217 F. 822 | W.D. Va. | 1914
By a deed dated March 12, 1909, Mrs. O. H. Browning, inter alia, leased to one Boswell a tract of coal-bearing land lying near Pocahontas, in this district. In addition to certain royalties, the consideration for the lease was a so-called “bonus” of $200,000. A part thereof was to be paid by April 1, 1909, and the balance was payable in three annual installments, due, respectively, in
“$50,000.00. Pocahontas, Va. April 1, 1909.
“One year after date I promise to pay to the order of Ollie H. Browning fifty thousand dollars, without offset, with interest from date at the rate of five per cent, per annum. For value received, negotiable and payable at First National Bank, Pocahontas, Va. Thos. T. Boswell,”
The two remaining notes are identical with the foregoing, except as to the time for payment. In the lease the provision in respect to the notes reads:
“Payable on the respective days aforesaid, with interest at the rate of *5 per cent, per annum from date until paid.”
The notes were not paid, and a question has been made as to whether the sums thus in default bear interest at 5 per cent, until the maturity of the notes, until judgment, or until payment.
“Six mouths after date, we promise and bind ourselves * * * to pay to John F. Hicks, or order, the sum of $7,000, with interest at the rate of 12 per centum per annum from date.”
The opinion reads:
“It was as competent for these parties to agree upon 12 as upon 6 per centum per annum, as the rate of interest upon the debt until its payment; and we are of opinion that they did agree upon 12 and not upon 6 per centum per annum as the rate in this case. We think their contract ought to be construed precisely as if the words ‘till paid’ had been inserted therein after the words ‘from date,’ and that such was their obvious meaning.”
In Evans v. Rice, supra, the bond read: “With interest at the rate of 8 per cent, per annum, payable annually.” It was held that this rate prevailed until payment. -
But, even if there were room for doubt as to the proper construction of the notes in the case at bar, the wording of the lease (the formal and fully expressed contract of the parties) removes, as it seems to me, all possibility of even a plausible, contention that the contract is otherwise than for 5 per cent, per annum until payment.
“ * * * It is further decreed that Ollie H. Browning * * * shall have and be entitled to a first and prior lien upon the lands * * * for the true and lawful balance remaining unpaid upon the bonus payment of $200,000 in said lease mentioned, * * * and all interest due and to become due thereon, the amount of such principal and interest, respectively, ta be ascertained and reported by the master appointed in these proceedings.”
Notwithstanding the facts above set out, it is urgently contended that the debt should bear interest at 6 per cent., at least from the date of the judgment rendered in this cause on October 27, 1914. My own opinion is that the- unquestionable contract right of the debtor to have the interest run at 5 per cent, until payment makes argument unnecessary. In Roberts v. Cocke, 28 Grat. (69 Va.) 207, 218, it is said:
“Wherever there is a contract, express or implied, for the payment of legal interest, the obligation of the contract extends as well to the payment of the interest as it does to the payment of the principal sum, and neither the courts nor the juries ever had the arbitrary power to dispense with the performance of .such contract, either in whole or in part.”
In Strayer v. Long, 83 Va. 715, 722, 3 S. E. 372, 376, it is said:
“The next assignment of error is as to the allowance of 10 per centum interest on the Long debt. The contract is for 10 per centum per annum, which was a legal rate of interest in this state at that time, if expressly contracted for. But it is argued that- in this case the court should reduce the rate of interest to 6 per centum from the time when the lands of the defendant were taken out of his control and put in the hands of a receiver of the court, thus depriving him of the means of paying the debt. * * * But he is bound by his contract as he made it, the same not appearing to be unlawful, nor otherwise invalid. The courts cannot make another contract for the parties.”
I think of no sound reason for ruling that, while a creditor is entitled to have a validly agreed upon rate, higher than the regular rate, prevail until payment, the debtor is not entitled to have a validly agreed upon rate, less than the regular rate, prevail to the time agreed upon. In either event we have a clear contract right, and I know of no principle of law which authorizes the courts to make a new contract for the parties. In 6 Va. Law Reg. 658, relied upon by counsel for Mrs. Browning, it is said:
“If a contract is made for interest at the lower rate ‘until paid,’ of course such express agreement would prevail.”
