Swain v. Mechanic's Saving Ass'n

Opinion by Judge Hines : We are of the opinion that the court erred in giving interest on the amount recovered at the rate of ten per cent., from the 2d day of August, 1875, until paid. The stipulation in the contract and set forth in the petition is: “But in the event of his failure so to pay for two months together he was then to repurchase his stock and pay back to the plaintiff the said sum of $593.20, with interest, payable monthly from the time it was so paid to him, at the rate of ten per cent, per annum, and in addition thereto one-tenth of one per cent, penalty from the time of failure until paid.” The penalty is to continue until paid, and not the ten per cent, per annum. The right to recover the ten per cent, must depend upon the contract, [92] and we construe it to be an agreement to pay at that rate until due, and that the institution of the action was an election to treat the debt as due. From the time of the institution of suit the interest-should be computed at six per cent, per annum until paid. Rilling v. Thompson, 12 Bush 310. G. W. Ray, for appellants. The court erred in allowing an attorney fee. In Witherspoon v. Musselman, 14 Bush 214, we have held that such agreements are absolutely void as contrary to the policy of our laws. The judgment should have been for $593.20, with ten per cent, interest from August 2, 1875, to date of filing suit, subject to a credit of $27, and the debt to bear interest at six per cent, from the date of the institution of the suit. Judgment reversed with directions for further proceedings in conformity to this opinion.