Anderson v. Winston , 2 Va. Col. Dec. 188 ( 1753 )

Debt on the Act 3 & 4. Geo. 2. 12. ag’t taking excessive Usury The Pit. declares that the Deft, after the 29. Sept. 1730. viz ulto July 1731 at &c. upon a certain Contract between the Deft. & one John White made did receive of the said White by Way of corrupt Bargain & Loan 3;£ Current for Gain Use Interest & giving Day of Paiment of 20£ Curr’t by the Deft, to the s’d White lent over & besides the lawful Interest of 6 per Cent ag’t the Form of the Act of Assembly &c. And in another Action declares in like Manner for taking 36. s. for Interest & giving Day of Paiment of 12£. In which Action the Jury find specially

That White some time in June 1730 borrowed of the'Deft. 20£ Curr’t And in July 12£ more And gave separate Bonds for Paim’t of 20£. & \2£. Sterl. at the End of a Year In April 1732. White & the Deft, made a Settlement & for the first year White was charged for principal Money on both Bonds 36£. 16s. Curr’t & in Oct’r fall White paid the sd. 36.16.— & Interest at 6. per Cent from the respective Days of Paim’t in the Bonds & the Deft, received it And if the Court adjudge the Deft, guilty they find him guilty of taking the said 4.16.' — above six per Cent upon the sd. Bonds

And I take it upon the Matter found the Deft, is not guilty of any Breach of the said Act Before the making of which there was no Law here that settled the Rate of Interest nor were Men subject to any Penalty tho’ they took 20 or even [189] 50 per Cent. Now this Act provides “That no Person after the 29 — “ Sept. 1730 upon any Contract to be made after that Time for “ Loan of any Monies Wares &c. shall take above 6 p cent per “ Ann. for Forbearance And all Bonds See. made after that “ Time where More is reserved shall be void And any Person “ who after the Time aforesaid upon any Contract to be made “ after the said 29. Sept, shall receive above 6. p Cent, shall “ forfeit double the Value of the Mony See. lent See.

It is plain this Act was intended to refer only to Contracts made after the 29. Sept. 1730. The Penning of it is very strong to exclude all Contracts made before After the 29. Sept. 8e after the Time aforesaid is repeated no less than 4 Times Indeed it would be very strange to subject Men to such severe Penalties when they transgressed no Law then in being I suppose it won’t be pretended that any Bond taken before 29. Sept. 1730. where more than 6. p. Cent :’s reserved is void Then neither can the receiving the Money upon such Bond subject the Obligee to the Forfeiture of the double Value for it is receiving upon a Contract made after 29. Sept, [sic] is made penal by this act

This I take to be very clear upon the Words of the Act as well as evident from the Reason & Justice of the Thing And therefore it may be needless to mention the Authorities upon this head But as there are Cases directly in Point adjudged upon the Statutes of Usury in England I will beg Leave to mention 2 or 3 Hawkins 1. P. C. 244. is express that a Contract made before the Act 12. Ann. which reduces Interest to 5 p Cent is not within that Statute But that it is lawful to receive 6 p. Cent (the legal Interest before) upon such Contract See Dal. 13. Ray. 195.

But we need go no further than to the last Act ag’t Usury 8. G. 2. 5. to prove such Contracts are not within the first Act upon which this Action is founded The Title of it is To make void certain Contracts for paying excessive Usury Tt recites that there were sev’l Contracts subsisting made before passing of the 1. Act or between the Passing & Commencement And tho’ there was no Law in being to punish such unreasonable Lenders Yet such Contracts which were always unrighteous ought not to be binding It is therefore Enacted that all Bonds &c. made before 29. Sept. 1730. where any Interest above 6 p Cent is agreed to be paid shall be void as to all Interest above 6 p Cent.

