Wood v. Smith

23 Vt. 706 | Vt. | 1851

The opinion of the court was delivered by

Uoyce, Ch. J.

This was an action on book account, in which exceptions were taken to the judgment of the county court, accepting the auditor’s report in favor of the plaintiff. Two objections only are now urged; — first, to the allowance of interest on the plaintiff’s account in the manner stated by the auditor, — and, second, to the allowance of that portion of his account, which consisted of liquors sold to the defendant.

Interest is not necessarily a part of a debt, unless expressly made so by the terms of the contract; as when there is an undertaking to pay the debt with interest. But in most other cases of indebtedness, the creditor is allowed by the law of this state, under certain circumstances, to claim interest, though he is not obliged to insist upon it, or to treat it as a part of his demand. In these cases, where the claim is made and sustained, the debtor is held liable for interest upon a contract implied. And this implication of a contract to pay interest is made upon the ground, that, in the given case, justice to the creditor will not be done without it.

And hence, as a general rule, if a time of payment is limited by the contract, and the debtor make default of payment at the time, interest is thereafter allowed in the nature of damages for the detention of the debt. It is also allowed, where there is a known custom, or usage, to charge or claim interest, and where the parties may be supposed to have adopted the usage as one of the terms of their dealing. The court proceeded on this latter ground in allowing interest in the case of Raymond v. Isham, 8 Vt. 258.

In the present- case, the auditor refused to allow the plaintiff interest, as he had computed it, and adopted the rule of casting interest on the semi-annual balances of the account. This was substantially the mode of computation sanctioned by this court in Raymond v. Isham. But no facts, or reasons, are given in the report, for taking this rule of computation in preference to some other. Nothing is said as to the time of credit, on which the plaintiff sold his goods to the defendant, nor whether any time of payment was agreed upon. Neither -is any thing found by the auditor, as to any agreement or expectation of the parties on the subject of interest, nor even as to the plaintiff’s previous practice in regard to charging interest. The case, as it appears upon the report, is therefore materially different from the one above cited, since it wants the important fact of a known custom of charging interest at the end of every six months, on which that case was decided.

It seems to follow, that we can only sanction the allowance of interest upon the auditor’s rule, by assuming, that, by the universal or general custom of merchants in this state, six months is the longest period of ordinary credit, as understood between them and their customers, at the end of which payment of all balances of account are expected to be made; — or else, that the general custom of our merchants is to charge interest semi-annually. We are not prepared to assume either of these positions. Six months may be a more frequent and general period of credit, than any other, and the practice of thus charging interest may, indeed, prevail to a considerable extent. But we are satisfied, that in neither of these particulars is the custom so uniform and general, as to warrant us in assuming, that it is known and tacitly assented to by the whole community. The present was the case of a mutual running account, in which the balances were continually varying in amount, though they were uniformly more or less against the defendant. It was also a case, where the dealing, to a considerable extent, was a barter deal, — the defendant receiving supplies and making payment in lumber. This may have affected both the prices, at which the plaintiff charged his goods, and the period of credit, as understood between the parties.

We think, that, to warrant an allowance of interest as here made, the report should disclose some ground, on which an implied undertaking of the defendant to pay it may justly be raised. In the absence of all such showing it has been considered' in this state, that the obligation to pay interest would not arise, until the expiration of a reasonable time to settle the amount and make payment. And this, in analogy to the common law rule in other cases, has been regarded as one year from the accruing of the particular indebtedness, to which the interest is applied. Upon this part of the case the decision below is considered erroneous, and the judgment must therefore be reversed.

Upon the other subject presented and discussed, we discover no sufficient ground for disturbing the judgment. The sale of liquors, during the period for which the plaintiff was allowed to recover on such items, was prohibited to all persons not having a special and restricted license, namely, to sell for medicinal, chemical and mechanical purposes only. But each of these parties had such a license for that period; and we think, that a sale for the bona fide purposes mentioned in the license should be protected, though a secondary sale, to effect the application of the liquors to those purposes, if to be made by a person duly licensed, was in contemplation of the parties. And though the amount of liquors sold to the defendant was large, there is not enough in the report to justify any legal inference, that the parties designed to violate the law.

Judgment reversed and case recommitted on the subject of interest.