INTEREST, estates. The right which a man has in a chattel real, and
more particularly in a future term. It is a word of less efficacy and extent
than estates, though, in legal understanding, an interest extends to estates,
rights and titles which a man has in or out of lands, so that by a grant of his
whole interest in land, a reversion as well as the fee simple shall pass. Co.
INTEREST, contracts. The right of property which a man has in a thing,
commonly called insurable interest. It is not easy to give all accurate
definition of insurable interest. 1 Burr. 480; 1 Pet. R. 163; 12 Wend. 507 16
Wend. 385; 16 Pick. 397; 13 Mass. 61, 96; 3 Day, 108; 1 Wash. C. C. Rep.
2. The policy of commerce and the various complicated. rights which different
persons may have in the same thing, require that not only those who have an
absolute property in ships and goods, but those also who have a qualified
property therein, may be at liberty to insure them. For example, when a ship is
mortgaged, after, the mortgage becomes absolute, the owner of the legal estate
has an insurable interest, and the mortgagor, on account of his equity, has also
an insurable interest. 2 T. R. 188 1 Burr. 489; 13 Mass. 96; 10 Pick. 40 and see
1 T. R. 745; Marsh. Ins. h. t.; 6 Meeson & Welshy, 224.
3. A man may not only insure his own life for the benefit of his heirs or
creditors, and assign the benefit of this insurance to others having thus or
otherwise an interest in his life, but be may insure the life of another in
which he may be interested. Marsh. Ins. Index, h. t.; Park, Ins. Index, h. t.; 1
Bell's Com. 629, 5th ed.; 9 East, R. 72. Vide Insurance.
INTEREST, evidence. The benefit which a person has in the matter about
to be decided and which is in issue between the parties. By the term benefit is
here understood some pecuniary or other advantage, which if obtained, would
increase the, witness estate, or some loss, which would decrease it.
2. It is a general rule that a party who has an interest in the cause cannot
be a witness. It will be proper to consider this matter by taking a brief view
of the thing or subject in dispute, which is the object of the interest; the
quantity of interest; the quality of interest; when an interested witness can be
examined; when the interest must exist; how an interested witness can be
3. - 1. To be disqualified on the ground of interest, the witness must gain
or lose by the event of the cause, or the verdict must be lawful evidence for or
against him in another suit, or the record must be an instrument of evidence for
or against him. 3 John. Cas. 83; 1 Phil. Ev. 36; Stark. Ev. pt. 4, p. 744. But
an interest in the question does not disqualify the witness. 1 Caines, 171; 4
John. 302; 5 John. 255; 1 Serg. & R. 82, 36; 6 Binn. 266; 1 H. & M. 165,
4. - 2. The magnitude of the interest is altogether immaterial, even a
liability for the most trifling costs will be sufficient. 5 T. R. 174; 2 Vern.
317; 2 Greenl. 194; 11 John. 57.
5. - 3. With regard to the quality, the interest must be legal, as
contradistinguished from mere prejudice or bias, arising from relationship,
friendship, or any of the numerous motives by which a witness may be supposed to
be influenced. Leach, 154; 2 St. Tr. 334, 891; 2 Hawk. ch. 46, s. 25. It must be
a present, certain, vested interest, and not uncertain and contingent. Dougl.
134; 2 P. Wms. 287; 3 S. & R. 132; 4 Binn. 83; 2 Yeates, 200; 5 John. 256; 7
Mass. 25. And it must have been acquired without fraud. 3 Camp. 380; l M. &
S. 9; 1 T. R. 37.
6. - 4. To the general rule that interest renders a witness incompetent,
there are some exceptions. First. Although the witness may have an interest, yet
if his interest is equally strong on the other side, and no more, the witness is
reduced to a state of neutrality by an equipoise of interest, and the objection
to his testimony ceases. 7 T. R. 480, 481, n.; 1 Bibb, R. 298; 2 Mass. R. 108; 2
S. & R. 119; 6 Penn. St. Rep. 322.
7. Secondly. In some instances the law admits the testimony of one
interested, from the extreme necessity of the case; upon this ground the servant
of a tradesman is admitted to prove the delivery of goods and the payment of
money, without any release from the master. 4 T. R. 490; 2 Litt. R. 27.
8. - 5. The interest, to render the witness disqualified, must exist at the
time of his examination. A deposition made at a time when the witness had no
interest, may be read in evidence, although he has afterwards acquired an
interest. 1 Hoff. R. 21.
