Court Opinion

ID: 8056777
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:33:20.56886+00
Date Added: 2024-06-11T16:37:52.615061
License: Public Domain

The opinion of the court, was delivered by
Hornblower, C. J.
I am satisfied that I was wrong in directing the jury to allow interest at the rate of seven per cent., the legal interest in the State of New York, instead oí New Jersey interest, which is only six per cent.
Mr Justice Story in his commentaries on conflicting laws, 241, sec. 291, says, “ the general rule is, that interest is to be paid on contracts, according to the law of the place, where they are to be performed, in all cases where interest is expressly or impliedly to be paid.” In support of this rule the commentator refers to a great number of cases, -both American and English.
Chancellor Kent in his commentaries, (Sect. 39 p. 460,461 2d ed.) says “ The law of the place where the contract is made, is to determine the rate of interest, when the contract specifically gives interest; and this will be the case though the loan be secured by a mortgage on lands in another State; unless there be circumstances to show that the parties had in view the law of the latter place in respect of interest; when that is the case, the rate of interest of the place of payment, is to govern.”
*329The note in question though made in the city of New York was in express terms to be paid at the Bank of Elizabeth, in this State. The contract did not carry interest upon the face of it, but upon default of payment at the day and place, the law of this State tacitly annexes an obligation thenceforth to pay interest until the debt is liquidated. But the obligation to pay interest was no part of the contract; for if the contract had been performed, no interest could have been demanded. It may be said however, that it was; and that the understanding of the parties, and therefore in legal contemplation, a part of the New York contract, that if the money was not paid at maturity, it should then carry interest till paid. But the liability to pay interest, in such case is rather a legal consequence, than a conventional duty. The contract itself was for payment at a day certain. It did not contemplate a failure in the performance, and therefore made no provisions in anticipation of such an event; but left the law to take its course in case of a breach of the contract. Since therefore, the event which gave rise to and legalizes the plaintiff’s claim to interest, happened in this State; or in other words, since it was here, that the right to interest accrued, and by operation of our law that it becomes payable, the rate of interest must be such as is allowed in this State. (See Stoby on conflicting laws, fol. 245, Sect. 294,295.) The excess of interest, must therefore be deducted, and judgment entered for the residue, pursuant to the .agreement of the parties entered into at the Circuit.
Fobd, J. and Ryebson, J. concurred.
Judgment for 6 per cent interest.
Cited in Harker v. Brink, 4 Zab. 332; Campbell v. Nichols, 4 Vr. 83.