Same - Principal Absolutely Repayable

A loan being essential to usury, the contract must contemplate the absolute repayment of the principal. Thus, where a loan is made, to be returned at a fixed day, with more than the legal rate of interest, depending on a casualty which hazards both principal and interest, the contract is not usurious; but where the interest, only, is hazarded, it is usury.87

80 Becker's Investment Agency v. Rea, 63 Minn. 459, 65 N. W. 928 (stating different views); Durant v. Banta, 27 N. J. Law, 624. See "Usury," Dec. Dig. (Key-No.) § 26; Cent. Dig. §§ 57, 58, 62.

81 Richardson v. Scobee, 10 B. Mon. (Ky.) 12; Newell v. Doty, 33 N. Y. 83. See "Usury," Dec. Dig. (Key-No.) § 26; Cent. Dig. §§ 57, 58, 62.

82 Sylvester v. Swan, 5 Allen (Mass.) 134, 81 Am. Dec. 734; Claflin v. Boorum, 122 N. Y. 385, 25 N. E. 360. See "Usury," Dec. Dig. (Key-No.) | 26; Cent. Dig. §§ 57, 58, 62.

83 Dickerman v. Day, 31 Iowa, 444, 7 Am. Rep. 156; Sherman v. Black-man, 24 I11. 345; Law's Ex'rs v. Sutherland, 5 Grat. (Va.) 357; Holmes v. State Bank of Duluth, 53 Minn. 350, 55 N. W. 555. See "Usury," Dec. Dig. (Key-No.) § 26; Cent. Dig. §§ 57, 58, 62.

84 Danville v. Sutherlin, 20 Grat (Va.) 555; Geo. N. Fletcher & Sons v. Alpena Circuit Judge, 136 Mich. 511, 99 N. W. 748; Houghteling v. Lumber Co., 165 Mich. 498, 131 N. W. 109, 35 L. R. A. (N. S.) 1106. See "Usury," Dec. Dig. (Key-No.) § 26; Cent. Dig. §§ 57, 58, 62.

85 Gamble v. Queens County Water Co., 123 N. Y. 91, 25 N. E. 201, 9 L. R. A. 527; Clearwater County State Bank v. Bagley-Ogema Telephone Co., 116 Minn. 4, 133 N. W. 91, 36 L. R. A. (N. S.) 1132, Ann. Cas. 1913A, 622. See "Usury," Dec. Dig. (Key-No.) §§ 25, 26; Cent. Dig. §§ 55-62.

86 Memphis v. Bethel (Teun.) 17 S. W. 191; Griffith v. Burden, 35 Iowa, 143. See "Usury," Dec Dig. (Key-No.) §§ 25, 26; Cent. Dig. §§ 55-62.

Same - Contract For More Than Legal Rate Of Interest

The interest paid or agreed to be paid must be at a rate higher than the legal rate. Thus, if a person agrees to pay a specific sum, exceeding the lawful interest, provided he does not pay the principal by a day certain, it is not usury, since by a punctual payment of the principal he may avoid the payment of the sum stated, which is considered as a penalty.88

As to whether it is usury to charge compound interest - that is, interest upon overdue interest - the decisions are conflicting, but according to the weight of authority it is not so regarded; but interest cannot be charged on interest not due.89 It is not usury to provide for payment of an attorney's fee if the debt has to be collected by suit;90 nor to require payment in advance of the highest legal rate; 91 nor, under some circumstances, to pay a broker a commission, or for expenses, for procuring the loan,92 provided, as in other vored of usury, and was contrary to the policy of the law. See Bowman v. Neely, 151 I11. 37, 37 N. E. 840; Wilcox v. Howland, 23 Pick. (Mass.) 167; Henry v. Flagg, 13 Metc. (Mass.) 64; Cox v. Smith, 1 Nev. 161, 90 Am. Dec. 476; Young v. Hill, 67 N. Y. 162, 23 Am. Rep. 99. See "Usury," Dec. Dig. (Key-No.) § 1,9; Cent. Dig. §§ 103-106.

87 Lloyd v. Scott, 4 Pet. 205, 7 L. Ed. 833; Truby v. Mosgrove, 118 Pa. 89, 11 Atl. 806, 4 Am. St Rep. 575; Thorndike v. Stone, 11 Pick. (Mass.) 183; Wilson v. Kilburn, 1 J. J. Marsh. (Ky.) 494; Spencer v. Tilden, 5 Cow. (N. Y.) 144; Heist v. Blaisdell, 198 Pa. 377, 48 Atl. 259. See "Usury," Dec. Dig. (Key-No.) §§ 37-41; Cent. Dig. §§ 92-95.

