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lows: "The rule that a common carrier cannot, by contract, relieve himself from liability for the negligence of himself or his employees has no application to provisions in leases given by such carrier for buildings owned by him on or near the right of way, exempting him from liability for loss by fire.'

"The precise question now under consideration does not appear to have been heretofore presented to this court, but it has been decided in a number of other jurisdictions in accordance with the rule above stated by Page. Among the cases where leases of the same general character as the one here involved have been valid and enforcible the following may be cited: Hartford Fire Ins. Co. v. Chicago, Milwaukee and St. Paul Railway Co., 175 U. S. 91; King v. Southern Pacific Railroad Co., 109 Cal. 96; 29 L. R. A. 755; Stephens v. Southern Pacific Railroad Co., 109 id. 86; 50 Am. St. Rep. 17; 29 L. R. A. 751; Griswold v. Illinois Central Railroad Co., 90 Iowa, 265; 24 L. R. A. 647; 57 N. W. Rep. 843; Greenwich Ins. Co. v. Louisville and Nashville Railroad Co. (Ky.) 56 L. R. A. 477; Wabash Railway Co. v. Ordelheide, 172 Mo. 436; Rutherford v. Wabash Railroad Co., 147 Mo. 441; Northern Pacific Railway Co. v. McClure, 9 N. Dak. 73; 47 L. R. A. 149; 81 N. W. Rep. 52. The cases above cited all involved, either directly or indirectly, the validity of contracts, most of them leases like the one involved here, which purported to exempt the railroad company from liability for fires happening through the negligence of its servants. There is no well considered case that has come to our notice to the contrary. Some expressions may be found to the general effect that any contract by any person which assumes to place another party at the mercy of his own faulty conduct is void as against public policy, but such a statement of the rule of the law is too general and sweeping to receive judicial sanction. A fire insurance policy issued to anyone which purported to insure his property against his own willful and intentional burning of the same would manifestly be condemned by all courts as contrary to a sound public policy,

but it is not unlawful for insurance companies to issue policies which will protect property against a loss caused by the negligence of the assured. That is probably the most fruitful cause of fire losses. A common carrier owning property may obtain insurance against loss by fire resulting from the negligence of himself or his servants, and a stipulation may lawfully be entered into between the carrier and the owner of the goods by which the carrier is to have the benefit of such insurance procured thereon by the owner. If the owner of goods about to be transported insures them against loss by fire in transit, the carrier may make a lawful contract with the shipper that after having paid the owner for the loss under its general common law liability it may maintain an action against the insurance company and collect the insurance by way of indemnity for the loss sustained. (Phoenix Ins. Co. v. Erie Transportation Co., 117 U. S. 312; Wager v. Providence Ins. Co., 150 id. 99; Hartford Ins. Co. v. Chicago, Milwaukee and St. Paul Railway Co., supra.) If appellee had owned the warehouse and its contents in question it could have lawfully insured the same for its own benefit, and such insurance contract might have protected appellee from loss or damage caused by fire originating through the negligence of its servants. If such a contract, which is one of indemnity, merely, is valid, why may not appellee lawfully protect itself from damage arising from the same course by a stipulation with its tenant? There appears to be no distinction, either upon reason or authority, for upholding the contract in one case and declaring it void in the other."

Question 104: (1) Is it competent for a common carrier to contract against liability for loss arising out of its negligence in connection with its duties as a common carrier?

(2) If one person leases property to another under a contract whereby the lessee assumes all risk of loss, even that arising from the lessor's own negligence, is such provision valid?

(3) Can a common carrier bring itself within this rule? Why?

§ 95. (Contracts, Sec. 63.) Usurious contracts.

Case 105. Planters' Nat. Bank v. Wysong & M. Co., 12 American Lawyers Reports, 1416.

WALKER, J., delivered the opinion of the court:

"There are three principal questions raised in this case: First, was there usury? Second, if so, can it be recovered by way of counterclaim? Third, is the action barred by the statute?

