Page:North Dakota Reports (vol. 2).pdf/117

agreed upon to be received for the use, by the borrower, shall be stated in the contract, and, separately therefrom, the rate per cent. thereon of interest contracted to be charged; and if in any contract, either verbal or written, for the loan of money, the borrower receives a less sum than the principal sum so agreed upon and contracted to be loaned to and received by the borrower, the said contract shall be deemed to be usurious, except as otherwise herein provided." The seventh section provides that any broker, loan agent, or other person may receive a compensation for obtaining a loan, or forbearance of money, where such compensation, added to the interest expressed in the contract, does not exceed in the aggregate 12 per cent. per annum interest. If the compensation and interest named exceed 12 per cent., then the entire contract is declared usurious and void. It is apparently conceded, as no question is made on the point, that the note in suit in this case violates the provisions of § 4, above quoted, unless the words, "except as otherwise herein provided," bring the transaction within the provisions of § 7. As the $75 retained added to the 7 per cent. stated in the note, would not exceed in the aggregate 12 per cent. per annum on $500 for five years, it is claimed that the transaction is valid, under $ 7. We cannot admit such construction. In this case there is no middleman. The law can recognize no consideration passing from respondent to appellant except the loan of the money, and the amount retained by respondent was simply interest taken in advance. We do not think the transaction can be brought within the terms of § 7. Section 4 was enacted for a specific, well understood purpose. Few contracts are made that are usurious on their face. It is the almost universal custom to cover up the usury, either by misstating the amount of the loan or the correct rate of interest paid or contracted to be paid. The legislature intended by § 4 to effectually destroy any such cover, and to that end it, in positive terms, required parties to embody in the written contract the true contract, both as to amount loaned and interest paid or contracted to be paid. It matters not what the rate may be. It must be truly stated, or the contract is declared usurious and void. If the contracts mentioned in § 4 are