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eBook details

• Title: Burnhisel v. Firman
• Author : United States Supreme Court
• Release Date : January 01, 1874
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 57 KB

Description

Messrs. Snow and Hoge, for the appellant: I. Where a person contracts to pay money, and nothing is said about the rate of interest, the presumption, of course, must be that the interest is to be at the ordinary rate. But that is not this case. Here the party contracted to pay within one year with interest at 25 per cent., and he does not pay within the year. Against the will of the other party he violates his promise and keeps in his own hands the money of that party. What is the presumption in that case? The lender, for all the time that he did lend, insisted on 25 per cent., and for all the time that the borrower professed to borrow he agreed to pay that rate. If the borrower, in breach of his contract, in violation of his own duty, and against the lender's will and rights, extend the time, shall he not be held to the rate at which he took the money? The authorities declare that he shall. In Kohler v. Smith,1 in the Supreme Court of California, a person had given note for $1000, 'payable in two months after date, with interest at the rate of 5 per cent. per month;' that is to say, at the enormous rate of 60 per cent. a year. The statute of California gives but 10 per cent. a year for all moneys after they become due, 'where there is no express contract giving a different rate of interest.' The case, therefore, was just like the one now before the court. The court held that the debtor being in default in not paying the principal, must pay for the use of it at the rate of 5 per cent. a month till he did pay it. That case decides, therefore, that where moneys are lent at a higher rate of interest than the statutory rate, and are payable at a day fixed, and are not paid at the day, the higher rate, in the absence of agreement otherwise, is to continue.

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