Court Opinion

ID: 6473438
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:32:50.679215+00
Date Added: 2024-06-11T09:11:42.011418
License: Public Domain

DAVIS, J.
The action in the court below was founded upon a promissory note of the tenor following: “$1,897.00. Phœnix, A. T., March 8th, 1893. On or before July 8th, 1893, after date, for value received, I promise to pay to the order of R. J. Holmes, Sr., the sum of eighteen'hundred and ninety-seven dollars, at Phœnix, A. T., with interest thereon at the rate of one per cent per month, payable annually. [Signed] Hosea G. Greenhaw.” The district court, by its judgment, allowed interest on this note at the rate of one per cent a month after it became due. The appellant contends that his contract was only for that rate from the date of the note until its maturity, and that but seven per cent was recoverable after that period. This raises the only question presented by the appeal, and its determination involves the correct interpretation of the contract in the light of the statute then in force on the subject of interest. The provisions of law to be considered in this connection are the two following paragraphs, contained in the Revised Statutes of 1887:—
“2161. When there is no express agreement fixing a different rate of interest, interest shall be allowed at the rate of seven per cent per annum on all moneys after they become due on any bond, bill, promissory note, or other instrument in writing, or any judgment recovered in any court in this territory, for money lent, for money due on any settlement of accounts from the day on which the balance is ascertained, and for money received for the use of another.
“2162. Parties may agree in writing for the payment of any rate of interest whatever on money due or to become due oh any contract; any judgment rendered on such contract shall conform thereto, and shall bear the rate of interest agreed upon by the parties, and which shall be specified in the judgment.”
These provisions were adopted from the statutes of California, and had already been construed by the supreme court of that state against the view now urged by the appellant. In Kohler v. Smith, 2 Cal. 597, 56 Am. Dec. 369, the court *97said: “This language is very explicit, and shows that the intention of the act was twofold: First, that money demands after maturity, should draw interest; and, second, that they should draw interest at whatever rate was expressed in the written contract, notwithstanding that nothing is said expressly about interest after maturity; and it is only where no rate is agreed on that the statute rate takes effect. This construction is strengthened by the second section of the act, which requires judgment on such contracts to ‘bear the interest agreed upon by the parties ” A like decision has been made in other states upon similar statutes. Hand v. Armstrong, 18 Iowa, 324; Brannon v. Hursell, 112 Mass. 63; Marietta Iron Works v. Lottimer, 25 Ohio St. 621; McLane v. Abrams, 2 Nev. 199; Phinney v. Baldwin, 16 Ill. 108, 61 Am. Dec. 62; Hopkins v. Crittenden, 10 Tex. 189; Spencer v. Maxfield, 16 Wis. 185; Borders v. Barber, 81 Mo. 636; Warner v. Juif, 38 Mich. 662; Kellogg v. Lavender, 15 Neb. 256, 48 Am. Rep. 339, 18 N. W. 38; Wyckoff v. Wyckoff, 44 N. J. Eq. 56, 13 Atl. 662. While the authorities are somewhat conflicting, the preponderance of opinion in the state courts is clearly in favor of the doctrine that the stipulated rate of interest attends the contract until it is merged in this judgment. This view has also received the sanction of the supreme court of the United States in a case which came before it under a statute of Iowa which bears close resemblance to that of our territory. Cromwell v. Sac County, 96 U. S. 51, 24 L. Ed. 681. In the cases from that court where a different rule was apparently applied it will be observed that the local statutes governing interest rates were essentially different from our own. Brewster v. Wakefield, 22 How. 118, 16 L. Ed. 301; Burnhisel v. Firman, 22 Wall. 170, 22 L. Ed. 766; Holden v. Trust Co., 100 U. S. 72, 25 L. Ed. 567. Certainly the legislature, in providing that the judgment should bear the stipulated rate of interest, could not have had in contemplation that a different rate would prevail between the maturity of the note and the entry of the judgment, nor is it evident that the parties contracting under this statute so intended. The appellant had agreed in writing that the rate of interest for the use of the appellee’s money should be one per cent a month. If, in breach of his contract, in violation of his own duty and against the lender’s rights, he extended the time, should he not be held to the rate *98at which he took the money? Aside from the naked justice of the proposition, the inference seems irresistible that such was the requirement of our law. In other words, the statute meant that the principal of the note should bear the stipulated rate of interest from the time it was due until it was paid, whether payment was made voluntarily or enforced by judgment and execution.
There appears no error in the record, and the judgment of the court below is affirmed.
Sloan, J., and Doan, J., concur.