5 Cow. 587 | Court for the Trial of Impeachments and Correction of Errors | 1825
This case presents several important questions. A preliminary one raised by the counsel for the defendant in error, is, Avhether the merits of the cause come properly before the Court. A motion Avas made in the Court beloAV to refer the cause ; Avhich Avas granted on the usual ground, that it involved the examination of long accounts. The referees heard and reported
[ The Chancellor herr, stated the leading facts, as they appeared tipon the report.]
The question is, whether Reid, the intestate, was entitled to interest on his advances of money, as agent for the company. The first inquiry reía tes to the character of his agency. His appointment was by a very short and general resolution, declaring him agent and nothing more. . No instructions were given; and we are left to infer his powers from the history of his acts, and the acts of the company; whence it would seem, he was their general agent; being entrusted with all power necessary and proper for the sue
It is objected that the claim against the company, rested in an unliquidated account, which will not carry interest. True, we have such expressions in the books; but they are very indefinite and unsatisfactory. Anything may enter into an account. The sum due on a bond of several years standing, on which there have been various payments, may be said to rest in account, and to be unliquidated. An account is no more than a list or catalogue of items, whether of debts or credits. It seems to me there is no difference, whether the demand upon which interest is claimed, lie in account or in anything else. This cannot be the criterion. If the demand itself be unliquidated, it cannot carry interest ; and on the other hand, if it be liquidated it may. Have we any settled law upon this head of inquiry 7 I have looked into the cases cited, arid I find them deplorably inconsistent. But it seems to me, that the courts of Pennsylvania have seized on the true principle. They appear to put the allowance of interest, on the fault of the party who is to pay the money.
The difficulty in the case before us arises from the peculiar state of the facts. There is no reported case like it. it appears to me, however, that the advances of Reid were fairly within the scope of his agency. He was to keep the workmen together, and manage the whole concern. In doing this, he was obliged to make heavy disbursements; and there is no pretence that he did not act in perfect good faith. If the advances were within the scope of his power, this was equivalent to an express authority to make them.
It is urged that he did not render an account, that he was negligent in keeping the company advised as to the state of their business, in point of profit and loss. On this question, the case is very obscure. Some of the directors requested him to account; but there was no formal demand made. The company understood it to be a losing concern. Was he bound to account without any request 7 I can see no legal duty on his part, to furnish an account, any more than
With all the obscurity of the case, it is plain that he advanced his money for the use of the company. He was deprived of the use of that money, and the company had the benefit of it, under circumstances which, I think, are equivalent to a request on their part. Indeed, they do not pretend the contrary. To do so, would be to deny him the principal sum.
I do not intend to go over the cases cited. I have prepared no written opinion. The reasoning of Gh. J. Savage and Mr. Justice Sutherland, is very able ; and to my mind, most satisfactory and conclusive. I can add nothing to the view which they have taken of the subject; and it would be idle to say over again, what they have so well said already. Indeed I do not wish to be considered as departing from the Supreme Court, in any one particular. I am entirely satisfied with the conclusion to which they came; and I hope their judgment will be affirmed.
The documents returned with the writ of error, are a regular record of a judgment of the Supreme Court, on which is entered a declaration in an action on the case, a plea and issue, with a notice of set-off; an order of reference, a report of the referees in favor of the plaintiff below for the sum of $12,218 84; and a judgment of the court for that sum, with $2547 87, costs.
It has not been, and could not he suggested, that in this record there is any error.
But there is also returned, with the writ of error; anoth er document, purporting to he a case, which presents a history of the proceedings of the Supreme Court in the same cause; by which it appears that, on the 13th of November, 1824, the Supreme Court made an order, that a statement of facts should be drawn up, under the direction of the Chief Justice, to be incorporated in the record in the cause, in order that the defendants below might be enabled to prosecute their writ of error, if advised so to do.
From this statement, it appears that the 'cause was first referred in January, 1822; that, in March, 1824, the referees made a report in favor of the plaintiff helow for the sum of $14,913 46. That the defendants below were dissatisfied with this report; and made an application to the Supreme Court to set it aside; which application was made on a statement of the evidence before the referees, agreed upon by the attorneys for the respective parties, instead of being made on affidavits in the usual way.
The application to set aside the first report having been heard, the Supreme Court, in August, 1824, made an order that the report should be set aside, so far as it allowed interest to the plaintiffs below, after the second day of January, 1819 ; and on the charges for salary. And further, that in pursuance of a stipulation of the parties, the cause should be again referred to the same referees : and that they should report the amount due to the plaintiff below for interest to the last mentioned date, in addition to the sum due for principal. In pursuance of this order, the referees, in October, 1824, reported that there was due to the plaintiff below, the sum of $4565 38, for principal, and $7653 46, for interest, making together, $12,218 84, for which sum, with costs, the judgment was entered in October term, 1824.
The document returned with the writ of error concludes with a certificate under the hand and seal of the Chief Justice, that the state of facts had been settled under his direction, and that he approved of the same.
Now, from what I have stated, it appears that the error in this case, if error there be, is not in rendering the final judgment upon the record as it is returned with the writ of error ; but in the directions given by the interlocutory order of the 20th of August, 1824.
It seems to me, we ought to be very cautious how we decide that a writ of error will lie on such matter so brought fin. If o writ of error will reach this interlocutory order
But I do not find myself under the necessity of deciding whether the document returned with the writ of error, which is called the case, is properly before us, or not. The record of the judgment is undoubtedly presented to us in proper form; and I am ready to decide that there is no error in that. And my opinion is the same whether I refer to the case or not.
With these views I shall examine the cause as if the facts stated in the case transmitted with the judgment roll were properly before us.
As often as the question of interest has been before a court, the judges seem to have considered it as depending on general equitable principles ; and, in most instances, to have decided each case in reference to its particular circumstances ; without attempting to give any rule which might be generally applicable.
In the case of Pease v. Barber, (3 Caines’ Rep. 266,) which was an action for money had and received, Ch. J. Kent says, “ there maybe cases in which a defendant ought to refund the principal money only; and there may be other cases in which he ought, ex equo et bono, to refund the principal, with interest. Each case will depend on the justice and equity arising out of its particular circumstances.”
So far have questions of interest been considered matters of equity, and not of strict law, that, as in the anonymous case in Johnson, (1 John. R. 315,) they have been left for the jury to decide. In this case the court say, “ Jurors have, in many cases, a discretion to allow interest by way of damages, according to the circumstances of the case.”
It was said, in the argument, that it was derogatory to our jurisprudence to admit that there are not established rules by which every question arising in the administration of justice maybe decided ; that discretion is the law of despots, and that the rights of individuals must be precarious where it may be exercised. But human institutions must partake of the imperfections of human nature ; and it requires no great experience to learn how much it is beyond the capa-
city of man to prescribe laws which may be applied, without the exercise of any discretion in those who administer them, to all possible circumstances. Notwithstanding our statutes are so voluminous, are the work of so many ages, and have been so repeatedly revised, our multiplied books of commentaries and reports show how inadequate legislative enactments are to afford rules for all occasions ; and how much, after all, must be left to the wisdom and discretion of judges, and of jurors; “ and to that moral sense of right and wrong, which, like the senses of tasting and feeling in every man, makes a part of his nature.”
The question of interest, often depending so much upon considerations of equity growing out of the facts belonging to each particular case, the counsel, on either side, have not found it difficult to refer to innumerable cases, which, with
... y* , . . . , , . the help of great ingenuity, and the liberty of reasoning from analogy, they have made to appear well calculated to support their respective pretensions.
It must be recollected that the question in this case arises on money advanced, hy the intestate, for the use of the plaintiffs in error. However analogous this may seem to money lent, or to money had and received, the cases are not the same m principle.
