Although it appears to have been held at one time that usurious interest, i.e. interest in excess of the rate allowed by law to be charged, could not be recovered,2 the rule was long ago settled, in England, that assumpsit will lie to recover such interest as money paid under compulsion.3 In 1854, however, the English usury laws were repealed,4 and the only relief now afforded the oppressed debtor is that provided by the Moneylenders Act, 1900,6 which enacts, in substance, that where an action is brought by a person engaged in the business of money lending, and there is evidence which satisfies the court that the interest charged is excessive and that the transaction is harsh and unconscionable, the court may reopen the transaction, relieve the debtor from the payment of any sum in excess of that fairly and reasonably due, and if any such excess has been paid, order the creditor to repay it.
The common law rule that usurious interest may be recovered has been adopted, either by statute or by judicial decision, in many of the United States.1 Moreover, it has frequently been held that in the absence of an express abrogation of the common law remedy, the imposition of a statutory penalty for taking usurious interest - as double or treble the amount illegally received - does not deprive the debtor of his common law right to sue for the excess interest alone.2 Said Chief Justice Dixon in a Wisconsin case:3
1 Accord: Mobile, etc., R. Co. v. Steiner, 1878, 61 Ala. 559. And see Fairford Lumber Co. v. Tombigbee, etc., R. Co., 1910, 165 Ala. 275; 51 So. 770, 772.
2 Tomkins v. Bernet, 1693, 1 Salk. 22.
3 See Astley v. Reynolds, 1731, 2 Strange 915; Bosanquett v. Dash-wood, 1734, Cas. t. Talb. 38, (in equity); Smith v. Bromley, 1760, 2 Doug. 696; Clarke v. Shee, 1774, 1 Cowp. 197.
417 & 18 Vict. c. 90. This repeal did not deprive the High Court of its equitable jurisdiction to give relief against unconscionable bargains between expectant heirs or needy persons and money lenders, where an unfair advantage had been taken. See James v. Kerr, 1888, 40 Ch. D. 449.
5 63 & 64 Vict. c. 51. See Samuel v. Newbold, [19061 A. C. 461.
"If the borrower chooses, by not bringing his action within one year [the period fixed by the statute within which an action to enforce the penalty must be commenced], to waive his right to a treble recovery, he may do so and still retain the right to maintain an action for money had and received, to recover back the excess actually paid, at any time within the period prescribed by the statutes of limitations. For the remedy given by the statute is cumulative and not exclusive, as has frequently been decided in other States where similar statutory remedies have been given."
In a number of States, on the other hand, either because the statute expressly makes it lawful to pay and receive any rate of interest,1 or because a penalty imposed by statute is regarded as a substitute for the common law remedy,2 or because the statute is construed to mean that contracts for usurious interest are merely unenforceable as to such interest and not illegal or void,3 the right to restitution is denied.
1 Wood v. Cuthberson, 1884, 3 Dak. 328; 21 N. W. 3; State Bank v. Ensminger, 1884, 7 Blackf. (Ind.) 105; Baum v. Thorns, 1897, 150 Ind. 378; 50 N.E. 357; 65 Am. St. Rep. 368; Sherley v. Trabue, 1887, 85 Ky. 71; 2 S. W. 656; Furlong v. Pearce, 1864, 51 Me. 299; Scott v. Leary, 1871, 34 Md. 389; Commercial Bank v. Auze, 1897, 74 Miss. 609; 21 So. 754; Brown v. Mcintosh, 1876, 39 N. J. L. 22; Hintze v;. Taylor, 1894, 57 N. J. L. 239; 30 Atl. 551; Wheaton v. Hibbard, 1822, 20 Johns. (N. Y.) 290; 11 Am. Dec. 284; Cheek v. Iron Belt Bldg. Asso., 1900,127 N. C. 121; 37 S. E. 150; Melton v. Snow, 1909, 24 Okla. 780; 104 Pac. 40; Philanthropic Building Asso. v. McKnight, 1860, 35 Pa. St. 470; Miners' Trust Co. Bank v. Roseberry, 1876, 81 Pa. St. 309; Bexar Building Asso. v. Robinson, 1890, 78 Tex. 163; 14 S. W. 227; 9 L. R. A. 292 ; 22 Am. St. Rep. 36; Nichols v. Bellows, 1849, 22 Vt. 581; 54 Am. Dec. 85; Harper v. Middle State Co., 1904, 55 W. Va. 149; 46 S. E. 817; Wood v. Lake, 1860, 13 Wis. 84.
2 Baum v. Thorns, 1897, 150 Ind. 378; 50 N. E. 357; 65 Am. St. Rep. 368; Wheaton v. Hubbard, 1822, 20 Johns. (N. Y.) 290; 11 Am. Dec. 284; Porter v. Mount, 1863, 41 Barb. (N. Y.) 561; Wilson v. Selbie, 1895, 7 S. D. 494; 64 N. W. 537; Wood v. Lake, 1860, 13 Wis. 84; Schriber v. Le Clair, 1886, 66 Wis. 579, 29 N. W. 570, 889.
3 Wood v. Lake, 1860, 13 Wis. 84, 97.