9. - 6. The objection to incompetency on the ground of interest may be
removed by an extinguishment of that interest by means of a release, executed
either by the witness, when he would receive an advantage by his testimony, or
by those who have a claim upon him when his testimony would be evidence of his
liability. The objection may also be removed by payment. Stark. Ev. pt. 4, p.
757. See Benth. Rationale of Jud. Ev. 628-692, where he combats the established
doctrines of the law, as to the exclusion on the ground of interest; and
INTEREST FOR MONEY, contracts. The compensation which is paid by the
borrower to the lender or b the debtor to the creditor for its use.
2. It is proposed to consider, 1. Who is bound to pay iuterest. 2. Who is
entitled to receive it. 3. On what claim it is allowed. 4. What interest is
allowed. 5. How it is computed. 6. When it will be barred. 7. Rate of interest
in the different states.
3. 1. Who is bound to pay interest 1. The contractor himself, who has agreed,
either expressly or by implication, to pay interest, is of course bound to do
4. - 2. Executors, administrators, assignees of bankrupts or of insolvents,
and trustees, who have kept money an unreasonable length of time, and have made
or who might have made it productive, are chargeable with interest. 2 Ves. 85; 1
Bro. C. C. 359; Id. 375; 2 Ch. Co. 235; Chan. Rep. 389; 1 Vern. 197; 2 Vern.
548; 3 Bro. C. C. 73; Id. 433; 4 Ves. 620; 1 Johns. Ch. R. 508; Id. 527, 535, 6;
Id. 620; 1 Desaus. Ch. R. 193, n; Id. 208; 1 Wash. 2; 1 Binn. R. 194; 3 Munf.
198, Pl. 3: Id. 289, pl. 16; 1 Serg. & Rawle, 241, 4 Desaus. Ch. Rep. 463; 5
Munf. 223, pl. 7, 8; 1 Ves. jr. 236; Id. 452; Id. 89; 1 Atk. 90; see 1 Supp. to
Ves. jr. 30; 11 Ves. 61; 15 Ves. 470; 1 Ball & Beat. 230; 1 Supp. to Ves.
jr. 127, n. 3; 1 Jac. & Wall. 140; 3 Meriv. 43; 2 Bro. C.C. 156: 5 Ves. 839;
7 Ves. 152; 1 Jac. & Walk. 122; 1 Pick. 530; 13 Mass. R. 232; 3 Call, 538; 4
Hen. & Munf. 415; 2 Esp. N. P. C. 702; 2 Atk. 106; 2 Dall. 182; 4 Serg.
& Rawle, 116; 1 Dall. 349; 3 Binn. 121. As to the distinction between
executors and trustees, see Mr. Coxes note to Fellows v. Mitchell, 1 P. Wms.
241; 1 Eden, 857, and the cases there collected.
5. - 3. Tenant for life must pay interest on encumbrances on the estate. 4
Ves. 33; 1 Vern. 404, n. by Raithby. In Pennsylvania the heir at law is not
bound to pay interest on a mortgage given by his ancestor.
6. - 4. In Massachusetts a bank is liable, independently of the statute of
1809, c. 87, to pay interest on their bills, if not paid when presented for
payment. 8 Mass. 445.
7. - 5. Revenue officers must pay interest to the United States from the time
of receiving the money. 6 Binney's Rep. 266.
8. - 1 Who are entitled to receive interest. 1. The lender upon an express or
9. - 2. An executor was not allowed interest in a case where money due to his
testatrix was out at interest, and before money came to his hands, he advanced
his own in payment of debts of the testatrix. Vin. Ab. tit. Interest, C. pl.
10. In Massachusetts a trustee of property placed in his hands for security,
who was obliged to advance money to protect it, was allowed interest at the
compound rate. 16 Mass. 228.
11. - 3. On what claims allowed. First. On express contracts. Secondly. On
implied contracts. And, thirdly. On legacies.
12. First. On express contracts. 1. When the debtor expressly undertakes to
pay interest, he or his personal representatives having assets are bound to pay
it. But if a party has accepted the principal, it has been determined that he
cannot recover interest in a separate action. 1 Esp. N. P. C. 110; 3 Johns. 220.
See 1 Camp. 50; 1 Dall. 315; Stark. Ev. pt. iv. 787; 1 Hare & Wall. Sel.
13. Secondly. On implied contracts. 1. On money lent, or laid out for
another's use. Bunb. 119; 2 Bl. Rep. 761; S. C. 3 Wils. 205; 2 Burr. 1077; 5
Bro. Parl. Ca 71; 1 Ves. jr. 63; 1 Dall. 349; 1 Binn. 488; 2 Call, 102; 2 Hen.