Where money is lent by one to another, it is a transaction between the parties personally; and, as was said by Gross, J. in the case of Calton v. Bragg, (15 East, 223,) which ' ' was an action for money lent: “ If there be no proof of a contract, it might be given against the intention of the parties at the time of the loan. If they did not then contract for interest, it shows that they did not mean to reserve it.” But this reasoning will not apply, when money is advanced
I do not find that any one of the cases, cited from the English books, or from our own reports, is a case where interest has been denied for money advanced. Nevertheless it is certainly true, that the judges often use expressions which would apply to such a case; but my meaning is, that the question whether interest was, or was not to be allowed on money advanced for the use of another, on an implied authority, has, in no case where there has been a decision against the allowance of interest, been the matter presented, by the facts, for the decision of the court.
It would be a tedious and irksome task to refer to all the English cases which have been quoted, in order to show that not one of them is inconsistent with this assertion. I shall content myself with remarking, that the case of Calton v. Bragg, which was so much relied upon in the argument, was an action for money lent.
But I will, as briefly as I possibly can, notice the cases in our own books to which we have been referred.
The counsel for the plaintiffs in error cited the case ol Campbell v. Mesier, (6 John. Ch. Rep. 21,) to show that there the Chancellor allowed interest for money advanced, from the time of demand and refusal only. The circum stances of that case were very peculiar. The defendant was liable to contribute to the rebuilding of a party wall. He not only refused to contribute, but forbid the prostration of the old wall. The complainant erected a new one, at a much greater expense than the re-establishment of the old one required. It could not be ascertained till the new wall was appraised, and it was estimated what it would have cost to restore the old Avail, hoAv much the defendant ought to have paid. When this appraisement and estimate Avere made, and the extent of the defendant’s liability Avas thereby settled, the complainant demanded the amount. The Chancellor decided that the defendant should pay interest from that time. Here was a case very different from an advance of soecific sums of money. It is true the demand is consid
In the case of Kanes v. Smith, (12 John. 156,) the question as to interest turned upon the construction of a special agreement. The plaintiffs were to pay interest for so much as the wines shipped by the defendants might produce, more than sufficient to reimburse to them the value of the merchandise which they consigned to the defendants. But there was no stipulation for interest in case, as it happened, the sales of the wines should not be equal to the value of the cargoes furnished by the Kanes. In the first place, it is to be remarked, that here was no advance of money, made by tire plaintiffs, in virtue of an implied authority from the defendants. And the court would not construe the agreement to mean that the defendants should he liable for interest for which there was no stipulation, if the result of the
Porter v. Bussey, (1 Mass. Rep. 436,) the Supreme Judicial Court of Massachusetts would only allow interest fr0m commencement of an action to recover a return premium.
In Storer v. Storer, (9 Mass. Rep. 37,) the same Court refused to allow an administrator interest on advances; because, as the court said, he might have put himself in cash from the estate.
The case of Winthrop v. Carleton, (12 Mass. Rep. 4,) so far from showing that interest is not to bo allowed on advances, is directly the reverse. The claim was for interest on money advanced by the plaintiff, as consignee of the defendant’s ship. Parker, Ch. J. says, 11 The defendant must be considered as indebted to the plaintiff, in Charleston, the moment the money was advanced ; and he ought to pay the same interest which he would have paid, had he given his promissory note at the time.” But, for some reason which is not apparent,
In Jacobs v. Adams, (1 Dall. 50, 52,) the claim was for money paid to an executor, appointed by a will which was afterwards revoked. The court said, as the money was paid as well as received in mistake, and no fraud could be imputed to either party, interest was only payable from the time of demand.
lu Williams v. Craig, (1 Dall. 313,) the court set aside the report of referees, because they had allowed interest upon an unsettled account. But it does not appear by this report, that the account was for money advanced. On the contrary, by a reference in that case to Henry v. Risk, (1 Dall. 265,) as an authority, it would seem that the account in the former was for goods sold and delivered.
There were two other cases, one from 13 Massachusetts Reports, and another from 1 Connecticut Reports, cited by the counsel for the plaintiffs in error, to show that interest had been denied on cash advances, which I have not had an opportunity of examining. I have not taken much pains to procure them; because, whatever they might decide, they could not control what I consider to be the whole current of authority on the subject. And unless these cases are to the contrary, I think I may repeat, what I said in the outset, that no one case, cited by the counsel for the plaintiffs in error, decides that interest is not to be allowed on money advanced by one person for the use of another.
On the other hand, there are very many cases by which it has been decided that interest is to be allowed on such advances, from the time they are made. Of these cases I shall notice but two or three.
Craven v. Tickell, (1 Ves. jun. 60,) was a case of money expended by the complainant for the defendant, in building a house. Lord' Chancellor Thurlow says, “ Interest must be given on the money expended, since it was laid out. Money paid to the workmen who were to be paid by the defendant, is money advanced for him.”
In Lessee of Dilworth v. Sinderling, (1 Bin. 494,) Ch. J. Tilghman says, “ It may now be safely affirmed, that for a considerable time past, the settled law has been, that interest is recoverable for money lent and advanced.” And interest was allowed from the time of the advances.
In Liotard v. Graves, (3 Caines’ Rep. 238,) Thompson, J. says, 11 With respect to interest on the plaintiff’s account, I think they had a right" to charge it on the money advanced, but not on the account, as it was unsettled; and, therefore, interest ought not to be calculated, except on the money ad
However ic may be, with respect to money lent, or as to money and received, or in regard to merchandise sold and delivered; or, however it may be where advances are made in pursuance 01 an express agreement) in which nothw js said about interest, I think the above authorities will . admit of no other conclusion than that it is now a well established general rule of law, that where a person advances money for the use of another, under an implied authority, he who makes the advance is entitled to interest from the time it was made.
That the advances were made, by the intestate, under an e 7 J 7 implied authority from the plaintiffs in error, it appears to me> is well established by the facts stated in the case. It is stated, that when Reid assumed the agency of the factory, in 1813, it could not have been kept in operation without advanees. It would be extending an indulgence to incorpora-
ted companies to which I do not think they are entitled, to presume that the plaintiffs in error were so ignorant of their affairs as not to know that this was their condition. They afterwards found the factory proceeding. They must therefore have known that there were advances, without which it could not have been put in operation, or carried on; and that they must have known that these advances could only have been made by their agent, Reid. Again; when the factory was conducted by Reid & Alsop, in partnership with the plaintiffs in error, there was an express stipulation that Reid & Alsop should make the necessary advances, upon which interest should be allowed.
When Reid, as to the management of the concern, took the place of Reid & Alsop, and found that advances were Yet necessary, and that the company made no provision for them, I think he had a right to presume that it was intended by the company that he should make them ; and that they
It has been insisted that interest is not allowable on an open unliquidated running mutual account; and many authorities have been cited, which, I think, establish this as another general rule. But in the case of Liotard v. Graves, in which the claim' for interest was on such an account, we see that the plaintiffs xvere allowed to selfect the items xvhich were for money advanced ; and to recover interest on these from the time of the advances; although it was disalloAved on the general balance.
In the case before us, the account, on the one side, is wholly for cash advances made by the agent; and on the other, of cash received by him. It does not appear to me, that this is a mutual, running account, in the sense of those terms as they are used in any of the cases xvhich have been cited. If the agent would have been entitled to interest if he had advanced only one sum, and so could have made only a single charge, and could not, therefore, have exhibited a running account, I cannot conceive why, xvhen repeated advances xvould oblige him to make an account of many items, he should not have the same claim for interest on each advance, that he xvould have had if his whole adv ¡nee had been made at one time.
I have said that it is a general rule that interest shall he allowed on money advanced on an implied authority ; but, like all other general rules, this may have its exceptions, growing out of circumstances connected with the transaction which may render the claim of interest inequitable. I find, however, no such circumstances in this case. On the contrary, it appears to me that it would be very unjust to allow the plaintiffs in error to have the benefit of the intestate’s advances, without obliging them to make any compensation for those advances. I think that neither law, justice or policy would sanction such a decision.
