one who is employed to make wagers and to pay any losses which may be incurred, and who does thus incur and pay losses on behalf of his principal cannot recover them from him.90 Therefore, a broker who negotiates for his principal a transaction held to be a gambling contract can recover from his principal neither for commissions nor advances.91 If, however, the broker was ignorant of the facts or intent making the contract of his principal illegal, he may recover.92 One who has B. & Ald. 179; Tatam v. Reeve, [1893] 1 Q. B. 44; Scollans v. Flynn, 120 Mass. 271. Saffery v. Mayer, [1901] 1 K. B. 11. See also St. Croix v. Morris, 1 Cab. & El. 485; White v. Wilson's Adm., 100 Ky. 367, 38 S. W. 495, 37 L. R. A. 197; Central Trust &c. Co. V. Respass, 112 Ky. 606, 66 S. W. 421, 56 L. R. A. 479, 99 Am. St. 317; Schoenberg v. Adler, 105 Wis. 645, 81 N. W. 1055. Cf. Hill v. Fox, 4 Hurlst. & N. 359. 91 Irwin v. Williar, 110 U. S. 499, 28 L. Ed. 225, 4 Sup. Ct. 160; Embrey v. Jemison, 131 U. S. 336, 33 L. Ed. 172, 9 Sup. Ct. 776; Bailey v. Phillips, 159 Fed. 535; Phelps v. Holderness, 56 Ark. 300, 19 S. W. 921; Cashman v. Root, 89 Cal. 373, 26 Pac. 883, 12 L. R. A. 511, 23 Am. St. Rep. 482; Anderson v. Holbrook, 128 Ga. 233, 57 S. E. 500, 11 L. R. A. (N. S.) 575; Calumet Grain & E. Co. v. Williams, 97 Ill. App. 36; Orthwein-Matchette Inv. Co. v. McFarlin, 93 Kan. 526, 144 Pac. 842; Stewart v. Schall, 65 Md. 289, 4 Atl. 399, 57 Am. Rep. 327; Cover v. Smith, 82 Md. 586, 34 Atl. 465; Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. A. 200, 15 Am. St. Rep. 159; Beers v. Wardwell, 198 Mass. 236, 84 N. E. 306; Mohr v. Miesen, 47 Minn. 228, 49 N. W. 862; Crawford v. Spencer, 92 Mo. 498, 4 S. W. 713, 1 Am. St. Rep. 745; Saunders v. Baker, 122 Mo. App. 294, 99 S. W. 51; Rogers v. Marriott, 59 Neb. 759, 82 N. W. 21; Sunderland v. Hibbard, 97 Neb. 21, 149 N. W. 57; Dows v. Glaspel, 4 N. Dak. 251, 60 N. W. 60; Lester v. Buel, 49 Ohio St. 240, 30 N. E. 821, 34 Am. St. Rep. 556; Riordan v. Doty, 50 S. C. 537, 27 S. E. 939; Kassuba Commission Co. v. Blodgett, 155 Wis. 529, 143 N. W. 1060; Snoddy v. American Nat. Bank, 88 Tenn. 573, 13 S. W. 127, 7 L. R. A. 705, 17 Am. St. Rep. 918. But see Hawley v. Bibb, 69 Ala. 52; Pedt v. Hatcher, 112 Ala. 514, 57 Am. St. Rep. 45; Jones v. Ames, 135 Mass. 431. In Warren v. Hewitt, 45 Ga. 501, it was held that if the principal subsequently executes his note or bill, or makes an express promise to pay the broker, or with full knowledge of the facts allows the transaction to proceed, he becomes liable. See also Peet v. Hatcher, 112 Ala. 514, 57 Am. St. Rep. 45. The notion of making enforceable by ratification a transaction originally unenforceable because obnoxious to public policy is, however, indefensible, and Warren v. Hewitt was overruled by Anderson v. Holbrook, 128 Ga. 233, 57 S. E. 500, 11 L. R. A. (N. S.) 575. See also Pelouze v. Slaughter, 241 Ill. 215, 89 N. E. 259; Moore v. Blanck, 71 N. Y. Misc. 257, 129 N. Y. S. 1105. 92 Boyd v. Hanson, 41 Fed. 174; Ponder v. Jerome Hill Cotton Co., 100 Fed. 373, 40 C. C. A. 416; Parker v. Moore, 115 Fed. 799, 53 C. C. A. 369; Rumsey v. Berry, 65 Me. 570; Jones v. Ames, 135 Mass. 431; Gaylord v. Duryea, 95 Mo. App. 574, 69 S. W. 607. made a contract in furtherance of wagering transactions is not only denied a right to enforce it, but is freed from liability for breach of it. A telegraph company though under contract to furnish market quotations to the proprietor of a bucket shop may refuse to do so.93 The proprietor of a gambling house is not liable for breaking a contract of employment with one whom he has engaged as manager of it.94 § 1682. Usury. 95 Usury, which originally meant simply interest for the use of money, but which now has come to mean excessive interest, is forbidden by law in many jurisdictions. All interest was deemed contrary to the law in early times; 25 though the Jews, and subsequently the Lombards, seem to have been permitted to take it.96 In the time of the Tudors interest at the rate of 10 per cent was legalized by statute, but the recitals of these statutes indicate that it was still regarded as opposed to morality and Christianity." The rate of legal interest was gradually reduced, and by statute in the reign of Queen Anne, was made 5 per cent.98 Excessive interest remained illegal in England subject to some statutory exceptions until 1854. If more than the legal rate was contracted for a loan the transaction was void 93 Smith v. Western Union Tel. Co., 84 Ky. 664, 2 S. W. 483. A fortiori if there is no contract the public duty of a telegraph company does not compel it to furnish quotations to such a person. Western Union Tel. Co. v. State, 165 Ind. 492, 76 N. E. 100, 3 L. R. A. (N. S.) 153. See also Bryant v. Western Union Tel. Co., 17 Fed. 825. 