& Munf. 381; 1 Hayw. 4; 3 Caines' Rep. 226, 234, 238, 245; see 3 Johns. Cas.
303; 9 Johns. 71; 3 Caines' Rep. 266; 1 Conn. Rep. 32; 7 Mass. 14; 1 Dall. 849;
6 Binn. R. 163; Stark. Ev. pt. iv. 789, n. (y), and (z); 11 Mass. 504; 1 Hare
& Wall. Sel. Dec. 346.
14. - 2. For goods sold and delivered, after the customary or stipulated term
of credit has expired. Doug. 376; 2 B. & P. 337; 4 Dall. 289; 2 Dall. 193; 6
Binn. 162; 1 Dall. 265, 349.
15. - 3. On bills and notes. If payable at a future day certain, after due;
if payable on demand, after. a demand made. Bunb. 119; 6 Mod. 138; 1 Str. 649; 2
Ld. Raym. 733; 2 Burr. 1081; 5 Ves. jr. 133; 15 Serg. & R. 264. Where the
terms of a promissory note are, that it shall be payable by instalments, and on
the failure of any instalment, the whole is to become due, interest on the whole
becomes payable from the first default. 4 Esp. 147. Where, by the terms of a
bond, or a promissory note, interest is to be paid annually, and the principal
at a distant day, the interest may be recovered before the principal is due. 1
Binn. 165; 2 Mass. 568; 3 Mass. 221.
16. - 4. On an account stated, or other liquidated sum, whenever the debtor
knows precisely what he is to pay, and when he is to pay it. 2 Black. Rep. 761;
S. C. Wils. 205; 2 Ves. 365; 8 Bro. Parl. C. 561; 2 Burr. 1085; 5 Esp. N. P. C.
114; 2 Com. Contr. 207; Treat. Eq. lib. 5, c. 1, s. 4; 2 Fonb. 438; 1 Hayw. 173;
2 Cox, 219; 1 V. & B. 345; 1 Supp. to Ves. jr. 194; Stark. Ev. pt. iv. 789,
n. (a). But interest is not due for unliquidated damages, or on a running
account where the items are all on one side, unless otherwise agreed upon. 1
Dall. 265; 4 Cowen, 496; 6 Cowen, 193; 5 Verm. 177; 2 Wend. 501; 1 Spears, 209;
Rice, 21; 2 Blackf. 313; 1 Bibb, 443.
17. - 5. On the arrears of an annuity secured by a specially. 14 Vin. Ab.
458, pl. 8; 3 Atk. 579; 9 Watts, R. 530.
18. - 6. On a deposit by a purchaser, which he is entitled to recover back,
paid either to a principal, or an auctioneer. Sugd. Vend. 327.; 3 Campb. 258; 5
Taunt. 625. Sed vide 4 Taunt. 334, 341.
19. - 7. On purchase money, which has lain dead, where the vendor cannot make
a title. Sugd. Vend. 327.
20. - 8. On purchase money remaining in purchaser's hands to pay off
encumbrances. 1 Sch. & Lef 134. See 1 Wash. 125; 5 Munf. 342; 6 Binn.
21. - 9. On judgment debts. 14 Vin. Abr. 458, pl. 15; 4 Dall. 251; 2 Ves.
162; 5 Binn. R. 61; Id. 220; 1 Harr. & John. 754; 3 Wend. 496; 4 Metc. 317;
1 Hare & Wall. Sel. Dec. 350. In Massachusetts the principal of a judgment
is recovered by execution; for the interest the plaintiff must bring an action.
14 Mass. 239.
22. - 10. On judgments affirmed in a higher court. 2 Burr. 1097; 2 Str. 931;
4 Burr. 2128; Dougl. 752, n. 3; 2 H. Bl. 267; Id. 284; 2 Camp. 428, n.; 3 Taunt.
503; 4 Taunt. 30.
23. - 11. On money obtained by fraud, or where it has been wrongfully
detained. 9 Mass. 504; 1 Camp. 129; 3 Cowen, 426.
24. - 12. On money paid by mistake, or recovered on a void execution. 1 Pick.
212; 9 Berg. & Rawle, 409
25. - 13. Rent in arrear due by covenant bears interest, unless under special
circumstances, which may be recovered in action; 1 Yeates, 72; 6 Binn. 159; 4
Yeates, 264; but no distress can be made for such interest. 2 Binn. 246.
Interest cannot, however, be recovered for arrears of rent payable. in wheat. 1
Johns. 276. See 2 Call, 249; Id. 253; 3 Hen. & Munf. 463; 4 Hen. & Munf.
