Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1861-03-10

Decisions OF the supreme oours OF tho
state OF Tennessees mt Knoxville, Sep.
semeer Terms 1880.

0FECLAL.
Decisions OF the Supreme oeurs OF tho
state OF Tennessee, mt KnoxyiIIs, sep-
semser Terms 1880.
Halys. Han
The complainant seeks to be relieved in part
against judgment for S495,5 obtained against him
by defendant the ground, that the note on which
the Judgment was founded was to some extent usu-
rious.
The parties are brothers. and there seems to have
been course of dealings between them. running
through several years On the 18th of Nav 1875
they made a final settlement the result of which
was, that complainant fell in debt to defendant in
the sum of S8l35l for which the former executed
to the latter bill single due one day from date; and
which on its face purports to be an adjustment of
their accounts up to that date Upon this bill single
suit was commenced on the Slst OF, January 1852.
and Judgment was obtained for the sum above stated
in ST ptemDer, 1857.
In the progress Of said suit at law the defendant
(now complainant) filed petition for the discovery
Of the alleged usury, which was answered: but on
the trial the Circuit Judge ruled that the matter of
usury could not be enquired into, as there was no
plea OF usury IN the case. And in June 1858,
this bill was filed reiterating pretty much the same
charged contained in the petition
1t is alleged IN the bill and more explicitly in the
petition for discovery which is part of the evil
dence-tEat the blu single for Ssl3.51, was made
up of the amounts of the several small notes held
settlement before mentioned And it 10 alleged that
compound interest on said several notes. from year
to year and added 70 the principal each year thus
making the interest bear interest And that by
this process Of compromising the proper amount
was swelled some $500. No objection it seems
was made at the settlement to computation of COM
pound interest, on the several small notes and
from the statement in the bill and the more explicit
statement in the petition fer discovery it is mani
fest that it was agreed between the parties, that
notes. The ground of complaint seems to be that
compound interest was not allowed to complainant
on the settlement, the various items of his ac-
count against the defendant--as it was understood
between the parties, was to have been done, as is
alleged by complainant, this, however, is denied by
the defendant, and is not sufficiently proved.
We need not stop to notice the mprobability and
apparent inconsistency of the statement OF the
supposed ground of equity assumed in the bill,
because putting the in the strongest possible
aspect for the complainant it is obvious that he is
entitled to no relief against the judgmentat law.
There can be no palmer legal proposition stated
than that compound interest is not usury. In the
language of the Court in Kelley Hickock Wend.
52l, compound interest has nothing to do with the
question Of usury.
1t is PLAIN that the computation of interest upon
interest turned into principle does not increase the
rate OF interest upon the amount upon the original
loan. Indeed the cases which hold that interest
upon interest is not allowable, concede generally
1t is disallowed upon principle of supposed
public policy; being regarded as a hard oppression
exactiOn, in favor of negligent creditors and tend
ing to usury. See Paiges &. I02 Johns oh. r. A.
f. Term Rep. 6l3.
There is considerable diversity of Judicial opn-
ion TO be found in the Books upon this question.
According to some Of the authorities an agreement
at the time of the loan that If the interest be not
paid at the time stipulated it shall be deemed prn
cpal and bear interest," will not be enforced in
equity. But it is otherwise it seems, where an
agreement TO that effect has been made subsequent
to the original contract when the interest fell duel
Johns eh. Rep. IA, II, and cases referred to.
The of this distinction is certainly not very
obvious The more reasonable doctrine as it seems
to u.s. is that asserted in Kennon vs. Dickens Cam.
Nor. $751; (cited iR'Mowry Bishops, Paigis CHI.
Rep. 1922 namely, that when the payment of inter
est at stated periods forms part of the contract and
payment of the principle sum is postponed to dis
tant day upon the faith of the agreement for regu
lar and punctual discharge of the interest at the
times agreed upon, equity and good conscience at
least requires that debtor should fulfill his engage
ment or to render to his creditor the usual equiva-
lent for the nonpayment Of the interest at the time
agreed upon. There are numerous other American
cases which have sanctioned the recovery of inter-
est upon interest, from the time it became due,
ferred to Mowry VS.. Bishop, above cited
We are aware of no rule of law which would be
violated by permitting the parties to agree at the
time Of tue loan, that II the interest be not paid at
the time stipulated. il should be treated princ-
pie and bear interest. This is surely nothing more
than simple justice to the lender.
The doctrine that interest upon interest, cannot
be stipulated for at tie time Of the loan contract
has been carried nc farther IN the cases 10 which
we have had access than refusal to carry into eff
feet such agreement. But if after the interest
is due, an agreement is made, that it shall carry
interest, such agreement would be enforced as
we understand the doctrine.
At all eyents IL is clear that a oourt of eouitv
would not ses aside, or release against such an
agreement much less would it interposs after iudg
ment at law founded upon the agreement, if the
compound interest we're voluntarily paid, could it be
recovered back, s, Psigis ch, Rep. 80. 102, and
cases there cited ], Wind, d2l
This latter course of decision-if we inclined
to follow it-Eould deny to complainant any relief
in this case But, before stated, il seems TO us,
that the case of Resnan vs.. Dickins lays down the
correct doctrine; and it appears that in several of
the States, the law has been settled accordingly.
| There is however q conflict of decision upon this
subject. See Gritty, on Cents. ed of 1848) 648,
Note l. Where the cases are referred to MOwry vs..
Bishop s. Paige's 90.
Ii results that in neither aspect of the case can
| lief be given to complainant. If it be assumed,
that it stipulated in the original contract, that
the interest should be compounded, if not punetu-
ally psid hold that there is nothing Illegal, or
immoral, contrary to policy IN such agreement.
The interest is both legally and eeuitaaly due at
the expiration Of the period limited for its payment,
and if, instead or paying the iReres, il be convert
ed into principle by the previous agreement Of the
parties, We think there be no objection to en-
| forcing such agreement.
But if the agreement to compound the interest,
made after the interest became due, and at the
time of the settlement, the weight of authority is
still greater against the claim TO relief as We have
before seen.
The decree will be reversed, and the bill dismiss
| ed. MCKINaEY
true copy Test: W. R. CAswBII, Clerk.