The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1858-12-02

rious and chang ing AS the contracts OF men, and
the legislation OF different communicates make
them. Hence, If We had a usury law, the mere
fact that the parties TO q negotiable instrument
had stipulated therein that II should draw legal
in,eres, after maturity, would not take II out OF
the category OF promissory notes. Ii would
stu be an agreement IN writing to pay a sum
certain at day named, and the insertion of the
rate OF interest would only be making that RI
press which the law would amer. II II were not
there.
The instrument in this case, therefore, is none
the less a piomlssory note, because the parties
have specified therein that IL shall draw three
per cent. month after maturity, until paid
The real question 10 be determined Is this /:
Is II competent for the payee and maker OF a
ptomissory note, under ouI statute, 10 agree
upon any rate OF interest after maturity which
shall be valid and binding in an action on the
note : Or. IN other words, can an agreement
rs 10 interest extend beyond the termination
OF the original and substantive contract 10
which It Is an adjunct,
The counsel Tor the defendant Insists that
there is no consideration for such agreement.
10 establish a support for THIS position, how
ever. he Is obliged 10 discuss the interest clause
by Itself, independent Of the main contract on
which II is hinged, He calls il u contract when
II IN properly an appenjage TO contract, ex'
ecutoIy when II Is contingent, and nj the time
when Il becomes operative, AZ contract, II at
allie, he says !, IL nudumpuctum and void
Though such clause may not have any seper
ate or distiact consideration at the inception Of
the note, IN which Il Il found, "a matter not
easily determined from the language VI the IN
s,rumcnD, yet II can only become operative
upon well defined aud valuable one the use
oil money. The fact that the plaintiff did not
agree to iorbear can have no effect, since With
out forbearanco he takes nothing. A note on
demand presents similar case, The question
tl..I Seat. tha at HI. az
against Wakefield, MINI. $50 Is regarded rs an
authority. For there the rate was extended he
yund default by the Court, though the parties
had not in terms 10 stipulated,
The Court found that the parties intended
the note should draw the same rate Of interest
after due as before, and the decision would
have been the same had such intention been
expressed In the note.
iut la there any need Of a distinct considcra
ton, as the basis Of an agreement In respect TO
the rate OF interest . note shall bear after ma
turty, existing ut the time Of the execution Of
tho note think not, for the reason that such
agreem amounts 10 nothing unless the mo.
ney be actually used, and then the use furnish.
es u consideration exactly preportionate to the
liability incurred
That something must be paid for the use of
money after the same falls due, either as inter.
est or damages, ID the universal rule. In states
where usury law exists, the legal rate Of in
tcfest is considered the reasonable value Of
such use and is held TO be the proper measure
OF damages. The effect OF our statute IN, |
think, To authorize parties to substitute the
rate they may agree upon in each case for the
general unbe Dding statutory rate, and this, too,
without any other consideration than exists In
all cases where the statutory rate IA applied,
Besides, II is not clear that the rate agreed up
en- by the parties in this case was not founded
on consideration existing Ut the time the note
tl.ty IA lac. tat ,in. A hat
II did not form one OF the chief inducements
for the pantir 10 part with his money!
The rate Is not above the ordinary rate Of IN.
terest throughout the State, while the rate be
fore maturity Il less; and IT seems reasObs
! bic suppostion that all the terms 81 the note
were duly eauvasscd before ratification. and
! that ca cb Of TIA III contributed, ia greater OF
/ less degree, 10 the general result
II il to be remembered IN this connection,
/ tia, a failure to pay sncb q note at maturity
I has not been held 10 inv olive such loss of II
nancial standing and credit, M In other com.
munitcs where protest brings dsb0nor and
! bankruptcy; and IL is chiefly. II not wholly, for
the reason that the higher rate Of interest after
maturity is intended not 20 much TO compel ~
to stand in lieu Of prompt payment This !
believe to have been the usual practice aud
/ understanding among all classes Tor the last
I ten years. II would seem 10 follow, therefore,
that no consideration IL necessary as The basis
Of an arguinen, 70 pay interest after maturity,
4 independent o! that which gives vitality 10 the
main contract-'hat II any presumption arises
on the face OF the instrument II that the mat
ter Of interest after due WAS q controlling ele-
ment In the negotiation OF the main ntract.
! and that without such presumption. still IL was
! the Intention Of the law makers 10 permit and
authorize parties to legislate for themselves, as
! were, on every occasion when the use Of mo
ney comes In question, and that such private
l...t Lat a. a..
| govern the particular case TO which IL refers, in
place OF the general statute. not only from the
lnce ption Of the contract TO its termination az
confi art but beyond default and until full pay
! mcnt. Finally, on this point II may be aug
/ gested whether the question Of consideration IL
no, one Of evidence rather than Of pleading 10
I be alleged and proved ~ n defence. II seem
! 10 me 10 be just thatthe burden Of proof should
be thrown on the pfomisof who seeks 10 reap
/ q benefit from his failure TO perform one con.
tract by forced construction u the term. Of
another.
Il IL further urged on the part Of the defend
! ant that II the clause In the note sued upon TO
pay three per cent. a month after maturity,
has any force, II must be considered = penalty
inserted TO cover damages sustained by plain
10 on account Of the non payment u the prin.
cipal and that the measure VI damages 10 spch
case il seven per csDtun per annurn. The
cases cited. however, DO not support the posi-
ton, as 10 every instance agross sum was 10 be
paid on default, without regard 10 anything bot
mere default. Nor do any of them arise in &C
tons upon prom iss0ry B0,es The counsel for
the defendant .ay- there 10 no difference be
tween ~ agreement 10 pay gross sum on de
fault. or large rate Of interest. But think
there il q wide difference 10 the one case
mere default creates the liability. withou, the
obligor receiving any benefit, or the obhgee
suffering any injury commensurate with The
psDsty. In the other, default only bias the Fl
feet 10 render that . pressDt sobsisting con
tract which was future and contingent before,
with the further difference that the rev
contract can be enforced only according
70 the tine Il il. allowed 10 run
gro. sun 10 agreed upon solely 10 induce
prompt payment, but IN a case ike the present
defsul. Is presumed aud expected, ard such
provison made iof i a. the parties think tes.
.onAbi.. The form u the instrument luhicstHs
tbs IL pfomise 70 pay a certain sum a. q
certain time ruth ,sf0ai after maturity, % Untn
pad What form Of NSrds more srpftssiYe u
contingent Duration, yet short and tstiiy gsed,
could be inserted IN negotiable prOmis-ury
no.. Intended 70 paSs from ham - hand a. cash,
IN many Instances the rate 81 .ut'fssi after
maturity i higher than before. and bot b ghsf