470; 5 Munf. 21.
26. - 14. Where, from the course of dealing between the parties, a promise to
pay interest is implied. 1 Campb. 50; Id. 52 3 Bro. C. C. 436; Kirby, 207.
27. Thirdly, Of interest on legacies. 1. On specific legacies. Interest on
specific legacies is to be calculated from the date of the death of testator. 2
Ves. sen. 563; 6 Ves. 345 5 Binn. 475; 3 Munf. 10.
28. - 2. A general legacy, when the time of payment is not named by the
testator, is not payable till the end of one year after testator's death, at
which time the interest commences to run. 1 Ves. jr. 366; 1 Sch. & Lef. 10;
5 Binn. 475; 13 Ves. 333; 1 Ves. 308 3 Ves. & Bea. 183. But where only the
interest is given, no payment will be due till the end of the second year, when
the interest will begin to run. 7 Ves. 89.
29. - 3. Where a general legacy is given, and the time of payment is named by
the testator, interest is not allowed before the arrival of the appointed period
of payment, and that notwithstanding the legacies are vested. Prec. in Chan.
837. But when that period arrives, the legatee will be entitled, although the
legacy be charged upon a dry reversion. 2 Atk. 108. See also Daniel's Rep. in
Exch. 84; 3 Atk. 101; 3 Ves. 10; 4 Ves. 1; 4 Bro. C. C. 149, n.; S. C. 1 Cox,
l33. Where a legacy is given payable at a future day with interest, and the
legatee dies before it becomes payable, the arrears of the interest up to the
time of his death must be paid to his personal representatives. McClel. Exch.
Rep. 141. And a bequest of a sum to be paid annually for life bears interest
from the death of testator. 5 Binn. 475.
30. - 4. Where the legatee is a child of the testator, or one towards whom he
has placed himself in loco parentis, the legacy bears interest from the
testator's death, whether it be particular or residuary; vested, but payable It
a future time, or contingent, if the child have no maintenance. In that case the
court will do what, in common presumption, the father would have done, provide
necessaries for the child. 2 P. Wms. 31; 3 Ves. 287; Id. 13; Bac. Abr. Legacies,
K 3; Fonb. Eq. 431, n. j.; 1 Eq. Cas. Ab. 301, pl. 3; 3 Atk. 432; 1 Dick. Rep.
310; 2 Bro. C. C. 59; 2 Rand. Rep. 409. In case of a child in ventre sa mire, at
the time of the father's decease, interest is allowed only from its birth. 2
Cox, 425. Where maintenance or interest is given by the will, and the rate
specified, the legatee will not, in general, be entitled to claim more than the
maintenance or rate specifled. 3 Atk. 697, 716 3 Ves. 286, n. and see further,
as to interest in cases of legacies to children, 15 Ves. 363; 1 Bro. C. C,. 267:
4 Madd. R. 275; 1 Swanst. 553; 1 P. Wms. 783; 1 Vern. 251; 3 Vesey & Beames,
81. - 5. Interest is not allowed by way of maintenance to any other person
than the legitimate children of the testator; 3 Ves. 10; 4 Ves. 1; unless the
testator has put himself in loco parentis. 1. Sch. & Lef. 5, 6. A wife; 15
Ves. 301; a niece; 3 Ves. 10; a grandchild; 15 Ves. 301; 6 Ves. 546; 12 Ves. 3;
1 Cox, 133; are therefore not entitled to interest by way of maintenance. Nor is
a legitimate child entitled to such interest if he have a maintenance; although
it may be less than the amount of the interest of the legacy. 1 Scho. & Lef.
5: 3 Ves. 17. Sed vide 4 John. Ch. Rep. 103; 2 Rop. Leg. 202.
32. - 6. Where an intention though not expressed is fairly inferable from the
will, interest will be allowed. 1 Swanst. 561, note; Coop. 143.
33. - 7. Interest is not allowed for maintenance, although given by immediate
bequest for maintenance, if the parent of the legatee, who is under moral
obligation to provide for him, be of sufficient ability, so that the interest
will accumulate for the child's benefit, until the principal becomes payable. 3
Atk. 399; 3 Bro. C. C. 416; 1 Bro. C. C. 386; 3 Bro. C. C. 60. But to this rule
there are some exceptions. 3 Ves. 730; 4 Bro. C. C. 223; 4 Madd. 275, 289; 4
34. - 8. Where a fund, particular or residuary, is given upon a contingency,
the intermediate interest undisposed of, that is to say, the intermediate
interest between the testator's death, if there be no previous legatee for life,
or, if there be, between the death of the previous taker and the happening of
the contingency, will sink into the residue for the benefit of the next of kin
or executor of the testator, if not bequeathed by him; but if not disposed of,
for the benefit of his residuary legatee. 1 Bro. C. C. 57; 4 Bro. C. C. 114;
Meriv. 384; 2 Atk. 329; Forr. 145; 2 Rop. Leg. 224.