And it is at least doubtful if the editorial in 5 Va. Law. Reg. 113, was intended to present a different contention. u It should be added that there are at least two Virginia decisions which indicate that the foregoing has been the Virginia rule since a very early" date. In Brooke v. Roane, 1 Call (5 Va.) 205 (1798), at a time when the statutory rate of interest in this state was 5 per cent., a judgment bearing interest at such rate was rendered against Brooke. When levy of execution thereon was made, the statutory rate of interest having been in the meantime increased to 6 per cent., Brooke executed'
“It seems to me, therefore, that an account ought to be taken, and that the legatees of John Glanton pay their ratable proportion of the money clue, for hire of negroes, and on the sales of the land, with interest at 5 per centum per annum, on the latter from the death of William Howell to the time of payment.”
This case was also apparently decided on common-law principles. The bill was filed in July, 1800, to set aside a conveyance made in 1783.
The statute in question reads as follows:
“In any suit in equity, or in an action founded on contract, where no jury is impaneled, judgment or decree may be rendered for interest on the principal sum recovered, until such judgment be paid; and where there is a jury, which allows interest, the judgment shall, in like manner, be for such interest until payment.” Section 3391, Code 1904.
See, also, Code 1887, § 3391; Code 1873, p. 1121, § 18; Code 1860, p. 733; Code 1849, p. 673; 1 Rev. Code 1819, pp. 208, 508. The statute in its original form (Code 1808, p. 29; 3 Shepherd’s Statutes at Large, pp. 98, 99, §§ 1, 5) was enacted January 20, 1804, and went into effect May 1, 1804.
One reason for the construction I give to this statute is found in the provision as to the time to which interest runs when a jury allows interest by its verdict. “The judgment shall, in like manner, be for such interest until payment.” It seems to me that the words “in like
Another and stronger reason for such construction is found in the Virginia• authorities. In Snickers v. Dorsey, 2 Munf. (16 Va.) 505, 510, the second headnote reads:
“In general, since the 1st of May, 1804, when interest is allowed in equity, it should not stop at the time when the balance of account is struck, nor at the date of the decree, but should run to the payment of such balance.”
The decree of the appellate court reads:
“And it is ordered that the cause be remanded to the said court of chancery, to be proceeded in upon the principles and for the purpose aforesaid, and also for the purpose of allowing the appellee interest on the principal sum, which may be found due to him, to the time of payment.”
In Dunbar v. Woodcock, 10 Leigh (37 Va.) 628, 654, the trial court was held in error to have allowed interest from a remote date, the decree below was reversed, “with instructions to allow interest on the balance which may be found due from the date of the final decree” —necessarily until payment. 'In Cecil v. Hicks, supra, 29 Grat. (70 Va.) 1, 3, 8, 26 Am. Rep. 391, the court said:
“The only question presented by the case to this court for decision is: Did the circuit court err in rendering judgment for interest on the said principal sum at the rate of 12 per cent, per annum from the date of said bill till payment, instead of interest thereon at that rate from said date till the maturity of said bill, and at the rate of 6 per cent, per annum from such maturity until payment? * * * Upon the whole, we are of opinion that there is no error in the judgment, and that it ought to be affirmed.”
In Evans v. Rice, 96 Va. 50, 56, 30 S. E. 463, 465, the third headnote, by Professor M. P. Burks, reads:
“Agreement to Pay Higher than Legal Rate of Interest — How Long Rate Continues. — Where a greater than the legal rate of interest is agreed on by the parties, on a debt to mature in the future, the greater rate continues, in the absence of an agreement to the contrary, after the maturity of the debt, and until it is paid.”
It was contended by appellant (see brief filed at Wytheville and now before me):
“But even though your honors should differ from the views above presented, and decide thát the 8 per cent, interest which the 83,000 bond bore was a' part and ingredient of the purchase price of the property, then we submit that said bond could only bear 8 per cent, interest up to the time of its. maturity, and that from and after its maturity 8 per cent, would becomei usurious. # * * ”
The opinion of the court reads:
“It is contended, however, by appellant, that, even though the transaction be not usurious,, where a bond is given for the payment of a sum of money at a future day, reserving a rate -of interest permitted by contract, but greater than that established by law, only the legal rate can be recovered after the debt becomes due, unless the continuance of the greater rate be expressly provided for in the contract itself. This is the law in many jurisdictions, and is sustained by courts of the highest authority. In this state, however, it has been settled otherwise, and the rate of interest reserved in the contract*827 ■continues as an incident of the debt due, in the absence of any stipulation to the contrary. Cecil v. Hicks, 29 Grat. [70 Va.] 1 [26 Am. Rep. 391].”
