3 Cow. 393 | N.Y. Sup. Ct. | 1824
It is admitted, that on the 22c? of Marche 1822, when the report of the referees was made, the defendants were justly indebted to the plaintiff in the principal sum of $6882,91 ; and the only error complained of in the report of the referees, is in the interest allowed to the plaintiff. The principle upon which the interest is to be calculated, and the time to which, are the only questions for the determination of the Court»
^he
. It Was justly remarked, at the bar, that there is no subject! in the whole range of the English law, ori which the author-^ ities are so little in harmony With each other, as on that of Merest; and the' American authorities are scarcely less contradictory. It may now, howéver, tie considered as settled, ^ng^anc^> that no interest is recoverable upon,money lent, money ha‘d and received, or paid, laid out, and expended, without an express contract for its payment, or proof that the money has actually beén used by the defendant, or of special circumstances, from which an agreement to pay interest may be inferred.' Where money is lent upon a written security, fixing the day oif payment, interest is" also recoverable from that day. But where goods are sold upon a credit, no interest is recoverable from the time when the credit expires, without an agreement, either express or implied, to pay it.
English cases stated anil considered.
In De Haviland v. Bowerbank, (1 Campb. Rep. 50) the Question was, whether an agent was responsible for interesé upon money had1 an'd received, to the use of his principal ; and if liable at all, whether interest Should run from the time-When the money was received, or from' the timé whea payment Was deina'nded. It Was held, by Lord Ellenborodgh, Ch'. J. that no- interest could be recovered; and he stated the rule to be, that where money of theplaintiff had. cometo the hands of the defendant, to'establish a right to'interest upon it, there should either be' a' s'pecifick agreement to that effect, or something should appear from' which a promise to pay interest might be inferred, or proof should be given of the money being used. De Bernales v. Fuller & others, (2 Cambp. Rep. 426) was also a case of money had and received. Interest was refused ; the rule laid down in De Haviland v. Bowerbank was reiterated, and was also stated to have been confirmed by the Court of King’s Bench. In a note to this case, Gordon & others v. Swan & others is stated, in which the Court of King’s Bench determined, that interest is not recoverable in an action for goods sold and delivered, to be paid for at a certain day. Bayley, J. observed, that the six months credit was for the benefit of the purcha
In Calton v. Bragg, (15 East, 223) the question was, as to a right to recover interest upon money lent. It was argued, that there is a difference between the case of money had and received and money actually lent / but the distinction was repelled by the Court ;• and, after a consideration of all the authorities, the rule, as laid down by Lord Ellenborough, ia the cases already cited, was fully sanctioned and established. (Walker v. Constable, 1 B. & P. 306. Tappenden v. Randall, 2 id. 472, S. P.) His Lordship has been uniform and consistent in the application of this rule ; for in Kingston v. M'Intosh, (1 Campb. Rep. 518) he refused interest upon the sum insured in an action upon the policy; in Atkinson v. Lord Braybrooke, (4 id. 380) he decided, that no interest was recoverable in an action upon a foreign judgment; and in Crockford v. Winter, (1 id. 129) he refused interest in an action for money had and received, although the money had been obtained by fraud.
Before the time of Lord Ellenborough, it had been held, in the case of Blaney v. Hendrick, (3 Wils. Rep. 205 ; 2 Bl. Rep. 761, S. C.) that interest was recoverable upon an account stated, and upon money lent; (Robinson v. Bland, (Bull. N. P. 274-5, S. P.) and in Trelawney v. Thomas, (1 H. Bl. 305) that it was also recoverable upon money laid out for the use of another, and for money lent, and that the two cases stood upon the same ground of reason, justice and equity ; and in Mountford v. Willes, (2 B. & P. 337) interest was allowed in an action for goods sold, from the expiration of the credit given.
Numerous as have been the cases in England, in which this question has been raised and discussed, very little has been said by any of the Judges as to the reason or principle upon which the allowance or refusal of interest depends, Lord Ellenborough, and the other Judges who have gone with him upon the subject, seem to consider interest as a demand altogether distinct from, and independent of the original debt; and not as growing out of, or necessarily connected
demom^' diatinet from the principal.