I am in favor of affirming the judgment of the Supreme Court.
Bowman, Earll, Ellsworth, Haight, Keyes, Lake, Lefferts, Mallory, M’Intyre, M’Michael, Ogden, Redfield and Thorn, Senators, concurred in the result of these opinions.
A preliminary objection is made, that a writ of error does not lie upon the record in this cause, so as to bring up the case settled by the Chief Justice, and which has been substituted for the report of the referees. There certainly is great irregularity in the form in which the facts are presented. It was competent to the court below to compel a detailed report by the referees of all the testimony before them, which might have been amended on the motion of either party in the same manner as Justices’ returns to writs of certiorari; and the report thus perfected, being spread on the record, would present the case with all the precision and accuracy of a special verdict. When the beneficial operation of the statute authorizing references, is considered, and the multitude of causes which, under the modern liberal practice, are determined by that method, it is desirable that the present loose mode of presenting the merits by affidavits, often contradictory and always obscure, should be superseded by the more technical and regular reports of referees, which will at least abbreviate the proceedings and save labor in the examination of a case. Had not
Considering it in that light, and as a part of the record, it is to he treated as a special verdict presenting facts and leaving qxxestions of law for the determination of the court. This viexv removes the technical objections which were urged on the argument.
That it is a novelty, that a writ of error should he brought upon a judgment founded on the report of referees, furnishes no solid objection, when the same principles apply, and the same reasons exist for bringing it, which subject judgments upon special verdicts, and demurrers to evidence, to the same revisal. It strikes me as a monstrous proposition to say that the right of trial by jury may be taken away by statute, and then, because it is taken axvay, the judgment which may be rendered shall not he subject to the revision and appeal provided by the constitution. If that were indeed its effect, I should say that the law itself which provi ded such a mode of trial xvould be unconstitutional, and any
It was remarked in the argument, that the motion in the Supreme Court to set aside the report, was in the nature of a motion for a new trial. This is true. Of the same character would be a motion to set aside a special verdict, and for a new venire. But the refusal in either case, xvould be a confirmation of the report or verdict; and if folloxved by a judgment, xvould necessarily be final. The court having confirmed the report xvould no longer entertain any motion or other proceeding in the same court to revise their judgment. There can be no question then, I apprehend, that this is, to all intents and purposes, and in the most technical sense, a “judgment of the Supreme Court.”
It seems hardly necessary to refer to any case, to decide whether a writ of error lies upon a final judgment; for if not in such a case, it does not lie in any. The case of Clason v. Shotwell, (12 John. Rep. 31,) turned, entirely, upon the question, whether the rule of the Supreme Court directing re-restitutions of the possession of property, xvhich had been taken under a forcible entry and detainer, was or was not a final judgment. It xvas conceded by counsel on both sides, is expressly admitted in the dissenting opinion of Chancellor Kent, and is the basis of that delivered by San
That this cause has terminated in the Supreme Court, that there is a definitive judgment concluding the rights of the parties, cannot admit of a question. And as that is the only test to determine whether a writ of error -lies, I am of opinion it is well, brought in this case.
In approaching the merits of this cause, the magnitude,' importance and difficulty of the questions'which it involves, will excite distrust in any conclusions to which the mind may arrive. But having the solemn duty'to perform, of making up an opinion satisfactory to myself, and having bestowed all the time, labor and attention which it required, I have come to a conclusion which I am bound to express. Yet when the difficulties of the subject are considered, there will be little occasion for surprise if differing views should be entertained.
An English reporter lias remarked, that, “it would fortunately be a very difficult matter to fix upon another point of English law in which the authorities are so little in harmony with each other.” (1 Campb. N. P. Rep. 53.)
And yet there are few branches of the law of more immediate, direct and practical importance, not only in our extensive commercial transactions, but in the every day business of every man, in every station and condition of life-The cause of the contradiction of opinions and of the inconsistency of adjudged cases, on any subject, will be found always to be, the attempt to establish arbitrary rules without referring them to the reasons and principles on which they should be founded. Such has been the case with the law of interest. No elementary writer has ever attempted to
The experience of ages demonstrates that the law can never be rendered clear, intelligible and permanent, without the reasons for its rules are understood, its leading principles settled, and the cases which arise under it, founded upon those principles. In many of the branches of the law. we are indebted for the advances towards certainty which have been made, to the efforts of individuals to reduce the confused mass of cases into system, and extract from them the principles which can alone guide us in the decision of new questions as they arise. This cause presents such a question, and it appears to mo lhat it cannot be satisfactorily determined without reference to the great principles of the law of interest, and to the reasons of the rules in analogous cases. The attempt, therefore, to reduce that branch of law into some kind of system, seems required by the necessity of the case, and however unsuccessful, still it may be useful in stimulating further exertions; and inducing others more competent, hereafter to accomplish it
The cases to which we have been referred, and many others, have been examined, and an effort will be made to arrange them in appropriate classes, or divisions, in reference, solely, to the principles which it is supposed governed their decision. This will be done, to prove the principles themselves, to sustain and fortify them, and to show that these cases, with very few exceptions, do in truth proceed on a com ■ mon reason, and may be brought into a harmonious system.
It seems to be the better opinion, (Hawkins, book 1, chap. 82,) that by the ancient common law, it was absolutely unlawful to take any kind of interest or usury, as it was then called, for money. In an anonymous case in Hardus, (Hard. Rep. 420,) Lord Hale is reported to have said, that “ Jewish usury was prohibited at common law, being £40 per cent, and more; but no other.” But Hume, in his 33d chapter, says, “ In 1546 a law was made for fixing the inter-
The statute of Henry 8, referred to, simply provides that “ none shall take, for the loan of any money or commodity, above the rate of ten pounds for one hundred pounds, for one whole year.” All the statutes which have been passed in England and in this state, are in the same language. They are negative, prohibitory of interest being taken above a certain rate ; they are.none of them affirmative; they do not declare in what cases interest shall be taken; much less do they in any case require it to be paid;
Since then, neither by common law nor by statute, is a party in any case required to pay interest. It follows inevitably and irresistibly, upon the universal principle of all law, that a man cannot be made legally liable to pay interest, as such, without his own agreement to that effect. All liability must be created by law, or by agreement. Some agreements are contrary to law. Such were contracts for the payment of interest, until the statute allowed them ; such contracts for a higher rate than is allowed by statute are still contrary to law. These deductions seem obvious and familiar; but I apprehend they lie at the foundation of the questions in this cause. If correct, they establish a great principle in the law of interest, which will guide us through its labyrinths ; that its allowance by the courts, as an incident to the debt., and invariably following it, is founded sole
To sustain the above position, that whenever the courts allow interest as such, as incidental to the debt, and under-rules precluding all discretion, they do so on the ground of the agreement of the parties, in addition to the reasoning founded upon the common law and the statutes, I refer to the case of Calton v. Bragg, (15 East’s Rep. 326,) as full and conclusive authority. Lord Ellenborough says in that case, “ Lord Mansfield sat here for upwards of thirty years, Lord Kenyon for above thirteen years, and I have now set here for more than nine years, (a period of 52 years) and during this long course of time, no case has occurred where, upon a mere simple contract of lending, without an agreement for the payment of the principal at a certain time, or for interest to run immediately, or under special circumstances, from whence a contract for interest was to be inferred, has interest been ever given.” I quote this, not as an opinion, but as evidence of a fact; and coming from such authority, conclusive proof of the law of England, at the time mentioned. The researches of counsel confirm the evidence, if it needed any; and it is strengthened by the opinion of Mr. Jefferson, in the letter to Mr. Hammond before referred to, and quoted by the counsel for the plaintiffs in error. These remarks are to be understood as applicable only to the first class of cases, where the court allow interest, and not to that class where juries in their discretion give it as damages ; for Lord Ellenborough, himself, frequently directed it in actions of trover and trespass for chattels, and in other actions of tort.
