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only from that time, where no demand has been previously made.385 But in other states interest runs from date, on a demand note,386 or a note which names no time for payment, and is, in effect, payable on demand.38 387

Interest until Tender-Bankruptcy.

§ 1711. Interest ceases to run after a sufficient tender of payment,388 although in Louisiana a tender has been held not to stop the running of interest without proof of injustice to the debtor by a judgment for the interest.389 Even where tender is made by an agent, and the money withheld until the note, which was lost, be found, and the money is afterwards lost by the insolvency of the agent, interest will stop from the date of the tender.390 But, where interest is expressly reserved, it is recoverable, although the payee has sufficient money of the maker's in his hands, which he has failed to apply to the bill.391

The maker's bankruptcy stops the interest, in general, unless the previous dealings between the parties raise an agreement for interest by implication.392 So, the maker of a note is not liable for interest after injunction granted at the instance of another indorsee

167; Gore v. Buck, 1 T. B. Mon. (Ky.) 209; Bartlett v. Marshall, 2 Bibb (Ky.) 467. But, to the effect that it cannot be allowed by the jury without proof of a previous demand, see Patrick v. Clay, 4 Bibb (Ky.) 246.

385 Hunt v. Nevers, 15 Pick. (Mass.) 500. So, of an I. O. U. Gay v. Rooke, 151 Mass. 115, 23 N. E. 835.

386 Proctor v. Whitcomb, 137 Mass. 303; Pullen v. Chase, 4 Ark. 210; Walker v. Wills, 5 Ark. 166; Edgmon v. Ashelby, 76 Ill. 161.

387 Gaylord v. Van Loan, 15 Wend. (N. Y.) 308; Francis v. Castleman, 4 Bibb (Ky.) 282. So, a money bond. Purdy v. Philips, 11 N. Y. 406.

388 Byles, Bills, 311; 2 Pars. Notes & B. 394; Dent v. Dunn, 3 Camp. 296. So, on a bank note, Suffolk Bank v. Worcester Bank, 5 Pick. (Mass.) 106; or a coupon, Bailey v. Buchanan Co., 115 N. Y. 297, 22 N. E. 155. But not where the maker disputes the note after making the tender. Tishomingo Sav. Inst. v. Buchanan, 60 Miss. 496.

389 Thiel v. Conrad, 21 La. Ann. 214.

390 Chit. Bills, 760; Dent v. Dunn, 3 Camp. 296. But not where there was no right to demand such indemnity, because the lost note was specially indorsed. Dudman v. Earl, 49 Iowa, 37.

391 Laughlin v. Wright, 63 Cal. 113.

392 Chit. Bills, 760; Ex parte Williams, 1 Rose, 399; Ex parte Cocks, Id.

against payment by him.393 Interest was formerly allowed only to the commencement of the action,394 but it is now reckoned down to final judgment.395 And on payment of money into court the interest must be paid down to the date of such payment, and not merely to the commencement of the action.390

Interest after Maturity.

§ 1712. Where no interest is reserved in a note, it will draw interest after maturity at the legal rate.397 And if the note reserves interest at a higher rate from a day named, before its maturity, it will continue to bear the same rate of interest after maturity, although the rate established by the lex fori may be lower.398 And in some states, where a note bears interest at a designated rate, it will bear the same rate after maturity.31 399 So, where it bears a certain rate

317; Lowndes v. Collens, 17 Ves. 27; Lithgow v. Lyon, 1 Coop. t. Eld. 29. And, if interest is not expressed, even prior interest cannot be included in the petitioning creditor's claim. Ex parte Greenway, Buck, 412.

393 Stevens v. Barringer, 13 Wend. (N. Y.) 639.

394 Byles, Bills, 310; Chit. Bills, 763; Robinson v. Bland, 2 Burrows, 1077; Randolph v. Raginder, Prac. Reg. C. P. 357. And if, by the terms of the note, the interest is not to begin until a certain day, and suit is begun before that time, the judgment cannot include such interest. Billingsley's Adm'r v. Billingsley, 24 Ala. 518.

