Lamprey v. Mason

148 Mass. 231 | Mass. | 1889

Knowlton, J.

The report presents two cases of great hardship for the defendants, but we can deal with them only by applying the principles of law by which they must be governed.

Under the Pub. Sts. c. 77, § 3, it is lawful for parties to contract for any rate of interest or of discount. The St. of 1888, c. 388, authorizing in all cases the discharge of loans for less than one thousand dollars by paying the principal and interest at the rate of eighteen per cent per annum, and a sum not exceeding ten dollars for the actual expenses of making and securing the loan, applies only to contracts made since its passage.

In the eases at bar, the defendants admitted that the notes were given for a valuable consideration, and were duly signed. There was no allegation in either of the answers, nor offer of proof at the trial, of fraud in obtaining either of the notes. No such issue was presented as in Trambly v. Ricard, 130 Mass. 259. The evidence excluded was offered “for the purpose of proving the allegations of the answers,” and it had no relation to the validity of the contracts in their inception. The finding, from the papers in the case, that the contracts were unconscionable in the rate prescribed to be paid for the use and detention of the money, does not, in the absence of fraud, legally justify the court in refusing to enforce them. It is, in effect, a finding merely that there was gross inadequacy of consideration, which, in itself alone, never renders a contract invalid. The case of Cutler v. Johnson, 8 Mass. 266, cited by the defendants, rests upon the usury laws in force when it was decided. The same laws seem to have had an influence in the decision of Cutler v. How, 8 Mass. 257, and of Baxter v. Wales, 12 Mass. 365; and in these cases, and in Boynton v. Hubbard, 7 Mass. 112, 123, there are intimations which are inconsistent with the uniform current of later decision.

The defendants contend that the notes ceased to be binding, as to the rates of interest named in them, by reason of the failure of the plaintiff to render accounts of the amounts due on them. But the payee of a promissory note upon which payments have been made is not legally bound to furnish the maker with a statement of the amount due upon it. The parties are supposed to have equal knowledge upon that subject. The maker can protect his rights and stop interest by tendering a sum sufficient to cover the whole amount due. In these cases there was no tender nor plea ‘of tender, and it appears that the defendants never had on hand a sufficient sum to pay the notes, although they could easily have obtained it. The plaintiff’s conduct in relation to the payment of the notes, as described in the offer of proof, did not amount in law to fraud, nor change his legal rights, however it may be regarded in other aspects.

Each of the notes expressly provided that the rate of interest should continue after maturity, for such time as the principal sum, or any part of it, should remain unpaid. It is the law in this and in many other States, that, without such express provision, the rate of interest named in a contract to be paid for the use of money when it is due, is impliedly agreed between the parties to be the rate which shall be paid by way of damages for the detention of the money after it is due. But in the jurisdictions where a different doctrine prevails, it is held that an express stipulation of the parties for the payment of a certain rate of interest for the detention of money after it becomes due shall be given effect, unless it conflicts with statutes against usury. Union Institution for Savings v. Boston, 129 Mass. 82, and cases cited. The ruling, that from the date of the writ in each case the plaintiff was entitled to recover interest at the rate of six per cent only, was erroneous. The rates called for by the several contracts continue until the contracts are merged in the judgment. Pierce v. Boston Five Cents Savings Bank, 129 Mass. 425. Union Institution for Savings v. Boston, 129 Mass. 82. Brannon v. Hursell, 112 Mass. 63. Downer v. Whittier, 144 Mass. 448.

In each case there must be judgment for the amount named in the auditor’s report, with interest as therein stated since the time to which interest was therein computed.

Judgment accordingly.