ments have been made on a note, the interest is to be calculated with 349 out making any rest.3 So, where the payments made are less than the amount of interest then due.350 But if a note is payable in installments, "with interest to be paid annually," and suit is brought for the interest before the principal is due, it may be recovered, with compound interest.351 What Law Governs Interest. § 1707. Interest is to be reckoned at the rate fixed by the law in force at the time of making the instrument, and not at its maturity or at the beginning of the suit,352 although the rate may have been reduced by subsequent statute.353 But a general statute as to the rate of interest will not be applied to a banking corporation whose rate is fixed by its own charter.354 And a statute reducing the legal rate will not affect a demand note previously made, with interest at a higher rate, payable semiannually, if it was intended in fact to run for several years.* But an agreement for a high rate of interest for the year's forbearance will be construed to continue only for one year, where the rate was subsequently reduced by law. 356 And a mere parol agreement by the maker for higher interest than that re 355 nor in Washington on city warrants, Portland Sav. Bank v. City of Montesano, 14 Wash. 570, 45 Pac. 158. 849 Either at the commencement of the action, Folsom v. Plumer, 43 N. H. 469; or, if reckoned from date, at maturity, Barker v. International Bank of Chicago, 80 Ill. 96. But in North Carolina compound interest is chargeable with annual rests on a note made to a guardian. Little v. Anderson, 71 N. C. 190. Perry v. Taylor, 1 Utah, 63. 350 Townsend v. Riley, 46 N. H. 300; 351 Bannister v. Roberts, 35 Me. 75. And in other states interest is allowed on interest made payable annually or semiannually. Cook v. Courtright, 40 Ohio St. 248; Angel v. Miller, 90 Tex. 505, 39 S. W. 916. But only at the legal rate, although a higher rate is reserved. Angel v. Miller, supra. 352 Lee v. Davis, 1 A. K. Marsh. (Ky.) 397. of interest "from and after Sept. 1" does not day. Handley v. Cunningham's Trustee, 12 Bush (Ky.) 401. As to the rates of interest allowed in the United States, see § 521, supra. 353 Besser v. Hawthorn, 3 Or. 129. 354 Shunk v. Bank, 22 Ohio St. 508. 355 Seymour v. Insurance Co., 44 Conn. 300. 356 Mueller v. McGregor, 28 Ohio St. 265. And a statute fixing the rate apply to a note made on that 360 357 served in the note cannot be shown in an action upon the note.3 The rate of interest is to be determined by the law of the place of contract,358 even where the note is secured by a mortgage on land lying in another state.359 And, if no interest is given before judgment by the usage of the place where the note was made, none will be allowed. If another place of payment is named in the instrument, the rate of the latter place is, in general, the one governing the maker of the note, since he promises to pay at that place.361 But the drawer's and indorser's contract is to pay generally, if the bill is not accepted or paid by the acceptor or maker, and the rate of the place of drawing or indorsing is therefore to govern them.362 Where the rate of a foreign place of payment governs, it must be proved,363 or the recovery will be at the rate established by the lex fori.36. 357 Hunt's Ex'r v. Hall, 37 Ala. 702. 358 Lanusse v. Barker, 3 Wheat. 101; Cowqua v. Lauderbrun, 1 Wash. C. C.. 521, Fed. Cas. No. 3,299; Jaffray v. Dennis, 2 Wash. C. C. 253, Fed. Cas. No. 7,171; Davis v. Coleman, 29 N. C. 424; Lewis v. Ingersoll, *40 N. Y. 347, 3 Abb. Dec. (N. Y.) 55; Winthrop v. Pepoon, 1 Bay (S. C.) 468. So, as against the place where it is afterwards negotiated. Ex parte Heidelback, 2 Low. 526, Fed. Cas. No. 6,322. And the place of contract is generally indicated by the date. Hoppins v. Miller, 17 N. J. Law, 185. And see § 81, supra. But a memorandum on a bill, drawn in Georgia, and accepted in South Carolina, to the effect that it was a South Carolina contract, is sufficient to sustain a recovery of interest at the South Carolina rate. Boyce v. Edwards, 4 Pet. 111. 359 Chase v. Dow, 47 N. H. 405. 360 Courtois v. Carpentier, 1 Wash. C. C. 376, Fed. Cas. No. 3,286. 