395 Chit. Bills, 763; 2 Pars. Notes & B. 394; Jarrold v. Rowe, 8 Price, 582; or until verdict, Paine v. Caswell, 68 Me. 80; or until allowance as a claim against the deceased maker's estate, Jameson v. Barber, 56 Wis. 630, 14 N. W. 859.

396 Byles, Bills, 310; Chit. Bills, 764; Mercer v. Jones, 3 Camp. 477; or, in default, the action may proceed for the balance of interest due, Kidd v, Walker, 2 Barn. & Adol. 705.

397 And payments credited at 10 per cent. without the maker's consent will be changed to the legal rate. Godfrey v. Craycraft, 81 Ind. 476. The rate is determined by the lex fori, and although less than that of the place of the contract. Ives v. Bank, 2 Allen (Mass.) 236.

398 Overton v. Bolton, 9 Heisk. (Tenn.) 762.

399 Broadway Sav. Bank v. Forbes, 79 Mo. 226, affirming 9 Mo. App. 575; Marietta Iron Works v. Lottimer, 25 Ohio St. 621; Howland v. Jennings, 11 U. C. C. P. 272; Buckingham v. Orr, 6 Colo. 587; Augusta Nat. Bank v. Hewins, 90 Me. 255, 38 Atl. 156; Chafoin v. Rich, 92 Cal. 471, 28 Pac. 488; Meaders v. Gray, 60 Miss. 400; Tishomingo Sav. Inst. v. Buchanan. Id. 496; Kohler v. Smith, 2 Cal. 597; Hand v. Armstrong, 18 Iowa, 324. So. in In

of interest "from date," 400 or "until maturity," 401 or during the life of the payee. 402 But, where a note bearing interest at 10 per cent. is extended at 9 per cent., the original rate of interest will revive after the expiration of the extension.403 And interest may be recovered, in general, from maturity until judgment, at the rate reserved before maturity.404 So, in Iowa, until payment in the case of a municipal bond, which expressly reserved 10 per cent., although the attached coupon (without such reservation) only draws the legal rate of 6 per cent. 405 In other states, also, the rate reserved before madiana. Shaw v. Rigby, 84 Ind. 375, overruling Burns v. Anderson, 68 Ind. 202, and Richards v. McPherson, 74 Ind. 158, and re-establishing Kilgore v. Powers, 5 Blackf. 22, as the Indiana rule. So, where a note is payable one day after date, "with interest from date at twelve per cent. per annum payable annually." Sharpe v. Lee, 14 S. C. 341. So, where the expressed rate is lower than the legal rate. Schmidt v. Bank, 153 Mass. 550, 27 N. E. 595.

400 Borders v. Barber, 81 Mo. 636; Briscoe v. Kinealy, 8 Mo. App. 76; Maguire v. Filley, 9 Mo. App. 581; Thompson v. Pickel, 20 Iowa, 490; Kellogg v. Lavender, 15 Neb. 256, 18 N. W. 38; Monnett v. Sturges, 25 Ohio St. 384; Cecil v. Hicks, 29 Grat. (Va.) 1. So, a city bond with 10 per cent. interest "per annum payable annually on presentment of the annexed warrant." Pruyn v. City of Milwaukee, 18 Wis. 367. So, where there were interest coupons running up to the maturity of the principal note, and no further. Holbrook v. Sims, 39 Minn. 122, 39 N. W. 74, 140. The cessation of coupons raises no presumption that interest shall stop. Kendall v. Porter (Cal.) 52 Pac. 143. And outstanding coupons, which are not yet due, do not prevent the reckoning of interest up to date of judgment. Guignon v. Trust Co., 156 Ill. 135, 40 N. E. 556.

