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Colonial Cases

Pinto, 1936

[usury]

Pinto

Italian Consular Court, Shanghai
Rapex, 1936
Source: The North China Herald, 24 June 1936

 

ITALIAN CONSULAR COURT.

USURY CHARGE PROVED.

STATE v. PINTO.

COUNSEL: Mr. D'Auxion de Ruffe and Dr. G. Constantini for Defendant.

Before Cav. R. Rapex.

   A further sentence of ten months imprisonment and a fine of 5,000 lire was imposed on V. Pin to, manager of the Pinto Bank, by Cav. R. Rapex in the Italian Consular Court on Thursday on a second charge, that of usury. 

   The first charge, that of defrauding the International Assurance Company, Ltd., was brought against Pinto jointly with Mrs. A. Cacciopoli in the Italian Court last week, the first defendant being sentenced on Thursday to 14 months imprisonment, and a fine of 2,000 lire, and the second defendant being sentenced to six months imprisonment, and a fine of 200 lire, the latter sentence being suspended for a period of five years.  An appeal in the first case was immediately lodged by counsel for the defence, M. D'Auxion de Ruffe and Dr. G. Constantini, and is to be heard by a court of appeal; on the island of Rhodes, while a similar appeal has also been filed with regard to the second case.

   The case was adjourned last Thursday to allow an expert to examine defendant's accounts, and the first witness to be called in Thursday's proceedings, Mr. Ferrero, gave evidence that he had examined the books, and had found the book-keeping to be very primitive.  It was very hard to ascertain anything from then, but judging from two operations he found that the percentage of interest on one loan was one per cent per month, and on another loan of $1,000, approximately three per cent per month.

 

   Mr. Garguilo, to whom Pinto had loaned money, declared that on a debt incurred with Pinto in the sum of $800, he agreed that he would pay three per cent per month interest.

   Dr. Constantini, (cross-examining): For what purpose did you need the money?

   The Judge: It makes no difference what he needed it for.

Money From Idiots.

   Pinto, in evidence, was asked by the judge whether he remembered saying to Count T. T. Tatisheff, with whom he was confined in jail for a period, that he obtained money from "idiots."  Defendant declared that he had made that statement, but had not meant it seriously, but as a joke.

   The Judge: It certainly is a great joke.  What percentage interest did you charge? - Only one per cent.

   After having been shown items in his own account book that showed that an interest of more than one per cent had been charged, Pinto declared that he had charged two per cent per month, but the extra one per cent was made up out of insurance, commission, etc.  The judge then pointed out an item amounting to over $1,300, on which an interest of $126 had been charged, and asked defendant how much interest per month he thought this amounted to.

   Dr. Constantini: This has nothing to do with the case.  This particular client has nothing whatever against Pin to.

   The Judge: It shows Pinto's methods of  doing business.

   Pinto then gave the reasons for which the money was required by Garguilo.

   Mrs. Cacciopoli said she had been to see Mr. Garguilo on many occasions for the purpose of collecting from him the  money due on loans from Pinto, and at different timers he had paid to her varying sums in the region of $10-$15, occasionally gibing her a cumshaw of $1, or so.  Showing witness the books of the bank, the judge pointed out payments to Pinto by Garguilo amounting to $50, $50, and $200, when the total debt stood at only $800. After the collection of these sums, declared the judge, the debt still remained at $800, so these must have represented the inertest on the loan.

   The next witness, Mr. Carisio, who had also borrowed money from Pinto, said that he did not explain to Pinto why he needed the money, but Pinto asked him whether he had not a brother in the United States.  Witness said that he had a brother living in America, but stated that he had no connection with the loan.

   "How should I know about his brother in America when he did not tell me about him?" expostulated Pinto to the judge.

Large Interest Paid.

   Carisio continued that he had made shipments of hand-made material to the United States, and had made a handsome profit on the transaction.  He could thus afford to pay Pinto a large interest on the loan.  Pinto, he declared, knew that he had a brother living in the United States, but witness did not say that he needed the money for his brother.

   One of the witnesses heard that day was Count T. T. Tatisheff, who was confined in the same cell with Pinto at the central Police Station, and who subsequently gave evidence in court of conversations which Pinto was alleged to have carried on with him while in jail.  These conversations were of a confidential nature.  Tatisheff, recalled, was asked by the judge whether Pinto had explained to him how much money he could obtain from "idiots."  "He told me that he was taking 12 per cent a year," declared Tatisheff, "but that on top of that there were commissions, provisions, and insurance, wiping out the original interest of 12 per cent.  The interest, he said, came to anything that he wanted it to."

   The Judge: Did he say exactly what amount he was receiving as interest? - When he was speaking on the subject of diamonds, he said that 25 per cent per annum would be permitted.  With regard to real estate, he was telling me that 30 per cent would be a legal rate of interest.

"Financial Sharks"

    After Dr. Constantini had summed up in Italian, M. de Ruffe said that he had no sympathy for those who were financial sharks.  He was pretty well-known for having fought with the press over this kind of person.  Financial sharks were of different species, and the most dangerous were those whom they might call the "smart set."  They were above the law, being particularly powerful.  Against this type of person he had always fought, and always would fight.  When it came to the case of Pinto, the defence had to admit that the interest charged by him was illegally high.

   "But why," continued M. de Ruffe, "should a small fry such as Pinto pay heavily, while the biggest offenders escape."  He admitted that in many cases Pinto had charged a heavy interest, possibly 30-40 per cent.  But it might serve as an excuse to put forward the fact that many people had not paid him that interest, and he therefore lost both the interest and the capital.

   "In the long run," declared M. de Ruffe, "I would not like to undertake such business, because I am afraid that I should be the loser.  In any case, Pinto's business was but a small and insignificant one."  It had been the unfortunate trick of many in Shanghai for a number of years that in some cases a very high rate of interest was considered legal. In one of the high courts in Shanghai, the judge had debarked himself unable to proceed against Indian money-lenders because 45 per cent was considered a legal rate of interest.  When Pinto inquired what was the legal rate of interest, he might have been informed that in some courts the rate of 45 per cent was admissible.

   He had himself conducted an action in the Chinese court because the defendant had charged over 60 per cent interest per year, and the case was dismissed.  Pinto's average charge of three to four per cent a month came down to a very much smaller figure when they looked at the many cases in which he lost money.  In times of depression even the most important banks took a very high rate of interest, and Chinese banks had charged five per cent per month on an overdraft.

   Referring to Count Tatisheff as a "human derelict," counsel said he had better not say anything about a man who condemned a fellow prisoner.  The fact that money had been borrowed for the sake of sending it to a mistress or husband at home was not one that suggested that the circumstances of the borrower were desperate.  In many cases, Pinto had lent the money in a disinterested manner, and only the previous day he himself had been approached by an Englishman who had been loaned money by Pinto with no interest, and wished to give evidence on his behalf.  "The whole thing," counsel concluded, "amounts to much ado about noting, and I would ask for a dismissal of this case."

Published by Centre for Comparative Law, History and Governance at Macquarie Law School