Woolley v. Alexander

Citations

• 99 Ill. 188
• 1881 Ill. LEXIS 164

Syllabus

<p>1. Usury- — contract, so far as void for, can not be cured by subsequent legislation. A contract made in 1856, so far as it provided for the payment of interest in excess of that allowed by law, was absolutely void, and could not be rendered valid and binding by any subsequent repeal of the law governing when it was entered into, but such contract, as to the principal and such rate of interest as was allowed by law, at the time of its execution, to be contracted for, was not void.</p> <p>2. Same — penalty may be released by repeal of the law. A penalty for reserving usurious interest in a contract, until enforced, is subject to legislative control, and may be abolished wholly or in part.</p> <p>3. Same — act of 1857 construed. While the act of 1857, revising the law relating to interest, would seem to be an absolute repeal of the penalty-imposed by the act of 1845, yet, taking the whole act together, it was intended, so far as then existing usurious contracts were concerned, as a mere reduction or a substitute for the penalty imposed by the act of 1845, extending simply to the entire interest reserved instead of three times that amount as provided in the latter act, and this it was competent for the legislature to do.</p> <p>4. The legislature has no power to substitute one penalty for another except where that'which is substituted is, in effect, a mere reduction or modification of the original penalty; and where a penalty is once released or abrogated, it ceases to be subject to legislative control.</p> <p>5. Same — payments of, applied on principal. Where usurious interest has been reserved, and the debtor makes payments to be applied on the note or other evidence of indebtedness, without specifying how they are to be applied, the law will apply them to that part of the indebtedness which the debtor is legally bound to pay; and when, in such case, the law imposes a penalty on account of usury, which operates as a forfeiture of the whole or a part of the interes