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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> The Exchange Loan Co. v. Torrance [1904] ScotLR 41_303 (16 February 1904)
URL: http://www.bailii.org/scot/cases/ScotCS/1904/41SLR0303.html
Cite as: [1904] ScotLR 41_303, [1904] SLR 41_303
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SCOTTISH_SLR_Court_of_Session
Page: 303↓
Court of Session Outer House.
[
v.
Facts:
Circumstances in which, in an action by a firm of money-lenders for recovery of money lent, and interest, the Court, holding that the interest charged was
Page: 304↓
excessive and the transaction harsh and unconscionable, reopened the transaction and adjudged a reasonable sum, under the Moneylenders Act 1900, section 1.
The Moneylenders Act 1900 enacts, sec. 1,—“Where proceedings are taken in any court by a money-lender for the recovery of any money lent after the commencement of this Act … and there is evidence which satisfies the court that the interest charged in respect of the sum actually lent is excessive … and that … the transaction is harsh and unconscionable,… the court may reopen the transaction and take an account between the money-lender and the person sued, and may … reopen any account already taken between them and relieve the person sued from payment of any sum in excess of the sum adjudged to be fairly due in respect of such principal, interest, and charges as the court, having regard to the risk and all the circumstances, may adjudge to be reasonable…
In this action the pursuers sued the defenders for the sum of £54, 11s. sterling, with interest on £16 sterling at the rate of £5 per centum per annum from the 23rd day of October 1903 until payment.
By bill dated 20th May 1901, drawn by the pursuers upon and accepted by the defenders, and payable one day after date, the defenders bound themselves to pay to the pursuers the sum of £25 sterling for value received. By a letter of agreement of the same date granted by the defenders to the pursuers, the pursuers agreed to receive payment of the bill in weekly instalments of 25s., commencing on 28th May 1901 and continuing until the whole was paid up, but in the event of the defenders failing for two successive weeks, or for three weeks altogether, to call upon the pursuers and pay the instalments, the pursuers were to be entitled to recover from the defenders at any time thereafter the whole sum or balance due on the bill; the defenders also agreed to pay to the pursuers in the event of such failure an additional sum of 6d. for each £1 or part of £1 of the total amount of the bill, and that by way of interest and for every week's failure till such time as the pursuers proceeded to recover from them as aforesaid.
The defenders fell into arrears in their repayments.
Payments of £21, 7s. were, however, made to account of principal and interest. The present action was raised on 26th October 1903.
On 23rd November 1903 the defenders before lodging defences offered £12 with expenses.
The pursuers pleaded—“(1) The defenders being justly indebted and resting-owing to the pursuers the sum sued for in respect of the bill and letter of agreement founded on decree should be granted as concluded for. (2) The letter of agreement being valid and binding, and the transaction being reasonable in the circumstances, decree should be granted as concluded for.”
The defenders pleaded—(1) The interest charged by the pursuers in respect of the sum lent being excessive, and the transaction harsh and unconscionable, the Court should reopen the transaction and find the pursuers only entitled to what is fairly due by the defenders. (2) The defenders having offered a sum in excess of what is fairly due by them should be assoilzied from the conclusions of the action, with expenses from the date thereof.
“Finds (1) that by bill dated 20th May 1901 the defenders bound themselves to pay to the pursuers £25 for value received; (2) that on the same date the pursuers and defenders entered into an agreement for the payment of interest on said advance of £25, being the letter of agreement; (3) that there is no relevant averment on record that said advance was attended with unusual risk; (4) that the interest charged on said £25 and specified in said agreement is excessive in the sense of the Act (63 and 64 Vict. cap. 51), and that the transaction was harsh and unconscionable on the part of the pursuers in the sense of the Act, and that the provisions of said Act apply to this case; (5) that certain payments have been made by the defenders to the pursuers in repayment of said advance and interest thereon; (6) that by letter dated 23rd November 1903 the defenders tendered payment of £12 with expenses in full of the debt due to the pursuers under the said bill; and (7) that the said tender was in the circumstances reasonable: Therefore decerns the defenders conjunctly and severally to pay to the pursuers the said sum of £12 on delivery by the pursuers to the defenders of the foresaid bill: Finds the pursuers entitled to expenses to said 23rd November 1903, and finds the defenders entitled to expenses since said date,” &c.
Counsel for the Pursuers— M'Lennan. Agent— Robert Broatch, L.A.
Counsel for the Defenders— Graham Stewart. Agents— Mylne & Campbell, W.S.