Section — Marc, Institutiones Morales
§ 2. ON PROFIT NOT TO BE PERCEIVED FROM LOAN FOR CONSUMPTION, OR ON USURY
- DEFINITION. In the broader sense, usury is called every profit which someone perceives from money handed over to another in any way whatever, for example for constituting a census, for entering upon partnership, etc. In the strict sense, as it is taken here, usury is profit immediately proceeding from loan for consumption (III, 758), that is, precisely by force of the loan, another title being excluded, or, to use the words of the Fifth Lateran Council: Usury is the profit which one endeavors to acquire by no labor, no expense, no peril (Sess. X, Bull Inter multiplices).
DIVISION. Usury is twofold: 1. real, which is expressed by pact; - 2. mental, which is intended in the mind, without express stipulation.
Usury is called palliated or implicit when it lies hidden under another contract, for example purchase, lease, etc. (III, 761).
(12) St. Alphonsus, III, 758, ed. G., II, p. 203; Carriere, III, p. 226, where there is a copious catalogue of authors; Zech (ap. Migne, Curs. Theol., XVI, p. 763); Funk, Zins u. Wucher; Van Roey, de Justo Auctario; Biederlack, Der Darlehenszins; Vermeersch, De Just., n. 357, where the question is very well explained.
- PRINCIPLES. I. Usury, or profit precisely by force of loan for consumption, is altogether illicit. In other words: Loan for consumption is an essentially gratuitous contract, and both Positive and Natural Law prohibit that one endeavor to acquire profit from a loan for consumption by force of the loan. The first is established from the Encyclical of Benedict XIV, Vix pervenit (1 Nov. 1745), by which the Supreme Pontiff confirms all laws previously enacted, especially those of the Council of Vienne (1313), the Fifth Lateran Council (1515). Cf. Lehmkuhl, I, n. 1301; Bucceroni, Ench. mor., p. 97. - The reason for the second is that it is unlawful to exact profit for the use of a thing not one's own. There is indeed no injustice if, for the utility which the lender loses, he exacts compensation, likewise for the burden which perhaps he undertakes, or which is included in his action (cf. n. 1035); but to exact profit solely because of the utility which the borrower perceives is nothing other than to exact the profit of a thing which has already passed into the ownership of another through handing over, indeed which in many cases already does not exist, since through its use it has already been consumed (III, 759).
Do not say: To furnish another the occasion of acquiring something, or to lack some thing which profits another, are estimable by price. We deny both assertions, on account of the reason given n. 1035, namely that only that is estimable by price which contains some burden in itself. Besides, how could the lack of a plainly useless thing, as is supposed, which immediately passes into the ownership of the borrower, and the imposition of the burden of returning a similar thing at its own time, be called estimable by price?
Therefore usury does not consist in the oppression of the poor alone; even when made toward the rich, it is bad. Read the words of the Bull of Benedict XIV.
Note. The things just said have force for real usury and for mental usury, namely if the loan for consumption were made principally on account of hope of gain, although hoped for from mere benevolence, so that without such hope the loan would not be given. And hence it is why this 42nd proposition was condemned by Innocent XI: "It is not usury when something beyond the principal is exacted as owed from benevolence and gratitude." The reason for the condemnation is that benevolence can never oblige to furnishing gain, since it can be shown in many other ways (III, 762; H. Ap., X, 143).
- II. Usurers and their cooperators are held concerning usuries exacted as concerning a stolen thing. The reason is that a usurious contract is null by every law; but the naked handing over of a thing does not transfer ownership of it (III, 783). See the things said concerning the possessor of bad faith (n. 940 ff.).
Yet the lender can retain what the borrower gave beyond the principal merely gratis, or so that he might show himself grateful, or so that he might prepare for himself a new loan (III, 763).
In the case in which the lender doubts whether the borrower gave gratis or as the price of the loan, one must distinguish: when the lender received in good faith and afterwards, when doubt supervenes, cannot become certain, then he can licitly retain it for himself. But otherwise, if he already received in doubt, whatever others say; because with doubt no one can legitimately begin possession. For the rest, if the borrower was not poor, nor illiberal, nor gave moved by some demand or threats of the lender, then it can be presumed that he gave gratis (H. Ap., X, 144).
- PRACTICAL RULE. For discerning what pacts in a loan for consumption are licit and what are illicit, when no extrinsic title accedes, one must attend to the rule which St. Thomas hands down: "Every burden estimable by price, imposed in a loan for consumption as a debt from justice, is true usury" (2. 2, q. 78, a. 2).
Hence: 1. If what is exacted is not measured by money, as benevolence, friendship, it is not usury; provided that in sign of benevolence some benefit in particular is not exacted, as is clear from the 42nd proposition mentioned above.
- It is not usury to exact something already otherwise owed from justice, for example that the borrower cease from vengeance, from unjust vexation, etc.; because a new burden is not imposed. But it would be usury to exact a debt which is owed from charity alone, for example that the borrower buy from oneself or from one's relatives; because, when such a pact has been placed, a burden of justice is added, which is estimable by price (cf. above n. 1036, Quaer. 2, n. 2). See St. Alphonsus, III, 774, 780, 781; H. Ap., X, 158-160.
- IT IS ASKED. What can the lender recover when THE VALUE OF THE THING grew or decreased during the time of the loan?
Resp. 1. If in good faith attention is not given to the increase or decrease which will supervene upon the thing lent, a pact can be made in such a way that the thing be returned in the same quantity. Likewise, if it is equally doubtful whether the value of the thing is to be increased or diminished. The reason is that, since the peril is equal on each side, equality by this very fact is already preserved in the contract.
- If it is certainly or more probably foreseen that the value of the thing is going to be increased, it is not licit to agree that it be returned in the same quantity: for example, if a bushel of wheat is now worth three lire, and is going to be worth four at the time of restitution, it is not licit to agree that just as many be paid, or that a whole bushel be returned. The reason is that, in this way, more would be accepted than was given.
Except unless the lender had determined to preserve the thing until the time of increased price; because then he can exact more by reason of profit ceasing. Yet the valuation of peril, or of expenses for preserving the thing, must be deducted.
- If certainly or probably the thing at the time of restitution is considered going to be of less value, the lender will be able to seek a greater measure, so that he may preserve himself unharmed (III, 782; H. Ap., X, 160).
As concerns money, it suffices that it be restored according to the same value, "because in money one does not think of the bodies, but of the quantity." Yet a pact is licit that it be returned in the same species and in the same number of coins, at least if the peril of increase or decrease is common (Sacred Penitentiary, 21 Jan. 1873; A. S. S., vol. 7, p. 221).