Scottish Court of Session Decisions

Subject_1 USURY.

Lady Braid
v.
Earl of Kinghorn

Date: 26 January 1669
Case No. No. 12.

Found usurious to stipulate that each, term's annual-rent is to bear annual-rent, after due.

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There is a bond of £. 10,000 granted to the Earl of Buchan principal, and the Earl of Kinghorn cautioner to umquhile ——— Morison, of Darsie, and Dame Nicolas Bruce, now Lady Braid, then his spouse, bearing annual-rent, and a clause stating the principal sum after ilk term, as a stock to bear annual-rent, and termly penalties in case of failzie. This being called in præsentia, it was alleged for Kinghorn, that annual of annual was a most usurary paction, rejected by all law, and our custom, and cannot subsist in whatever terms it be conceived, otherwise by the like paction, the annual of that annual might bear annual, and so perpetually multiply; and if this were sustained, there would never be a bond hereafter in other terms. It was answered, that bonds of corroboration, stating annual-rents into principals by accumulation, have ever been allowed, and though that be done after the annual-rent is become due, making it then to bear annual-rent, there is no material difference to make it bear annual-rent by a paction ab ante, but not to take effect till the annual-rent be effectually due. It was answered, that custom had allowed the stating of annual-rents after they were due, into a principal, because then being presently due, they might instantly be exacted; but law and custom hath rejected the other case. The pursuer further alleged, that she being a widow, and this her livelihood, annual-rent at least should be due for the annual-rents seeing she is ready to depone, that she borrowed money to live upon, and paid annual-rent therefore, or otherwise the termly failzies ought to be sustained.

The Lords sustained the defense, and found no annual-rent due of the annual, nor termly failzies, seeing there was no charge at the pursuer's instance against this defender, and that he was a cautioner, but modified for all £. 100 of expenses.

Stair, v. 1. p. 593. Gosford reports this case:

The deceased Earl of Buchan, as principal, and the Earls of Kinghorn and Rothes, as cautioners, having given bond to ——— Dick and the Lady Baird, in life-rent, and their heirs, in fee, for £. 20,000 of principal, and annual-rent termly, and in case of failzie, to pay not only penalty, but the annual-rent should be stated in principal sum, and bear annual-rent thereafter; whereupon she did pursue the Earl of Kinghorn for payment of the annual-rent of the said annual-rents. The Lords found the bond as to that clause null and void, conform to the civil law De usuris; notwithstanding it was alleged, That the pursuer being a life-renter and having no other subsistence, for want of the annual-rent, was forced to borrow money for her entertainment; and that it was lawful for a creditor to take bond for by-gone annual-rents, which was not reprobated by our law; so, upon that same reason, it was lawful to the pursuer to make use of that same obligatory clause for the payment of annual-rents of the annual-rents not paid at the term.

Gosford MS. p. 33.