Here is the Judgment of the Legislature that Contracts made before the 1. Act or between the Passing & Commencement are not punishable by any Law And all the Punishment inflicted [190] by this Act is only to make such Contracts as were then subsisting void as to all Interest above 6. p Cent but there is no Penalty for receiving the Money upon such Contracts If there was the Deft, would not be within it the Matter for which this Prosecution is set on Foot being transacted long before the making of this Act & was not a Contract then subsisting

If then the Deft, did not take above 6. per Cent upon a Contract made after the 29. Sept. 1730 I conceive he is not guilty of the Breach of any Law And that there is nothing found in this Verdict to prove he did is very clear In June & July 1730 he let White have 20£. &12^.Curr’t & took his Bond for Paiment of the like Sum Sterling at the End of a Year This I hope was a Contract before the 29. Sept. 1730. It was lawful then for the Deft, to receive the Money due upon these Bonds I mean without being subject to any Penalty In April 1732. White & the Deft, made a Settlement At this Time the Deft, might lawfully receive the Sterling Money reserved on the Bonds as I sayed and he might also lawfully receive 6 per Cent Interest upon this Mony from the Time it ought to have been paid And this is all he did do The Sterling Money is paid in Cash at 15 p Cent the lowest Exch’a w’ch makes 36. 16. the Mony reced upon this ' Settlem’t tog’r with Interest upon it from the Time it was paiable by the Bonds at 6 per cent.

If there is any Pretence of a Contract after the 29. Sept. 1730. in all this it must be when this Settlement was made but upon that he took no more than 6 per Cent And however unreasonable it might be to take 15 per cent upon the first Contract which was before the Law it is plain he has not taken more than is allowed by the Law on any Contract since And therefore he is not guilty of any Breach of the Act of Assembly Unless it is construed that the receiving Mony after the 29. Sept. 1730. upon a Contract before that Time where more than 6. per cent is reserved is within the Act But I humbly conceive such a Construction can never prevail Being ag’t the express Words as well as the Intention of the Act which as I have observed is penned in the strongest Terms to exclude all Contracts before It is against the Sense of the Legislature here since the making of it as I have shewed from the 2 Act ag’t Usury Against the Rule of Construction in such Cases as appears from the Cases I have read adjudged upon this Point in England Against the private Sentiment as we may suppose of Sir J. R. who we all know had the Penning of the 2. Act & was very active in promoting it [191] And also ag’t natural Justice to punish any Man for an Action innocent in itself with respect to human Laws by a Law made ex post facto Which kind of Laws have been always condemned as unjust And therefore to make such a Construction of a Law against the express Words of it I apprehend can never be thought right

And I hope the Consequence of such a Determination will be considered It must affect a great Number of People who thought they might lawfully take more than 6 per Cent before the Act & perhaps in Conscience might do so For with Deference to the learned Gentlemans Opinion I think some Men under some Circumstances may as lawfully take 10 per Cent as others may 5 I mean foro conscientice & abstracted from positive Laws And this most of the Writers of the Law of Nature agree I own that Usury seems to have been always condemned by the ancient Laws of England tho’ an Usurer was only punishable by Ecclesiastical Censures in his Life time But if it was found by 12 Men after his Death that he died an Usurer he was compared to a Thief His Goods were forfeited to the King & his Lands escheated 3. Inst. 151. And as Usury was an Offence punishable by the Law of the Church We frequently find it sayed to be ag’t the Law of God Not that it is prohibited by the Gospel tho’ it might be so by the Canons & Decrees of the Pope which last in the Times of Superstition the artful Priest taught the World to believe were as much the Law of God as the Gospel itself But now Mankind are more enlightened and Protestants at least allow nothing to be ag’t the Law of God but what is prohibited in Holy Writ 1. Hawk. 245.

As to the Prohibition in the Jewish Law that is not at all obligatory upon Christians The Law of Moses was promulged to a particular People and only binding upon them to whom it was promulged It was not intended nor in [sic] any where sayed to be an universal Law to Mankind And that it is not binding upon Xtians that is the ritual & political Part of it We have the Authority of the Church viz the 7th of the 39. Articles It is true the moral Part is there sayed to be binding And so it would be if it was not in the Law of Moses. The moral Law being entirely & universally obligatory upon Mankind

But in Truth this Prohibition is not a general but a partial Prohibition respecting the Jewish Nation only for they are permitted to take Usury of a Stranger tho’ not of one another which is a plain Proof that Usury is not ag’t the moral Law for if it had [ric] the Jews who were the sanctified & chosen People of God would never have been permitted the Practise of it at all. Indeed it is impious to suppose that God would tolerate the practise of a Thing simply [192] & naturally -unlawful This Prohibition then to the Jews was meerly political 1. To obviate the avaritious Disposition observable in that People and to prevent it from running out into Oppression of one another And 2. thereby to cement them into a closer Bond of Amity to each other 3. To secure & strengthen that Democratical Government Moses intended to institute by preserving some kind of Equality in Property Upon which Principles the Laws of Jubilee & ag’t alienating Land for ever were also instituted It must however be owned the primitive Xtians took no Usury probably out of a Superstit'ous Reverence to the Mosaic Law which might be the first Occasion of its being condemned by the Church tho’ afterwards abused by the Clergy who made a Market of that as well as other Offences by the Practise of commuting for Penance.

