Byrd v. Newcomb Mill & Lumber Co.

Holden, J., delivered the opinion of the court. The contract is not usurious to the extent that a greater rate of interest than twenty per cent, per annum was contracted for or received, which would forfeit the principal and all interest under chapter 229, Acts of 1912. The written contract expressly provides that the borrower, appellant, shall have twelve months within which to market the lumber and pay the amounts advanced after such advances are made; and as be [193] was under no contractual obligation, directly or indirectly, to pay within a. shorter time, he could not have been forced to do so; therefore he did not contract to pay the amount of the advances by marketing the lumber and turning over the proceeds therefor to appellant in such length of time as to make the interest charge, ten per cent, “flat” on the advances, more than twenty per cent, interest per annum. The fact that there was an indefinite assumption or expectation of the lender and borrower that the lumber would probably be shipped every ninety days or in less than one year, as it would usually be dry and ready for shipment within that length of time, and that the ten per cent, “flat” would then be paid at such times as the lumber was shipped, cannot render the contract usurious, for the reason that it was not certain, but only probable, that the shipments would be made in such a short time after making advances as to make the interest charge more than twenty per cent, per annum, and since the debtor was not obligated to ship sooner than twelve months after the advances were made. 29 A. & E. of L. 460; Planters’ Bank v. Snodgrass, 4 How. 573. The appellant under the written contract had twelve months in which to market the lumber and pay appellee the money advanced with interest. If appellant borrower voluntarily exercised his privilege or option to ship the lumber and pay the advances and interest sooner than stipulated in the contract, this voluntary action on his part could not vary the terms of the original written contract so that it can be interpreted to mean that the parties contemplated and agreed in the first instance to the payment of more than twenty per cent, interest per annum. Under the contract the appellant did not agree or contract to pay more than twenty per cent, interest per annum; and, as no interest whatever was received in this case, there still [194] being a large balance of the principal due and unpaid by appellant after all payments are credited, it cannot be said that more than twenty per cent, per annum was usuriously received. The statute protects and safeguards the borrower by penalizing sharply the lender in the usurious contract; but it was not meant to give to the borrower any unjust advantage of the lender. Its good purpose should not be perverted into a source of legal fraud by borrowers upon lenders. The statute provides the severe penalty of forfeiture of the principal and all interest for its violation, and it must be strictly construed, and can be successfully invoked only where it is clear and certain, from the particular facts of each case, that the usurious interest was either contracted for or received. The facts in this ease do not bring it within the statute. Affirmed.