Blanchard v. Bank

• Decision Date: 22 September 1921
• Citation: 108 S.E. 649
• Parties: BLANCHARD. v. DOMINION NAT. BANK et al.
• Court: Virginia Supreme Court

108 S.E. 649

BLANCHARD.

v.DOMINION NAT. BANK et al.

Supreme Court of Appeals of Virginia.

Sept. 22, 1921.

Appeal from Circuit Court, Washington County.

Suit by F. T. Blanchard against the Dominion National Bank and others. Decree for the named defendant, and complainant appeals, and the named defendant cross-appeals. Affirmed, as amended.

A. H. Blanchard, of Bristol, Hutton & Hut-ton, of Abingdon, for plaintiff.

Peters & Lavinder, of Bristol, for defendants.

PRENTIS, J. This is the sequel to the case of Blanchard v. Dominion National Bank, 125 Va. 586, 100 S. E. 463. There the appellant, who was the indorser of certain notes, claimed that they had been paid. That question having been decided against him, the case was remanded for further proceedings. One of the objections then urged is thus stated in that opinion:

"Objection is made to the decree appealed from on the ground that it is uncertain, because it fails to state from what time theamounts due the [plaintiff] should bear interest."

This point is thus decided:

"The decree did not finally dispose of the case, but referred it to a commissioner to take certain accounts, which would of necessity disclose, not only the amount of the bank's claim, but the time from which it bore interest. This decree properly ordered accounts of liens and their priority before directing a sale under the trust deed."

After the former appeal was determined and the case remanded, the commissioner stated the account and compounded the interest on the debt semiannually. The appellant excepted to this, claiming that the amount of the debt was irrevocably fixed by the former decree at $4,584, and that, as no other time was thereby fixed, the interest thereon could only be computed from the date of the decree, October 10, 1918, and also upon the ground that, in case his first exception should be overruled, the commissioner erred in compounding the interest. At the hearing the court entered a decree in favor of the creditor, Dominion National Bank, for the sum of $4, S86.18, with simple interest thereon from June 6, 1914, that being the aggregate of the balance due by the debtor as of that date.

The chief contention of the appellant upon this appeal is that, because the notes provide for semiannual payments of interest thereon, therefore the debt was usurious. No authority is cited supporting this proposition, and so far as we are informed it has never been sustained by any court anywhere.

This is said by the learned annotator in a note to 46 Am. St. Rep. 189:

"The interest specified in these statutes [referring to usury] is usually designated as a certain rate per annum. This has never, so far as we are aware, been considered either as forbidding loans for a short period of time, or as requiring that interest shall be computed at yearly intervals only. On the contrary, it is well settled that interest may be made payable semiannually, or quarterly, or at such recurring periods as may receive the assent of the parties."

And he cites numerous cases to support the text.

In Myer v. Muscatine, 1 Wall. 391, 17 L. Ed. 566, this is said on the subject:

"This objection has no foundation. When a statute fixes the rate of interest per annum, it has always been held that parties may lawfully contract for the payment of that rate, before the principal debt becomes due, at periods shorter than a year"—citing Mowry v. Bishop, 5 Paige (N. Y.) 98.

In Brown v. Vandyke, 8 N. J. Eq. 795, 55 Am. Dec. 250, it was held that an agreement between commission merchants and their customers that rests shall be made in their accounts quarterly, and that interest should be calculated upon the balance thus found to be due quarterly, was not usurious, saying in this connection:

"Business men must be allowed to make their own bargains; and when they do so understandingly, and are not entrapped or deceived, their bargains must be enforced. If the parties dealing with commission merchants agree that rests shall be made quarterly, it has long been settled that such a mode of stating accounts and...