Originally, the word "usury " meant any money received for the use of other money. Whether it were more or less, such taking was thought to be unlawful, or, at least, immoral. In modern times, a moderate payment for the use of money has been held to be lawful; and to this the name of interest is given; or rather, such payment of money for the use of money, whether it be more or less, is now called interest, while the word "usury" is now confined to the taking of more than the law allows.
Now, and for some generations, the law of England and of this country not only permits parties to bargain for a certain rate of interest, and enforces that bargain, but it makes it for them, in many cases; that is, where it is certain that money ought now to be paid, and ought to have been paid long since, the law, in general, implies conclusively that, for the delay in the payment of the money, the debtor promised to pay legal interest. (a) l
This interest is allowed on money withheld, if not on the ground . of some promise to pay it, express or implied, then as damages for default, in retaining the money which belongs to another. The contract may be implied from the usage of a place, or of a trade, (b) or from the course of dealing between the parties, (c) or from the practice of one party, if that be known to the other party. (d) * Among the cases in which interest has been allowed for the detention of a debt, the following may be considered the
(a) Selleck v. French, 1 Conn. 32, Reid v. Rensselaer Glass Factory, 3 Cowen, 393, 5 id 587; Dodge v. Perkins, 9 Pick. 368. And see Kennedy v. Barnwell, 7 Rich. 124.
(b) Meech v. Smith, 7 Wend. 315, most important: An action of debt on a judgment,(e)or on an account liquidated. (f) For goods sold, interest accrues after the day of payment; (g) and if sold for cash, it begins from the date of the delivering of the goods. (gg) On an unsettled claim, after a demand of payment (h) For rent to be paid at a fixed time, interest is payable from the time the rent becomes due, (i) even if it be payable in specific articles. (j) For money paid for the use of another, interest is due from the time of payment. (k) So it has been held in cases of money lent. (l) If the money is due now, but not payable until some act of the promisee, as if payable on demand, then that act must take place before any claim for interest can accrue; (m) and this requirement of demand has been applied to bank-notes.(mm) Interest is payable on coupons from their date, without demand, if funds are not provided to pay them when payable.(mn)
Koons v. Miller, 3 Watts &S. 271; Watt v. Hoch, 25 Pa. 411.
(c) Easterly v. Cole, 3 Comst. 502, 1 Barb. 235.
(d) M'Allister v. Reab, 4 Wend. 483, 8 Wend. 109; Easterly v. Cole, supra.
1 The authorities on the subject of the allowance of interest in common-law actions are collated and discussed in White v. Miller, 78 N. Y. 393. - K.
The guarantor of a note is liable for interest from the time that he is notified of the default of the principal, (n) and perhaps from the date of the default.(o)
In England, the weight of authority would seem to establish the rule, that interest should not be added in the amount of * damages, unless there be a distinct contract to pay
(e) Klock v. Robinson, 22 Wend. 157; Prescott v. Parker, 4 Mass. 170; Gwinn v. Whitaker, 1 Harris & J. 754; Hodgdon v. Hodgdon, 2 N. H. 169. And see Nelson v. Felder, 7 Rich. Eq. 395.
(f) Blaney v. Hendrick, 3 Wilson, 205, Walden v. Sherburne, 15 Johns. 409, 424; Liotard v. Graves, 3 Caines, 226, 234; Elliott v. Minott, 2 McCord, 125.
(g) Crawford v. Willing, 4 Dall. 286, 289, Bate v. Burr, 4 Harring. (Del.) 130; Porter v. Monger, 22 Vt. 191; Easterly v Cole, 3 Comst. 502.
(gg) Foote v. Blanchard, 6 Allen, 221.
(h) Mcllvaioe v. Wilkins, 12 N. H. 474; Gammel v. Skinner, 2 Gallia. 45; Barnard v. Bartholomew, 22 Pick. 291. See Goff v. Rehoboth, 2 Cash. 475; Purdy v. Phillips, 1 Kern. 406.
(i) Clark v. Barlow, 4 Johns. 183; Williams v. Sherman, 7 Wend. 109; Den-nison v Lee, 6 Gill & J. 383; Elkin v. Moore, 6 B. Mon. 462; Buck v. Fisher, 4 Whart. 516.
(j) Lush v. Druse, 4 Wend. 313 , Van Rensselaer v. Jewett, 5 Denio, 135, 2 Comst. 135, Van Rensselaer v. Jones, 2 Barb 643. But see Philips v. Williams, 5 Graft. 259; Dana v. Fiddler, 2 Kern. 40. (k) Gibbs v. Bryant, 1 Pick. 118; Sims v. Willing, 8 S. & R. 103; Goodloe v.
Clay, 6 B. Mon. 236; Reid v. Rensselaer Glass Factory, 2 Cowen, 39,5 id. 587.
(l) Dilworth v. Sinderling, 1 Binney, 488; Liotard v. Graves, 3 Caines, 226; Reid v. Rensselaer Glass Factory, 2 Cowen, 393, 5 id. 587; but in Hubbard v. Charles-town Branch R. R. Co., 11 Met. 124, where a party had overdrawn money at a bank by mistake, it was held, that interest could not be recovered nntil after demand made or some default in payment. See Simonds v. Walter, 1 McCord, 97; King v. Diehl, 9 S. & R. 409. See 1 American Leading Cases, 341, where, in a note under Selleck v. French, the whole subject of interest is thoroughly considered.
(m) Jacobs v. Adams, 1 Dall. 52; Hunt v. Nevers, 15 Pick. 500; Breyfogle v. Beckley, 16 S. & R. 264; Nelson v. Cartmel, 6 Dana, 7; Henderson v. Blanchard, 4 La. An. 23; Livermore v. Rand, 6 Foster, 85; Hantz v. The York Bank, 21 Pa. 291. And see Purdy v. Philips, 1 Kern. 406.
(mm) In re Herefordshire Co. Law Rep. 4 Eq. 250.
(mn) North Penn. R. R. Co. v Adams, 54 Pa. 94.
(n) Washington Bank v. Shurtleff, 4 Met. 30.
(o) Ackerman v. Ehrensperger, 16 M. & W. 99.
1ll interest; (p)l but there, also, this contract may be implied from the usage of trade, or from other circumstances, (q) In this country, the rule seems to be well established, that whoever receives money not his own, and detains it from the owner unlawfully, must pay interest therefor. Hence a public officer retaining money Wrongfully, is chargeable with interest during the time of such wrongful detainer, (r) So an agent, unreasonably neglecting to inform his principal of the receipt of money, is liable for the interest from the time when he should have communicated such information, (s) But an agent is not generally liable for interest on funds in his hands, unless he uses them, or is in default in accounting for them, (t) Interest is recoverable on money fraudulently obtained and withheld, (u) It is not chargeable on book debts, unless by custom or agreement, (uu)