| n. | 1. | |
| 1. | A premium or increase paid, or stipulated to be paid, for a loan, as of money; interest. Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury. | |
| 2. | The practice of taking interest. | |
| 3. | (Law) Interest in excess of a legal rate charged to a borrower for the use of money. |
| Noun | 1. | usury - an exorbitant or unlawful rate of interest Synonyms: vigorish |
| 2. | usury - the act of lending money at an exorbitant rate of interest |
USURY, contracts. The illegal profit which is required and received by the
lender of a sum of money from the borrower for its use. In a more extended
and improper sense, it is the receipt of any profit whatever for the use of
money: it is only in the first of these senses that usury will be here
considered.
2. To constitute a usurious contract the following are the requisites:
1. A loan express or implied. 2. An agreement that the money lent shall be
returned at all events. 3. Not only that the money lent shall be returned,
but that for such loan a greater interest than that fixed by law shall be
paid.
3.-1. There must be a loan in contemplation of the parties; 7 Pet. S.
C. Rep. 109, 1 Clarke R. 252; and if there be a loan, however disguised, the
contract will be usurious, if it be so in other respects. Where a loan was
made of depreciated bank notes to be repaid in sound funds, to enable the
borrower to pay a debt he owed dollar for dollar, it was considered as not
being usurious. 1 Meigs, R. 585. The bona fide sale of a note, bond or other
security at a greater discount than would amount to legal interest, is not
per se, a loan, although the note may be endorsed by the seller, and he
remains responsible. 9 Pet. S. C. Rep. 103; 1 Clarke, R. 30. But, if a note,
bond; or other security be made with a view to evade the laws of usury, and
afterwards sold for a less amount than the interest, the transaction will be
considered a loan; 2 Johns. Cas. 60; 3 Johns. Cas. 66; 15 Johns. R. 44 2
Dall. 92; 12 Serg. & Rawle, 46 and a sale of a man's own note, endorsed by
himself, will, be considered a loan. lt is a general rule that a contract,
which, in its inception, is unaffected by usury, can never be invalidated by
any subsequent usurious transaction. 7 Pet. S. C. Rep. 109. On the contrary,
when the contract was originally usurious, and there is a substitution by a
new contract, the latter will generally be considered usurious. 15 Mass. R.
96.
4.-2. There must be a contract for the return of the money at all
events; for if the return of the principal with interest, or of the
principal only, depend upon a contingency, there can be no usury; but if the
contingency extend only to interest, and the principal be beyond the reach
of hazard, the lender will be guilty of usury, if he received interest
beyond the amount allowed by law. As the principal is put to hazard in
insurances, annuities and bottomry, the parties may charge and receive
greater interest than is allowed by law in common cases, and the transaction
will not be usurious.
5.-3. To constitute usury the borrower must not only be obliged to
return the principal at all events, but more than lawful interest: this part
of the agreement must be made with full consent and knowledge of the
contracting parties. 3 Bos. & Pull, 154. When the contract is made in a
foreign country the rate of interest allowed by the laws of that country may
be charged, and it will not be usurious, although greater than the amount
fixed by law in this. Story, Confl. of Laws, Sec. 292. Vide, generally, Com.
Dig. h.t.; Bac. Ab. h.t.; 8 Com. Dig. h.t.; Lilly's Reg. h.t.; Dane's Ab.
h.t.; Petersdorff's Ab. h.t.; Vin. Ab. h.t.; 2 Bl. Com. 454; Comyn on Usury,
passim; 1 Pt. S. C Rep. Index, h.t.; 1 Supp. to Yes. jr. 307, 337; Yelv. 47;
1 Ves. jr. 527; 1 Saund 295, note 1; Poth. h.t.; and the article Anatocism;
Interest.