Strictness of noTadoptetTin this country,
ded^in New-York,
The- strictness of' the English Courts, upon this subject,. has never-been adopted by this Court, or, I may say, generally, by the Courts of this country. Thus, in Pease v. Barber, (3 Caines’ Rep. 266) it was held, that interest may be recovered under a count for money had and received, against the express decision of the- English C. B. in Walker v. Constable, (1 B. & P. 307) and. Tappenden v. Randall, (2 id. 472.) The Supreme Court there- say, “ The action for mo
In Liotard v. Graves, (3 Caines’ Rep. 234) it Was held, ioy all the Judges, that interest is recoverable upon money paid or advanced, from the date of its advancement; but that, upon an account for goods sold, no interest is recoverable, unless there be evidence of an agreement to pay it, ■ intil a liquidation of the account takes place. Newell v. Griswold, (6 John. Rep. 45) also decides the latter point.
In Beals v. Guernsey, (8 John. Rep. 446) which was an action of trespass against a Sheriff, for illegally taking the plaintiff’s personal property, interest was allowed, by way of damages. The Court say, “ The plaintiff ought not to he deprived of his property, for years, without compensation for the loss of the use of it; and the jury had a discretion to allow interest in this case, as damages. It has been allowed in actions of trover, and the same rule applies in trespass, when brought for the recovery of property,”
In The People v. Gasherie, (9 John. Rep. 71) interest was allowed on money which had been collected and applied, by the testator óf the defendant, to his own use, from the time when it ought to have been paid over. The Court advert to the (then) late English decisions, in which interest had been refused on liquidated sums, and on money obtained by fraud, and express their dissatisfaction with them. They say, “ If the defendant retains, and converts to his own use, the plain= tiff’s money, he ought to pay interest. It is allowable in actions for money had and received. In trover, for a speeiñck chattel, the jury may, and, in many cases, ought to allow interest for the detention, by way of damages.”
The case of Kanes v. Smith, (12 John. 156) falls within the principle of unliquidated accounts for goods, &c. The advances made by the plaintiffs were not in money, but in cargoes ; that is, in merchandize. The defendant furnished a cargo of wine, which the plaintiff’s ship took to the East indies, under a special agreement as to the mann erin which the proceeds should be disposed of. One part of the agree-
^Massachusetts
The spme general principles have been established ip Massachusetts and Pennsylvania. (Fowler v. Shearer, 7 Mass. Rep. 24. Wood v. Robins, 11 Mass. Rep. 504. Weeks v. Hasty, 13 Mass. Rep. 218.) These were actions for money paid, and money had and received, and interest was recovered from the time the money was paid or received.
Pennsylvania.
So in Rapelie v. Emory, (1 Dall. Rep. 349) interest was allowed on money had and received. It was put upon tfye same ground as money lent, and held to be clearly distinguishable frqm the case of goods sold and delivered, where no money pass.es between the parties. In Commonwealth v. Crevor, (3 Binn. Rep. 123) Tilghman, Ch. J. says, it is considered as settled, th.at interest shall be recovered against a man who has received the money of another, and holds it against his consent. The Lessee of Dilworth v. Sinderling, (1 Bin. Rep. 488) is very analagous, so far as the question of interest was concerned, to the one now under consideration. There a trustee was allowed interest upon advances 'made by him for the use of the cestuy que trust. Those advances were part' of a general unsettled account with the trqst estate, composed of charges for expenses and advances in erecting buildings, &c. on the one side, and- of credits for
These cases appear to me to put the claim of interest -upon its true principle., 1 hey consider it as a necessary incident to the principal debt; and imply a promise to pay ,7, 7 . ; i J: . It from the day the debt becomes due, if it is not paid. This promise is supported by the universal obligation which rests upon every man to render a just equivalent for the use or detention of that which does not belong to him. The value of money is the legal rate of interest. That, then, shall be paid.
American ca-s¡der jntei.Cil¿ a,n incident to the principal debt.
In actions sounding in tort, where no contract can be supposed to exist, the same rule of compensation may be adop- * e . ' 1 ted for th-e improper detention of specific articles of personal property; but it shall be given by way of damages, and act as interest.
interest ai1?wed m actions sounding in tort-
No interest shall be allowed upon an unliquidated account -fur goods, wares, and merchandize, without an agreement to allow it either express or implied •, because the balance of the account, only, constitutes the debt, and, until that is ascertained, there is, strictly speaking, no debt due. This appears from the manner in which an account may be proved»
Merest not ^q’^tea1 ac" count; anc. wh5r‘
The reason sometimes given, why an unliquidated account should not carry interest, viz. “ that the defendant does not know how much he has to pay,” can not he the true one. It would be a sufficient answer to it, to say that he can always ascertain.the balance by application to the plaintiff. But again, an agreement, either express or implied, to pay interest on the different items of an account, either from the day of their.delivery, or after a given credit, will be effectual. But, notwithstanding such agreement, the defendant is as ignorant of the balance of the account, as though it had not been made. If such ignorance, therefore, was the ground for refusing interest, it would not and ought not to be allowed," notwithstanding the agreement. But such agreement breaks up and destroys the individuality of the account, and renders each item a distinct independent debt, due at the time agreed upon, and, of course, carrying interest from that time.