85. - 9. Where a legacy is given by immediate bequest whether such legacy be
particular or residuary, and there is a condition to divest it upon the death of
the legatee under twenty-one, or upon the happening of some other event, with a
limitation over, and the legatee dies before twenty-one, or before such other
event happens, which nevertheless does take place, yet as the legacy was payable
at the end, of a year after the testator's death, the legatee's representatives,
and not the legatee over, will be entitled to the interest which accrued during
the legatee's life, until the happening of the event which was to divest the
legacy. 1 P. Wms. 500; 2 P. Wms. 504; Ambl. 448; 5 Ves. 335; Id. 522.
36. - 10. Where a residue is given, so as to be vested but not payable at the
end of the year from the testator's death, but upon the legatee's attaining
twenty-one, or upon any other contingency, and with a bequest over divesting the
legacy, upon the legatee's dying under age, or upon the happening of the
contingency, then the legatee's representatives in the former case, and the
legatee himself in the latter, shall be entitled to the interest that became
due, during the legatee's life, or until the happening of the contingency; 2 P.
Wms. 419; 1 Bro. C. C. 81; Id. 335; 3 Meriv. 335.
37. - 11. Where a residue of personal estate is given, generally, to one for
life with remainder over, and no mention is made by the testator respecting the
interest, nor any intention to the contrary to be collected from the will, the
rule appears to be now settled that the person taking for life is entitled to
interest from the death of the testator, on such part of the residue, bearing
interest, as is not necessary for, the payment of debts. And it is immaterial
whether the residue is only given generally, or directely to be laid out, with
all convenient speed, in funds or securities, or to be laid out in lands. See 6
Ves. 520; 9 Ves. 549, 553; 2 Rop. Leg. 234; 9 Ves. 89.
38. - 12. But where a residue is directed to be laid out in land, to be
settled on one for life, with remainder over, and the testator directs the
interest to accumulate in the meantime, until the money is laid out in lands, or
otherwise invested on security, the accumulation shall cease at the end of one
year from the testator's death, and from that period. the tenant for life shall
be to the interest. 6 Ves. 520; 7 Ves. 95; 6 Ves. 528; Id. 529; 2 Sim. &
39. - 13. Where no time of payment is mentioned by the testator, annuities
are considered as commencing from the death of the testator; and consequently
the first payment will be due at the end of the year from that event if,
therefore, it be not made then, interest, in those cases wherein it is allowed
at all, must be computed from that period. 2 Rop. Leg. 249; 5 Binn. 475. See 6
Mass. 37; 1 Hare & Wall. Sel. Dec. 356.
40. - 4. As to the quantum or amount of interest allowed. 1. During what
time. 2. Simple interest. 3. Compound interest. 4. In what cases given beyond
the penalty of a bond. 5. When foreign interest is allowed.
41. First. During what time. 1. In actions for money had and received,
interest is allowed, in Massachusetts, from the time of serving the writ. 1
Mass. 436. On debts payable on demand, interest is payable only from the demand.
Addis. 137. See 12 Mass. 4. The words "with interest for the same," bear
interest from date. Addis. 323-4; 1 Stark. N. P. C. 452; Id. 507.
42. - 2. The mere circumstance of war existing between two nations, is not a
sufficient reason for abating interest on debts due by the subjects of one
belligerent to another. 1 Peters' C. C. R. 524. But a prohibition of all
intercourse with an enemy, during war, furnishes a sound reason for the
abatement of interest until the return of peace. Id. See,, on this subject, 2
Dall. 132; 2 Dall. 102; 4 Dall. 286; 1 Wash. 172; 1 Call 194; 3 Wash. C. C. R.
396; 8 Serg. & Rawle, 103; Post. 7.
43. Secondly. Simple interest. 1. Interest upon interest is not allowed
except in special cases 1 Eq. Cas. Ab. 287; Fonbl. Eq. b. 1, c. 4, note a; U. S.
Dig. tit. Accounts, IV.; and the uniform current of decisions is against it, as
being a hard, oppressive exaction, and tending to usury. 1 Johns. Ch. R. 14;
Cam. & Norw. Rep. 361. By the civil law, interest could not be demanded
beyond the principal sum, and payments exceeding that amount, were applied to
the extinguishment of the principal. Ridley's View of the Civil, &c. Law,
84; Authentics, 9th Coll.