361 2 Edw. Bills & N. § 1009; Story, Bills, § 399; Bodily v. Bellamy, 2 Burrows, 1094; Scofield v. Day, 20 Johns. (N. Y.) 102; Hawley v. Sloo, 12 La. Ann. 815; Howard v. Branner, 23 La. Ann. 369; Peck v. Mayo, 14 Vt. 33; Austin v. Imus, 23 Vt. 286; Swett v. Dodge, 4 Smedes & M. (Miss.) 667; Summers v. Mills, 21 Tex. 77. Although payable in British sterling. Bushby v. Camac, 4 Wash. C. C. 296, Fed. Cas. No. 2,226. So, as against the acceptor. Cooper v. Waldegrave, 2 Beav. 282; Foden v. Sharp, 4 Johns. (N. Y.) 183. So, in an action for money paid at the defendant's request in taking up a bill. Burton v. Anderson, 1 Tex. 93. 362 Gibbs v. Fremont, 9 Exch. 25; Lanusse v. Barker, 3 Wheat. 101; Crawford v. Bank, 6 Ala. 12. 363 Swett v. Dodge, 4 Smedes & M. (Miss.) 667; Peacock v. Banks, Minor (Ala.) 387; Dunn v. Clement, 2 Ala. 392; Dickinson v. Bank, 12 Ala. 54. 364 Wood v. Corl, 4 Metc. (Mass.) 203; Wheeler v. Pope, 5 Tex. 262. And see Griffin v. Judson, 12 U. C. C. P. 430. See, also, § 1712, infra. Interest Reckoned from Date. § 1708. When a bill is payable at a certain period after date, and bears interest by its terms, it will be reckoned from date, in the absence of words showing a different intention.365 But if a note is made payable "with 10 per cent. interest after maturity," and the note is changed to 6 per cent. by erasure and interlineation, it will draw interest at that rate from maturity, as originally provided and not erased. And if a note is made payable in installments, the whole to become due on default in any installment, the entire balance will bear interest from the default.867 Where it is stipulated that the note shall draw interest "if not paid at maturity," it will be reckoned from the date of the note.368 And where a note is made payable at a certain time, "with interest from date," if not punctually paid, such interest will be recoverable in case of default,3 369 but not if the note 365 Byles, Bills, 309; Benj. Chalm. Dig. art. 13; Chit. Bills, 759; 2 Pars. Notes & B. 393; Kennerly v. Nash, 1 Starkie, 452; Doman v. Dibden, 1 Ryan & M. 381; Richards v. Richards, 2 Barn. & Adol. 447; Dewey v. Bowman, 8 Cal. 145; Gholson v. King, 79 N. C. 162; Green v. Kennedy, 6 Mo. App. 577; Kimmell v. Burns, 84 Ind. 370; Kilgore v. Powers, 5 Blackf. (Ind.) 22; Bogan v. Calhoun, 19 La. Ann. 472; Dickinson v. Tunstall, 4 Ark. 170; Campbell v. Jones, 79 Ala. 475; Smith v. Goodlett, 92 Tenn. 230, 21 S. W. 106. So, if payable one year after the maker's death, with legal interest, Roffey v. Greenwell, 10 Adol. & E. 222, 2 Per. & D. 365; or "when he shall arrive at the age of twenty-one years, with legal interest thereon," etc., Winn v. Young, 1 J. J. Marsh. (Ky.) 51; or on the happening of a certain event, with annual interest, Washband v. Washband, 24 Conn. 500. So, if it is provided that the interest be "paid quarterly," Inglish v. Watkins, 4 Ark. 199; or if the note is drawn with interest "until paid," Pittman v. Barret, 34 Mo. 84. 366 Staynor v. Knowler, 82 Ind. 157. 367 Chit. Bills, 763; Blake v. Lawrence, 4 Esp. 147. 368 Main v. Casserly, 67 Cal. 127, 7 Pac. 426; Hackenberry v. Shaw, 11 Ind. 392; Horn v. Nash, 1 Iowa, 204; Parvin v. Hoopes, Morris (Iowa) 387. Although it was to draw a lower rate of interest if paid at maturity, Daggett v. Pratt, 15 Mass. 177; or none at all, Flanders v. Chamberlain, 24 Mich. 306. 369 Gully v. Remy, 1 Blackf. (Ind.) 69; Horner v. Hunt, Id. 213; Satterwhite v. McKie, Harp. (S. C.) 397; Ely v. Witherspoon, 2 Ala. 131. is paid at maturity.370 If a note is payable on demand, with lawful interest, it will in like manner carry interest from date, and not from maturity only.371 Interest from Maturity. § 1709. Where there is no stipulation for interest, and the paper matures at a time certain, or at sight, it will draw interest from its maturity without prior demand.372 And in some states it is provided by statute that all bills and notes shall bear interest from maturity, unless it is expressly stipulated that interest shall not accrue until after a certain date.373 But where a note is payable during a given month, but not on a particular day, it will draw interest only from the last day of the month.374 When interest is not expressly reserved, the holder must in all cases use ordinary diligence in trying to collect the bill.375 And it has been held that, without an express stipulation for interest, the maker will only be liable for interest from demand, if no demand is made at maturity.376 If the bill is payable at a certain time, it will draw interest from that day, unless its nonpayment at that time was due to the negligence of the holder. 