Court Opinion

ID: 3646974
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:02:52.096314+00
Date Added: 2024-06-11T12:08:28.316330
License: Public Domain

An injunction was granted, and the defendants having filed their answer, the cause came on to be heard upon the bill and answer, when the following question was made and ordered to be sent to this Court, to wit, Whether interest on the three bonds mentioned in complainant's bill, or on either of them, shall be computed from the time they bear date, or from the time they were made payable.
The question submitted to us in this case is simply this, whether the interest secured by the bonds and to be paid from the dates thereof, on such sums as should remain unpaid sixty days after each bond became due, was so secured by way of penalty or not. And the Court think that such interest was so secured by way of penalty, and that a court of equity ought to relieve against it. This is like the case of Orr v. Church, 1 Hen. Bl., 227. It is true that the word penalty is there inserted in the bond; but we think that makes no difference. The principle in both cases is the same. In this case, as well as in that, the interest was only demandable on the failure of the obligors to pay at the day. Had the principal of the bonds been paid on the day on which they became due, or within sixty days thereafter, such interest would not have been demandable by the terms of the contract; hence it could only be demanded as a penalty for nonperformance. The obligors *Page 117 
wanted no interest until the days of payment mentioned in the bonds and the clauses securing the interest were inserted to insure punctuality. It is the peculiar province of a court of equity to relieve against penalties. We, therefore, think that the injunction should be made perpetual as to the interest which by the terms of the contract accrued on the two bonds on which complainant hath been sued, from the date of the             (148) said bonds up to the time when they respectively became payable; and that defendants come to an account for the moneys paid to them by Johnson  Fleming, and that complainant be credited with the amount of interest which they have improperly received upon the first bond.