SECTION XXIV. ΟΗΙΟ. Chapter 586. An act fixing the rate of interest. SECTION 1. Be it enacted, &c., That all creditors shall be entitled to receive interest on all money, after the same shall become due, either on bond, bill, promissory note, or other instrument of writing, or contract for money or property; on all balances due on settlement between parties thereto, or money withheld by unreasonable and vexatious delay of payment; and on all judgments obtained, from the date thereof; and on all decrees obtained in any court of chancery, for the payment of money, from the day specified in the said decree for the payment thereof or if no day be specified, then from the day of the entering thereof, until such debts, money or property is paid, at the rate of six per centum per annum, and no more. SECT. 2. That the " act fixing the rate of interest, and for the prevention of usury," passed December twenty-ninth, eighteen hundred four, be, and the same is hereby repealed. This act shall be in force from and after the first day of June next. Passed January 12, 1824. When a money-lender takes from a borrower an obligation for a greater amount than the money lent and the stipulated interest, with an undertaking on his part, to receive a less sum in discharge of the obligation if punctually paid, chancery may relieve against the excess as a penalty. Brockway v. Clark. 6 O. R. 50.. The act of 1804 (O. L. c. 69) fixed the rate of interest at six per cent. per annum, and provided for the punishment of usury. That law was held to make so much of contracts as stipulated for more than the legal rate of interest void; and under it the courts were in the practice of enjoining from collecting the excess, when the debtor tendered the amount of principal and lawful interest due. Ibid. The existing act differs from the law formerly in force in very essential particulars. The former contains no provision forfeiting the debt, nor any one prohibiting the contracting for, or the receiving any rate of interest; the latter provided that any person demanding or receiving more than six per cent. per annum, on any contract, debt, or demand whatever, forfeited the whole amount of the debt on which such illegal interest was charged or received. The former is entitled, 'an act fixing the rate of interest;' the latter, 'an act fixing the rates of interest, and for preventing usury.' Ibid. When payments have been made on instalments not due and payable, such payments should be applied to the extinguishment of principal and such proportion of interest as has accrued upon the principal thus extinguished. Miami Exporting Company v. Bank of the United States. 50. R. 261. An agreement to pay interest upon interest, after the interest has become due, is not usurious. Fabes and Adams v. Cantfield, 3 O. R. 18. In an action brought to recover arrearages of interest, payable yearly by agreement, interest may be recovered upon the successive annual charges from the time they severally fall due. Watkinson v. Root, 4 O. R. 373. SECTION XXV. PENNSYLVANIA. Act of 2d March, 1723. An act for reducing the interest of money from eight to six per cent. per annum. SECTION 1. No person shall, directly or indirectly, for any bonds or contracts to be made after the publication of this act, take for the loan or use of money, or any other commodities, above the value of six pounds for the forbearance of one hundred pounds, or the value thereof, for one year, and so proportionably for a greater or less sum. SECT. 2. If any person or persons whatsoever do or shall receive or take more than six pounds per cent. per annum, on any such bond or contract as aforesaid, upon conviction thereof, the person or persons so offending shall forfeit the money and other things lent, one half thereof to the governor, for the support of government, and the other half to the person who shall sue for the same, by action of debt, bill, plaint or information, in any court of record within the province, wherein no essoin, protection, or wager of law, or any more than one imparlance shall be allowed. 1. Where more than legal interest is included in any specialty or note, the whole amount cannot be sued for and recovered; but the plaintiff is entitled to a verdict for the just principal and interest. 2 Dallas, 92. 2. The rule of law is, that interest is allowed on goods sold and delivered, and on all open accounts, where by the usual course of dealing, or by express agreement, a certain time is fixed upon for payment, on money lent and advanced; on arrears of rent, unless it would be inferred by the landlord's conduct that he did not mean to insist upon it, or he demands more than is due, or there are other special circumstances which might make the charge of interest improper; and generally, wherever one person detains the money of another, without any right and against his consent. 6 Binney 162. 1 Sar. & Ra. 176. 1 Binney, 488. 1 Dallas, 315, 349. 2 Dallas, 193. 4 Dallas, 289. 3. But where a person was ignorant that a sum of money had been paid for his use by the plaintiff, he is not chargeable with interest but from the time he was informed of the fact. 1 S. & R. 176. 4. If the landlord resorts to the land itself for the payment of the arrears of ground rent, he cannot charge interest. 2 Binney, 146. 5. In the case of promissory notes, and generally, whenever a certain day is fixed for payment, interest is to be calculated from the day of payment, and when no day is fixed, from the time of demand. 1 Dallas, 52. 1 Smith, 158. 6. Money paid on account of a bond should be first applied to the discharge of the interest due, and the residue credited towards the satisfaction of the principal. 1 Dallas, 378. 7. A dormant partner is liable for interest, upon the receipt of the money, by an active partner, without his privity or participation. 