Case Name: Lightfoot v. Price
Court: Superior Court of Chancery of Virginia
Jurisdiction: Virginia
Decision Date: 1809
Citations: 4 Hen. & M. 431
Docket Number: 
Parties: Lightfoot v. Price.
Judges: 
Reporter: Virginia Reports
Volume: 14
Pages: 939–939

Head Matter:
Lightfoot v. Price.
Spring Vacation,
1809.
Partial Payments — Interest. — What is the proper mode of calculating interest, where partial payments have been made.
The principal point in this case was, as to the mode of adjusting interest.
Partial Payments — Interest.—in Ward v. Ward, 21 W. Va. 874. it is said: “The proper rule for computing interest, where partial payments have been made, is to deduct the payment from the aggregate sum of principal and interest, computing the latter to the date of the payment and the balance forms a new capital; on that interest is to be computed from that time to the next payment, and so on for each payment; but with this caution, that the new capital be not more than the former, so that if the payment be less than the interest due at the time, the excess of interest must not augment the remaining capital, because that would be to give interest upon interest which would be unlawful. When the payment is less than the interest accrued on the principal at the date of the payment, no stop should be made, but the interest should be computed until the payments, whether one or more, are sufficient to absorb the whole of the Interest and then the same should be deducted from the sum of principal and interest. JAghtfoot v. Price, 4 fíen, Jf. 481.To the same effect, the principal case is cited in Hurst v. Hite, 20 W.Va. 193; De linde v. Wilkinson, 2 Pat. & H. 671.
See monographic note on “Interest'’ appended to Fred v. Dixon. 27 Gratt. 541.

Opinion:
By the Chancellor.
I concur in the opinion, given by the late Judge of this Court, in the year 1795, in the case of Ross v. Pleasants, Shore & Co. and William ^Anderson, that so much of any payment as is equal to, or exceeds the interest, is to be applied to the discharge thereof, and the residue towards discharging the principal, unless the debtor, at the time of the payment or before, directed otherwise; that is to say, from the sum of principal and interest, computing the latter to the time of payment, the payment is to be deducted, and the balance forms a new capital; on that, interest is to be computed from that time, but with this caution, that the new capital be not more than the former, so that if the payment be less than the interest due at the time, the surplus of interest must not augment the remaining capital; because that would give interest upon interest, which would be unlawful.
The report was therefore recommitted, and the Commissioner directed to reform it. according to the foregoing opinion.