88 Lloyd v. Scott, 4 Pet. 205, 7 L. Ed. 833; BLAKE v. YOUNT, 42 Wash. 101, 84 Pac. 625, 114 Am. St Rep. 106, 7 Ann. Cas. 487, Throckmorton Cas. Contracts, 230; Gambril v. Doe, 8 Blackf. (Ind.) 140, 44 Am. Dec. 760; Fisher v. Anderson, 25 Iowa, 28, 95 Am. Dec 761; Righter v. Warehouse Co., 99 Pa. 289; McNairy v. Bell, 1 Yerg. (Tenn.) 502, 24 Am. Dec. 454; Walker v. Abt, 83 I11. 226; Ramsey v. Morrison, 39 N. J. Law, 591; Conrad v. Gibbon, 29 Iowa, 120; Hackenberry v. Shaw, 11 Ind. 392; Rogers v. Sample, 33 Miss. 310, 69 Am. Dec. 349. But see Carroll Co. Sav. Bank v. Strother, 28 S. C. 504, 6 S. E. 313; Connecticut Mut Life Ins. Co. v. Westerhoff, 58 Neb. 379, 78 N. W. 724, 79 N. W. 731, 76 Am. St. Rep. 101; Linton v. Insurance Co., 104 Fed. 5S4, 44 C. C. A. 54. See "Usury," Deo. Dig. (Key-No.) §§ 37-41; Cent. Dig. §§ 92-95.

89 BLAKE v. YOUNT, 42 Wash. 101, 84 Pac. 625, 114 Am. St. Rep. 106, 7 Ann. Cas. 487, Throckmorton Cas. Contracts, 230; Stewart v. Petree, 55 N. Y. 621, 14 Am. Rep. 352; Culver v. Bigelow, 43 Vt. 249; Quimby v. Cook, 10 Allen (Mass.) 32; Merck v. Mortgage Co., 79 Ga. 213, 7 S. E. 265; Austin v. Bacon, 28 Wis. 416; Taylor v. Hiestand, 46 Ohio St. 345, 20 N. E. 345; Gilmore v. Bissell, 124 I11. 488, 16 N. E. 925; Brown v. Vandyke, 8 N. J. Eq. 795, 55 Am. Dec. 250; Keiser v. Decker, 29 Neb. 92, 45 N. W. 272: Telford v. Garrels, 132 I11. 550, 24 N. E. 573; Hale v. Hale, 1 Cold. (Tenn.) 233, 78 Am. Dec. 490; Ginn v. Security Co.. 92 Ala. 135, 8 South. 3S8; Brown v. Bank, 86 Iowa, 527, 53 N. W. 410. See, for distinctions, Cox v. Brookshire, 76 N. C. 314; Simpson v. Evans, 44 Minn. 419, 46 N. W. 908; Kimbrough v. Lukins, 70 Ind. 373; Drury v. Wolfe, 134 I11. 294, 25 N. E. 626; Leonard v. Patton, 106 I11. 99; Mathews v. Toogood, 23 Neb. 536, 37 N. W. 265. 8 Am. St. Rep. 131; Hochmark v. Richler, 16 Colo. 263, 26 Pac. 818; Young v. Hill, 67 N. Y. 162, 23 Am. Rep. 99; Palm v. Fancher, 93 Miss. 785, 48 South. 818, 33 L. R. A. (N. S.) 295. In some jurisdictions, however, the courts have refused to allow recovery of Interest on Interest, on the ground that it sa-

Clark Cont.(3d Ed.) - 22

90 Weatherby v. Smith, 30 Iowa, 131, 6 Am. Rep. 663; Dorsey v. Wolff, 142 I11. 5S9, 32 N. B. 495, 18 L. R. A. 428, 34 Am. St Rep. 99; Williams v. Flowers, 90 Ala. 136, 7 South. 439, 24 Am. St. Rep. 772; Merck v. Mortgage Co., 79 Ga. 213, 7 S. E. 265; Smith v. Silvers, 32 Ind. 321; First Nat Bank v. Canatsey, 34 Ind. 149; National Bank of Athens v. Danforth, 80 Ga. 55, 7 S. E. 546; Shelton v. Aultman & Taylor Co., 82 Ala. 315, 8 South. 232; Fowler v. Trust Co., 141 U. S. 411, 12 Sup. Ct. 8, 35 L. Ed. 794. Otherwise by statute in some states. See "Usury," Dec. Dig. (Key-No.) § 62; Cent. Dig. 8 135.

