Spofford v. State Loan Co.

• Decision Date: 01 March 1911
• Citation: 208 Mass. 84,94 N.E. 287
• Parties: SPOFFORD et al. v. STATE LOAN CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

208 Mass. 84

94 N.E. 287

SPOFFORD et al. v. STATE LOAN CO.

Supreme Judicial Court of Massachusetts, Suffolk.

March 1, 1911

COUNSEL

C. S. Ward, for appellants.

A. K Cohen, for appellee.

OPINION

MORTON J.

This is apparently a case of hardship for the plaintiffs. We say apparently because it is possible that the situation in which the plaintiffs find themselves may be due to their own extravagance or imprudence.

The plaintiffs contend that the releases which were given by them before the giving of the mortgage now in question were null and void; and the defendant conceded at the hearing before the single justice that if they were, then the excess which it had received over and above the statutory rate of 18 per cent. entitled the plaintiffs to a discharge of the mortgage. The single justice found that the releases had not been obtained by fraud, and ruled in effect that they were valid and binding on the plaintiffs. A decree was thereupon entered, after the plaintiffs had amended their bill allowing them to redeem the outstanding mortgage upon paying the principal sum of $335 secured by the mortgage, with interest at the rate of 18 per cent. to the date of payment. The plaintiffs appealed. We think that the ruling and finding were right.

The amount borrowed and for which the original mortgage was given was $405. There is nothing in the statute (Rev. Laws, c. 102 § 51) which renders it illegal for the lender to ask for and receive more than 18 per cent. interest when the amount borrowed is less than $1,000. As the single justice said (we quote from his memorandum of decision which is printed with the papers in the case): 'Rev. Laws, c 102, § 51, does not forbid the making of a loan at the rate of 48 per cent. a year. All that it provides is that a loan for less than $1,000 shall be discharged upon payment or tender of the sum actually borrowed, with interest at the rate of 18 per cent. a year, plus a sum not exceeding $5 for the actual expenses of making and securing the loan; provided, however, that in any event the holder is entitled to interest equal to 9 per cent. of the sum lent.' At the expiration of every six months, when the sum secured by the mortgage fell due, the defendant had a right to demand payment, and, if the sum due was not paid, to foreclose the mortgage. If the plaintiffs could not pay or did not want to pay the amount due, or make a tender as provided by the statute, ...