6 Johns. Ch. 313 | New York Court of Chancery | 1822
It is a well settled rule, and for which I may refer to the case of Connecticut v. Jackson, (1 Johns. Ch. Rep. 13.) and to the authorities there cited, that compound interest cannot lawfully be demanded and taken, except upon a special agreement, made after the interest has become due. It is, then, a debt due, and the creditor may insist upon immediate payment of it, or that the debtor should allow interest upon it, which is, in fact, turning the interest into principal. In the case of a mortgage security, it would be fair for the mortgagee, says Lord Ch. Manners, (1 Ball & Beatty, 430.) to call for interest due at the end of the year, and, if not paid, to insist on its becoming principal; but if it constituted part of the original agreement, it would be usurious and oppressive. The agreement, in such cases, is prospective in its operation, and that the interest then due and payable shall, thereafter, carry interest. Thus, in the case of Thornhill v. Evans, (2 Atk. 330. n. 1.) Lord Hardwicke directed the master, in taking an account of what was due for principal and interest upon the mortgage, to inquire what arrears of interest were, from time to time, agreed, in wri
Decree accordingly»