§ 1479. Simple interest is recoverable in an action of assumpsit, or in an action upon the case wherever there is either, 1st, an express or implied contract therefor; or, 2d, whenever there has been a tort or breach of contract, whereby special damage has resulted to the party claiming it. "Wherever interest is claimed upon an express or implied contract therefor, it is a necessary incident to the original debt, and a matter of strict right, which must be allowed by the court.1 But, whenever it is claimed on account of a tort, or a breach of contract, it is in the nature of damages, and is wholly in the discretion of the jury.
§ 1480. In the first place, interest is allowable in all cases where there has been either an express or an implied contract therefor. If the contract be express, it must, as a matter of course, be allowed. And on a contract to pay a certain sum at a certain time with a stipulated rate of interest, if the principal be not paid at the specified time, the same rate of interest will be allowed after as before the breach.2 A contract to pay interest will be implied either from a general mercantile usage or custom; as in the case of bills of exchange and promissory notes, upon which, in the absence of any other agreement, interest runs from the day of payment; or from demand, if they be payable on demand;3 or from the issuing or service1 of the writ, when no demand is made;2 - or it will be implied from the particular course of dealing between the parties, or the special custom of one party, known and acceded to by the other; as where it is the custom of a particular person to charge interest upon all sales made by him after the lapse of a certain limited period; in which case he may charge all persons with interest who deal with him with a knowledge that such is his custom.3 So, also, where by the terms of the contract the principal is to be paid at a specific time, an agreement is always implied to make good any loss arising from default of payment at the proper time, by the payment of interest after such default.4
1 See Whitworth v. Hart, 22 Ala. 343.
2 Morgan v. Jones, 8 Exch. 620; 20 Eng. Law & Eq. 454; Price v. Great Western Railway, 16 M. & W. 244.
3 Page v. Newman, 9 B. & C. 378; Foster v. Weston, 6 Bing. 709; 4 Moore & P. 589; Blaney v. Hendricks, 2 W. Bl. 761. So in the case of a refusal to pay a deposit of money payable on demand. Ingersoll v. Campbell, 46 Ala. 282 (1871).
§ 1481. A contract to pay interest is also implied whenever money is advanced or expended for the use of another person at his request.5 If money be voluntarily expended
1 Maxcy v. Knight, 18 Ala. 300.
2 Pierce v. Fothergill, 2 Bing. N. C. 167; 2 Scott, 334.
3 Fisher v. Sargent, 10 Cush. 250; Reab v. McAlister, 8 Wend. 109; De Havilland v. Bowerbank, 1 Camp. 50; Page v. Newman, 9 B. & C. 380; Robinson v. Bland, 2 Burr. 1086; Wood v. Hickok,2 Wend. 501; Reid v. Renselaer Glass Factory, 3 Cow. 436; Calton v. Bragg, 15 East, 223; Bruce v. Hunter, 3 Camp. 467; Eaton v. Bell, 5 B. & Ald. 34; Nichol v. Thompson, 1 Camp. 52, note; Esterly v. Cole, 3 Comst. 502.
4 Robinson v. Bland, 2 Burr. 1086; Rensselaer Glass Co. v. Reid, 5 Cow. 611; Porter v. Munger, 22 Vt. 191; Boddam v. Riley, 2 Bro. Ch. Cas. 3; Mountford v. Willes, 2 Bos. & Pul. 337; De Havilland v. Bowerbank, 1 Camp. 50; Calton v. Bragg, 15 East, 223; Esterly v. Cole, 3 Comst. 502.
5 The American rule stated in the text differs from the English rule, which restricts the allowance of interest to cases where there is either a specific day of payment, in which case interest is allowed after default; or where a contract to pay interest is implied, from either a general custom or usage, or from the particular course of dealing of an individual, known and assented to by the person with whom he deals; or where the money has been used and interest made upon it; or where the special circumstances of the case manifestly indicate an agreement to pay interest. The English authorities are extremely perplexing and contradictory, but the nearest statement of the English rule on this subject would seem to be, that where money is received, advanced, or expended, for the use of another, interest is not allowed thereupon, unless the money be payable at a specific time, in which case it would be allowed after default. But if it were not payable at a specific time, no interest would run thereupon, although the sum be liquidated, and an account be rendered, and a demand be made, unless, at the time of rendering the account or dewithout the knowledge or request of the party for whose benefit it is advanced, it is a gratuitous bailment, and would not only not draw interest, but would generally give no strict legal claim to the party expending it to be reimbursed for the principal. But if it be expended or advanced at the request of the person benefited, the party expending or advancing it may recover interest from the time of the payment thereof, without making any demand therefor.1 Thus, if a surety, manding payment, an agreement was made to pay at a stated time. See Piuhorn v. Tuckington, 3 Camp. 468. In Calton v. Bragg, 15 East, 223, Lord Ellenborough said, speaking of a period of more than fifty years, that no case had occurred during that period, "where upon a mere simple contract of lending, without an agreement for payment of the principal at a certain time, or for interest to run immediately, or under special circumstances from which a contract of interest was to be inferred, had interest ever been given." This case is affirmed in Page v. Newman, 9 B. & C. 380, by Lord Tenterden, in which he says that "It is a rule sanctioned by the practice of more than half a century, that money lent does not carry interest." The same rule was adopted in Hubbard v. Charlestown Branch R. R. Co., 11 Met. 124. This doctrine is also declared in De Havilland v. Bowerbank, 1 Camp. 50, and De Ber-nales v. Fuller, 2 Camp. 427, and in Walker v. Constable, 1 Bos. & Pul. 306. In Ekins v. East India Co., 1 P. W. 396, it is said that "If a man has my money by way of loan, he ought to answer interest," and interest was allowed; but the money was there wrongfully acquired and detained. This case was, however, affirmed upon appeal to the House of Lords, 2 Bro. Parl. Cas. 382. In Blaney v. Hendricks, 2 W. Black. 761, 3 Wils. 206, interest was allowed upon an account stated for money lent. So, also, in Craven v. Tickell, 1 Ves. Jr. 60, Lord Chancellor Thurlow said that interest must be given on money expended, since it was laid out. So, also, in Trelawney v. Thomas, 1 H. Black. 305, it was held that interest was allowable on money lent. But the general weight of authority seems to be in favor of the rule as it has been stated in this note. The American authorities almost unanimously follow the overruled English cases, upon the ground that where money is advanced or expended for the use of another person, such person receives all the benefit therefrom, and the party advancing it is deprived of the use thereof, and the interest accruing therefrom, for which it is but just that he should be recompensed. If, as a matter of friendship, money be advanced, the party advancing has the privilege of waiving all demand of interest, and of principal too, if he please. So that the American rule does not oppose disinterested and generous plans.