The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1892-07-09


ruinously involved through over
sight or negligence. civilians VS..
Williams, l6, Serg. & Rawle, 25S. J
The question then remains, has
there been new agreement or
agreements for interest upon inter-
est due in the case before me?
The mortgage was made to Sc
cure debt of $22, 1000, also to pro-
tect the PLAINTIFFS endorsement of
four notes, aggregating $4,000,
and to secure future advances. The
accounts were kept hy the plaintiff,
who was the defendants agent, i'm
the method i'm vogue among sugar
agents here. aThe account is made
up pro and con each quarter, debit
ing the same with interest on oil
advances, payments, etc., and cred
iting the same with interest on all
receipts, and the balance, which
ever it is, credit or debit, is brought
forward to the hext account MAS
ter's Report.)
The PLAINTIFFS counsel contends
that by this system Of accounting
with stated rests and the periodic
delivery of duplicate accounts to
the debtor, the acceptance by the
latter of such accounts containing a
statement of interest due, and the
transfer of such interest to the gen.
eral account, adding it to the prin-
cipal where it bears interest,
amounts TO an implied contract to
pay interest upon the due interest,
which takes the case out of the
statute.
Is such acceptance Il recognition
of a prior agreement or evidence of
a new agreement? The original
agreement calls for interest at the
rate of nine per cent. per annum
and contains, no reference to in
terest upon interest. In ordinary
cases of mutual accounts, an acqui-
escence by the debtor of the charg-
ing of interest on interest due is
sufficient evidence of q new agree
ment to that effect, which may be
enforced; but in the case before us
the account Is secured by a mort
gage, for an indefinite period, of
leasehOld estates In land, the unex-
PRED terms of which for the most
part run until January 1st, 1899.
Some authorities hold that in such
case the new agreement to pay
interest on interest must be in writ
ing; as Lord Parker in Brown VS..
Barkham, /, Peere Williams, 652,
said: "to make interest on a mort
gage principal, it is requisite that
there should be a writing signed by
the parties, for-as-much as the es-
tate in the land is to be charged
Herewith" This rule is supported
by the above quoted case of Van
Benschooten VS.. Lawson, Morgan
VS.. Mather, 2 Yes. 10, and others.
The principle appears to be that in
case of mortgage of real estate Sc
curities an agreement to further
charge them would be within the
statute of frauds unless it was in
writing.
The Court in Young VS.. Hill,
(67 n. Y, 1851 questions this rule
and asserts that it has not been ap-
piled in practice. My impression
gained from reference to modern
authorities, is that such a rule,
which was once undoubtedly recog-
nized, has become obsolete. The
Court in the last named case doubts
the application of the statute OF
frauds to such a case, saying, sit
may be questioned whether the
courts can extend the statute OF
frauds to cases not within its terms
and in their discretion require
promises to be in writing, which
the Legislature has not seen fit It
subject to that formality."
| In the case at bar the defendants
by accepting, without protest, the
periodic accounts furnished by thu
plaintiff, transferring accrued inter
est to the principal, have acqiuesced
thereto. This is sufficient evidenc,
of new promises to pay interes
upon such accrued interest changed
to principal, which are binding upol
the defendants, and / do not fine
that such promises should be il
writing.
The defendant further objecte,
that the contract did not call fo
quarterly rests in the accounting
J and that therefore if interest ma
} be changed to principal, it shout
only have been done once a year
, However this may be, I am ir
! formed by the Master, that as
matter of fact the charging of ir
: terest has been Offset by a system {
: counter credits, SO that the result
5 the same as if annual rests had bee
3 made.
, I therefore override the objectiC
: to the plaintiffs accounts, based {
> the ground of illegal charges
t compound interest,
C. Brown foi. plaintiff; j. N
r Davidson and A. s. Hartwell f
defendants.
0 May II, 1892.