377 In such case the jury may refuse to allow interest, but otherwise the interest must be included in the verdict.378 If there is no one legally entitled to receive payment 370 Parker v. Plymell, 23 Kan. 402. But the rule in Indiana allows interest in such case only from maturity, Billingsly v. Cahoon, 7 Ind. 184. 371 Byles, Bills, 309; Benj. Chalm. Dig. art. 13; 2 Edw. Bills & N. § 1007; Hopper v. Richmond, 1 Starkie, 507; Paine v. Caswell, 68 Me. 80. So, on a note "with interest on demand." Whitton v. Swope, 1 Litt. (Ky.) 160; Pate v. Gray, 1 Hempst. 155, Fed. Cas. No. 10,794a. 872 Byles, Bills, 309; Benj. Chalm. Dig. art. 213; Chit. Bills, 762; 2 Pars. Notes & B. 393; Lithgow v. Lyon, 1 Coop. Ch. Cas. 29; Lowndes v. Collens, 17 Ves. 27; Jacobs v. Adams, 1 Dall. 52; Sweet v. Hooper, 62 Me. 54; Joyner v. Turner, 19 Ark. 690. So, if payable when a subscription is complete or at the maker's death. Carr v. Robinson, 8 Bush (Ky.) 269. 373 NORTH CAROLINA (Code, § 44); TENNESSEE (Shannon's Code, § 3494). 374 Pollard v. Yoder, 2 A. K. Marsh. (Ky.) 264. 375 Chit. Bills, 759; Bann v. Dalzel, Moody & M. 228, 3 Car. & P. 376. 376 Bradford v. Cooper, 1 La. Ann. 325. 377 Chit. Bills, 759; Laing v. Stone, 2 Man. & R. 561; Lithgow v. Lyon, 1 Coop. Ch. Cas. 29. 378 Chit. Bills, 760; Cameron v. Smith, 2 Barn. & Ald. 308. And a verdict at maturity (e. g. where the holder has died, and no personal representative is yet appointed), no interest will be reckoned until a lawful demand can be made.3 379 Interest on Demand Notes. § 1710. A demand note, without express reservation of interest, bears interest from demand only.38 So, too, an order drawn on a county treasurer or on a corporation,381 or a bank note.382 But where notes of a banking company are payable on demand, and no demand is made before the order to wind up the company, no interest can be recovered.383 If a note is payable on demand, without reserving interest, it will run from the time of commencing suit,384 and refusing interest on a note overdue for 30 years will not be disturbed by the court. Du Belloix v. Lord Waterpark, 1 Dowl. & R. 16. But, if there was an annexed agreement that suit should not be brought as long as the payee thought the maker safe, interest would be computed from maturity. man v. Baker, 5 Humph. (Tenn.) 406. Roll 379 Chit. Bills, 763; Murray v. East India Co., 5 Barn. & Ald. 204. 380 Byles, Bills, 310; Benj. Chalm. Dig. art. 213; Chit. Bills, 762; 2 Edw. Bills & N. § 1009; 2 Pars. Notes & B. 393; Barough v. White, 4 Barn. & C. 327, 6 Dowl. & R. 379, 2 Car. & P. 8; Upton v. Lord Ferrers, 5 Ves. 801; Farquhar v. Morris, 7 Term R. 124; Hard v. Palmer, 21 U. C. Q. B. 49; Breyfogle v. Beckley, 16 Serg. & R. (Pa.) 264; Adams v. Adams, 55 N. J. Eq. 42, 35 Atl. 827; Cannon v. Beggs, 1 McCord (S. C.) 370; Dillon v. Dudley, 1 A. K. Marsh. (Ky.) 66; Wallace v. Wallace, 8 Ill. App. 69; Hunter v. Wood, 54 Ala. 71; Maxcy v. Knight, 18 Ala. 300; Nelson v. Cartmel, 6 Dana (Ky.) 7. Although the note was given for money loaned at the time it was made, Hunter v. Wood, 54 Ala. 71; and was so expressed, Schmidt v. Limehouse, 2 Bailey (S. C.) 276. So, on a check, interest runs from presentment and protest. Niblack v. Bank (Ill.) 48 N. E. 438. 381 Yellowly v. Commissioners, 73 N. C. 164; English v. Trustees, 6 Ind. 437. So, an interest coupon payable on presentation bears interest only from demand. Corcoran v. Canal Co., 1 MacArthur, 358. But in NORTH CAROLINA (Code, § 45), bills, bonds, or notes on demand bear interest from the time they are demandable, unless otherwise expressed. So, in TENNESSEE (Shannon's Code, § 3496). 382 Estate of Bank of Pennsylvania, 60 Pa. St. 471. But the closing of the doors of a bank dispenses with formal demand, and interest will run from that time. In re East of England Banking Co., L. R. 6 Eq. 368, L. R. 4 Ch. App. 14. 383 In re Herefordshire Banking Co., L. R. 4 Eq. 250. 384 Byles, Bills, 310; Chit. Bills, 762; Pierce v. Fothergill, 2 Bing. N. C. |