§ 1704. Interest from the time of maturity is generally allowed on commercial paper by the usage of trade, although a jury is not bound to give more than nominal interest as damages.323 But,

323 Byles, Bills, 309; Benj. Chalm. Dig. art. 213; Chit. Bills, 759; 2 Pars. Notes & B. 396; Keene v. Keene, 3 C. B. (N. S.) 144. Where the contract does not call for interest, it is a question for the jury whether the party is entitled to it, and at what rate. Gibbs v. Fremont, 9 Exch. 25.

if a note bears interest by its terms, the verdict must be for the interest as well as the principal.324 In Great Britain interest may now be recovered, by statute, on all written instruments payable at a time certain, and on all other debts after written demand, and notice that interest will be claimed.325 If the interest is expressly provided for in the instrument, it is part of the debt, but otherwise it is only recoverable as damages for the detention of the debt.326 Where the interest is deducted in advance, it is designated as "discount."

327

In the absence of usury laws, the rate of interest will be fixed by the agreement of the parties, however exorbitant that may be.328 But, if the agreement is to pay a certain rate of interest on a certain contingency, the happening of the contingency will determine the

324 Smith v. Keels, 15 Rich. Law (S. C.) 318; and it may be allowed by the court, although the verdict is irregular, Allen v. Reilly, 15 Nev. 452. So, if a judgment by default is entered for too little interest, the mistake may be corrected for the plaintiff on a writ of error brought by the defendant, Pridgen v. Bonner, 28 Tex. 799; and the interest is to be reckoned in the same currency as the principal, Holt v. Given, 43 Ala. 612.

325 3 & 4 Wm. IV. c. 42, §§ 28, 29; Duncombe v. Brighton Club, L. R. 10 Q. B. 371. But a nonnegotiable note payable "one month after my arrival in England" will not draw interest. Page v. Newman, 9 Barn. & C. 378.

326 Byles, Bills, 308; Chit. Bills, 760; Watkins v. Morgan, 6 Car. & P. 661; Hudson v. Fawcett, 7 Man. & G. 348; Cameron v. Smith, 2 Barn. & Ald. 305, 5 Taunt. 626; In re Burgess, 2 Moore, 745, 8 Taunt. 660; Crouse v. Park, 3 U. C. Q. B. 458. In the absence of any statute, damages are recoverable as proved. Perry v. Taylor, 1 Utah, 63.

327 Philadelphia Loan Co. v. Towner, 13 Conn. 249; Niagara Co. Bank v. Baker, 15 Ohio St. 68; Pape v. Bank, 20 Kan. 440. But, where a note is payable without interest, interest will not be allowed on part payments made before maturity, without an agreement to that effect, Parker v. Moody, 58 Me. 70.

328 Young v. Fluke, 15 U. C. C. P. 360. But an agreement to pay 4 per cent. per month for one year, and privilege of a second year at the same rate until the end of two years, will not cover the second year, where no payment or arrangement is made, and the payee has not elected to keep the money two years. Chapin v. Murphy, 5 Minn. 474 (Gil. 383). The rate agreed on need not be expressed in the note. Davey v. Bank (S. D.) 72 N. W. 83. But the figures "10%" after the amount have been held not to be capable of explanation by parol as an interest clause, and the note has been left to bear the legal 6 per cent. Griffith v. Furry, 30 Ill. 251.

right to recover the interest.3 329 In some states the statute fixes one rate of interest as lawful in the absence of agreement, and another as "conventional interest," allowable in case of express agreement.330

Action for Interest.

§ 1705. An action may be brought for interest that has become due, although the principal is not yet due.331 If the note is payable in installments, with interest, the interest on each installment becomes due with that installment.3 332 But an action cannot be brought for the interest separately, if the principal is also due.333 Although, if another bill is given upon the maturity of an overdue bill, and the original is retained expressly for the arrears of interest not covered by the new bill, an action may be brought upon it after the new bill is paid, and the principal thus discharged.334 Interest may be recovered upon the common count without any special averment.3 The acceptor of a bill, as well as the maker of a note,336 and the drawer and indorser, are all liable for interest.337 The drawers and

329 Daniel v. Henry, 30 Tex. 26.

335

330 Thus, in KENTUCKY, interest may be stipulated for in writing, up to 10 per cent., but otherwise only 6 per cent. is allowed. Ky. St. § 2218. see § 521, supra.

