Scott v. Kennedy

Citations

• 201 Pa. 462

Syllabus

<p>Partnership—Loan—Share of profits in lieu of interest—Act of April 6, 1870, P. L. 56.</p> <p>Under the act of April 6, 1870, a contract in writing to lend money to a partnership and take a share in the profits in lieu of interest, is valid, and the fact that the share of the profits may be largely in excess of the legal rate of interest on the money loaned, will not render the contract usurious.</p> <p>The Act of April 6, 1870, P. L. 56, should be strictly construed when a question of usury is involved, and no one should have the protection of the act who has not observed its requirements, and in entire good faith loaned money under its provisions.</p> <p>Where a contract with a partnership is in writing, and stipulates for a share of the profits in lieu of interest on money loaned to the partnership under the contract, it is immaterial whether the sum to be paid is fixed in advance, or left to be determined by a fixed percentage. The fact that a judgment note not bearing interest is given to the lender to protect him in case of default of the borrowers, will not render the agreement invalid.</p>