3 Minn. 339 | Minn. | 1859
By the Cowt.
Appeal from the District Court of the Second Judicial District. Marston sued Talcott upon two promissory notes, which read as follows, viz :
“$110 00. St. Paul, June 10th, 1858.
“Six months after date I promise to pay Lewis P. Marston, or order, one hundred and ten dollars, with interest at the rate of six per cent, per annum from date until due, and five per cent, per month after due until paid, value received.
(Signed.) “H. J. Talcott.”
“$48 00. St, Paul, Oct. 19th, 1858.
“Thirty days after date I promise to pay to Lewis P. Mars-ton, or order, forty-eight dollars, with interest after due at the rate of five per cent, per month until paid, value received.
(Signed.) “H. J. Talcott.”
The answer admits the Plaintiff’s complaint, but sets up by way of set-off, or counter claim, a note of which he alleges he is the owner and holder, in the words and figures following, viz:
“$78 00. . Winona, Aug. 14th, 1858.
“Three months from date I promise to pay George B. Peters, or bearer, seventy-eight dollars, with interest from date until due at the rate of two and one half per cent, per month, and interest after due until paid, at the rate of three per cent, per-month, value received.
(Signed.) “Lewis P. Marston.”
The Defendant claims interest from the date of the note at the rate of two and a half per cent, per month. Both parties demanded an assessment of damages, and upon such assessment, the Plaintiff was allowed six per cent, per nTinnm upon the first mentioned note, after the same became due, and seven per cent, per annum upon the second note after it became due. Upon the note described in the answer, damages were assessed at the rate of two and a half per cent, per month, from date to entry. of judgment. Both parties excepted to the assessment of damages, and appeal to this Court.
The legal principles involved in the case at bar, were to some extent considered in the case of Mason, Craig et al. vs. Callendar, Flint & Co., argued and decided at the last December term of this Court. But the great importance of a correct settlement of the questions raised by the exceptions, in view of the fact that almost every citizen of the State is more or less affected by them, together with the further consideration, that the Court was not unanimous in the construction given to the statute regulating interest, has induced the Court to hear a further argument on the subject. And upon a careful review of the statute, the Court is now of the imani
The result of the investigation of the Court on the question of interest in the case of Mason, Craig et al. vs. Callendar, Flint & Co., 2 Min. 350, was that interest being the creature of contract, is recoverable st/r'ictJ/y as interest, only during the continuance of the contract, and as provided by its terms, before breach, and not after. Whatever is recovered after breach must be recovered as damages, and not as interest. It was also held that the contract terminated at the expiration of the time limited in the note for the payment of the money. It was further held that the measure of damages for breach of contract of this kind, must be the legal rate of interest. And the error committed by the Court in that case was in determining that the legal rate of interest, constituting the measure of damages, was that specified in the note, before breach of the contract.
The first section of chapter thirty-five of the Revised Statutes, provides, that “ any rate of interest agreed upon by the parties in contract, specifying the same in writing, shall be legal and valid.” This section makes the interest expressly the creature of contract. In order to recover more than seven per cent., before the note was due, the parties must have agreed upon the rate, and must have expressed that agreement in writing. The first mentioned note in the complaint, is a contract in writing, to pay a certaim sum, at a certain time, with an agreed rate of interest for the use of the money up to that time. That is as far as the contract extends. The payee promises the maker of the note, the use of the money for the period of six months, in .consideration of receiving interest therefor at the rate of six per cent per annum. Thus far the instrument is in the usual form, and has all the requisites of a simple contract. But there is another provision in the note, which is of a different nature. The promissor agrees to pay five per cent, per month after due till paid.” If this can be
If therefore the contract between the parties terminated at the expiration of the time limited in the note for thfe payment of the money, the first section of chapter thirty-five cannot apply to regulate the measure of damages in this case. Eor that section in terms, only applies to “ interest,” as such, and to interest, upon a “ contract.” The section may be construed and have practical effect in carrying out the intent of the legislature, without violating any of the settled rules of law, when applied to contracts before breach, but if attempted to be applied to contracts after breach, leads at once to confusion and disturbance of well settled rules of law.
As the damages were improperly assessed upon one of the