In Shipman v. Bailey, 20 W. Va. 140, 145, 146, it is said:
“In a number of cases in Virginia and elsewhere the courts have decided, evidently upon this view of the effect of the judgment upon the original contract, that where a debt is contracted for [at] a less or greater rate of interest than tlie laws of the lex fori permit at the time of its enforcement, if authorized by the laws when or where it was made, the courts of the lex fori will not hesitate to give judgment upon such debt, to bear interest at the rate specified in the contract, not only to the date of the judgment, but afterwards until the debt "is paid.”
See, also, Bent v. Patten, 1 Rand. (22 Va.) 25; Pickens v. McCoy, 24 W. Va. 344, 353; Barbour v. Tompkins, 31 W. Va. 410, 7 S. E. 1.
In 3 Minor’s Inst. (2d Ed.) p. 386, it is said:
“ * * * A promise ‘to pay $1,000 six months after date, with 8 per cent, for 12 per cent., or 3 per cent.) interest,’ is prima facie interpreted as a promise to pay $1,000 six months after date, with 8 per cent, (or 12 per cent., or 3 per cent.) interest, not only until maturity, but afterwards until paid.”
In 4 Minor’s Inst. (3d Ed.) p. 967, it is said:
“In an action on a contract, where no jury is impaneled, judgment is to be ■entered for interest on the principal sum recovered, from the time the principal was payable, or expressly bore interest, until payment.”
In 1 Robinson’s (old) Pr. p. 361, citing Code 1819, it is said:
“In all actions founded on contracts, where judgment shall he rendered in ■court, if interest be allowed, such interest shall be upon the principal; sum due, and shall continue until such principal sum be paid. And in all actions founded on contracts and tried before a jury, the jury shall ascertain the principal sum due, and fix the period at which interest shall commence, if interest be allowed by them; and judgment shall be rendered accordingly, carrying on the interest till the judgment shall be satisfied.”
I find nothing in the present statute which gives the court any discretion as to the rate of interest. The statute seemingly contemplates that, where interest is properly allowed, it shall be at either the statutory rate or at the (legally) agreed rate. An entire absence of discretion as to the rate of interest tends to support the conclusion that no discretion was intended as to the time to which interest, if allowable, should run at the legally agreed rate.
“The word ‘may’ will be construed to mean ‘shall’ or ‘must,’ when the public interests and rights are concerned, and when the public or third persons have a claim do jure that the power shall be exercised. * * * And, in general, where the statute enacts that a public officer ‘may’ act in a certain way, which is for the benefit of third persons, he must .act in that way.”
“Permissive words in respect to courts or officers are imperative in those cases in which the public or individuals have a right that the power so conferred be exercised.”
In Supervisors v. U. S., 4 Wall. 435, 445, 446, 447, 18 L. Ed. 419, the statute involved read:
“The board of supervisors * * * may, if deemed advisable, levy a special tax. * * * ”
In the opinion it is said:
“The conclusion to be deduced from the authorities is that where power is-given to public officers, in the language of the act before us, or in equivalent language, whenever the public interest or individual rights call for its exercise, the language used, though permissive in form, is in fact peremptory. What they are empowered to do for a third person the law requires shall be done. The power is given, not for their benefit, but for his.”
See, also, Galena v. Amy, 5 Wall. 705, 18 L. Ed. 560.
It follows that, even if there be in some cases a discretion given by the statute to the court as to the time to which and the rate at which interest shall run, there is no discretion whatever in a case such as we have here. The foregoing are the reasons which lead me, in the decree of sale of October 27, 1914, to order that Mrs. Browning recover interest on the bonus payments at the rate of 5 per cent, until payment.'