I consider it established then, beyond all question or cavil, that the allowance of interest, by the court, as an incident to the debt, is always founded on the agreement of the par
This agreement may be expressed in writing or by words, or it may be implied.
First. If there be an agreement in the body of a note or other instrument, that interest shall run with the debt, it is invariably assessed. If there be a verbal agreement to pay it, that is equally binding ; for there is no law requiring such a contract to be in writing.
Secondly. That this agreement be implied ;
1st. Prom the custom or usage of the business in which the debt is contracted. When such custom is known to the parties, or may reasonably be presumed to have been known, it enters into the original contract, and forms a part of it. (Eddowes v. Hopkins, 1 Dough. Rep. 375. Selleck v. French, 1 Con. Rep. N. S. 35.) But there ought to be evidence that such custom was known. (1 Starkie, 487.)
2d. Where the principal is to be paid at a specific time, the law has always implied an agreement to make good the loss arising from a default, by the payment of interest. (Per Lord Mansfield, in Robinson v. Bland, 2 Bur. 1806.) This proceeds entirely on the idea of a default, and it is a universal maxim that where interest does not run with the principal none accrues until a default is made in payment.
This is illustrated by the familiar case of a note payable on demand, when it is never allowed but from the time of demand made by suit or otherwise.
Interest is allowable on money lent from the time it was agreed to be paid. This was the decision in Robinson v.
3d Where an account has been liquidated by both parties, and the debt therefore becomes due and payable, it carries interest on the same ground of a debt payable at a specific time ; that there is an implied contract to pay. This reason is given in Boddam v. Ryley, (2 Bro. C. C. 3.) The rule is settled by other cases. (2 W. Bl. 761, 3 Wils. 205, and 15 John. 424.) It is also recognized by those cases, which decide, that, upon an open account where mutual credit exists, interest is not allowable unti a liquidation ; (1 Dick. 428, 6 John. Rep. 45, 1 John. Rep. 315 ;) and by those cases where it is held that interest is not allowable on unliquidated accounts. (2 Salk. 623; 1 H. Bl. 303 ; 2 Bos. & Pul. 219; 2 Gall. Rep. 45; 1 P. Wms. 376; 7 John. 213.)
Where a demand is liquidated by a judgment, the right to recover interest in a now action, is founded on the same principle. (6 John. 283.)
4th. Wliere an account lias been rendered, and the debtor, during a reasonable time for that purpose, makes objection, it may fairly be presumed that he has acquiesced in it. It then becomes a liquidated account, and carries interest, upon the same principle from the time of such presumed liquidation. (2 Vern. 276. 2 Ves. Sen. 239. 2 Atk. 252. 15 John. 424.)
For the same reason, a demand of payment of an unsettled claim for wages, being equivalent to the rendering of an account, entitles to interest for such demand ; as then the debt is liquidated, due and payable. (2 Gall. Rep. 45.)
And this I apprehend to be the principle which governed the decision of the Supreme Court, in the case of Kane v. Smith, (12 John. 156.) The defendants were charged with interest from the time the deficiency in the funds provided by them was ascertained, and they were notified of the balance; for until then, the court say, the defendants could not be deemed in default. So, the case of Brown v. Campbell, (1 Serg. & Rawle, 179,) upon notice that the plaintiff’s money was applied to his use, the defendant was in default, in withholding payment.
5th. Upon the same principle, there may be various other circumstances in the transactions between the parties, which furnish evidence of an intention by the debtor to pay interest. The giving a note or bill of exchange, which is void or turns out to have been of no value at the time, or the offering to give a written security for the debt, has justly been considered evidence that the debtor considered the debt to be due and payable, and carrying interest on the same ground as where it was payable at a specific time. Such an instance is furnished by the case of Robinson v. Bland, (2 Bur. 1088.)
The rendering an account, containing a charge of interest on particular items, and that account being liquidated by the debtor, is evidence of an agreement to pay the interest thus charged ; and is so held by Lord Ellenborough in the case of Calton v. Bragg, before cited.
So, such an account being acquiesced in by the debtor’s omitting to object to it within a reasonable time, furnishes the same evidence of an agreement to pay the interest charged, as was held by Livingston, J. in Liotard v. Graves, (3 Caines’s Rep. 226.)
And in subsequent dealings between the same parties, of the like nature, the liquidation of such a former account, there being no new agreement and no new circumstances to vary the case, would furnish sufficient ground to imply an agreement to pay the like interest in those subsequent dealings. Such was the case of Nichol v. Thompson, (1 Campb. N. P. Rep. 52.)
And on the same principle, where interest has, under like circumstances, been allowed by the debtor to other creditors, the knowledge of which comes to the creditor in the given case, and he acts in expectation of a similar allowancet there would he good ground to presume an agreement, to pay interest also to the new creditor. This would he in analogy to the rule which exists where there is a custom or usage of trade. I find no adjudged case which precisely determines such a rule, although there are many analogous. It is certainly as broad and liberal as the most strenuous advocates for the allowance of interest could require, and is more nearly applicable to the present case than any other.
It is believed that these classes comprehend all the cases of implied agreements that have been cited, excepting those of Liotard v. Graves. (3 Caines’ Rep. 226,) and Dilworth v. Sinderling, (1 Bin. Rep. 494.) In most of them, the question whether there was an agreement to allow interest, is one of fact, which should he left to a jury ; and that fact once ascertained, the rule of law applies. A great share of the difficulty on this subject, has arisen from the court’s undertaking to draw a rule from the facts of each case, by which it is made fluctuating and uncertain.
In these classes which have been enumerated, the interest is considered a necessary incident to the debt, following it, as is said in one of the cases, like a shadow following its body.
But there is another class of cases, already alluded to, in which interest may he allowed by a jury, under the advice of the court, in their discretion, and which, when fairly exercised, the courts will not disturb.
This second class comprehends those cases only where interest is not a necessary incident to the debt, hut may be allowed under circumstances, by way of mulct, or punishment, for some fraud, delinquency, or injustice of the debt- or, or for some injury done by him to the creditor; and in such cases the legal rate of interest is assumed as the measure of damages. This is done,
1st. In action of tort technically so called; as in trover, or in trespass for taking chattels. (8 John 446. 14 John. 128, 273, 385.)
The application of the rule in these cases may sometimes be capricious ; but the rule itself is as certain as any other which allows damages in any case. The judgmentof twelve indifferent men, is the best criterion that can be establish ed.
2d. In actions upon contracts. Thus, Radcliff, J. in his opinion, which was sustained by this court, in the case of Lynch v. De Viar, (3 John. Cas. 310,) says, “ It is a settled rule that money received to the use of another and improperly retained, always carries interest.” In that case, the party had expressly promised to pay the money when received ; and withheld it under frivolous and unjust pretexts The contrary doctrine which was laid down in De Bernales v. Fuller, (2 Camp. N. P. Rep. 426,) must have arisen from not sufficiently distinguishing between the cases where a jury may allow interest; and those in which the court must allow it. It seems to have been confounded with the latter class. It is contradicted by the decision of this court already referred to ; by the Supreme Court of this state in The People v. Gasherie, (9 John. 71,) and Slingerland v. Swart, (13 John. 255;) by the Supreme Court of Massachusetts, in Wood v. Robbins, (11 Mass. Rep. 504,) and Wyman v. Hubbard, (13 Mass. Rep. 232;) by the Supreme Court of Pennsylvania, in Crawford v. Willing, (1 Dall. 349, 4 Dall. 289,) Commonwealth v. Crevor, (3 Binney, 123,) and Brown v. Campbell, (1 Serg. & Rawle, 179.) All these cases allow interest where there has been fraud, injustice or delinquency; and none of them put the allowance of it, on the ground of gain or benefit to the debtor from the use of the money alone. The case of De Bernales v. Fuller is opposed also to the most respectable English authorities. Lord Mansfield, (1 Doug. 375,) says, “ In cases of long delay under vexatious and oppressive circumstances, interest may be recovered, if a jury, in their discretion, think fit to allow it.” This remark is the more valuable, as showing the correctness of the distinction between the allowance of interest by the court and by the jury.
