Hagood v. Aikin, Case No. 1287

Case No. 1287 | Tex. | Oct 16, 1881

Stayton, Associate Justice.

The question in this case is, was it error, in a suit brought upon promissory notes executed on the 1st of January, 1876, which provided for the payment of interest at the rate of two and one-half per cent, per month from their date until payment should be made, to enter judgment, since the adoption of the present constitution, for the principal and interest due upon such notes up to judgment, and to make the judgment bear interest from and after its date, upon such aggregate sum, at the same rate which the parties contracted the notes should bear.

At the time the notes were executed, it was legal to contract for interest at any rate upon which the parties could agree, and under the statute which existed a,t that time, as the same has been construed by this court in a number of cases, it was proper so to enter the judgment. Pasch. Dig., 3943; Frazier v. Campbell, 5 Tex., 275" court="Tex." date_filed="1849-12-15" href="https://app.midpage.ai/document/frazier-v-campbell-4887278?utm_source=webapp" opinion_id="4887278">5 Tex., 275; Jewett v. Thompson, 8 Tex., 437; Coles v. Kelsey, 13 Tex., 78; Mathews v. Hancock, 20 Tex., 7" court="Tex." date_filed="1857-07-01" href="https://app.midpage.ai/document/hutchins-v-wade-4888945?utm_source=webapp" opinion_id="4888945">20 Tex., 7.

The statute then in force provided that “All judgments of the several courts of this republic shall bear interest at the rate of eight per cent, per annum from and after the date of judgment, and the same shall be recovered and allowed; provided, however, that such judgments shall be given only upon contracts hereafter made, in which there may be no more than eight per cent, stipulated in writing.”

Parties must be understood to have contracted with reference to the statute above quoted and the settled construction placed thereon by this court.

It is true that the present constitution, which was adopted since the contracts sued upon in this case were made, does provide that conventional interest shall not exceed twelve per cent, per annum (Const., art. XVI, sec. 11); but it can only operate upon contracts made since its adoption, and it neither invalidates contracts made before that time which provide for a higher rate of interest, nor regulates the entry of judgment upon such contracts.

The act of 18th January, 1840 (Pasch. Dig., 3943), was in force when the notes were executed upon which the judgment in this cause was rendered, and has never been repealed; but has been practically continued in force, with the construction thereof by this court incorporated therein, and made a part thereof.

The statute now provides that “All judgments of the several courts of this state shall bear interest at the rate of eight per cent, per annum from and after the date of judgment, except when the contract upon which the judgment is founded bears a specified interest greater than eight per cent, per annum, and not exceeding the highest rate of conventional interest permitted by law, in which case the judgment shall bear the same rate of interest specified in such contract, and after the date of such judgment.” R. S., 2980.

We understand this statute to mean that a judgment shall bear the same interest as the contract upon which it is founded, if such rate of interest does not exceed the highest rate of interest permitted' by law at the time the contract was made, even though such rate may exceed the highest rate of interest which may be contracted for since the adoption of the present constitution.

The agreement to pay interest at the rate at which the judgment was rendered was legal and binding at the time of rendition of the judgment, because not unlawful at the time the notes were executed, and upon such contracts, the rate of interest for which the judgment was rendered was “ permitted by law,” and there was no error in so entering it.

The judgment of the district court is affirmed.

Affirmed.

[Opinion delivered October 16, 1881.]