It is settled thaUnteresHs allowable on af °cashmUaccount.
But whether this reasoning be sound or not, is of very l'tíle importance. For I conceive the principle which it is intended to illustrate to be fully established in the cases of Liotard v. Graves, and of the Lessees of Dilworth v. Sinderling & Lewis, already cited, viz. that an unliquidated account for money paid, or lent, does carry interest. When
To apply these principles to the case before us. ín May, ' 1813, Reid entered upon the duties of active agent for the defendants. The case states, “ that, at that time, the stock, materials and funds of the defendants were insufficient to keep the factory in operation ; and large advances were requiredfor that purpose. No express authority or direction was given to Reid to make the advances ; but if they were necessary to keep the factory in operation, and no provision was made by the company for them, an authority to the agent to procure them was necessarily implied, ft must be understood that the defendants were well informed of the state of their affairs when Reid entered upon the agency» Knowing, then, that advances were necessary to keep the works in operation, and it being the business and duty of the agent to keep them in operation, the fact of his appointment as agent, under such circumstances, implied an authority to make advances, or borrow money for the purpose. His skill and fidelity in the management of the concerns of the company have not been called in question. It is not pretended that the advances exceeded the exigencies of the concern, or that they have not been proved and established with the most scrupulous exactness.
Principles ap-> ease*t0 i>re3m*
The case states that the debtor side of the plaintiff’s account consisted' of more than five hundred charges, for distinct advances, each of which was clearly proved. The particular purposes to which the money thus advanced was applied is not stated in the case. That they were such as came within the scope of the authority of a general agent, there can be no doubt, or the plaintiff’s demand would have been resisted on that ground. But the only ground of complaint is, that the intestate did not render his account; and apprise the defendants that it was a losing concern. No reluctance was ever manifested by him to account. His account was never asked for until 1819, when he stated to some of the directors that the company were in his debt s
I think he is not entitled to interest upon-his' compensatien as agent. No agreement was ever made as to the amount which he was to receive. His- predecessor-, it is true, had received $1250 ; but the company were nob concluded by that circumstance from lessening the compensation to' him, if, either from the diminished duties of- the station, or the state of their funds, they thoughtit expedient. There was nothing by which either party was concluded-as-to the amount of compensation. It could be recovered only upon a quantum, meruit; and must be considered as an uncertain- and unliquidated demand ; and, therefore, cannot carry interest until demand made. (Trelawny v. Thomas, 1 H. Bl. 305, per Gould, J.) With these modifications, X am of opinion that the report of the referees should be confirmed.
The questions.
The questions for the decision, of the 1 Court are, whether the plaintiff" is entitled to interest on any part of her demand ; and if any, on what part,, and for what time.
Cas6 stated.
To decide these questions correctly, it seems to me imp0rpant to understand what was the agreement between the
It is stated in the cáse, that when Reid was appointed agent in 1813, “ the stock, materials and funds of the defendants were insufficient to keep the factory in operation, and large advances were required for that purpose.” What, then, was the understanding of the parties as to the manner of carrying on the business 1 How were those advances to be made, and by whom ? And on what terms ? Without funds the business could not be prosecuted. Had the defendants 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. It was certainly no part of his duty, as agent, to make advances from his own funds, Suppose it had not been in his power to do this : the defendants did not furnish them; and suppose that, under these circumstances, he had borrowed the necessary amount ; would it be contended that he should pay the interest himself? Why should he do this ? was he to be benefitted by the use of the money ? Or was it the defendants, the principals for whom the agent acted, who were to receive the con-
but principals' hK not own for 3iis benefit $ for the
terest^be recoverabie on account at6for monies.
It ivas contended on the argument, that interest is not recoveraMe on an unliquidated account for monies, unless there be an agreement to pay interest, express or implied, or a fraudulent detention or vexatious.delay ; and that the case; under consideration comes within that principle. A review of some of the cases on this subject may be of use.
, English cases.
