Court Opinion

ID: 6408823
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:02.543533+00
Date Added: 2024-06-11T15:51:18.239949
License: Public Domain

Dewey, J.
The case of Hastings v. Wiswall, 8 Mass. 455, early settled the principle, that upon a note, payable in a certain number of years with annual interest, judgment could be recovered only for simple interest on the principal sum. The question there arose, upon a motion in behalf of the plaintiff, that in entering up the judgment, the interest due by the terms of the note at the expiration of each year should be added to the principal, and interest be cast upon the aggregate, and so from year to year ; but this was refused, and simple interest on the principal sum only was allowed by the court. This opinion was reaffirmed, or rather recognized as the existing rule of law, by C. J. Parker, in Barrell v. Joy, 16 Mass. 227. It was also somewhat considered in the case of Wilcox v. Howland, 23 Pick. 167, where it was again held that an action will not lie to recover interest upon interest, although a new contract, made after such interest had accrued, (as in the case of a promissory note given for compound interest,) would be a valid promise, and might be enforced. These cases seem to settle the general principle as to the right to enforce payment of compound interest upon *67antecedent contracts, and would preclude a recovery cf such interest in the ordinary case of a promise to pay compound interest.
The only further inquiry is, therefore, whether this case falls within the principles settled in the adjudicated cases. It is supposed by the plaintiff that there are elements in the present case, that will materially distinguish it from those alluded to. It is true that the promise, which is the subject of the present action, is a promise to pay the annual interest of certain notes of Elijah Flagg and Joshua Flagg, if the makers of those notes do not make such annual payment of interest. The makers of those notes-are not sued, but the party giving the collateral promise to pay annual interest. We perceive no distinction, however, in the principle of the two cases. As a prospective promise to pay compound interest, it is equally objectionable as if made by the makers of the note. The payment of interest on the whole sum might have been enforced by action to enforce the payment of the same at the end of each year, if the plaintiff had seen fit so to do. Not having done so, it is as much to be presumed in this as in the cases of annual interest stipulated for in the note itself, that the party waives such claim for annual interest, Indeed, the same objection, whether it be that of waiver, or that the policy of the law is adverse to compound interest, applies to both cases. The plaintiff, having received the simple interest upon the principal of the notes, which are the subject of the defendant’s promise, and having forborne to enforce against the defendant the payment of annual interest from year to year, as he might have done, cannot now enforce the payment of compound interest.

Judgment for the defendant.