December 14, 1932.
PRESENT: Stearns, C.J., Rathbun, Sweeney, Murdock, and Hahn, JJ.
( 1) Mortgages. Usury. A mortgage loan for one year, where the amount charged as interest, bonus and expenses, is not in excess of 30 per cent of the amount actually received by the mortgagor as proceeds of the loan, is not in violation of the usury statute.
BILL IN EQUITY on facts stated in opinion. Heard on appeal of complainants and appeal denied and dismissed.
William H. McSoley, for complainants.
Huddy Moulton, for respondent.
This is a bill in equity to declare void two second mortgages on the ground that the loan was usurious. The cause is here on the complainants' appeal from a decree of the Superior Court dismissing the bill.
The amount of the two mortgages which were for one year was $3,500. The interest rate was 8%. The respondent deducted $140, as interest for six months in advance, and $355 as a bonus; and the complainants received the difference between the total of these two charges and $3,500, that is, $3,005. Had the complainants at the end of the first six months period paid $140 as interest for the second six months they would have been entitled to have the mortgages remain for the full period of one year for which the mortgages were taken. They did, however, default such payment and the mortgages were foreclosed. The complainants had ample notice of the foreclosure proceedings, attended the sale and permitted the respondent to purchase the properties at the foreclosure sale.
The sum charged as a bonus plus interest at 8% for one year equals $635. The loan being for one year, the respondent might, without violating the usury statute, have charged as interest, bonus and expenses any sum not in excess of 30% of the amount actually received by the complainants as proceeds of the loan. See § 3207, G.L. 1923. The sum of $635, the charge for one year, is less than 30% of $3,005, the amount actually received by the complainants. As the usury statute has not been violated, it is unnecessary to consider the question of the complainants' laches or whether to obtain equitable relief it was necessary that they offer in their bill to repay with interest the amount actually received.
The appeal is denied and dismissed. The decree appealed from is affirmed and the cause is remanded to the Superior Court for further proceedings.