"First. If a bank loans $2,000, at 6 per cent interest, with the understanding and agreement that it shall retain $500 of the amount as a deposit of the borrower in the bank, which shall not be subject to his check or his withdrawal of it, but remain on general deposit under control of the bank, it is evident that the bank is charging and receiving 72 per cent interest, or 12 per cent in excess of the legal rate of interest. The transaction has not even the merit of being an ingenious device to hide or conceal the usury, for it is perfectly apparent what the legal effect is, as the borrower is paying 6 per cent on $2,000, when he is to receive only $1,500. The usury is plain and palpable, and there can be no doubt of the intent, on the part of the bank, to violate the law against the payment of excessive interest, or usury. There are, generally speaking, four elements of usury: (1) A loan or forbearance of money, either express or implied; (2) upon an understanding that the principal shall be or may be returned; (3) and that for such loan or forbearance a greater profit than is authorized by law shall be paid or agreed to be paid; (4) entered into with an intention to violate the law. The fourth element may be implied if all the others are expressed upon the face of the contract; the other three must be established by a sufficiency of evidence. The transaction in question clearly embraces all of these elements. The usury is indisputable. 29 Am. & Eng. Enc. Law, 2d ed. p. 509, states that ‘in the case of loans or discounts by a bank at the highest legal rate of interest, a provision that the proceeds of the loan or discount or any part thereof shall be kept as a deposit

in the bank during the period or a portion of the period of the loan renders the transaction usurious, for the reason that the borrower thus pays interest on money which he does not receive or have the use of.'

Question 105: What was the agreement in Case 105? What are the four elements of usury? Was the charge in this case usurious?

(Note to Case 105. (1) What is usury? Usury is the charging a higher rate for the use of money than the law permits. This rate varies in different states. Any device by which such greater rate is obtained constitutes usury, although called a "commission" or any other name. One who lends money for another may, however, charge a commission for his efforts although the borrower thereby pays in interest and commission a greater sum than the legal rate. Deducting beforehand the full legal interest is not usury.

(2) Penalty for charging usury. Usury once paid cannot be reclaimed. An apparent exception to this is where one is compelled to pay usury to a purchaser of negotiable paper where the usury is hidden. The penalty for charging usury is a civil penalty, and enforceable only at the defense of the borrower when sued on the loan and when he makes that defense. The penalty varies with the jurisdiction from loss of the excess interest to loss of principal.)

Case 106. Bowman v. Neely, 137 Ill. 443, 27 N. E. 758. MR. JUSTICE SHOPE delivered the opinion of the court: "The plaintiff below, John Neely, filed his claim in the county court of Jersey county, against the estate of. Joshua Neely, deceased, upon a promissory note, as follows:

'$3481.31

Jerseyville, Ill., Feb. 12, 1876. 'One year after date, for value received, I promise to pay to the order of John Neely thirty-four hundred eightyone 31/100 dollars, with ten per cent interest from date, at the banking house of Cross, Carlin & Co., interest payable annually, and if not so paid, to become the principal, and to bear the same rate of interest.

'Joshua Neely.'

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"On the note were the following indorsements: 'Oct. 4, 1879, received two thousand dollars on this note;' 'Paid $300, (three hundred dollars,) Nov. 28, 1883;' 'Paid upon the within Feb. 20, 1886, $1000 by M. E. Bagley.'

"The county court allowed the claim, but refused to allow interest upon the interest. On claimant's appeal the cause was tried in the circuit court without a jury, and the court allowed and rendered judgment for the principal and interest, and interest upon interest, as provided in the note. The administrator appealed to the Appellate Court for the Third District, where the judgment of the circuit court was affirmed. The case is brought to this court by the further appeal of the administrator.

It is not contended that the note provides for the payment of usurious interest, or that a sum in excess of the legal rate was reserved therein. The question presented is, whether the interest on the note, if not paid when due, according to the terms of the note, (that is annually,) became principal, and drew interest, and whether such interest upon the interest is collectible, that is, whether compound interest can be contracted to be paid. It is conceded that the interest was not paid when due, or was not paid annually from the date of the note, and it is shown by the two judgments of the county and circuit courts, that a difference of something in excess of $500 will be made if interest upon overdue interest is allowed. It was said in Leonard v. Villars' Admr. 23 Ill. 377: 'To compute interest upon interest after its maturity, has by all courts, whether exercising equity or common law jurisdiction, been held to be compound interest, and in violation of law.' It is clear that the contract is here for compound interest. This question has been considered by this court, and we have uniformly held that compound interest is not recoverable in this State. In the late case of Drury v. Wolfe et ux., 134 Ill. 294, it was said: 'The general rule recognized by this court is, parties can not be bound, by any contract made before interest is due, for the payment of compound interest,'-citing Leonard v.

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