44. Thirdly. Compound interest. 1. Where a partner has overdrawn the part
nership funds, and refuses, when called upon to account, to disclose the
profits, recourse would be had to compound interest as a substitute for the
profits he might reasonably be supposed to have made. 2 Johns. Ch. R. 213.
45. - 2. When executors, administrators, or trustees, convert the trust money
to their own use, or employ it in business or trade, they are chargeable with
compound interest. 1 Johns. Ch. R. 620.
46. - 3. In an action to recover the annual interest due on a promissory
note, interest will be allowed on each year's interest until paid. 2 Mass. 568;
8 Mass. 455. See, as to charging compound interest, the following cases: 1
Johns. Ch. Rep. 550; Cam. & Norw. 361; 1 Binn. 165; 4 Yeates' 220; 1 Hen.
& Munf. 4; 1 Vin. Abr. 457, tit. Interest, C; Com. Dig. Chancery, 3 S 3; 3
Hen. & Munf. 89; 1 Hare & Wall. Sel. Dec. 371. An infant's contract to
pay interest on interest, after it has accrued, will be binding upon him, when
it is for his benefit. 1 Eq. Cas. Ab. 286; 1 Atk. 489; 3 Atk. 613. Newl. Contr.
47. Fourthly. When given beyond the Penalty of a bond. 1. It is a general
rule that the penalty of a bond limits the amount of the recovery. 2 T. R. 388.
But, in some cases, the interest is recoverable beyond the amount of the
penalty. The recovery depends on principles of law, and not on the arbitrary
discretion of a jury. 3 Caines' Rep. 49.
48. - 2. The exceptions are, where the bond is to account for moneys to be
received 2 T. R. 388; where the plaintiff is kept out of his money by writs of
error; 2 Burr. 1094; 2 Evans' Poth. 101-2 or delayed by injunction; 1 Vern. 349;
16 Vin. Abr. 303; if the recovery of the debt be delayed by the obligor; 6 Ves.
92; 1 Vern. 349; Show. P. C. 15; if extraordinary emoluments are derived from
holding the money; 2 Bro. P. C. 251; or the bond is taken only as a collateral
security; 2 Bro. P. C. 333; or the action be on a judgment recovered on a bond.
1 East, R. 486. See, also, 4 Day's Cas. 30; 3 Caines' R. 49; 1 Taunt. 218; 1
Mass. 308; Com. Dig. Chancery, 3 S 2; Vin. Abr. Interest, E.
49. - 3. But these exceptions do not obtain in the administration of the
debtor's assets, where his other creditors might be injured by allowing the bond
to be rated beyond the penalty. 5 Ves. 329; See Vin. Abr. Interest, C, pl.
50. Fifthly. When foreign interest is allowed. 1. The rate of interest
allowed by law where the contract is made, may, in general, be recovered; hence,
where a note was given in China, payable eighteen months after date, without any
stipulation respecting interest, the court allowed the Chinese interest of one
per cent. per mouth from the expiration of the eighteen months. 1 Wash. C. C. R.
51. - 2. If a citizen of another state advance money there, for the benefit
of a citizen of the state of Massachusetts, which the latter is liable to
reimburse, the former shall recover interest, at the rate established by the
laws of the place where he lives. 12 Mass. 4. See, further, 1 Eq. Cas. Ab. 289;
1 P. Wms. 395; 2 Bro. C. C. 3; 14 Vin. Abr. 460, tit. Interest, F.
52. - 5. How computed. 1. In casting interest on notes, bonds, &c., upon
which partial payments have been made, every payment is to be first applied to
keep down the interest, but the interest is: never allowed to form a part of the
principal so as to carry interest. 17 Mass. R. 417; 1 Dall. 378.
53. - 2. When a partial payment exceeds the amount of interest due when it is
made, it is correct to compute the interest to the time of the first, payment,
add it to the principal, subtract the payment, cast interest on the remainder to
the time of the second payment, add it to the remainder, and subtract the second
payment, and in like manner from one payment to another, until the time of
judgment. 1 Pick. 194; 4 Hen. & Munf. 431; 8 Serg. & Rawle' 458; 2 Wash.
