Myrick v. Battle

SEMMES, J.: The only question presented by the record in this case is, the rate of interest which sliould bo allowed on the note ;.yed on. [349] The note of the Appellant is elated the 14th of March, 1844, and payable one day after date. At the date of the note, our statute provided that where no rate of interest was expressed in the contract, no higher rate than eight per cent, should be charged. Duval, 78, § 1. On the day after the execution of the note, this statute was altered, reducing the rate of interest to six per cent.' per annum. Thomp. Dig., 234. It is contended, that inasmuch as the law was amended before the maturity of the note, and, of course, before interest had commenced running, the judgment of the Court below, allowing eight per cent, interest, was erroneous. We do not think so. Upon both principle and authority, the respondent was entitled, as of right, to recover eight per cent, interest. All contracts for the payment of money bear interest after maturity, though silent on the subject, unless there is an express stipulation to the contrary. When the contract is silent as to the interest, as in this case, the law will imply an understanding, on the part of the debtor, to pay the legal rate, and this implied understanding is not only supported by mercantile usage in all commercial instruments of a negotiable nature, but because interest is considered as a legal incident to every debt, certain in amount, and payable at a certain time. The rate of interest is to he determined by the law of the place where the contract is to bo executed, and when, as in the contract before us, no place is indicated, it is to be presumed where it is made. 1 Am. Lead. Cases, 519. The interest, though an incident to the debt, is impliedly a part of the contract, and the contracting parties are to be presumed to have had reference to the law as it existed at the time the contract was made, and, as a consequence, üio statute altering the rate of interest can be made to af [350] feet contracts entered into before its passage, otherwise the obligation of the contract would bo impaired, for the Constitution, in tliis respect, recognizes no distinction between express and implied contracts. No analogy, in our opinion, exists, and therefore no argument can bo drawn, from the right of the Legislature to alter the rate of interest in reference to judgments, after a contract is made. A judgment is a part of the remedy, and carries such rate of interest as is legal at its dato, whatever rate was recoverable on the contract. The contract is merged in the judgment rendered, and the judgment is controlled by the statute, and not by the contract. It has been expressly determined in the case of Lee vs. Davis, 1 A. K. Marsh., 397, that the rate of intoi’cst -on a note is to be regulated by the law as it exists at the time ■the contract was made. We see no reason to depart from the principle decided in that case. See also Bryan vs. Moore, Miner 377. Let the judgment be affirmed.