In the case of Trelawney v. Thomas, (1 H. Bl. 304,) cited and much commented on in the argument, the defendant had engaged the plaintiff to advance money in order to carry on an election, which he had done according to the re
Probably the rule of easiest application, would be this: where money has been lent, advanced or expended by request, and under an agreement to pay at a specific time, or where it has been had and received under a like agreement, then the allowance of interest may he safely referred to the principle of an implied contract to pay interest on default ; and so, also, where the money is not to be refunded at a particular time, hut a default arises from a demand, or notice, the same principle will apply. But where no time of payment is fixed, and where the duty to pay arises from the relative situation of the parties, it seems that it should he referred to a jury to determine whether damages shall be given, by an allowance of interest. Thus, sheriffs and other public officers are required to pay interest on monies received by them, which it was their duty to pay over immediately. (People v. Gasherie, 9 John. 71. 14 John. 255. 7 Mass. Rep. 14.) So a private agent, not applying money as directed, is chargeable with interest. (4 Dessausure, 110.) But we also find it settled, in Williams v. Storrs, (6 John. Ch. Rep. 353,) that where an agent is ready to pay over money received by him to the party entitled to it, he is not in default and shall not be chargeable with interest, unless he has employed the money for the purposes of gain. These are equitable considerations that must be left to a jury, and which a court ought not attempt to estimate. All that a court
With respect to the allowance of interest to an agent for monies advanced by him, there is nothing in his character of agent to entitle him to it. He must receive it upon the same principles which would give it to any other creditor. Indeed, the general policy of the law is adverse to the allowance of interest to an agent or trustee for advances ; it is presumed, for the purpose of withholding any temptation to speculate on the funds of his principal. (1 P. Wms. 376. 14 Vin. Ab. 458, pl. 10. Select Cases in Ch. 50. 2 Eq. Cas. Abr. 531. pl. 15.) So in the case of an administrator, the Supreme Court of Massachusetts refused interest on advances. (9 Mass. Rep. 37.)
But where an agent has expended money by the directions of his principal, there can be no reason for distinguishing it from the case of money lent or advanced by any other person. An instance of its allowance in such a case is found in Craven v. Tickell, (1 Ves. Jun. 63,) which refers to the distinction between allowing interest on the contract, or by way of damages.
So, if advances are made by an agent with the knowledge and acquiescence of the principal, it is but advancing a single step in the same train of reasoning, to presume a request. And if a request, an implied agreement to pay; and on a default in payment, the like agreement, as in all other cases of default, to pay interest.
So, in advance of a single sum, on a particular occasion, or a few sums, may, from the circumstances, furnish ground for presuming knowledge in the principal, acquiescence by him, and an implied promise to pay immediately, which as we have seen, carries interest from the time of default.
All these are cases of advances on the one side, and depend upon the same principles which would regulate the allowance of interest to any creditor not an agent.
The same principles will be found applicable to the case of mutual credits, between an agent and his principal.
In the case of single advances, or where they are made only on one side, that knowledge is implied necessarily from the fact of knowing that such advances are made. In the case of mutual credits, that inference does not follow; for the credits may be equal to, or overbalance the advances. Hence it seems to be an irresistible consequence, that in the case of mutual credits, there can not be a default without the knowledge of a balance to be paid. The same principles which govern the laws of interest in all the other cases stated, ought to control here. If it is to he charged on the ground of an implied agreement, then .there should certainly he a request to advance the money, or something tantamount, as knowledge and acquiescence, and a default upon which the implied agreement to pay interest arises. -If it is to he charged upon the ground of delinquency in not paying, there must be knowledge of the fact on which the delinquency arises, before it can exist. That fact is the existence of a balance. These deductions seem to flow plainly from the principles which have been extracted from all the cases ; and which an effort has been made to arrange. And they are consonant to the first dictates of common sense and common justice; that no man should be held liable to pay interest for monies advanced not only without his request or consent, but without his knowledge ; that he should not pay it where there was no default on his part, and where there could be none.
The distinction between the case of an account containing items only on one side, and that where there are mutual dealings and mutual credits, is exemplified by the different rule which is applied to those cases under the statute of lirn
These principles arc believed to be in accordance with the opinions expressed by the Judges of the Supreme Court in this cause, or to be ligitimate conclusions from them, and from the numerous cases on the subject. -But there is one ground for the allowance of interest, intimated by one- of the Judges, to which, as I understand it, I cannot subscribe. It is, that a “ universal obligation rests upon every man to render a just equivalent for the use of that which does not belong to him.” This is unquestionably true, if that bene
I proceed to apply the principles thus deduced, to the present case.
First. It is not pretended that there has been an express agreement by the plaintiffs in error to pay interest on the moneys advanced by Reid. Secondly. Is there any evidence of an implied agreement to that effect ?
1st. There is no usage or custom knoAvn to the parties, set up. 2d. There Avas no specific time of payment agreed on. 3d. The account has never been liquidated. 4th. No account Avas ever rendered by Reid. Ch. J. Savage, in the opinion delivered by him in the Supreme Court, says, “ There certainly appears to haA'e been a culpable negligence on both sidesin Reid, in not rendering his account, and in the plaintiffs in error, in not requiring them. Upon the principles Avhich have been stated, as Reid or his representative holds the affirmative, and is bound to shorv the circumstance or fact which evinces an agreement to pay in
tcrest, .the admission of a culpable negligence on liis part, in omitting to do that which would apprise the adverse party of the state oí affairs and which would furnish him a. claim to interest, is, in itself, a strong circumstance against him. The plaintiffs in error then were, and still are on the defensive. Generally speaking, it is not the business of one who does not know the state of the accounts, and who turns out to be the debtor, to inquire into them; on the'eontra.ry, it is the duty of the creditor to apprise his ignorant debtor of the existence of the claim. And most clearly, I apprehend, is this the law with respect to agents. In the case of Lady Ormond v. Hutchinson, (13 Ves. 53,) Lord Eldon says, with respect to the steward of an estate, that “ it is not necessary to call for an account from him. His duty requires him to render accounts periodically, and if from negligence or any other cause he fails in that, he cannot make the obscurity occasioned by that omission, a cover to him.” The similarity of the case of a steward and that of an agent for a manufacturing company, is evident; and tile difference, if any, is in favor of holding the latter to a more strict accountability. It appears to me upon general principles of policy that no agent ought to be permitted to found a claim of any kind, either for interest or salary, upon his own culpable negligence.
Conceding, then, that the plaintiffs in error rvere equally culpable, in their neglect to require an account, but which is not admitted, the precise case is presented where the maxim applies, contained in Jenkins : “ Where neither party has any right, the condition of the possessor is the best.” The case of Beaumont v. Boultbee, (11 Ves. 359,) decides; that where there had been such a mutual acquiescence and negligence on both sides, very similar to the present case, the agent should not be allowed interest until after the bill filed. The cases of. White v. Lincoln, (8 Ves. 363,) and Pearse v. Green, (1 Jac. & Walk. 135,) cited on the argument on the part of the plaintiffs in error, together with various others in the equity reports, show the vigilance of the Chancery courts in preventing an agent from deriving any
Under the fifth head, as I have arranged it, of implied agreements to allow interest, we are to inquire whether there are any facts or circumstances in the transactions between the parties, either in the same or in any former business of the like nature, where interest has been allowed, or an intention to allow it has been evinced ? It is not pretended, nor would the case warrant it, that there are any such cin inn-stances in the transactions between the parties themselves, as evince an agreement to allow interest. But it is suggested in the opinion of the Chief Justice, that the defendants having agreed to pay interest on the advances made by Reid & Alsop, the yearpreceding, furnishes some ground for charging the plaintiffs in error with it in this case. It is due to the Chief Justice to observe, that this does not appear to be much relied on by him ; but as it was thrown out by him, and has been urged with much force by the counsel for the defendant in error, it ought to be briefly examined. In the first place, it was not a transaction between these parties ; and the fact, that the company had made a particular agreement with one agent to allow interest, and had subsequent ■ ly made another agreement with another agent, in which nothing was said about interest, would furnish at least as strong reason for saying that the one did not mean to pay it.
