2023 New Mexico Statutes › Chapter 56 - Commercial Instruments and Transactions › Article 8 - Money, Interest and Usury › Section 56-8-5 - Interest; open accounts.

In current or open accounts there shall not be collected more than fifteen percent interest annually thereon, thirty days after the delivery of the last article or service; provided that the parties may set a higher rate by agreement.
History:
Laws 1882, ch. 25, § 2; C.L. 1884, § 1736; C.L. 1897, § 2552; Code 1915, § 3527; C.S. 1929, § 89-105; 1941 Comp., § 53-605; 1953 Comp., § 50-6-5; Laws 1977, ch. 293, § 2; 1980, ch. 68, § 3; 1981, ch. 194, § 1; 1983, ch. 254, § 3.
ANNOTATIONS
Cross references.
— For interest when no written contract,
see
56-8-3 NMSA 1978.
Compiler's notes.
— Annotations to decisions under former 56-8-3 NMSA 1978 and its predecessors, which contained provisions concerning interest on open accounts, appear in the annotations to decisions under this section.
Interest runs on an open account against the estate of a deceased person,
beginning six months after the date of the last item.
Radcliffe v. Chaves
, 1910-NMSC-004, 15 N.M. 258, 110 P. 699.
Usurious agreements not totally void.
— The usury statute of 1866, which completely voided usurious agreements, repealed by Laws 1872, ch. 19, which abolished the plea of usury and permitted any rate of interest, was not revived when the latter act was repealed by Laws 1882, ch. 25, § 1.
Milligan v. Cromwell
, 1886-NMSC-009, 3 N.M. (Gild.) 557, 9 P. 359.
Void only as to excess.
— Contract of loan providing for usurious interest cannot be held void, except as to interest in excess of what the statute allows to be charged, collected, or received.
McBroom v. Scottish Mortg. & Land Inv. Co.
, 153 U.S. 318, 14 S. Ct. 852, 38 L. Ed. 729 (1894).
Enforceable as to principal and legal maximum.
— Where a written contract provides for the payment of money at a rate of interest exceeding 12%, recovery may be had of the principal and interest thereon at the rate of 12%.
Milligan v. Cromwell
, 1886-NMSC-009, 3 N.M. (Gild.) 557, 9 P. 359.
Section inapplicable when account stated.
— This section pertains to interest on money due on open account; when there is an account stated, not an open account, an interest award on the basis of an open account is inappropriate.
Tabet Lumber Co. v. Chalamidas
, 1971-NMCA-140, 83 N.M. 172, 489 P.2d 885.
Section inapplicable when contract governed by law of foreign state.
— Where a contract was executed in the territory between a resident and a foreign corporation, stipulated that it was to be governed by the statutes of the foreign state, the fact that the interest required exceeded that allowed by this section did not invalidate the contract.
Goode v. Colorado Inv. Loan Co.
, 1911-NMSC-047, 16 N.M. 461, 117 P. 856.
Higher rate by agreement of parties.
— Where the open account credit agreement between the supplier of materials and a subcontractor on a municipal construction project provided for interest at 18% per year, prejudgment interest was awardable as a sum justly due under 13-4-19 NMSA 1978 at the rate of 18% per year against the surety on the payment bond for the project.
State ex rel. Solsbury Hill, LLC v. Liberty Mut. Ins. Co.
, 2012-NMCA-032, 273 P.3d 1, cert. granted, 2012-NMCERT-003.
Evidence supported finding that interest rate charged against open account, which was above the statutory amount, was agreed to by the parties, where invoices stated: "Past due accounts are charged 2% per month on the unpaid balance. This is an annual interest rate of 24%."
Superior Concrete Pumping, Inc. v. David Montoya Constr., Inc.
, 1989-NMSC-023, 108 N.M. 401, 773 P.2d 346.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
45 Am. Jur. 2d Interest and Usury §§ 247 to 249.
Rights as between vendor and vendee under land contract in respect of interest, 25 A.L.R.2d 951.
Payments under ostensibly independent contract as usury, 81 A.L.R.2d 1280.
Provision for interest after maturity as a rate in excess of legal rate as usurious or otherwise illegal, 28 A.L.R.3d 449.
Reformation of usurious contract, 74 A.L.R.3d 1239.
47 C.J.S. Interest and Usury; Consumer Credit §§ 6, 22; 91 C.J.S. Usury §§ 11, 56.