Spires v. Hamot

Per Curiam. Tracy v. Wicoff has long since ceased to be authority. It has been directly overruled in Primrose v. Hart, (1 Dall. 378); The Commonwealth v. Miller, (8 Serg. & Rawle 458); and Smith v. Shaw, (2 Wash. C. C. R. 167), in accordance with all the English decisions since Chase v. Box, (2 Freem. 261), which was the first of them, and decided in 1702. The truth is, Tracy v. Wicoff is as unfounded in principle as it is in authority; for, calculating interest oh payments, the debt would, in course of time, be discharged, both principal and interest, by payment of interest only. The rule established by all other decisions is that a partial payment is to be applied to the interest, in the first place, and in the second to the principal. The reason is that, though interest may be reserved to be paid yearly, half-yearly or quarterly, it accrues from day to day, and not like rent from year to year. A creditor may refuse to receive the principal before it is due, or a part of it when due, except on his own terms; and were he to receive it as a payment bearing interest, it would, in effect, be a loan. But if he receive it unconditionally, the residue applied to the principal, after payment of the interest, stops interest on the principal pro tanto. The last of the endorsements on this bond purports that the payment was received “ on account of principal and interest,” which is no more than the law would imply. The jury, therefore, were directed to adopt an erroneous rule of computation. Judgment reversed, and venire de novo awarded.