I conclude, then, that there is nothing in the agreement with Reid & Alsop, which can show the nature and terms of the subsequent agreement with Reid alone; and I consider that there is nothing in this case to establish an express or implied agreement to pay interest, which would oblige the Court to allow it, as a rule of law.
Is it, then, a case included under the second general head, where a jury might, in their discretion, allow interest ? It certainly is not one of those actions for wrongs, where such a discretion exists. Does it come under the second subdivision of this head 1 And is it a case where, upon natural principles of equity, the debtor ought to pay interest in consequence of any fraud, delinquency or injustice ?' The difficulty of arriving at precise and definite rules to govern this class of cases, has already been mentioned, and the causes of it explained. But I think I have shown that the general rule being that an agent is not to be allowed interest, unless there be evidence of an agreement to pay it, or a delinquency, the burthen is on the agent claiming it, to establish the agreement or the delinquency; and that lie must at least prove a knowledge on the part of his principal, that advances were making, and an acquiescence in their being made}
The facts in this very case, illustrate the principle. By the schedule A. referred to in the case and printed with it, it will be seen that the balance fluctuated, and that of those stated by the referees, ten were in favor of Reid, and thirty in favor of the company. It is reasonable, in such a state of things, to require of the company knowledge, or even reason, to presume that there was an ultimate balance against them ?
Again, by the resolution of June 15th, 1813, the agent was directed to furnish an estimate of the funds necessary for
How can it be said that the company should have given Reid notice that they did not mean to pay interest on the balance of his advances, when they were kept ignorant by him of the fact of his making them; and when, from the nature of the business, they could not know that there was or would be such a balance? And is it correct, in any case, to require a party to give notice that ho will not be accountable ? It is not incumbent on the plaintiff to show a liability, affirmatively, and can he be permitted to say that it exists, because a defendant has said and done nothing about it, either to create or acknowledge it, or to deny it?
Thus far, this case has been considered strictly in reference to those general principles of the law of interest, which have been stated in the former part of these remarks. It is believed that every case which has been cited, is comprehended in that arrangement, and classed in one or other of the divisions, excepting only two, which have been much re
The cases alluded to, are those of Liotard v. Graves, in the Supreme Court of this state, and The lessees of Dilworth v. Sinderling, in Pennsylvania. They are supposed to decide, that interest is allowable on cash advances, whether on one side only, or in the case of mutual credits, without the account being, liquidated, and without any other evidence or circumstance, to infer an agreement for the payment of interest. It will strike every one that such a rule ■founded on, and resulting from a particular case, instead of being deduced from general principles, must necessarily be arbitrary, fluctuating and capricious. To whatever extent the Supreme Court may have felt itself bomid by a prior decision of the same court, it is proper to observe, that, in this court, that decision is no authority. We are as much bound to revise it, as the one brought up by this writ of error. The decisions in both cases, are upon the same footing, and entitled to regard, not for the names and stations are of the judges, but for the principles and reasons on which they are founded, and which they contain. With respect to that of Liotard v. Graves, truth compels me to say, that there are no principles to be extracted from it. Livingston, J. allows the claim of interest, expressly on the ground, that, “ an account was rendered as early as 1797, which interest is calculated, and yet no objection to it was made, in the succeeding correspondence, from which, I conclude, such charge consisted with the understanding of the parties.” This is sound and intelligible. The principle of an implied agreement is recognized, and properly applied. Had this been the only opinion delivered, there*would have been no difficulty. But those of the other judges state the rule of law absolutely to be, that interest is legally demand-
/I admire that principle of flexibility in the common law, which enables it to be adapted to the ever-vaiying condition of human society; and it is in that respect unquestionably, altogether superior to any written code. But I understand that flexibility to consist, not in the change of great and essential principles, but in the application of old principles, to new cases, and in the modification of the rules flowing from them, to such cases as they arise : so as to presume the reason of the rules, and the spirit of the law..
Such, however, does not appear to be the case with the decision in Liotard v. Graves, if it be correctly understood by the Judges of the Supreme Court; .for unless it is put upon the ground assumed by Livingston, J. it departs from the spirit of the law of interest, and from the reason of all its rules in other cases. Admitting it, then, to be as supposed, it is not entitled to be regarded as evidence of the law.
But the dicta of the other three judges, (for really, they can be called nothing else, in that case,) do not come up to the present.0 They say interest is to be allowed on money advanced ; but whether in a case where the advances are all on one side, or in a case of mutual credits, they do p't
if, in considering that case, we are to be governed by the usual rules of construction, and confine the remarks of the judges to the case before them, the fair import of their decision will be found to be, that in a case where the advances are' all one side, and are made at the request of tire principal, interest is allowable. The claim to interest , in that case, was upon the charges for advances to Weeks, the captain of the vessel, and for other disbursements in London, while prosecuting the claim and appeal there. These advances were made by the express order of the defendant; and I cannot discover in the case the least evidence that the plaintiffs had received moneys belonging to Graves. In such a state of things, the decision in that case would be perfectly correct, and in conformity to the principles I have endeavoured to establish ; but is, obviously, wholly inapplicable to the present case, where moneys were received and paid out, and mutual credits existed ; and where there is' 210 evidence of a request or even knowledge of advances being made. From the cases cited, subsequently decided by the same judges, it would seem to me, that they did not intend to establish a general rule, by the decision in that case, but were governed by its peculiar circumstances. With regard to this case then, I consider, firstly, that it does not establish the rule contended for, and is inapplicable to this caso; and secondly, that if it did, it would be contrary to the whole current of authority, in England, and in this country, at the time of our revolution and long after, and unsupported by the principles of analogous cases, and ought not be regarded as authority in changitrg the law.
The other case relied on as an authority to sustain the judgment of the Supreme Court, is that of Dilworths lessees v. Sinderling, (1 Bin. Rep. 448.) That was, indeed a most extraordinary case, in all its features. It was an action of
But, if we may look abroad for cases, to sustain and fortify our conclusions, there are two proceeding from the very respectable Supreme Courts of Massachusetts and. Connecticut, which are worthy of our attention, not only on account of the sources from which they emanate ; but from their harmony with the other cases and with analogous principles. That of Winthrop v. Carleton, (12 Mass. Rep. 4,) is precisely like that of Liotard v. Graves, as it seems to be understood by three of the judges who decided it. The Supreme Court of Massachusetts refused interest on such advances except from the time of the commencement of the suit, because there had been no liquidation of the accounts, and no demand made,
Having finished the examination of the only two cases which are relied on to sustain the position, that interest is allowable on money lent or advanced without any agreement express or implied for the payment of interest, and without any liquidation of the account, or any other circumstance to show a default in the debtor, I am brought to a point in this cause, where firm ground is felt, and where we are relieved from the obscurity and inconsistency of the modern cases. It has already been alluded to incidentally. The common law of England, as it stood on the 19th day of April, 1775, in relation to the allowance of interest on money advanced in the case of mutual credits, without liquidation of the account, has not been denied or questioned. In such a case interest was not allowable. The testimony of Lord Ellenborough and Mr. Jefferson, the chronological arrangement of the cases in the opinion of Ch. J. Savage, and the citations of the counsel on both sides, establish this position beyond all controversy. The constitution declares that it “ shall be and continue the law of this state, subject to such alterations as the legislature shall make concerning the same.” The legislature has made no alterations in the law now under consideration. I feel myself as much bound to adhere to that law, as if it were en-grafted in the constitution in so many words ; and I can no more depart from it, than I can from any other principle of the common law. I mean not to be understood, that when the judges of England, have applied the principle of the common law erroneously, we are not at liberty to correct the application, and restore those principles to their original purity. But it should be a clear and 'unequivocal case of erroneous application; and even then, we should not lightly disturb a rule settled for a century.
