Otis v. Lindsey

10 Me. 315 | Me. | 1833

The opinion of the Court was delivered by

Mellen C. J.

The note declared on in this case is clearly not usurious. Compound interest is not usury. In the note before us, nothing more than lawful interest was cast upon interest which had become due. No law prohibits such a transaction. Ord on Usury 36; Hamilton v. Le Grange, 2 Hen.Bl. 144; 4 T. R. 613, S. C., Doe v. Warren, 7 Greenl. 48. Though, according to this last decision, such interest upon interest is not recoverable on the ground that by operation of law it becomes principal and bears interest. Yet, after interest has accrued, the parties may, by settling an account, or by a new contract, turn it into principal. That was done in the present case. It is true that the interest on the old notes was not payable annually, but still, if at the end of each year, a note had been given for the interest on each of those notes, and carrying interest, surely they might all have been recovered; and why should the principle be different, because the same amount of interest was all cast at one time, and inserted in the new note,- now in suit. It is only a different and more simple process, by which the same result is produced. The defence is wholly unsubstantial.

Judgment on the verdict,