17 Conn. 243 | Conn. | 1845
The subject of compound interest has been so recently and so fully discussed in this court, in the case of Camp v. Bates, 11 Conn. R. 487., that the particular views there expressed need not be here repeated. That a contract for the payment of compound interest, made before interest has accrued, is, to that extent, void, and will not, unless in special cases, be enforced, either in law or equity, may now be considered as the law of this state. And the special cases referred to are well enumerated, in the opinion there given. But unless in such special cases, the law will never imply an obligation to pay such interest. To stipulate for the payment of compound interest a priori, although sometimes regarded as tending to usury, has never been holden to be really usurious. Such a stipulation may perhaps be considered as somewhat inconsistent with the phraseology of our statute, which prohibits the taking of more than six per cent, per annum, directly or indirectly; and the English statute of Henry 8., is of the same import. It is equally well understood, as we suppose, that a promise to pay interest upon arrears of interest due, being founded upon a moral consideration, is good. Eaton & al. v. Bell & al. 5 B. & Ald. 34. (7 E. C. L. 13.) State of Connecticut v. Jackson, 1 Johns. Ch. R. 13. Schieffelin v. Stewart, Id. 620. Van Benschooten v. Lawson, 6 Johns. Ch. R. 313. Mowry v. Bishop, 5 Paige, 98. Ord on Usury, 37. Lord Ossulston v. Yarmouth, 2 Salk. 449. Hastings v. Wiswall, 8 Mass. R. 455. Barclay & Co. v. Kennedy & Co. 3 Wash. C. C. Rep. 350. Denniston v. Imbrie, Id. 396. Smith v. Shaw’s adm’x, 2 Wash. C. C. Rep. 196. Bainbridge v. Wilcocks, 1 Bald. C. C. Rep. 536. 540. Forbes & al. v. Canfield, 3 Hamm. R. 17. Wilcox v. Howland, 23 Pick. 167.
If, therefore, the plaintiff had instituted an action upon the bond to which the coupon in question was attached, for the recovery of the semi-annual interest, which had become due, he could not have recovered any interest upon such interest. This' action is essentially of that character. It is not founded upon any contract expressed in or implied from the coupon
It is indeed true, that the interest, by the tenor of the coupons, is payable to bearer; but this arrangement is only one of convenience, to prevent the necessity of the frequent presentation of the bond at the place of payment, and the multiplied indorsements of interest upon it. A new species of negotiable paper is not thus created. The coupon, in this form, operates only as an order or letter from the obligee, requesting the interest upon the bond to be paid to another.
We have been informed of a recent case in the circuit court of the United States for the district of Michigan, which arose upon a bond and coupon issued by the city of Detroit,, bearing an interest of six per cent., in which it is said, that a different opinion from the one we express, has been advanced-We regret, that we have not been able to see and examine that case, and the reasons which governed its decision. In some of our sister states, interest' upon interest has been considered as recoverable. It may be so in Michigan. Indeed, it would not be strange, under the modern notions which prevail on the subject of regulating interest by law, and under the influences produced by a different moral sense regarding the propriety of demanding interest, from that heretofore prevailing, that different views on this subject should be enter
We place our decision upon what we suppose to be the law of our own state regarding the reservation and recovery of compound interest, derived, as we believe, from the authority of the English courts, irrespective of the opinions which the courts of other states have expressed on the same subject.
We shall therefore advise, that no interest be allowed upon these coupons.
Judgment for defendants.