Stoner v. Evans

Wagner, Judge, delivered the opinion of the court. Plaintiff sued the defendants oh the following promissory note: — “ Iron Mountain, November 4, 1857. Five years after date, we, or either of us, promise to pay to the order of Pate Buford, five thousand five hundred dollars, for value received, with interest at the rate of ten per cent, per annum from date; interest payable annually. — JamesS. Evans, Milton P. Boyce, P. G. Long, David Evans.” The note was assigned by Buford to plaintiff. There was but one point presented in the court below, and it is the only point relied on here: that as the interest was payable annually, if not promptly paid at the end of the year, it would stand like any other debt for money, and would legally draw interest at the rate of sis per cent. The court refused to give the note this construction, and rendered judgment for the amount due on the note, with simple interest at the rate of ten per cent. The plaintiff excepted, and brings the case here by writ of error. We do not think that because the interest was payable an [463] nually, it was therefore to be compounded and bear interest in the event of its not being paid when due. By the express terms of the agreement the interest was to be paid annually, and if not so paid the plaintiffs might have recovered it by action ; but there is no authority for saying that he could let it run, treat it as a separate and,independent debt, and then recover interest on it without stipulation to that effect. The R. C. 1855, p. 891, § 6, provides that parties may, in any contract in writing whereby any debt is secured to be paid, agree that if the interest on such debt is not punctually paid it shall become a part of the principal and thereafter bear interest. In this case there was no such agreement made by the parties or inserted in the contract; and where there is no such special agreement incorporated in the contract or stipulated between the parties, interest on interest cannot be allowed. The judgment is affirmed. The other judges concur.