compound interest, yet the payment of it is not necessarily in a legal sense the payment of usury; and if a debtor knowingly, understandingly and unconditionally pays it under no peculiar circumstances of oppression, it cannot be recovered back.
Judgment reversed, and new trial granted.