Leonard v. Administrator of Villars

Walker, J. The first question presented by the assignment of errors on this record is, whether the wife, who was a party to the mortgage, was a necessary party to this bill. When she became a party to the mortgage, it was for the purpose of barring her right of dower in the mortgaged premises. When she acknowledged the execution of that instrument, for the relinquishment of that right, it could only have that effect upon a foreclosure of the equity of redemption. A default in the payment of the money, to secure which the mortgage was executed, did not operate any more to bar her right of dower than it did her husband’s equity of redemption. Until the right of redemption is barred by foreclosure, her right to redeem her dower in the lands, from the mortgage, whenever her right of dower should be vested by her husband’s death, still remains. That it is a contingent interest, can make no difference, as her acknowledgment of the mortgage, only operates as an absolute release of her right of dower in the premises, when it is followed by a foreclosure of her equity of redemption. The absolute relinquishment, is contingent upon the foreclosure. It was expressly held by this court, in a proceeding to foreclose a mortgage by sci. /a., that the wife joining in its execution is a necessary party. The .court say, she was one of the mortgagors, and it was necessary, to foreclose her equity of redemption and right of dower, that the judgment should be rendered against her. Gilbert v. Maggord, 1 Scam. 471. A court of equity can have no greater right to bar the right of redemption of parties not before the court, than a court of law. A decree which should attempt to deprive her of these rights, unless she were a party to the record, and properly before the court, could not bind her any more than would a decree against any other person over whom the court has no jurisdiction. The court below, therefore, erred in rendering the decree until all proper parties had been brought into the case. It is also insisted that the court erred in allowing compound interest, and interest upon interest not then due. To compute interest upon interest after its maturity, has, by all courts, whether exercising equity or common law jurisdiction, been held to be compound interest, and in violation of law. This question is one that has been frequently presented, and it is believed, as uniformly held to be unauthorized. We are not aware of any well considered case, which has held that there is an implied legal or moral obligation to pay interest upon unpaid interest, after its maturity. The court below erred in computing interest upon the interest, after it fell due. And there can be no pretense in justice or law for allowing interest on interest not due, and which has not been withheld, and which the payee' has no right to demand. If, by the terms of the agreement, the deferred payments became due, upon the breach of some condition or stipulation in the contract, and before the time had arrived when the payment of the interest could be demanded, even if interest were authorized to be charged upon unpaid interest, we can neither see the reason or justice of allowing interest to be computed upon the accruing interest, before the principal sum became due by the forfeiture. Such a rule would be oppressive, and could have no claims upon the chancellor for allowance. For these errors, the decree of the court below must be reversed, and the cause remanded. Decree reversed.