Howland v. Marr

Cole, J. Tbe evidence in tbis case abundantly shows that it was the custom between these parties to convert interest already due into principal, and to give notes drawing twelve per cent, interest for the amount of such interest. This was the course of dealing between the parties, and in some cases it appears the notes thus given were ante-dated to the time the interest became payable. Whether this was in pursuance of a general understanding and agreement between the parties, that interest, if not paid when due, should become principal and draw interest, it is perhaps unnecessary to determine. Marr says that there was such an understanding or agreement made as early as 1856. But Meredith Howland denies that there was a general agreement between him and Marr that if any interest became due and unpaid it should chaw interest at 12 per cent., and that he was to give his note for it accordingly; yet he does say it was so arranged from time to time, because he could not pay the interest, and Marr insisted that the interest should draw interest at 12 per cent. So that there is no room to doubt as to the custom of the parties. It was to convert the interest due into principal, the debtor giving a note for the amount, which drew the same rate of interest as the sum loaned. The circumstances of the giving of the $331 note are stated by Marr to be as follows. He says: “In the fall of 1859, I was'about going south to spend the winter, and I called on Meredith How-land for $1000, or so much of the money [as] he was owing me, and he could not pay me any money. I then wished to look over and see how we stood, and take a note for interest then due me ; Howland said it would make no difference; that he could not then well attend to it,, that he was going that winter to the legislature at Madison, and wanted to use all the money he had; and that he would arrange it up in the spring, the same as though it was clone then. ” Marr farther states that, [278] in tbe spring of 1860, be and Howland looked over their matters, and ascertained tbe amount due for interest on several notes wbicb be beld against Howland; that tbe time for tbe payment of tbe interest was equalized; that tbe note in question was given for the balance of tbe interest; that December 5th, 1859, was tbe time, as arranged by Howland, that interest was to be cast to, and therefore tbe note was dated as of that day. Howland, although be was subsequently called, does not deny that this agreement was made in tbe fall of 1859 in respect to the settlement of tbe interest then due; and therefore we may fairly assume that tbe note was given in May, 1860, in pursuance of tbe previous understanding and agreement between tbe parties. And tbe question arises, whether, in consequence of tbe note being ante-dated so as to carry out this agreement between tbe parties, it became affected with usury. At tbe time tbe note was actually given, tbe law limited tbe rate of interest to 10 per cent. (Laws of 1859, chap. 160; Laws of 1860, chap. 202); although in December, 1859, it was competent for parties to contract for tbe payment of 12 per cent, interest, in wbicb case such rate, exceeding seven dollars on tbe one hundred dollars, was required to be clearly expressed in writing. Sec. 1, chap. 160, supra. There certainly is not tbe least ground for saying that tbe parties resorted to this expedient of ante-dating tbe note as a cover for usury, or to evade any law upon that subject. There is not a particle of proof to show any corrupt motive in thus dating tbe note, or an in tention of taking more interest than tbe law allowed for tbe use of money. But tbe note was ante-dated simply for tbe purpose of carrying out tbe agreement and understanding of tbe parties, entered into tbe fall before, that tbe lender should receive interest upon interest after it became due and payable, at tbe rate of 12 per cent. Had tbe note been actually given in December, it would have been valid beyond all question. And does tbe circumstance that tbe note was not executed until some months after render tbe contract void ? It appears to [279] us not The contract was in fact made in the fall, and it was subsequently reduced to writing so that tbe lender might have the necessary legal evidence of its terms and conditions. The interest was actually due in the fall, and should have then been paid, or a note given for the amount But as the borrower could not then attend to the matter, and wanted to use his money, he agreed to arrange it in the spring so that the transaction should have the same legal effect as though then consummated. Hence the note was ante-dated in conformity to this understanding and agreement. We do not think the facts show that the instrument is usurious. See Patterson v. Storm, 14 Wis., 648; Banks v. Van Antwerp, 5 Abbott, 411; Andrews v. Hart, 17 Wis., 307. By the Court. — The judgment of the circuit court is reversed, and the cause remanded with directions to dismiss the complaint