Case ID: ohio_3/html/0012-01.html
Source: Caselaw Access Project
Author: {"author": "*By the Court :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fobes and Adams v. Judson Cantfield.
    Agreement to pay interest upon interest, after the interest has accrued, is not usurious.
    This case was adjourned from the county of Trumbull. It was a bill in chancery, to foreclose the equity of redemption in mortgaged premises, or to have a sale to raise mortgage money* The facts of the case were as follows: In the year 1801, the defendant was indebted to the complainants as security for some friends who had become bankrupt, and executed his individual notes for the amount, payable at short dates, and bearing interest at the rate of six per cent. In the year 1807, the principal and interest being unpaid, an agreement was made that the interest should be cast to that date, and that from that time the defendant should pay interest upon the aggregate amount annually. In 1812, the whole still remaining unpaid, the defendant agreed to give the mortgage in question, to secure the payment, and agreed that simple interest •.should be calculated to 1807, and compound interest annually, from that time. The amount due upon this calculation was ascertained, and several notes with the mortgage, given to secure the payment. And the question was, whether this was usurious under the laws of Connecticut, where the contract was made.
    T. D. Webb and J. C. Wright, for the complainants :
    Stated that the Connecticut statute was the same as the English -statute of Ann, and contended that the contract was not usurious. They cited Day’s Ord. on Usury, 29, 36; 1 Johns. Ch. 14; Ch. Rep. 15; 1 P. Wms. 652; 2 Salk. 449; 1 Atk. 304; 6 Johns. Ch. 313; 2. Dessaus. 275; 3 Day’s Cases, 268; 4 Id. 96; 2 Id. 483; 3 Cow. 284; 2 Johns. Ch. 182; 1 Id. 550; 2 Mass. 568; 6 Mun. 433.
    Tappan, for defendant:
    Cited the statute of^Connecticut, and exposition of it by Swift, in his Digest, vol. i, 313, maintaining that “ where a debt is due, and the creditor pressing for the money, and it is agreed, in consideration of forbearance to pay more than six per cent, interest, and a new security is taken, it is, in construction of law, a reloaning of the money, and brings the case within the statute.” He also cited 1 Swift, 716; 1 Ver. 99; 1 P. Wms. 652; 2 Salk 499; 1 Atk. 304; 6 Johns. Ch. 314; 3 Johns. Ch. 395; 5 Johns. Ch. 122.
   *By the Court :

A sum of money due for interest is as justly and fairly due as for any other consideration, and an agreement to pay interest upon it, after it is due, can not be deemed usurious. Courts have been indisposed to compute interest upon interest, where the contract between the parties was silent. But if when the interest is due and payable ,and constitutes a then subsisting debt, the debtor ask to retain it, and pay interest upon the amount at the legal rate of interest, the agreement is not usurious. It is nothing more than, an agreement to pay legal interest for'the forbearance of enforcing" the collection of a debt then actually due and demandable. Such was the case before us. In 1807, the debtor agreed that upon the-principal and interest then due, he would pay the interest annually. This agreement he failed to perform. In 1812, he acknowledged the existence and obligation of the agreement, and settled” the account according to it, and gave his notes for the amount, and the mortgage to secure the payment. If, instead of giving the-notes and mortgage, in 1812, he had when the amount was ascertained, paid it in money, he certainly could not have sustained an< action to recover back what he now calls the usury. Neither can he - now set it up to avoid the mortgage, or to escape from the pay- • ment. It was but the compliance with his agreement to pay the interest annually, and did not put the party in the same condition he would have been in, had the interest been annually paid, for* the receipt of the money might be worth more than the engagement to pay it. The contract was fair, free from injustice or oppression, and not touched by the statute. We are, therefore, of opinion, that the complainants are entitled to a decree for the whole debt claimed