94 Britt v. Davis, 118 La. 597, 43 So. 248, 118 Am. St. 390. 95 14 Encyc. of the Laws of England (2d ed.), 408. In 8 Bacon's Abr. 312, citing Hawkins' Pleas of the Crown, c. 82, § 4, it is said: "Anciently it was holden to be absolutely unlawful for a Christian to take any kind of usury, and that whosoever was guilty of it was liable to be punished by the censures of the church in his lifetime; and that if after death any one was found to have been a usurer while living, all his chattels were forfeited to the king, and his lands escheated to the lord of the fee.” 14 Encyc. of the Laws of England (2d ed.) 408. "The Statute 13 Eliz. c. 8, which allows 10 per cent. interest, recites, 'that all usury being forbidden by the law of God is sin, and detestable; ' and the 21 Jac. 1, reducing the rate to 8 per cent, provides that 'nothing in the law shall be construed to allow the practice of usury in point of religion or conscience;' Rolle says, that this clause was introduced to satisfy the bishops, who would not pass the bill without it. Oliver v. Oliver, Roll. R." 8 Bacon's Abr. 313. 98 12 Anne, Stat. 2, c. 16. even though in the form of a negotiable instrument which had come into the hands of a holder in due course.99 In consequence of the theories of political economy propounded by Hume, Adam Smith, Bentham, and their successors, the hostility to contracts reserving any rate of interest for which the parties might bargain, abated. In 1830 innocent holders of securities given on usurious consideration were allowed to recover,1 and in 18542 all usury laws were repealed. Subsequent experience has shown in England, as well as elsewhere, that it is not safe to leave all classes of the community free to make such bargains for loans as they may see fit, or as their necessities may compel them to make, and in England, as in many jurisdictions of the United States, limitations have been put on certain classes of loans by pawnbrokers, and other money lenders.3 § 1683. Statutes in the United States. In many of the United States statutes against usury still exist, the particular provisions of which must be sought in local enactments. It may be said of these statutes as a whole, however, that they are generally less severe than the earlier type of statute, and make a usurious contract unlawful only as to the interest or as to so much of the interest as exceeds the legal rate. This tendency towards a milder point of view is often emphasized by decisions of the courts; many of which doubtless do not regard with favor the policy of general prohibitions of usury. Usury is not regarded as so far obnoxious in itself as to prevent a loan of money for use in payment of a claim of a third person known to be usurious from being recoverable.1 The attitude of the courts towards the defence of usury is "Lowe v. Waller, 2 Doug. 736; Young v. Wright, 1 Camp. 139; Ackland v. Pearce, 2 Camp. 599. 1See Woolf v. Hamilton, 14 T. L. Rep. 499. 2 17 & 18 Vict., c. 90. Money Lenders Act, 63 and 64 Vict., c. 51. Lowe v. Walker, 77 Ark. 103, 91 S. W. 22; Thompson v. First State Bank, 99 Ga. 651, 26 S. E. 79; Trimble v. Thorson, 80 Iowa, 246, 45 N. W. V. 742; Jenkins v. Levis, 25 Kans. 479; Ratcliffe v. Buckler, 22 Ky. L. Rep. 1790, 61 S. W. 472; Yeiser v. Fulton, 36 Neb. 518, 54 N. W. 824; King Lane, (Okla.), 169 Pac. 901, L. R. A. 1918 C. 351; Vaught v. Rider, 83 Va. 659, 3 S. E. 293, 5 Am. St. Rep. 305. This was so held even though the new loan was from the creditor of the usurious loan in Lott v. Peterson (Ga. App.), 98 S. E. 361. also indicated by the general holding in recent cases that the repeal of usury laws without a saving clause operates retrospectively so as to cut off the defence in all actions, even in those based on contracts made prior to the repeal, 