91 Parker v. Cousins, 2 Grat (Va.) 372, 44 Am. Dec. 388; Telford v. Gar-rels, 132 I11. 550, 24 N. E. 573; Meyer v. Muscatine, 1 Wall. 384, 17 L. Ed. 564; Vahlberg v. Keaton, 51 Ark. 534, 11 S. W. 878, 4 L. R. A. 462, 14 Am. St Rep. 73; Goodrich v. Reynolds, 31 I11. 490, 83 Am. Dec. 240; Fowler v. Trust Co., 141 U. S. 384, 12 Sup. Ct 1, 35 L. Ed. 786; English v. Smock, 34 Ind. 115, 7 Am. Rep. 215; Newell v. Bank, 12 Bush (Ky.) 57; Rose v. Mun-ford, 36 Neb. 148, 54 N. W. 129; Hawks v. Weaver, 46 Barb. (N. Y.) 164; Mackenzie v. Flannery, 90 Ga. 590, 16 S. E. 710. See "Usury," Dec. Dig. (Key-No.) §§ 45, 46; Cent. Dig. §§ 98, 99.

92 Suydam v. Westfall, 4 Hill (N. Y.) 211; Matthews v. Coe, 70 N. Y. 239, 26 Am. Rep. 583; Merck v. Mortgage Co., 79 Ga. 213, 7 S. E. 265; Boardman v. Taylor, 66 Ga. 638; Haldeman v. Insurance Co., 120 I11. 390, 11 N. E. 526; New England Mortgage Security Co. v. Gay (C. C.) 33 Fed. 636; Thomas v. Miller, 39 Minn. 339, 40 N. W. 358; Baird v. Millwood, 51 Ark. 548, 11 S. W. 881; Cockle v. Flack, 93 U. S. 344, 33 L. Ed. 949; Pass v. Security Co., 66 Miss. 365, 6 South. 239; Hughes v. Griswold, 82 Ga. 299, 9 S. E. 1092; Hall v. Daggett 6 Cow. (N. Y.) 653; Nourse v. Prime, 7 Johns. Ch. (N. Y.) 69, 11 Am. Dec. 403; Telford v. Garrels, 132 I11. 550, 24 N. E. 573; Ginn v. Security Co., 92 Ala. 135, 8 South. 388; White v. Dwyer, 31 N. J. Eq. 40; Davis v. Sloman, 27 Neb. 877, 44 N. W. 41; Weems v. Jones, 86 Ga. 760, 13 S. E. 89. Even the lender, it has been held, may charge for extra services and expenses, for, to constitute usury, the charge must be for the loan or forbearance. Atlanta Mining & Rolling Mill Co. v. Gwyer, 48 Ga. 9; Morton v. Thurber, 85 N. Y. 550; Ammondson v. Ryan, 111 I11. 506; De Forest v. Strong, 8 Conn. 513; Dayton v. Moore, 30 N. J. Eq. 543; Daley v. Investment Co., 43 Minn. 517, 45 N. W. 1100; Swanstrom v. Balstad, 51 Minn. 276, 53 N. W. 648; Iowa Savings & Loan Ass'n v. Heidt, 107 Iowa, 297, 77 N. W. 1050, 43 L. R. A. 689, 70 Am. St Rep. 197. But see Jackson v. May, 28 I11. App. 305. But if the lender exacts a bonus in addition to interest at legal rate, it is usury. Fanning v. Dunham, 5 Johns. Ch. (N. Y.) 122, 9 Am. Dec 283; Hewitt v. Dement 57 I11. 500; Walter v. Foutz, 52 Md. 147; Harris v. Wicks, 28 Wis. 198; Stark v. Sperry, 6 Lea (Tenn.) 411, 40 Am. Rep. 47; Rowland v. Bull, 5 B. Mon. (Ky.) 146. But exacting bonus or commission cases, it is not a cover for a usurious transaction.98 It has been held that it is usury to delay payment of the money loaned, and exact interest for the full time.94