C. C. R. 167. See 3 Wash. C. C. R. 350; Id. 396.
54. - 3. Where a partial payment is made before the debt is due, it cannot be
apportioned, part to the debt and part to the interest. As, if there be a bond
for one hundred dollars, payable in one year, and, at the expiration of six
months fifty dollars be paid in. This payment shall not be apportioned part to
the principal and part to the interest, but at the end of the year, interest
shall be charged on the whole sum, and the obligor shall receive credit for the
interest of fifty dollars for six mouths. 1 Dall. 124.
55.- 6. When interest will be barred. 1. When the money due is tendered to
the person entitled to it, and he refuses to receive it, the interest ceases. 3
Campb. 296. Vide 8 East, 168; 3 Binn. 295.
56. - 2. Where the plaintiff was absent in foreign parts, beyond seas,
evidence of that fact may be given in evidence to the jury on the plea of
payment, in order to extinguish the interest during such absence. 1 Call, 133.
But see 9 Serg. & Rawle, 263.
57. - 3. Whenever the law prohibits the payment of the principal, interest,
during the prohibition, is not demandable. 2 Dall. 102; 1 Peters' C. C. R. 524.
See, also, 2 Dall. 132; 4 Dall. 286.
58. - 4. If the plaintiff has accepted the principal, he cannot recover the
interest in a separate action. 1 Esp. N. P. C. 110; 3 Johns. 229. See 14 Wend.
59.- 7. Rate of interest allowed by law in the different states. Alabama.
Eight per centum per annum is allowed. Notes not exceeding one dollar bear
interest at the rate of one hundred per centum per annum. Some of the bank
charters prohibit certain banks from charging more than six per cent. upon bills
of exchange, and notes negotiable at the bank, not having more than six months
to run; and, over six and under nine, not more than seven per cent. and over
nine months, to charge not more than eight per cent. Aikin's Dig. 236.
60. Arkansas. Six per centum per annum is the legal rate of interest; but the
parties may agree in writing for the payment of interest not exceeding ten per
centum per annum, on money due and to become due on any contract, whether under
seal or not. Rev. St. c. 80, s. 1, 2. Contracts where a greater amount is
reserved are declared to be void. Id. s. 7. But this provision will not affect
an innocent endorsee for a valuable consideration. Id. s. 8.
61. Connecticut. Six per centum is the amount allowed by law.
62. Delaware. The legal amount of interest allowed in this state is at the
rate of six per centum per annum. Laws of Del. 314.
63. Georgia. Eight per centum per annum interest is allowed on all liquidated
demands. 1 Laws of Geo. 270; 4 Id. 488; Prince's Dig. 294, 295.
64. Illinois. Six per centum per annum is the legal interest allowed when
there is no contract, but by agreenment the parties may fix a greater rate. 3
Griff. L. Reg. 423.
65. Indiana. Six per centum per annum is the rate fixed by law, except in
Union county. On the following funds loaned out by the state, namely, Sinking,
Surplus, Revenue, Saline, and College funds, seven per cent.; on the Common
School Fund, eight per cent. Act of January 31, 1842.
66. Kentucky. Six per centum per annum is allowed by law. There is no
provision in favor of any kind of loan. See Sessions Acts, 1818, p. 707.
67. Louisiana. The Civil Code provides, art. 2895, as follows: Interest is
either legal or conventional. Legal interest is fixed at the following, rates,
to wit: at five per cent. on all sums which are the object of a judicial demand,
whence this is called judicial interest; and Rums discounted by banks, at the
rate established by their charters. The amount of conventional interest cannot
exceed ten per cent. The same must be fixed in writing, and the testimonial
proof of it is not admitted. See, also, art. 1930 to 1939.
68. Maine. Six per centum per annum is the legal interest, and any contract
for more is voidable as to the excess, except in case of letting cattle, and
other usages of a like nature, in practice among farmers, or maritime contracts
among merchants, as bottomry, insurance, or course of exchange, as has been
heretofore practiced. Rev. St. 4, c. 69, 1, 4.
69. Maryland. Six per centum per annum, is the. amount limited by law, in all
70. Massachusetts. The interest of money shall continue to be at the rate of
dollars, and no more, upon one hundred dollars for a year; and at the same rate
for a greater or less sum, and for a longer or shorter time. Rev. Stat. c. 35,
71. Michigan. Seven per centum is the legal rate of interest; but on
stipulation in writing, interest is allowed to any amount not exceeding ten per
cent. on loans of money, but only on such loans. Rev. St. 160, 161.
72. Mississippi. The legal interest is six per centum; but on all bonds,
notes, or contracts in writing, signed by the debtor for the bona fide loan of
money, expressing therein the rate of interest fairly agreed on between the
parties for the use of money so loaned, eight per cent. interest is allowed.
Laws of 1842.