It has been one object of the review and arrangement of the cases which has now been made, to showthatthe courts in England have correctly applied the principles of the laiv of interest in all other cases to that of mutual accounts for money advanced and received; and that they pursue the analogy of those cases and follow the reason of them, when they require an agreement, express or implied, to pay inter
The result of my opinion is, that this being a case of mutual credits, where the account was never liquidated, there being no evidence of any agreement to pay interest; and there being no default in the plaintiffs in error for not paying a balance of the existence of which they were ignorant, interest ought not to be allowed on any of the items. And if, in any case of mutual credits without a liquidated account, it could be allowed, I am of opinion that the culpable negligence of Reid, in omitting to furnish an estimate of the necessary funds as directed, and in omitting to render his accounts for more than six years after the balance accrued to him ought to preclude him or his repesentative from the recovery of any interest, but from the time when he made a demand of that balance by suit.
I am therefore for reversing so much of the judgment of the Supreme Court as allows the defendant in error any interest before the commencement of the action.
On the 1st of May, 1813, all the materials and stock then owned by the directors amounted to $13,186 58. The intestate then took the active agency of the factory. The stock, materials and funds of the directors were insufficient to keep the factory in operation; and large advances were required for that purpose. The proceeds of
On the 12th of October 1821, the general account current was rendered to the directors. The debit side of the account contained five hundred and twenty-seven items, each of which was for cash advanced or paid out by the intestate for the purpose of keeping the factory in operation. The credit side of the account contained seven hundred and eighty-seven items, each of which was for cash received by the intestate for glass made at the factory, and for other property of the directors, sold by the intestate. The whole amount of cash advanced and paid by the intestate for the directors, between the 1st of May, 1813, and the time of his death, was one hundred and seven thousand and five hundred and seventy-nine dollars and seventy-four cents. The amount received by him during the same time, and credited to the directors, was one hundred thousand and ninety-nine dollars and eighty-eight cents.
The referees were unanimous in opinion, that there was due to the intestate on the 21st of March, 1822, for principal, the sum of six thousand eight hundred and eighty-two dollars and ninety-one cents; but they differed in their opinion on the subject of interest, the referees dissenting from the report, being of opinion that interest ought to be calculated only to the 1st day of January, 181G, and the the two rdferees making the report, being of opinion that it should be calculated to the 4th day of May term, 1822.
The Supreme Court set aside the report, so far as it allowed interest after the 2d day of January, 1819; and also on the charges for the salary of the intestate; and allowed interest on the receipts and advances of cash from the time of making or receiving it, to the second day of January, 1819. In coming to this decision, the court have commented upon most of the English and American decisions on the subject of interest, but have conceded that no case is to be found precisely parallel with the present. The decisions of the courts of other states are not obligatory upon the courts of this; but are entitled to great respect, as the opinions of learned men and able jurists. While the common law of England, as it existed in 1775, is adopted by the constitution of this state, and therefore obligatory on every court in it; this adoption, however, must be understood to be so far only as the common law of England is applicable to our system. On the question of interest, it is not pretended there is any difference in principle. In point of fact, the rate of interest is two per cent, less there than here. If, then, the same law is to govern, and interest cannot be recovered in England at five per cent, can it be recovered here at seven? That is the question.
Mr. Justice Sutherland, in giving his opinion in this cause, says, “ It may now be considered as settled, in England that no interest is recoverable upon money lent, money had and received, or paid, laid out and expended, without an express contract for its payment, or proof that the money has actually been used by the defendant, or of special circumstances, from which an agreement to pay interest maybe inferred.
Mr. Chief Justice Savage, in giving his opinion, does not controvert this position. These are the only opinions delivered in this cause. Yet the conclusion in both is to allow interest.
Mr. Justice Sutherland speaks of the present time, “ now settled in England,” as if it had not been long settled. How then is the fact ? Mr. Chief Justice Savage says, that in Calton v. Bragg, (15 East, 223, A. D. 1812,) Lord Ellenfiorough said, that Lord Mansfield had set in the K.’s B. for
Here, then, is the declaration of Lord Ellenborough, as to the uniformity of the decisions on the question of interest, in England for more than half a century—carrying us back beyond the period of our revolution, and the adoption of our constitution. And when, in point of fact, he is not shown to he mistaken, how can we conclude that he is so ? It is an official declaration, made, in the decision of a cause, in which the length of time that the rule had been settled, is assigned as a reason for not altering it. ■ Is it to he supposed that this declaration, made by the Lord Chief Justice of England, in the face of that nation and of the world, is not true? And, if it is true, it appears to me there is an end to this question. For no one will pretend that we are not bound, in the decision of this cause, by that rule of law which is recognized as part of the constitution of the state. If I am correct in this application of the constitution and the law, though I have other reasons, it could not he necessary to state them. But as my application maybe questioned ; and my opinion is founded as well upon equity and justice, as upon what I conceive to he the’constitution and the law, I shall proceed to examine the law on other grounds.
It is liot pretended that interest is recoverable on an unliquidated account for work and labor, or goods sold and delivered, unless the work is done, or the goods delivered, in pursuance of an agreement to pay interest.
Tiie reason for an exception in favor of cash accounts, I have never been able to discover, or in what particular an unliquidated cash account is different from any other unliquidated account.
The liquidation of accounts, whether for labor, goods, or money, is a matter of fact for the consideration of a jury, without regard to the nature of the items of which the account is
Interest must be computed on a certain sum; and so long as the amount is uncertain, it forms no criterion for the computation of interest: consequently, interest can never form any part of an unliquidated account of any description. It is no part of the amount due, and can only be computed on the amount when ascertained.
There is nothing in money thate makes it better than labor or goods. The chief use of money is to purchase labor and goods. Money is only the means of facilitating exchange; and whenever used, the commodity purchased is paid for, and no account is necessary to be kept against the purchaser. It is only when business is done on credit, that accounts are necessary to be kept, and that necessity must be limited to the commodities purchased and sold; such as labor and goods, and can never, on principle, be extended to money. But if cash accounts are kept, and are unliquidated, they must be placed upon the same footing of other unliquidated accounts.
Whenever items for cash have appeared in unliquidated aó ounts for other things, the items of cash have been considered by the Supreme Court, as if they were different from other items m the same account. But I know of no case where any reason is assigned for that difference. The liability of the defendant to pay interest can not depend upon the nature of the consideration for which he is indebted, whether that consideration is for labor, goods or money; for that would be making a distinction where there is no difference. Whenever the amount due is ascertained, it must be done in the money of account of the United States, which is dollars and cents; and whether those dollars and cents are for husks or pearls, it can make no possible difference. “ Things equal to one and the same thing, must be equal to another.”
In practice, money to any very considerable amomit is never lent or advanced, unless the terms upon which it is done are agreed upon between the parties. If it is agreed that interest should be paid, the rate is fixed by the sta
It is the difference between the party who has secured interest by agreement and the party who has neglected to do it, that has given rise to all the devices used to recover it. If this difference is a sufficient consideration, it would on the same principle, and for the same reason, justify the Court in altering every contract complained of by either party, as unequal or disadvantageous ; and thus make the measure of justice, in every case, depend upon the whim of the Court, and not upon the agreement of the parties.