5-a rule of construction at variance with that generally prevailing in regard to contracts illegal when made; and if a borrower under a usurious loan seeks affirmative relief in equity, he is usually required as a condition of relief to pay the loan with legal interest.6a So far as usury statutes impose other penalties than invalidating wholly or partially executory contracts, they are without, the scope of this book. § 1684. Essential elements of usury. The elements which must concur in order to constitute usury have been thus stated: "To constitute usury, in contemplation of law, the following essential elements must be present: (1) There must be a loan or forbearance; (2) the loan must be of money or something circulating as money; (3) it must be repayable absolutely and at all events; (4) something must be exacted for the use of the money in excess of and in addition to the interest allowed by law. Some decisions appear to imply that a fifth element should be added, consisting of the intent of the parties or at least of the lender, but it seems to us quite as accurate to say that the intention of the parties as the same appears from the facts and circumstances of the case may be considered, in connection with the other evidence, in determining whether the Ewell v. Daggs, 108 U. S. 143, 2 S. Ct. 408, 27 L. Ed. 682; Petterson v. Berry, 125 Fed. 903, 60 C. C. A. 610; Walker v. Arkansas Nat. Bank, 256 Fed. 1, 4, 167, C. C. A. 273; Woodruff v. Scruggs, 27 Ark. 26, 11 Am. Rep. 777 Mechanics', etc., Savings' Bank v. Allen, 28 Conn. 97; Coe v. Muller (Fla.), 77 So. 88; Parmelee v. Lawrence, 48 Ill. 331; Johnson v. Utley, 79 Ky. 71; Magil v. Mercantile Trust Co., 81 Ky. 129; Holmes v. essential elements of usury are present in the particular case under investigation." " § 1685. Loan or forbearance of money. The statute of Anne applied only to a loan or forbearance of money, and in the construction of this statute it was held that where property was sold, even though the contract provided in terms for the payment of a fixed price payable in the future with interest at a greater rate than that allowed by the statute, the transaction was, nevertheless, not usurious since everything that the buyer promised must be deemed consideration for the sale of property, not interest on a loan or forbearance of money." In the United States similar statutes have been similarly construed, so that where property is sold the parties may agree that the price, if paid after a certain time, shall be a sum greater by more than legal interest than the price payable at an earlier day;10 and though the difference between an agreed price for cash and that for credit is in terms stated in the form of interest at greater than the legal rate, the contract is not usurious. In a few States, however, statutes drawn in broader terms than the English model, have been held to render such transactions illegal. 12 and the courts of some other states, though not resting their conclusion upon any difference of statutory wording, refuse to go to the full extent of the English precedents in upholding such bargains.13 7 Clemens v. Crane, 234 I. 215, 229, 84 N. E. 884. 12 Anne, c. 16. 'Beete v. Bidgood, 7 B. & C. 453. 10 Primley v. Shirk, 60 Ill. App. 312, 163 Ill. 389, 45 N. E. 247; Tousey v. Robinson, 1 Metc. (Ky.) 663; Huber Mfg. Co. v. Ellis, 199 Mo. App. 96, 201 S. W. 931; West v. Belches, 5 Munf. 187. 11 Davidson v. David, 59 Fla. 476, 52 So. 139, 28 L. R. A. (N. S.) 102; Cutler v. Wright, 22 N. Y. 472; First Nat. Bank v. Mann, 94 Tenn. 17, 27 S. W. 1015, 27 L. R. A. 565; Graeme v. Adams, 23 Gratt. 225, 14 Am. St. Rep. 130; Reger v. O'Neal, 33 W. Va. 159, 10 S. E. 375, 6 L. R. A. 427. See also Dykes v. Bottoms, 101 Ala. 390, 13 So. 582; Rushing v. Worsham, 102 Ga. 825, 30 S. E. 541; Gilmore v. Ferguson, 28 Ia. 220; but see infra, § 1687. 12 Crawford v. Johnson, 11 Ind. 258; Newkirk v. Burson, 21 Ind. 129; Rosen v. Rosen, 159 Mich. 72, 123 N. W. 559, 134 Am. St. Rep. 712; Parchman v. McKinney, 20 Miss. 631; Thompson v. Nesbit, 2 Rich. L. 73. 13 In Hartranft v. Uhlinger, 115 Pa. 270, 8 Atl. 244, it was held that if the price is payable whenever the buyer sees fit, with interest at more than the legal rate, the transaction is usurious. See also Scofield v. McNaught, 52 |