401 Hamer v. Rigby, 65 Miss. 41, 3 South. 137; Macon Co. v. Rodgers, 84 Mo. 66. But see, contra, Cook v. Courtright, 40 Ohio St. 248.

402 Gale v. Corey, 112 Ind. 39, 13 N. E. 108, and 14 N. E. 362. In this case the interest was interrupted from the payee's death until the maturity of the note.

403 North v. Walker, 66 Mo. 453.

404 Andrews v. Keeler, 19 Hun (N. Y.) 87; Montgomery v. Boucher, 14 U. C. C. P. 45; Pridgen v. Andrews, 7 Tex. 461; or on a demand note until verdict, Colby v. Bunker, 68 Me. 524; although exceeding the legal rate, Hopkins v. Crittenden, 10 Tex. 189. And after judgment interest accrues at the rate fixed by statute, Marshall v. Green (Ky.) 1 S. W. 602; Burkhart v. Sappington, 1 G. Greene (Iowa) 66; and in force at that time, Verree v. Mughes, 11 N. J. Law, 91; and within the jurisdiction invoked, Gordon v. Phelps, 7 J. J. Marsh. (Ky.) 619; although the higher rate is expressly "until paid," Wade v. Pratt, 12 Heisk. (Tenn.) 231.

405 Cromwell v. Sac Co., 96 U. S. 51.

turity continues, by force of the statute, until payment.406 And this rule applies to a note payable one day after date, with interest "from date"; 407 and clearly so, if expressly "until paid." 408

But in some states interest after maturity must be reckoned at the rate fixed and implied by law, whether interest before maturity was reserved in the instrument at a higher 409 410 or a lower rate.1 And such rate will be allowed after maturity, although the note is discounted by a bank which is limited by its charter to a lower rate.* In some states the statute provides what rate shall be recoverable after maturity.412

411

406 Kerr v. Haverstick, 94 Ind. 178; Burns v. Anderson, 68 Ind. 202; Corcoran v. Doll, 32 Cal. 82; Cecil v. Hicks, 29 Grat. (Va.) 1; Cox v. Smith, 1 Nev. 161; McLane v. Abrams, 2 Nev. 199. So, in Illinois. United States Mortg. Co. v. Sperry, 26 Fed. 727; Ohio v. Frank, 103 U. S. 697; Phinney v. Baldwin, 16 Ill. 108. But see, contra, White v. Haffaker, 27 Ill. 349; Lamprey v. Mason, 148 Mass. 231, 19 N. E. 350; St. 1888, c. 388.

407 Gray v. Briscoe, 6 Bush (Ky.) 687. Although it seems that in Arkansas it would only bear such specified rate until maturity, if payable at a later day, and a contrary intention could not be shown by parol evidence. Casteel v. Walker, 40 Ark. 117.

408 Mobley v. Davega, 16 S. C. 73. But judgment in New York on a note made in England, "with interest until paid in England," includes interest to judgment only at the (lower) English rate. Scofield v. Day, 20 Johns. 102.

409 Burnhisel v. Firman, 22 Wall. 170; Holden v. Trust Co., 100 U. S. 72; Ewell v. Daggs, 108 U. S. 143, 2 Sup. Ct. 408; Ward v. Morrison, Car. & M. 368; Rilling v. Thompson, 12 Bush (Ky.) 310; Duran v. Ayer, 67 Me. 145; Eaton v. Boissonnault, 67 Me. 540; Robinson v. Kinney, 2 Kan. 184; Searle v. Adams, 3 Kan. 515; Lacy v. Dunn, 5 Kan. 567; Clark v. Russell, 1 Colo. 52; White v. Curd, 86 Ky. 192, 5 S. W. 553; Shelden v. Barlow, 108 Mich. 375, 66 N. W. 338; Newton v. Kennerly, 31 Ark. 626. So, where the note calls for the higher rate "from date." Brewster v. Wakefield, 22 How. 118, overruling 1 Minn. 352 (Gil. 260); Briggs v. Winsmith, 10 S. C. 133; Gardner v. Barnett, 36 Ark. 476; Woodruff v. Webb, 32 Ark. 612; Lemay v. Williams, Id. 166; Perry v. Taylor, 1 Utah, 63; or a fortiori if expressed to be from July 8th to December 21st, Rushing v. Sebree, 12 Bush (Ky.) 198. So, after the bill is taken up by an indorser, Stanley v. McElrath, 86 Cal. 449, 25 Pac. 16; McCrady v. Jones, 44 S. C. 406, 22 S. E. 414; or acceptor, Martin v. Muncy, 40 La. Ann. 190, 3 South. 640.

