Case ID: ny-super-ct_1/html/0314-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David Henderson, Jun., & William Cairns, Jun. versus Alexander Hamilton.
    Dec. Term, 1828.
    The defendant on the 3d of January, 1815, executed a bond for $8,500 in favour of the plaintiffs, to secure the payment of $4,404,52. The condition of the bond recited, that to pay and satisfy the last mentioned sum, one John C. Hamilton had by indenture granted unto the plaintiffs an undivided interest in certain lands (which had been conveyed by Timothy Pickering to John B. Church and others in trust,) which were unproductive and could not be divided for several years thereafter. The condition further stipulated, that the defendant should pay to the plaintiffs, year by year, the sum of $305,21, the lawful interest on said sum of $4,404,52, until the said estate should be divided and a clear and perfect title thereto, made to the plaintiffs.
    In an action upon the bond to recover the amount of the annual payments, from tire year 1818, to 1828, the defendant contended, I., that the plaintiffs were bound to show diligence in procuring a partition of the lands conveyed. II. That they were barred by the statute of limitations, from recovering any thing in arrear beyond six years, or that there was a presumption of payment from lapse of time. Held, however, that the statute of limitations did not apply to this case; that there was no presumption of payment, and that the plaintifis were not bound to procure a partition of the estate. Held, also, that the annual payments were to be viewed in the light of interest on, the principal sum, and that the plaintiffs were not entitled to interest upon the annual payments.
    This was an action of debt on a bond, for eight thousand five hundred dollars, executed by the defendant in favour of the plaintiffs, and bearing date on the third day of January, 1815. The condition of the bond was as follows:—
    “ Whereas the above bounden obligor toas on the day of the date' “ hereof, indebted unto the above named obligees, in the sum of four “ thousand four hundred and four dollars and fifty-two cents, law- “ ful money, of the United States of America, to pay and satisfy “ which, John C. Hamilton of the city of New-York, attorney at “ law, hath, by indenture bearing even date, herewith granted, bargained and sold, aliened, remised, released, conveyed and confirmed unto the above named obligees, an undivided interest, which he was entitled to, together with the other heirs and 66 widow of Alexander'Hamilton deceased, to certain lands and “ premises, which were conveyed by Timothy Pickering to John Church, Nicholas Fish, and Nathaniel Pendleton in trust, and upon “ certain conditions, as specified and contained in an Indenture, bear- “ ing date the seventh day of May, eighteen hundred and eight, as by reference to the deed of the said John C. Hamilton, to the above “ named obligees, will more fully and at large appear. And “ whereas, the estate and property remains undivided, and is un~ “ productive, and cannot be divided for several years to come, during “ which period, and until the same shall be divided according to the “ trust created, it was further agreed, that the said Alexander “ Hamilton should pay the lawful interest on the said debt of four thousand four hundred and four dollars and fifty-two cents “ yearly, and every year, until the said estate is divided, and the “ share or portion of the said John C. Hamilton shall be conveyed by “ the trustees to the said David Henderson Junior, and William Cairns “ Junior, their heirs or assigns. Now the condition of the above “ obligation is such, that if the abave bounden obligor, his heirs, " executors, or administrators shall, and do well, and truly pay or “ cause to be paid unto the above named obligees, their heirs, ex- “ ecutors, administrators or assigns, yearly, and every year, on the “ third day of January, the sum of three hundred and eight dollars and “ thirty-one cents, the lawful interest on the said sum of four thousand “four hundred and four dollars and fifly-tvio cents, until the said “ estate is divided, and a clear and perfect title thereof, be made to the “ above named obligees, their heirs or assignees, then the above “ obligation to be null and void, or else to be and remain in full “ force and virtue.”
    The declaration was in the common form, and the defendant, after craving oyer of the bond and condition pleaded, 1st, non est factum, 2d, solvit ad diem. The last plea, however, [was after-wards stricken out under a stipulation, that the defendant should have all the advantage of the statute of limitations, which could be gained by any special plea.
    The plaintiffs then assigned breaches for non-payment, setting forth the conditions of the bond and averring, that the estate and property therein mentioned, remained undivided on the third day of January, 1818, and that no title thereto had been made to the plaintiffs, or their assigns on that day, and that the sum of three hundred and eight dollars and thirty-one cents, became due and owing to them on that day accord'rig to the foim and effect of the said condition, which sum was still in arrear. There were similar breaches assigned as to each of the ten following years, up to, and including the year 1828.
    The cause was tried before Mr. Justice Oakley. At the trial, the defendant admitted the execution of the bond, and that the breaches of the condition were truly assigned by the plaintiffs : (the admission to have no effect upon his defence however,) and it appeared that the sum of three hundred and eight dollars, and thirty-one cents, which became due on the third day of January, 1816, and the like sums, which became due on the same day in tile year 1817, had been paid by the defendant to the plaintiffs.
    On this state of facts the counsel for the defendant moved for a non-suit, on the ground, that there was no evidence that any diligence had been used by the plaintiffs to effect a partition of the land, mentioned in the condition of the bond. This motion was overruled by the presiding Judge. The plaintiffs then claimed the yearly sum of three hundred and eight dollars and thirty-one cents, from the year 1818, to the year 1828, together with interest on each yearly sum, as the same accrued. The defendant insisted that the plaintiffs were only entitled to recover such sums, as had accrued on said bond for the last six years, claiming that all the residue was barred by the statute. He also contended that no interest was allowable on any of the annual sums. These points, however, were both ruled against the defendant, and the jury by the direction of the Judge gave a verdict for $4,815,69, in favour of the plaintiffs, subject to a case to be made, which either party had leave to turn into a bill of exceptions.
    The cause was now argued by Mr. J. Anthon for the defendant, and by Mr. David S. Jones for the plaintiffs.
    
