Case ID: scl_20/html/0408-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Singleton v. Wh. Lewis, Ex’or.
    
      Orangeburgh, Fall Term, 1838.
    The condition of the bond was “to pay the full s'4,000on^rbemye3í»2ifJwith lawful interest aíiytocommoncó Hela tUthátatthe annual interest pr\ncipaibeCand hore interest.
    Mr. Justice Earle, who tried the case, made the following . ° TSpOrt l
    
    This was an action of debt on bond. The jury found a special verdict, which presents the single question of interest 0n a Bond, dated 31st Jan. 1820, conditioned to “pay the full and just sum of four thousand dollars, on or before the 31st ^ay January> J821, with lawful interest to be paid annually, to commence from the date.” And the question was whether annual interest was to become principal and to bear interest. It seemed to me that although the prescribed credit was only one year, yet the words “with lawful interest to be paid annually, to commence from the date,” import a mutual stipulation for an indefinite extension of credit, and to pay annual interest on the principal sum. I was of opinion that the interest unpaid became principal, and should bear interest at the end of each year. I ordered the postea to be delivered to the plaintiff, %vith leave to enter judgment on the verdict accordingly. The defendant appeals and moves to reverse the decision, and for leave to enter judgment for defendant.
    
      Glover, for the motion.
    
      Preston, contra.
   Johnson, J.

The rule laid down in Gibbs v. Chisholm, 2 N. & M’C. 38, is, that if a bond be conditioned for the payment of interest annually on the principal sum, the interest shall carry interest if not paid at the day. The principle on which it proceeds, is that an express obligation to pay interest at a day certain, makes it quasi, a principal debt, and the obligation to pay interest on it is raised by law. That, however, was a case in which the payment of the principal debt was, by the condition of the bond, postponed for several years, and the condition with respect to the interest was, that it should ad interim be paid annually. Here, according to the condition of the bond, both the principal and interest was to have been paid at the end of one year from the date, and. I was very much disposed to think that interest ought not to have been computed on the annual interest but for the first year ; but upon further consideration I am inclined to adopt the conclusion of the presidingjudge, that the stipulation concerning the payment of interest was intended to provide for the case of principal not being paid at the day, and in that event that the interest should be paid annually. Thus understood, the condition would be, that failing to pay the principal, the defendant’s testator would pay the interest annually, and that case falls precisely within the rule in Gibbs v. Chisholm.

Motion dismissed.

O’Neall, J. concurred.

Harper, J. absent.