The oldest case cited is that of Sweatland v. Squire (2 Salk. 623, A. D. 1699,) where it was said by Powell, J. that interest is recovered by way of damages, when damages are recovered ratione detentionis debiti; but not when damages only are recovered; for interest is not recovered oo casione dampnorum. In the Attorney General v. The Brewer's Company, (1 P. Wms. 376, A. D. 1717) the defendants were trustees of a charity ; and, by improving the trust estate, had brought the charity in debt.- On rendering an account, Ld. Cowper refused to allow interest before the confirmation of the master’s report; for, until then, it was not a liquidated sum. In Harris v. Benson, (2 Str. 910, A.D. 1732) the Chief Justice said interest had never been allowed for money lent, without a note. In Robinson v. Bland, (2 Burr. 1085, A. D. 1760) it was decided, that interest was recow
Pennsylvania-
' jn Rapelie v. Emory, (1 Dall. Rep. 349, A. D. 1788) if was ruled, by Shippen, President, that when one man has received the money of another, and retains it without his consent, it is to he considered in the same light as money lent, and should carry interest. In Crawford v. Willing, (4 Dall. Rep. 289, A. D. 1803) Smith, J. said, “ Whatever may have been the doctrine in former times, we have traced, with pleasure, the progress of improvement, upon the subject of ■interest, to the honest and rational rule, that wherever one; man retains the money of another, against his declared will, the legal compensation for the use of money shall be charged and allowed ; and that, in the case of goods sold, inte3 rest should be allowed after the time of credit had elapsed,ánd demand of payment was made. In Lessee of Dilworth v. Sinderling, (1 Bin. Rep. 194, A. D. 1808) Tilghman, Ch„ J. declared the law to be settled, that interest is recoverable on an account for money lent and advanced ; and it was allowed to a trustee, upon advances laid out in improvements upon the trust estate, it appearing that the improvements were necessary and proper. In The Commonwealth v. Crevor, (3 Bin. Rep. 123, A. D. 1810) he says, it is settled, that interest shall be recovered against a man who receives the money of another, and holds it against his consent. In Brown v. Campbell, (1 Serg. & Rawle’s Rep. 179, A. D. 1814) he again says, the rule is, to allow interest where the defendant has retained the money of. the plaintiff unlawfully, and against his consent: that, until thp defendant was informed that the plaintiff’s money was applied to his
In Wood v. Robbins, (11 Mass. Rep. 504, A. D. 1814) the defendant had fraudulently obtained possession of the plaintiff’s money ; and Putnam, J. after reviewing most of the authorities, says, there may be cases where interest should not be allowed, as where the defendant was a mere stockholder, ready to pay the money to the party entitled ; but when the defendant has frauduletly obtained the money, or wrongfully detained it, he must be charged with interest. In Winthrop v. Carleton, (12 Mass. Rep. 4, A. D. 1815) the plaintiff, as consignee, made necessary advances, and recovered interest on them after suit brought.
In Connecticut, as appears by Selleck v. French, (1 Con. Rep. N. S. 32, 35, per Swift, J. A. D. 1814) interest is allowed on the ground of a contract expressed or implied, or as damages for the breach of a contract, or the violation of some duty ■. e. g. 1. Upon an express contract: 2. Upon an implied contract, arising from usage of trade, or former dealings between the parties ; 3. Upon a written contract to pay at a day certain, as on bills and notes, and on a policy after the money becomes due : 4. For goods sold, after the time of credit has expired : 5. For money received to the use of another, and retained contrary to duty; <3. For money obtained fraudulently, if the tort is waived, and assump? sit brought: 7. On a liquidated account: 8. On book account for services performed or articles sold, when, from the nature of the transaction, it appears not to be the intention of the parties that the services or articles were to rest on the footing of a mutual account on book : 9. But where there are mutual accounts, founded on mutual dealings, unless there be some promise or usage to pay interest, it will not be allowed. In such cases, no time of payment is stipulated ; each party is making payment; the balance is constantly changing; and the presumption is, that no interest is to be charged. In the case then before the Court, interest was allowed ; there were no mutual dealings ; the advances were all on the part of the plaintiff; there was no liquidated account, nor promise, nor usage; but the debt was
New-York.
In Gammell v. Skinner, (2 Gall. Rep. 45, A. D. 1814) in-, terest was denied on seaman’s wages, until after demand made ; and where there had been no actual demand, it was held to run from the commencement of the suit.