73. Missouri. When no contract is made as to interest, six per centum per
annum is allowed. But the parties may agree to pay any higher rate, not
exceeding ten per cent. Rev. Code, 1, p. 383.
74. New Hampshire. No person shall take interest for the loan of money,
wares, or merchandise, or any other personal estate whatsoever, above the value
of six pounds for the use or forbearance of one hundred pounds for a year, and
after that rate for a greater or lesser sum, or for a longer or shorter time.
Act of February 12, 1791, s. 1. Provided, that nothing in this act shall extend
to the letting of cattle, or other usages of a like nature, in practice among
farmers, or to maritime contracts among merchants as bottomry, insurance, or
course of exchange, as hath been heretofore used. Id. s. 2.
75. New Jersey. Six per centum per annum is the interest allowed by law for
the loan of money, without any exception. Statute of December 5, 1823, Harr.
76. New York. The rate is fixed at seven per centum per annum. Rev. Stat.
part 2, c. 4, t. 3, s. 1. Moneyed institutions, subject to the safety-fund act,
are entitled to receive the legal interest established, or which may thereafter
be established by the laws of this state, on all loans made by them, or notes,
or bills, by them severally discounted or received in the ordinary course of
business; but on all notes or bills by them discounted or received in the
ordinary course of business, which shall be matured in sixty-three days from the
time of such discount, the said moneyed corporations shall not take or receive
more than at the rate of six per centum per annum in advance. 2 Rev. Stat. p.
77. North Carolina. Six per centum per annum is the interest allowed by law.
The banks are allowed to take the interest off at the time of making a
78. Ohio. The legal rate of interest on all contracts, judgments or decrees
in chancery, is six per centum. per annum, and no more. 29 Ohio Stat. 451;
Swan's Coll. Laws, 465. A contract to pay a higher rate is good for principal
and interest, and void for the excess. Banks are bound to pay twelve per cent.
interest on all their notes during a suspension of specie payment. 37 Acts 30,
Act of February 25, 183,9, Swan's Coll. 129.
79. Pennsylvania. Interest is allowed at the rate of six per centum per annum
for the loan or use of money or other commodities. Act of March 2, 1723. And
lawful interest is allowed on judgments. Act of 1700, 1 Smith's L. of Penn. 12.
See 6 Watts, 53; 12 S. & R. 47; 13 S. & R. 221; 4 Whart. 221; 6 Binn.
435; 1 Dall. 378; 1 Dall. 407; 2 Dall. 92; 1 S. & R. 176; 1 Binn. 488; 2
Pet. 538; 8 Wheat. 355.
80. Rhode Island. Six per centum is allowed for interest on loans of money. 3
Griff. Law Reg. 116.
81. South Carolina. Seven per centum per annum, or at that rate, is allowed
for interest. 4 Cooper's Stat. of S. C. 364. When more is reserved, the amount
lent and interest may be recovered. 6 Id. 409.
82. Tennessee. The interest allowed by law is six per centum per annum. When
more is charged it is not recoverable, but the principal and legal interest may
be recovered. Act of 1835, c. 50, Car. & Nich. Comp. 406, 407.
83. Vermont. Six per centum per annum is the legal interest. If more be
charged and paid, it may be recovered back in an action of assumpsit. But these
provisions do not extend "to the letting of cattle and other, usages of a like
nature among farmers, or maritime contracts, bottomry or course of exchange, as
has been customary." Rev. St. c. 72, ss. 3, 4, 5.
84. Virginia. Interest is allowed at the rate of six per centum per annum.
Act of Nov. 22 1796, 1 Rev. Code. ch. 209. Vide 1 Hare & Wall. Sel. Dec.
INTEREST, MARITIME. By maritime interest is understood the profit of
money lent on bottomry or respondentia, which is allowed to be greater than
simple interest because the capital of the lender is put in jeopardy. There is
no limit by law as to the amount which may be charged for maritime interest. It
is fixed generally by the agreement of the parties.
2. The French writers employ a variety of terms in order to distinguish if
according to the nature of the case. They call it interest, when it is
stipulated to be paid by the month, or at other stated periods. It is a premium,
when a gross sum is to be paid at the end of the voyage, and here the risk is
the principal object they have in view. When the sum is a per centage on the
money lent, they call it exchange, considering it in the light of money lent at
one place to be returned in another, with a difference in amount between the sum
borrowed and that which is paid, arising from the difference of time and place.
When they intend to combine these various shades into one general denomination,
they make use of the term maritime profit, to convey their meaning. Hall on Mar.
Loans, 56, n.