331 Cooley v. Rose, 3 Mass. 221.

And

332 Saunders v. McCarthy, 8 Allen (Mass.) 42; Ewer v. Myrick, 1 Cush. (Mass.) 16; Bander v. Bander, 7 Barb. (N. Y.) 560.

333 Johnston v. Brannan, 5 Johns. (N. Y.) 268; Howe v. Bradley, 19 Me. 31; and paid, Stevens v. Barringer, 13 Wend. (N. Y.) 639; Moore v. Fuller, 47 N. C. 205. But see Byles, Bills, 311; Laing v. Stone, Moody & M. 229, note, 2 Man. & R. 561.

334 Byles, Bills, 311; Lumley v. Musgrave, 4 Bing. N. C. 9, 5 Scott, 230. 335 Nordenstrom v. Pitt, 13 Mees. & W. 723; Mills v. Bank, 11 Wheat. 431; Morrison v. Keese, 25 Tex. Supp. 154; Wernwag v. Mothershead, 3 Blackf. (Ind.) 401; Washington v. Bank, 1 How. (Miss.) 230; Chinn v. Hamilton, 1, Hemp. 438, Fed. Cas. No. 2,685. So, in an action of trover, interest may be included without special averment in the declaration. Paine v. Pritchard, 2 Car. & P. 558; 3 & 4 Wm. IV. c. 42, § 29.

336 Chit. Bills, 760; 2 Pars. Notes & B. 399. But, where the acceptor is entitled to have the bill presented for payment at a particular place, he is not liable for interest without proof of such presentment. Phillips v. Franklin, Gow, 196.

337 Chit. Bills, 760; Cameron v. Smith, 2 Barn. & Ald. 305. And see § 742,

338

indorsers of a bill are liable for interest without formal protest; but only from notice of dishonor, where they are entitled to such notice.339 But, if a note bears interest payable annually, an indorser will be liable for principal and interest after the principal becomes due, without any demand previously made for the annual interest, or notice of its nonpayment.340 Interest may also be recovered against one who guaranties the payment of a bill.341 And one maker will be liable for the rate of interest expressed, although a lower rate has been recovered against his co-maker.342

It has been held that war suspends the running of interest between debtor and creditor who are alien enemies.3 343

Compound Interest.

§ 1706. Compound interest may be allowed where it is consistent with the course of dealing between the parties.344 But it is not recoverable simply by reason of the stipulation for annual interest payments. In general, an agreement cannot be made in advance

supra.

345

So, the drawer of a memorandum check for borrowed money. Glover v. Graeser, 10 Rich. Eq. (S. C.) 441.

338 Windle v. Andrews, 2 Barn. & Ald. 696.

339 Byles, Bills, 310; Chit. Bills, 763; 2 Pars. Notes & B. 399; Walker v. Barnes, 5 Taunt. 240, 1 Marsh. 36.

340 Howe v. Bradley, 19 Me. 31.

341 Byles, Bills, 311; Ackermann v. Ehrensperger, 16 Mees. & W. 99. But a promise by a third party to pay interest on a note is not a promise to pay the principal. Home Sav. Bank v. Mackintosh, 131 Mass. 489.

842 Chafoin v. Rich, 92 Cal. 471, 28 Pac. 488.

343 Brown v. Hiatts, 15 Wall. 177; Id., 1 Dill. 372, Fed. Cas. No. 2,011; Conn v. Penn, Pet. C. C. 496, Fed. Cas. No. 3,104; Brewer v. Hastie, 3 Call (Va.) 22; Mayer v. Reed, 37 Ga. 482; Hoare v. Allen, 2 Dall. (Pa.) 102. But see, contra, Shortridge v. Macon, Chase, 136, Fed. Cas. No. 12,812; Paul v. Christie, 4 Har. & McH. (Md.) 161; Neilson v. Rutlege, 1 De Saus. Eq. (S. C.) 194; Griffith v. Lovell, 26 Iowa, 226; Spencer v. Brower, 32 Tex. 663. Especially where the parties are in the same county, Gates v. Bank, 12 Heisk. (Tenn.) 325; Yeaton v. Berney, 62 Ill. 61; or are represented there by an authorized agent, Denniston v. Imbrie, 3 Wash. C. C. 396, Fed. Cas. No. 3,802; Ward v. Smith, 7 Wall. 447.