410 Moreland v. Lawrence, 23 Minn. 84. So, of a bond, Ludwick v. Huntzinger, 5 Watts & S. (Pa.) 51; or trust certificate, Tuffli v. Trust Co., 2 Disn. (Ohio) 121.

411 United States Bank v. Chapin, 9 Wend. (N. Y.) 471.

412 Thus, in KENTUCKY, judgments bear 6 per cent. on the rate expressed

RAND.C.P.-153

(2433)

Higher Rate Reserved after Maturity.

§ 1713. Where a higher rate of interest is expressly reserved to be paid after maturity, such amount is recoverable, if not prohibited by statute.413 And it has been held that the maker may prove by parol an agreement that no interest should be charged after maturity.*11 But where a note is payable in six months, "without interest," it will be entitled to interest after maturity.415 On the other hand, interest "from maturity" will run from the day designated, without allowing for days of grace.416 Where a note provides for a higher rate of interest after maturity as damages, if it is not paid when due, such agreement is a penalty,417 but has been held to be valid as stipulated damages,*18 and not to be usurious,11o nor to affect the negotiability of the note or the bona fides of the purchaser.42o Such agreement is, however, strictly construed. Thus, the interest runs from maturity, and not from date, where the note provides for a higher rate of interest "until paid, if not paid when due." 421 So, where the interest is payable yearly, and is to bear the same rate if not paid, interest accruing after maturity will not be compounded.22 Where in the bill; and, if the rate is higher than 6 per cent., it is reduced to that rate at the death of the promisor or the maturity of the instrument. Ky. St. § 2220. In SOUTH CAROLINA, protested bills bear 7 per cent. from maturity until payment. 1 Rev. St. § 1400. In MISSISSIPPI, judgments bear interest at the same rate as the contract on which they are founded. Ann. Code, § 2350.

*

*

413 2 Daniel, Neg. Inst. 464; 2 Edw. Bills & N. § 1005.

414 Elliott v. Elliott, 79 Ky. 277.

415 Roberts v. Smith, 64 Tex. 94.

416 Letchford v. Starns, 16 La. Ann. 252. 417 Brown v. Maulsby, 17 Ind. 10. Crane, 33 Minn. 144, 22 N. W. 633; Berry v. Wisdom, 3 Ohio St. 241.

And disregarded as such. Smith v. Henry v. Thompson, Min. (Ala.) 209;

418 Bane v. Gridley, 67 Ill. 388; Witherow v. Briggs, Id. 96; Miller v. Kempner, 32 Ark. 573; Hubbard v. Callahan, 42 Conn. 524; Crapo v. Hefner (Neb.) 73 N. W. 702; Hallam v. Telleren (Neb.) 75 N. W. 560. And may even run back to the date. Finger v. McCaughey, 114 Cal. 64, 45 Pae. 1004; Capen v. Crowell, 66 Me. 282; Wilkinson v. Daniels, 1 G. Greene (Iowa) 179.

419 Davis v. Rider, 53 Ill. 416.

420 Parker v. Plymell, 23 Kan. 402.

421 Wernwag v. Mothershead, 3 Blackf. (Ind.) 401.

422 Vaughan v. Kennan, 38 Ark. 114.

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