A LOAN COMPANY'S CLAIM

Evening Post, Volume XCV, Issue 43, 19 February 1918, Page 8

A LOAN COMPANY'S CLAIM

JUDGMENT GIVEN FOR

DEFENDANT.

Reserved judgment was given^ by Mr. S. E. M'Carthy, S.M., in the Magistrate's Court yesterday in the case in which the Wellington Loan Company sued Maurice J.-Hasler for £28 16s, alleged to be due to the company in respect to a dishonoured bill of ex-' change. The evidence given for the defence sought to establish a collateral and controlling oral agreement between defendant and the plaintiff company's onetime manager. The defendant further relied oh the provisions of section 3 of the Moneylenders' Act, 1908.

■On 7th June, 1913, the plaintiff. company lent defendant £25. There was no proof ' that anything, was said directly as to the rate of interest. Defendant thereupon gave a promissory note for £27 10s, which and . several succeeding notes bore the name of an endorsee, who eventually went to the front, and subsequently the notes were unendorsed. At the end of each three-monthly period the defendant gave a lenewed promissory note for £27 10s, and paid the company £2 10s. The quarterly payments were made punctually up to 7th March, 1917. His Worship remarked that if this £2 10s was regarded as interest only the rate worked out at 40 per cent.

His Worship said that the Moneylenders' Act shoul.d not be administered so as to allow of debtors ridding themselves of onerous' contracts merely because they were inconvenient to discharge. , On the other hand the creditor should not be enabled by an oppressive use of; his. power to exact more than a reasonable interest.

■ The plaintiff company had promised the defendant, to treat the quarterly payments as'having been paid in reduction of both principal and interest; and if prompt payments were made the rate of interest would be reduced," That promise might or might not be admissable in evidence in an ordinary auction to recover the amount of the bill, but where, as in the present case, the defendant claims the benefit of the Moneylenders' Act, the fact that. such a promise was made, rendered it harsh and unconscionable on. the' part of the plaintiff company within the- meaning of the secy tion to carvy it out, more especially where the defendant has already overpaid principal and interest, calculating tha latter in comparison to commercial rates. Exercising the powers under the Act, the court'had reopened the transactions between 'the plaintiff company and defendant, and had taken an account between them. The result of that account was that, allowing the plaintiff's 20 per cent, interest per annum, the amount had been already overpaid. Judgment was given for defendant, without costs. ' . i

Leave to, appeal was granted, and security was fixed in the sum of £7 7s.

During the hearing of the case ■ Mr. E." M. Beechey appeared for the plaintiff 5 and Mr. P. W. Jackson for the defendant. , ■•.-..