In HM, Supreme Court on October 13 Judge P. Grant Jones delivered {udgment in the ease of Sham Singh versus C. H, Chaves and 'C. M, Franco, The case was one in which plainti@t sought to. recover the sum of $720: from the defend ants which he claimed was due to him from a loan he had made the Defendants claimed, how the loan was an unconscientious bargain and that the excessive interest charged constituted a fraud, since, the loan had been for ud was subject, according fo the contract, to interest at the rate of 2 per cent, per month for nine months, In delivering his judgment. the In this action the plaintiff as Partner in a so-called "Indian Loan Association" seeks to recover from the defendants jointly and severally 4 loan of $648 alleged to have Seen made to them on December 15 last, with interest at 2 per ent, per month for nine months, The amount was originally $120 covered by Promissory note for that. total and Was to be repaid in equal sums $72 on the Sed of each and every. Succeeding month against production And surrender of one of ten subsidiary notes expressed as attaching to and forming part of the prin: ipal instrument; in the event of default being made at any time payment of one of these instal ments all the others were to become due immediately with interest. at One of these Jy redeemed. leaving the balance Slaimed on the wrt plus, into a let in equity Against payment of the sums speci fied in their promissory notes, Their evidence as to the actual amount of the loan was conoborated by a Witness who was present when Was made and T accept their version of the transaction, Reliog has long been given in equity against unconscionable. bar-ame made ith heirs "and ottar Bersony on the. security at their Expectations, or reversions eats in property, "and. in the ein the debtor, the Court will go far restrain the' transaction as 0 compel the money-lender "to be satisfied with the. sums. advanced and' fair Interest for them. The cal question in every ease seems tome to be the same as that which rose in the ease of expectant hoist Sind reversioners before. the special doctrine in. their favour was. established that is tosay, whether the dealings have been' fair and Whether undue advantage has Deen Taken by' the money-lenter of, the weakness oF necessities of the pet-Son raising: the money. Sometimes treme old age ae been"undaly taken advantage of, sometimes great Astrese, sometimes infancy has been Imposed upon. In some cases may result the" conclusion that there exists mere inadequacy of price of exorbitance of interest charged, in which ease the transaction Wil not interfered with; but. in others, taking the whole history' together, It'may present s0 many features of Unfair dealing on the one side and weakness on the other aa to compel the Court to. exercise its equitable Juvisdiction, at all events so far restrain the prof lender within T'have quoted this judgment at mgth beetuse it anys, I think, all'that can be said. in favour of defendants plea in the present care ind Denman 3. lays it down clearly and definitely that mere exorbitance of interest round for reef fhe'olicy off he law to maintain freedom of con: tract and not to interfere. with the contracts of people who are on equal terms and nat under duress or pres-Sure; as Jessel MIN. R. said in en: net ty Bonnet (1876) 48 he"iaw' does not prevent from being for Hehe" ite, or ven, from agreeing to pay 100" per ent." "Ay far as. money-lenders were concerned, however, this state of the law was altered by the Money. Tenders. Act, 1000, and in' Samuel Newbold (1908 App. Cas. p. 481 was decided that the relied whic the' Act extended to a borrower was not, as was there argued for the Appellant, Himited to eases in which before the Act the Court of Chancery Would have given relief." Unde the fest section of the Act a Court might reopen a transaction and take fu" account between the "money" Tender and the debtor upon two eon. ditions, the frat being that the interest charged in reap set of the sum Prigne Rack transactions formerly second that case actually lent was excessive and the the contract was harsh, be wold as. being. in and unconscionable, and an excessive laws were repeated, (2 Faeut hess [rate of interest might of itself be and 18 Viet, €. 90. The grounds on nad boon taining" cee comet Which a Cotet of Equity would give The policy of relief in such cases were fully is usted in. Nevill v. Snelling D. Gro where the' principle' was sp: plied tothe ease of money ent Lnconscionnble terms toa. young ana minor at the time of the fist' ansation andthe son of a who lind no property' of his own aid possessing. large property, expectation of any except such general expectations as were found: dom his father's position in lite Tu "that case Denman. "said Whereas itis easy to find cases Which the Court has, interfered. favour of persons who have sub: rultted to hard bargains with money. Tenders on the security of propery fo which they would be cuttied, hot easy to find cases in which Such interference has taken place in favour of other. persons who have borrowed. money at interest, how: every, usurious and for. purpsecs, However, foolish. "Sull t ds" and, oven in cases relating to expectant heirs and reversioners, that" strees is often laid so very' much more upon other considerations than Don this circumstance that it' impossible to say that clearly from the cases that the Court will not any given case though it may be a case in which that particular ground for interference does not exist. I ¢an find no case which decides that the interference of the Court imited to cases in which the dealings have been with expectant he reversioners, or to cases in which the dealing has been one in relation to the expectancy, and I gather from the expressions used in several of Tender "has throughout been unconscientiously trading upon the weaknesses of the borrower, commencing operations "with him' during his charging him usurious i terest, and endeavouring to entangle him more and more in indebtedness, not as 2 fair matter of business but looking to the chances of extorting money from others interest the Act is to enable the Court to prevent oppression, leaving it in the discretion of the Court to weigh each case upon its own merits and to look behind a class of contracts which peculiarly lend themselves an abuse of t." (per Loreburn, LO). Lord lacnaghton said: "The be satisfied that the suction is harsh and unconscionable; the rate of interest may be So monstrous as to show that by teal And Lord, James of Here. ord has this pertinent passage in judgment: "No usury laws remained to restrain them (moneylenders), and so in many instances they lent money at as high a rate of interest as could be wrung from the necessities of the borrower. Terms were imposed which caused default, however, technical, to add to the burthen to be borne by the debtor, No sufficient legal remedy existed. The old Chancery jurisdic-ion was too narrow to meet the lease, It was not with remainder-men and reversioners that the modern money-lender dealt. The needy, helpless, perhaps unwary, borrower was of a different class to those who had in former days applied to the Court of Chancery' {for relief.. Exeessive interest of itself is sufficient to render a eon-tract harsh and unconscionable, Proof of excessive interest may of elf, therefore, be sufficient to entitle the debtor to relief. What Jamounts to excessive interest is to be determined by the tribunal each case, the question of ing material matter for consideration. When excessive interest is apparent ly established, any facts that tend to show that such excess does not render the contract harsh and untionable should be proved in idence by the lender. This bur-then is on him."
Now the civil jurisdiction of this [Court under Article 104 of the Order in Council 1925 cised on the iples of and conformity with English law for
Text read from the printed page and cleaned; old type leaves the occasional error.