[Footnote 1:  Eth., iv. 6.]

[Footnote 2:  De Usuris, c. 10.]

There was another title on account of which more than the amount of the loan could be recovered, namely, periculum sortis.  In one sense it was a contradiction in terms to speak of the element of risk in connection with usury, because from its very definition usury was gain without risk as opposed to profit from a trading partnership, which, as we shall see presently, consisted of gain coupled with the risk of loss.  It could not be lost sight of, however, that in fact there might be a risk of the loan not being repaid through the insolvency of the borrower, or some other cause, and the question arose whether the lender could justly claim any compensation for the undertaking of this risk.  ’Regarded as an extrinsic title, risk of losing the principal is connected with the contract of mutuum, and entitles the lender to some compensation for running the risk of losing his capital in order to oblige a possibly insolvent debtor.  The greater the danger of insolvency, the greater naturally would be the charge.  The contract was indifferent to the object of the loan; it mattered not whether it was intended for commerce or consumption; it was no less indifferent to profit on the part of the borrower; it took account simply of the latter’s ability to pay, and made its charge accordingly.  It resembled consequently the contracts made by insurance companies, wherein there is a readiness to risk the capital sum for a certain rate of payment; the only difference was that the probabilities charged for were not so much the likelihood of having to pay, as the likelihood of not receiving back.’[1]

[Footnote 1:  Cleary, op. cit., p. 115.]

We have referred above, when dealing with the legitimacy of commercial profits, to the difficulty which was felt in admitting the justice of compensation for risk, on account of the Gregorian Decretal on the subject.  The same decree gave rise to the same difficulty in connection with the justification of a recompense for periculum sortis.  There was a serious dispute about the actual wording of the decree, and even those who agreed as to its wording differed as to its interpretation.[1] The justice of the title was, however, admitted by Scotus, who said that it was lawful to stipulate for recompense when both the principal and surplus were in danger of being lost[2]; by Carletus;[3] and by Nider.[4] The question, however, was still hotly disputed at the end of the fifteenth century, and was finally settled in favour of the admission of the title as late as 1645.[5]

[Footnote 1:  Ibid.]

[Footnote 2:  Cleary, op. cit., p. 117.]

[Footnote 3:  Summa Angelica Usura, i. 38.]

[Footnote 4:  De Cont.  Merc., iii. 15.]

[Footnote 5:  Cleary, op. cit., p. 117.]

Sec. 6. Other Cases in which more than the Loan could be repaid.