In this state there have been several decisions on the subject of interest, which apply to most of the questions under consideration. Liotard v. Graves, (3 Caines’ Rep. 226, A. D. 1805) is a leading case. There, an account current had been rendered in 1797, containing a charge of interest, which was not objected to in the succeeding correspondence between the parties. Spencer, J. says, that for goods sold and delivered, unless there be evidence of an agreement to. pay interest, none is recoverable until liquidation ; that an account transmitted to a debtor, and acquiesced in, becomes liquidated, and interest is allowable ; that on money advanced interest is legally demandable ; and so by the usage of a particular trade. Thompson, J. said the plaintiffs had a right to charge interest on the money advanced ; that the account could not be considered settled, and on that ground carrying interest; that it was merely an account current between the parties ; and, unless some usage or practice was shewn, to. warrant the allowance, he should think interest ought not to, be calculated, except on the money advanced, Livingston,, J. said, “ If there be no special agreement between the parties, or usage of trade to the contrary, it ought to be allowed on all moneys advanced from their respective payments. One account is rendered as early as 1797, in which interest is calculated, and yet no objection is made to it in the succeeding correspondence, from which I conclude such charge consisted with the understanding of the parties.” Kent, Ch„ J. said, “the account exhibited is not an account liquidated, but a naked account current; and interest is allowable only on such items in it as are for moneys advanced, except the usage of trade has provided some particular rules o.n the subject.” At the next term, the case of Pease v. Barber, (3 Caines’ Rep. 266, A. D.
In Campbell v. Mesier, (6 John. Ch. Rep. 24, A. D. 1822) Chancellor Kent says,' “ it is the settled rule in the law of this state, that money received or advanced for the use of another carries interest after a default in payment ; and it is a very resonable and just rule.”
From an examination of these cases, it seems that interestis allowed, 1. Upon a special agreement: 2. Upon an implied promise to pay it; and this may arise from usage between the parties, or usage of a particular trade : 3. Where money is withheld against the will of the owner : 4. By way of punishment for any illegal conversion or use of another’s property : 5. Upon advances of cash, on the authority of Liotard v. Graves.
But Was it not his duty, as agent, to have rendered accounts regularly to his principals; and to have kept them advised'of the true state of their affairs ? There certainly appears to have been a culpable negligence on both sides» The defendants do not seem to have appointed any committee, to examine Reid’s accounts, as they did Kane’s, when he was their agent.
The defendants, having agreed to pay interest upon the advances made by Reid & Alsop, admitted, in that instance, at least, the propriety of such a charge against them. And, on the whole, I am of opinion, that from the manner in which the business had been done, the year next previous to the appointment of Reid as agent; from this being done, with a full knowledge on both sides that large advances were necessary ; if the defendants did not mean to pay interest, they ought so to have informed Reid, in order that he might not be using a large capital in their service when it was to be totally unproductive to him. Although Reid had the means of ascertaining the true state of the accounts, yet he had not the sole means. The defendants were equally able to determine by an inspection of the • books whether he had been re-imbursed for his advances. The ease does not inform us that any intimation was given by
bellowed till 1st January, vahees 8l1"
ílary0t0nt^e
*be compensation for Reid’s services, no sum was ever agreed upon between the parties; and his claim for these was never liquidated till it was done by the refereesínteres t ought not, therefore, to be allowed on his salary.
being a stockholder in the company, gave no opinion.
Rule.
Rule : That the report of the referees, made in this cause, he set aside, so far as it allows interest to the plaintiff, after the 2d day of January, 1819 ; and on the charges for the salary due the intestate ; and that, in pursuance of the stipulation of the parties, the cause be again referred to the referees appointed therein ; and that they calculate, and report the amount due to the plaintiff for interest up to the 2d'day of January 1819 ; and in addition to the sum reported to be due to her ; and that the calculation be made by allowing interest cm the receipts and advances of cash, from the time of make, or receiving the same, to the said 2d day of January ; and that neither party be allowed, as against the other, costs of the motion to set aside the report.
In Supreme Court, October term
November 13, 1824. $
Ordered, That when a bill of exceptions is taken at the Circuit, the party obtaining a verdict may notice the bill of exceptions for argument as frivolous, and the same shall have a preference, as in case of a frivolous demurrer, unless the party taking such exception shall, within four days after the trial, or before the same is noticed for argument, obtain, and serve on the opposite party, a certificate of the Circuit Judge, that there is probable cause to stay the proceedings, until the cause is reached in its regular order on the calendar.
The same view is taken of this subject, in Mr. Jefferson’s letter, cited by Butler, arg. in reply, supra.