      Mr. J. Anthon for the defendant contended,
    1. That the plaintiffs were bound, from the nature of their engagement with the defendant, to use due diligence to effect a partition of the lands conveyed in payment of the original debt, so that the interest might cease.
    II. They were bound to show that they had used such diligence, and notified the defendant of the difficulty, if there was any, that he might guard himself against the constant recurrence of the claim of interest.
    III. This creation of an annual charge after the extinguishment of the original debt, as far as the defendant was concerned, is within the spirit and equity of the statute of limitations, and the annual sums due more than six years back, are barred by the statute.
    IV. If the statute does'not apply, and the defendant is driven, as in ordinary cases on bonds, to a presumption of payment from lapse of time, the circumstances of this case, make the lapse of six years, a fair legal presumption of payment. [1 Term R. 270. 19 Ves. 196. 10 John. R. 381. 16 John. R. 214.]
    V. If the plaintiffs are entitled to recover, for the nine years as claimed, they have no right to demand interest on the several annual sums, the non-payment arising from their own laches in not demanding^; and such interest is in truth compound interest on the original debt, which the law will not tolerate. [1 John. Chan. Cas. 13. 6 John. Chan. Cas. 313.]
    VI. The plaintiffs must therefore, either take a verdict for the the last three years, or for the nine years, as the court shall decide, on the subject of the statute, or the legal presumption of payment; and in both cases without interest.
    
      Mr. D. S. Jones for the plaintiffs, contra contended,
    I. That the plaintiffs had not the power under their deed to effect a partition. The legal title to the estate, remained in the trustees named in the condition of the bond, and John C. Hamilton conveyed nothing to the plaintiffs but an equitable interest. The defendant on the other hand has an interest in the land, and all the means of effecting a partition, if any there be, are still open to him. Upon him lay the duty of putting a stop to the interest, which was annually accumulating, either by paying it when due, or by causing the partition to be effected, by which the plaintiffs might be put in possession of their estate.
    II. The statute of limitations is in no way applicable to this
    III. As to the interest. Suppose a bond conditioned to pay a certain sum yearly, and without any reference to the origin of the debt i in case of non-payment of the sum due, at the end of the year, the holder would be as much entitled to interest on that sum, as if the whole amount of the bond had fallen due at the same time.
    This case is of the same nature. It is an annuity; the annuity is a principal sum, and not interest, and in all cases of annuity bonds, interest is allowable. [3 Atk. 579. 2 Dickins R. 643. 2 P. Wms. 163. 1 P. Wms. 542.]
   Per Curiam.

. The annual sums to be paid by the defendant, were themselves in the nature of interest upon the principal sum secured by the bond. The bond was a continuation of the original debt, and the annual sums are not to be viewed in the light of annuities. Interest upon them, therefore, cannot be allowed, for that would be in effect to allow interest upon arrears of interest.

The statute of limitations does not apply to this case, neither is there any foundation for a presumption of payment. The plaintiffs were not bound to procure a partition of the estate; but by the very terms of the condition of the bond, the defendant himself was to furnish them with “ a clear and perfect title.”

The verdict of the jury, modified as to interest in the manner specified, must therefore be confirmed.

Judgment for the plaintiffs.

[D. S. Jones, Att’y for the plffs. E. Anthon, Att’y for the deft.]