Whoever has a Mind to be further convinced that Usury is not ag’t natural Justice let him read Puffendorfs Law of Nature B. 5. c. 7. s. 8. ad finem & Barbeyrack’s Notes thereupon where he may see it proved to a Demonstration that it is neither ag’t the Law of God nor of Nature but even necessary in the present State of human Affairs & of great Use in all trading Countries

Grotius who seems to candemn the Name allows the Thing He says L. 2. c. 12. there are some Things that look like Usury but are Pacts of another Nature as the Amends that ought to be made a Cred’r for the Loss he is at in being out of his Money &c. which is allowing the very Thing contended for viz If I lend Mony or Mony is owing to me I ought to have something for the Use of my Mony & the Loss I sustain for Want of it This is the very principle upon which Usury is proved to be consistent with natural Justice It is no matter whether you call it Usury or Interest Amends or Damages the Thing is the same And certainly in the present State of human Affairs where many Persons Estates consist all in Money And they cannot say it would be inconvenient that they should employ it in Trade & Husbandry No just Reason can be given why they should not make a Profit of their Estate as well as those who have Lands & rent them out Especially when their Money is as useful to the Commonwealth for no considerable Trade could be carried on without it

Usury was allowed by the Roman Law Puff. 276. Note 4. & is practised in almost all civilized Nations at least in all Christendom It is indeed prohibited by the Alcoran: but even [193] the Professors of that Religion evade it by lending Money to have a certain Share as a 4 or 5 Part of the Gain made by it which is the same Thing for- in Equity there is no Difference whether I agree for a certain Gain before hand or run the Risque of an uncertain one Puff. pag. 276.

As to the Quantum that may be taken for Usury according to natural Justice Grotius ad Lucam 6. 35. proportions it not by the Gain of the Borrower but the Loss that accrues to the Lender & that so much ought to be paid by the Borrower as the Lender in the Way of his Calling usually makes of his Money Allowance being made for Hazard But because it would be difficult to prove & adjust this exactly And such a Latitude would give an Opportunity to ill Men to insist upon too great an Interest The Policy of most Nations has reduced it to a certain Standard which is more or less according to the different Circumstances of each State In trading Countries as in Holland it is very low 2% or 3 per cent In Venice where there is no Trade it is 8 per Cent And Interest is high in all the Inland Parts of Germany The Rate of Interest in England has been reduced from Time to Time as Mony has grown more plenty & its Trade increased By the H. 8. It is prohibited to take more than 10 per Cent under a Penalty This is the first Law that made Usury cognizable in the Kings Court Thus it continued til Ja. 1. when Interest was reduced to 8. After the Restoration it was reduced to 6. & by the Ann to 5. In most of the English Plantations I am told it is now at ten 12. was permitted by the Roman Law till the Time of Justinian who reduced it to 8. Puff. 276. Note 4. Thus it varies in different Countries & in the same Country according to the different Circumstances of it

To conclude where the Rate of Interest is settled by Law in any Country No good Man ought to take more tho’ it was not prohibited under a Penalty But where there is no Law the Rule laid down by Grotius seems very equitable viz in Proportion to the Loss that accrues to the Lender And therefore a trading Person who usually makes a great Profit of his Money may with good Conscience require more than one whose Money lies dead upon his Hands From whence I would observe that the taking more than 6 per cent before there was any Law by some Men under some Circumstances was not so very criminal & unrighteous as is pretended Yet I should be sorry to be thought an Advocate for excessive Usury as it is certainly introductory of great Oppression & I am heartily glad it is settled by Law All that I contend for is that a Man may not be punished for any Contract of this Sort before there was any Law to make it penal And I hope Judgment will be given for the Deft.

This Case was agreed by the Parties & so no Judgm’t given