1 Dallas, 349, n. 2d ed. 8. A factor or agent who does not with due diligence remit the money of his principal, is chargeable with interest. Ibid. 9. If the sheriff take money out of bank, which has been by him deposited there by the agreement of the parties who are contesting the right of the money, he is bound to pay interest himself from the time he takes it out. 3 Binney, 121. 10. A judgment carries interest, although it is agreed that no execution shall issue until the plaintiff has perfected the title, to certain land for which the bond on which the action was brought was given. 6 Binney, 435. 5 Binney, 121. 11. Where interest is not of course, if the defendant offers to the plaintiff as much as is due to him, he is not liable to interest on the amount; but if he offers too little, and the plaintiff brings an action to recover the amount, he is. 3 Binney, 295. 12. The testator bequeathed to each of his legatees, a certain sum of money, to be placed at interest two years after his death, for their own benefit, and the principal and interest to be paid as they should respectively attain the age of twenty-one years; but if any of them should die before the share of such legatee was to be divided among the others: Held, that no interest was recoverable by any legatee during minority, but that it must accumulate, in order to form a fund for the other legatees if he should die before coming of age. 5 Binney, 477. 13. On the valuation of the real estate of an intestate, the person accepting the estate is bound to pay interest for the distributive shares of the other heirs, from the time of his acceptance. 1 Yeates, 392. 14. A tender of the sum due does not amount to an actual payment and discharge, but it suspends the interest until a subsequent demand and refusal. 1 Dallas, 407. 15. Where a person is prevented by law from paying the principal, he shall not be compelled to pay interest during the prohibition; as in case of a garnishee in a foreign attachment. 2 Dallas, 103. 1 Yeates, 474. 16. Interest is not to be paid by a mere trustee for the money which he holds for the use of another, unless he neglects to pay it on demand; and if there is no proof of demand, it must be calculated only from the commencement of the action. 2 Dallas, 182. 17. The defendant having contracted to make a conveyance to pay a specific sum within a limited time, is guilty of an immoral act in omitting to perform either of the alternatives; and the jury may give damages, by way of interest, beyond the penalty of the bond. 2 Dallas, 255. 18. The plaintiff is entitled (notwithstanding the penalty) to recover damages commensurate with the injury suffered by a non-performance. 4 Dallas, 149. 19. Where the condition of a bond is for the payment of interest annually, and the principal at a distant day, the interest may be recovered before the principal is due, in an action of debt on the bond; but no interest can be recovered on such interest. 1 Binney, 165. 20. A trustee is entitled to interest for advances made to supply the deficiency of the trust fund. 1 Binney, 488. 21. Although interest upon interest is in general unlawful, yet there are cases in which interest is considered as changed into principal and permitted to carry interest, as where a settlement of accounts takes place after interest has become due, or an agreement is made after interest becomes due, that it shall carry interest. Any agreement for interest upon interest, to be lawful, must be made after the interest has become due, and must be prospective, that the interest then due shall carry interest. An original agreement that if the interest is not paid at the time it shall be due it shall carry interest, though it would not amount to usury, so as to render the contract connected with it illegal and void, yet the party cannot recover such interest either at law or in equity. 1 J. Ch. R. 14. 6 J. Ch. R. 313. See 4 Yeates, 220. 5 Barn. & Alder. 34. 7 Sar. & Ra. 15. 11 Vesey, Jr. 93. 3 W. C. C. R. 350, 396. 22. It is doubtful if this rule of charging interest upon interest relates to real securities. See 9 Vesey, Jr. 223, though in 4 Yeates, 220 it was so held. Purden's Digest. 23. Where the contract is made in another state, the interest allowed in that state may be given. Jaffray v. Dennis, 2 W. C. C. R. 253. 24. So where a note was given in China, payable in eighteen months after date, without any stipulation respecting interest, the court allowed the Chinese interest of one per cent. per month, from the expiration of the eighteen months. Cowqua v. Landerburn, 1 W. C. C. R. 525. 25. It seems that interest on a judgment in another state cannot be recovered on a count for such interest in a suit on the judgment. Benton v Burgot, 10 S. & R. 240. 26. On an obligation to pay four per cent. interest, interest will be estimated at the same rate after the day of payment. Cooper v. Coates, cited 1 Yeates, 8. 27. A writing for the payment of money on demand for value received, bears interest only from the demand. Addis. 137. 28. In an action to recover contribution to a general average it was held, that interest ran from the time that the money was advanced upon which the average rose. Sims v. Willing, 8 S. & R. 103. 29. If a certain gain be reserved to the lender, besides the interest, it is usury. Addis. 126. 30. Under the act of assembly a transaction may be usurious where the price of land or other property is retained by the purchaser on condition of paying interest for the use of it, although the annual compensation be denominated rent. Evans v. Negley, 13 S. & R. 218. 31. A and B borrowed money of the defendant and gave their notes with usurious interest. When these became due, they drew new notes, making the principal and interest of the former notes |