The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 63
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GEORGE V. OSCAR SMITH & SONS CO.
cation to the facts of the present case still more clearly shows the il-
logical results of the proposition. It will be assumed that the interest
contracted for in this case exceeds 20 per cent. Under the proposition
criticized, and assuming that the contract was made in Pennsylvania,
the Pennsylvania law providing for a forfeiture of the excess interest,
the interest to the extent of 12 per cent. would be forfeited, and no
other consequences would follow. If, however, the laws of Pennsyl-
vania had permitted the making of the contract, the result would be
that the law of the state of Mississippi, where the payment was to be
made, would apply, and that law providing that if the interest is as
much as 20 per cent. the entire debt is to be forfeited, the result would
be that the plaintiff would lose all of his debt. The consequences are
The rule, however, as announced in Andrews v. Pond is entirely
logical. If the contract is void it is necessarily void everywhere, and
no consequences, other than those which result from the absence of a
contract, could take place where the agreement was made or else-
A consideration of the facts hereinbefore recited, and of the author-
ities noted and many others, leads to the conclusion that the contract
here under investigation should be held made with reference to the laws
of Mississippi, and the laws of that state should govern in determining
the rights of the parties to this suit.
Enforcement of Usury Laws by Federal Courts.
Courts of one state will not enforce or otherwise administer the
criminal statutes of another; nor will the courts of the United States
enforce any criminal statutes, except those of the United States. These
propositions must be limited by their application to the relations be-
tween the state and the person accused of violating her laws. As be-
tween two individuals whose contractual relations are affected by the
criminal statutes of the state, the courts of another state, or the courts
of the United States, will administer the resulting legal rights as they
would rights arising in any other way. To illustrate: If the criminal
statutes of the state forbid the doing of a certain thing, and a contract
is entered into between individuals in violation of such a statute, the
statute will be taken into consideration by the courts of another state
having jurisdiction of the subject-matter, or by the courts of the United
States, in a case within their jurisdiction. It may be that the result of
the criminal statute would be to make the contract under considera-
tion void; if so, the court of the other state or of the United States
would so declare. It may be that the criminal statute would have a
lesser effect by declaring the contract void in part, and indicating the
extent, in which case the remedy would be commensurate with the
The principles which have thus been announced have peculiar ap-
plication to the laws of usury. In a number of states the receipt of
usurious interest is made a crime and punished as such. Such a pun-
ishment will, of course, be inflicted alone by the state passing the law.
If in such a state, no other consequences being indicated than the pun-
ishment of the persons entering into the usurious contract, such a con-
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/78/: accessed September 22, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.