344 Chit. Bills, 761; Bruce v. Hunter, 3 Camp. 467; 5 Barn. & Ald. 34. But not without express agreement in WISCONSIN (Sanb. & B. Ann. St. § 1689). 345 Ferry v. Ferry, 2 Cush. (Mass.) 92; Hastings v. Wiswall, 8 Mass. 455; Doe v. Warren, 7 Me. 48. But see, contra, Anketel v. Converse, 17 Ohio St. 11;

for compound interest.346 But a new note or other contract may be made for interest on arrears of interest without usury.3 347 And interest coupons draw interest from their maturity.348 Where no pay

Catlin v. Lyman, 16 Vt. 144; Wheaton v. Pike, 9 R. I. 132; Bledsoe v. Nixon, 69 N. C. 89; Knight v. Braswell, 70 N. C. 709. But only if so expressed. Rix v. Strauts, 59 Mich. 364, 26 N. W. 638.

346 Catlin v. Lyman, 16 Vt. 44; Stewart v. Petree, 55 N. Y. 621; Perkins v. Coleman, 51 Miss. 298; Hochmark v. Richler, 16 Colo. 263, 26 Pac. 818; Bowman v. Neely, 137 Ill. 443, 27 N. E. 758. But see, contra, Calhoun v. Marshall, 61 Ga. 275; Zuickey v. Haney, 63 Wis. 464, 23 N. W. 577. So, by statute in CALIFORNIA, but not higher than the rate reserved on the principal. Civ. Code, § 1919; Finger v. McCaughey, 114 Cal. 64, 45 Pac. 1004. And agreement for a higher rate is invalid. Yndart v. Den, 116 Cal. 533, 48 Pac. 618. And in GEORGIA, where the interest matured, it could be sued upon before the maturity of the principal. Calhoun v. Marshall, 61 Ga. 275.

347 Wilcox v. Howland, 23 Pick. (Mass.) 167; Jasper Co. v. Tarvis, 76 Mo. 13. So, by statute in MINNESOTA. Gen. St. § 2212. And such note is not usurious. Stewart v. Petree, 55 N. Y. 621.

348 Aurora City v. West, 7 Wall. 82; Scotland Co. v. Hill, 132 U. S. 107, 10 Sup. Ct. 26; Cairo v. Zane, 149 U. S. 122, 13 Sup. Ct. 803; Connecticut Mut. Life Ins. Co. v. Cleveland, C. & C. R. Co., 41 Barb. (N. Y.) 9; North Pennsylvania R. Co. v. Adams, 54 Pa. St. 94; Mills v. Jefferson, 20 Wis. 50; City of Jeffersonville v. Patterson, 26 Ind. 15; Walnut v. Wade, 103 U. S. 683; Philadelphia & R. R. Co. v. Smith, 105 Pa. St. 195; Langston v. Railroad Co., 2 S. C. 248; New England Mortg. Co. v. Vader, 28 Fed. 265 (Pub. Laws Or. p. 17); Fox v. Railroad Co. (Conn.) 38 Atl. 871; Jefferson Co. v. Hawkins, 23 Fla. 223, 2 South. 362; Holbrook v. Sims, 39 Minn. 122, 39 N. W. 74, 140; Town Council of Lexington v. Union Nat. Bank, 75 Miss. 1, 22 South. 291; Connecticut Mut. Life Ins. Co. v. Cleveland, C. & C. R. Co., 41 Barb. (N. Y.) 9; Philadelphia & R. R. Co. v. Knight, 124 Pa. St. 58, 16 Atl. 492. Although expressly reserved in the coupon. Stickney v. Moore, 108 Ala. 590, 19 South. 76. But only at legal rate of interest. Holbrook v. Sims, supra. But see City of Pekin v. Reynolds, 31 Ill 529; United States Mortg. Co. v. Sperry, 26 Fed. 727. Such interest, it is held, cannot be recovered in the hands of the holder of the bond, to which it belongs. Buffalo Loan, Trust & Safe-Deposit Co. v. Medina Gas & Electric Light Co., 12 App. Div. 199, 42 N. Y. Supp. 781. And interest expressly reserved on the coupons is usury in Idaho, Rev. St. § 1266; Vermont Loan & Trust Co. v. Hoffman, 49 Pac. 314; but can be recovered in Nebraska up to the maximum statutory rate, Lewis Inv. Co. v. Boyd, 48 Neb. 604, 67 N. W. 456. In California interest is not recoverable on coupons on state bonds until the act of 1893, Molineux v. State, 109 Cal. 378, 42 Pac. 34; nor on bonds which are to be made out of a statutory fund providing only for annual interest, Davis v. City of Sacramento, 82 Cal. 562, 22 Pac. 1118;