But there is another view of this subject. The intestate was one of the principal stockholders, and most intimately acquainted with the business of manufacturing glass; and well knew whether it was profitable or otherwise. He had been concerned as a co-partner the year preceding the commencement of his agency. With his interest, then, as a stockholder, and his experience and knowledge as an individual, he advanced and paid for the directors between the first day of May, 1813, and the time of his death in August, 1821, one hundred and seven thousand, five hundred and seventy-nine dollars and seventy-four cents. If the intestate had not been reimbursed, during the same' period, any part of that sum, or had not been reimbursed the greatest part of it, by the direc tors, the inference made by the Supreme Court, that it must be intended that the intestate should make the advances on the credit of the directors, might be correct. But when it is considered, that during the same period the intestate received for glass made at the factory, anc other property of the directors sold by him, one hundred thousand one hundred and ninety-nine dollars and eighty-eight cents, and never informed them that there was any deficiency, or called upon the directors for any advances, is it not a more rational inference, that the
If the directors put into the hands of the intestate the means of creating a fund, and he looked to those means and that fund for reimbursement, and made the advances upon the credit of the fund, which he thus had the power of creating, and has never been deprived of that power, and has always had the benefit of that fund, his expectations are as fully realized, as if he had • the bond of the directors, under their corporate' seal, and they had tendered to him a full and complete performance of it; for the best, and most satisfactory performance, is that which equals the expectations of the parties. “Whatever is expected by one side, and known to be so expected by the other, is to be deemed a part or condition of the contractand that is a principle of universal law.
The chief business of the intestate, as agent, had ceased on the 3d of May, 1815, when the factory was destroyed by fire. From the account of the intestate as exhibted after his death, the balance of principal claimed, was $7379 86. It does not appear that the intestate had even intimated that a balance was due to him, until the 2d day of January, 1819; and that is the day to which the Supreme Court allow interest to be computed. But the reason for resting on that particular day does not appear. It is assumed, however, that it must be on account of the intimation of the intestate to the directors, that a balance was due at that time. If the intestate had, at the same time, exhibted his account, and such account had not been objected against, it might have been considered as liquidated, and such liquidation might have warranted the allowance of interest after that time. But on what principle an intimation that a balance was due, followed by a request to make out the account, which was not done, should have the effect of giving interest to that time, and of preventing the accumulation of it thereafter is inconceivable to me. And it is equally difficult for me to conceive, how such intimation and request,
In giving the opinion of the Supreme Court, it is said to be “ stated in the case, that when the intestate was appointed agent in 1813, the stock, materials and funds of the directors were insufficient to keep the factory in operation, and large advances were required for that purpose.” It is then asked, •“ what then was the understanding of the parties as to the manner of carrying on the business ? How were those advances to be made, and by whom? And on what terms ? Without funds the business could not be prosecuted. Had the directors intended to furnish the necessary funds themselves, they would have made a further call upon the stockholders. Not having done so, they must have intended that the,¡advances should be procured in some other way ; and of course, by the agent, as he was the only active person engaged in the business, and had, the preceding year, made the advances in the same business.” This is assum-' ing facts that do not appear, and then reasoning from them as if they existed. The preceding year, the intestate, Robert Alsop, and the directors, entered into a copartnership, under the name of John Reid & Co., for the purpose of manufacturing glass; and by the articles of copartnership, it was stipulated what each one should do ; but at the end of the year, when the intestate took charge of the business as agent of the directors, no such stipulation was entered into between the parties; and that is one point of difference between the two cases. Another is, the parties are not the same. If there is any implication of law as applicable to a tenant holding over, it can only exist as between the parties ; but the application of such a rule to this case might be questioned on other grounds. The interrogations are also made upon a misapprehension of facts. It now appears, that the stock, materials and funds, were insufficient to keep the factory in operation. But did it appear before the advances were made ? And if so, who knew it ? The intestate was the only person who had charge of the business ; and, consequently, the only person to whom the fact could be known. It is true, it was his business to know ife
The sense of the parties, as indicated by their acts, evidently is, that the proceeds of the sales of glass, and other property of the directors, should be disbursed by the intestate as their agent, if necessary, in carrying on the business and keeping the factory in operation. And if such proceeds were not sufficient, it was expected the intestate would notify the directors, which he did not do ; but proceeded to make the advances without giving such notice: thus, not only neglecting his duty, but transcending his authority as an agent. It follows, therefore, that the intestate was the delinquent, and the court are now called upon to reward his delinquency, not merely by reimbursing the money advanced, but to do it with interest.
If the above reasoning is correct, it would go to preclude any recovery for either principal or interest. But there is no question as to the principal. If, however, it was in question, and could not be recovered, can any recovery be had "‘or the interest? If the directors had received any profits rrom the use of the money advanced by the intestate, it would be just and equitable that they should be charged with the interest to the amount of such profits ; or had the money been advanced at the request of the directors, they would then have assumed the risk, and without regard to the profits, been justly chargeable with the interest. But when we consider the money voluntarily advanced, not on the credit of the directors, but on the credit of the business, a business conducted solely by the intestate, why should the failure of the business give him a claim upon the directors for interest ? Had the directors known, as the intestate must have done, that manufacturing glass was a losing business, it is not to be supposed they would have continued
It is conceded by the Supreme Court, in giving their opinion, and there is no case parallel with the present. If this concession is true, it may be questionable whether it ought not to he sufficient to reverse this judgment. I have always considered justice best administered, when the Court pronounced the law as it was at the time of the decision. The legitimate power of the court is limited by the law of the land ; if not exercised according to that law, it is done against right, and is a usurpation. Now rules of property should be established from the principles deduced from analogous cases, and the fitness of things: hut old rules should never be altered for such causes. The community suffer less from the number of new rules, than from the alteration of old ones. The ends of justice require that the law should be certain. If the facts presented in the present case had never before existed in any other, the decision of the Supreme Court would not be complained of as erroneous. But, in practice, the same facts must have frequently occurred. The disbursements of agents in conducting the business of their principals, of attorneys and solicitors, in the progress of their client’s causes are every day cases, that happen as often as agents are appointed, and attorneys and solicitors retained. Yet no case is to he found where interest
The security, for capital, that is given by the government and laws of any country, is the strongest inducement to the accumulation of it. And in a nation like this, where so much capital is employed in the hands of agents, I should shudder at a decision, giving to the agent the right of swallowing up that capital, by interest on advances of his own, voluntarily made, in a losing business, known only to himself, and not disclosed to his employers. The force of principle might compel me to yield to such a rule, if settled as the law of the land; but I cannot do it on the score of comity. And I must say I should mourn over that land, were I an inhabitant of it, where such a rule prevailed.
If this had been an ordinary case, I should have contented myself with giving my opinion without my reasons. But viewing the decieion of the Supreme Court, as I do, not only erroneous in principle, but fraught with incalculable mischief to the community, I have taken the liberty of troubling the court with these reasons; and such is my apology, if any is necessary, for doing it.
Burt, Clark, Dudley, Gardiner, Lynde, Wilkeson, Wooster and Wright, Senators, concurred in the result of these opinions.
But a majority of the court concurring in the result of the opinions delivered by Sanford, Chancellor, and Golden, Senator,
It was thereupon ordered, adjudged and decreed, hat the judgment of the Supreme Court be, in all things, iffirmed, &c. and that the record and proceedings be remitted, &c.
It seems, from the opinion of Ch. J. Parker, that the only question in relation to interest, hi that case, was, whether South Carolina interest, at the rate of seven per cent, was to be allowed, or Massachusetts interest, which was only six. By the report of the case, which is rather obscure, it does not appear that the interest which accrued prior to the commencement of the suit, was claimed at the trial. If it was not, the court could not allow it under the stipulation by which the cause was brought before them. It is probably this fact to which the chief justice alludes, when he intimates that such interest might have been recovered, and at the South Carolina rate, if it had been at tended to in season.
Vid. Jacobs v. Adams, (1 Dall. 52.) per M’Kean, C. J.
But see note, ante p. 600.