Brewster v. Wakefield

• Decision Date: 01 January 1856
• Citation: 1 Minn. 352
• Parties: WILLIAM BREWSTER et al. vs. WILLIAM WAKEFIELD.
• Court: Minnesota Supreme Court

Page 352

1 Minn. 352

WILLIAM BREWSTER et al.vs.

WILLIAM WAKEFIELD.

Supreme Court of Minnesota.

Error to district court, Ramsey county.

Points and authorities for plaintiff in error.

1. The court below erred in decreeing the payment of interest upon the promissory notes mentioned in the decree, at a greater rate than seven per cent. per annum, from the maturity of the said notes, respectively, by the defendant Brewster.

2. The court below erred in decreeing the payment out of the proceeds of the sale ordered in the decree, of interest upon the said promissory notes, at any greater rate than seven per cent. per annum, from and after the maturity of the said notes.

3. The said notes contain no express contract to pay interest after their maturity. The rate of interest specified in them respectively, refers to, and is limited and controlled by, the time specified for its payment. No interest can, therefore, be recovered upon them, from and after the time of their maturity, except as damages for the non-payment of principal when due, and, as such, only at the rate fixed by statute, in the absence of an express contract, viz.: seven per cent. per annum.

Authorities: Rev. Stats. p. 155, ch. 35; Bander v. Bander, 7 Barb. S. C. R. 560; Macomber v. Dunham, 8 Wend. R. 553; U. S. Bank v. Chapin, 9 Wend. R. 471; Ludwick v. Huntzinger, 5 Watts & S. R. 51, 60, also cited in note to Chitty on Bills, (11th Am. from 9th Lond. Ed.) [682;] Clay v. Drake, Min. Ala. [164]; Henry v. Thompson, Min. Ala. [209]; also 2 U. S. Dig. 624, §§ 243, 244.

Points and authorities of defendant in error:

1. The rates of interest are clearly expressed in the terms of the promissory notes, and fixed by the contract of the parties, which the parties were competent to do, and the rates agreed upon are legal and valid, by the provisions of our statute. Rev. Stats. p. 155, ch. 35.

2. It is the duty of the court to construe the contract, and give it effect according to the intention of the parties at the time of making it, as gathered from the face of the instruments. Story on Cont. 556, §§ 633-634; 7 Barb. S. C. R. 560, cited by plaintiff in error; Chitty on Cont. 74, (7 Am. ed.)

3. If the terms of the notes are ambiguous, or the intention of the parties appear from the face of the notes doubtful, they are to be taken and construed by their terms most strongly against the maker. (9th and 12th ed.) Chitty on Bills, p. 682 — note; Chitty on Cont. p. 95, and notes.

4. The terms of the notes and the manifest intention of the parties were a contract on the part of the maker to pay the respective rates of interest mentioned in the notes, as well after maturity as before, until the principal sum should be paid. Fake v. Eddy's Exec'rs, 15 Wend. R. 76.

5. That the judgment and decree of the court below was correct, and well supported by the evidence appearing from the notes and mortgage.

Brisbin & Bigelow, for plaintiffs in error.

Ames & Van Etten, for defendant in error.

CHATFIELD, J.

Wakefield, the defendant in error, brought his action, and obtained judgment in the district court, against Brewster, and others, the plaintiffs in error, for the foreclosure of a mortgage and sale of the mortgaged premises. The mortgage was given to secure the payment of two promissory notes bearing date July 11, 1854, and payable twelve months after date. One of the notes was for the sum of $5,583.75, with interest at the rate of twenty per cent. per annum; the other note was for the sum of $2,000, with interest at the rate of two per cent. per month. Upon the assessment of the amount due upon the notes, the plaintiff below claimed to be entitled to interest on the notes at the rates specified in them, respectively, from their date to the time of the judgment. To the allowance of such interest, Brewster — who was the mortgagor — objected, and insisted that interest on each of the notes should be computed at the rate specified in it, from the date of the notes, to maturity, and that after maturity, interest should be computed at the general legal rate of seven per cent. per annum. The district court overruled the objection, and allowed to the plaintiff below interest on each of the notes at the rate specified in it, from the date thereof to the time of judgment. Brewster excepted, and removed the case to this court by writ of error. The exception stated presents the only question to be determined by this court, in this case, and is simply this: Does the rate of interest specified in the promissory note cease at the maturity of the note? The question must be solved by the application of the provisions of the statute "of the interest of money" to the terms of the contracts contained in the notes. That statute contains only two short sections in these words: "Section 1. Any rate of interest agreed upon by the parties in contract, specifying the same in writing, shall be legal and valid. Section 2. When no rate of interest is agreed upon, or specified in a note, or other contract, seven per cent. per annum shall be the legal rate." The two prominent ideas that strike one in analyzing this statute are these: That the legal, or general rate of interest — seven per cent. per annum — is to be applied only "when no rate of interest is agreed upon, or specified in a note or contract;" and if any rate is specified in the contract or note — it matters not what it may be — it is valid, and, consequently, to be applied to the demand. The statute contains no limit as to the time during which the rate agreed upon in the contract shall run. Consequently, if there is any such limit, it must result from the operation of some controlling legal principle. Is there any such principle properly applicable under the provisions of our statute?

Interest is but an incident to the debt that bears it — a rent that the debtor pays for the use of his creditor's money. The power and influence which money confers upon its owner has hitherto induced restrictions upon the rates of use, and even absolute prohibitions beyond certain rates, under severe penalties and forfeitures by legislative enactment. It seems to have been the purpose and design of our statute to sweep away all such obstacles in the way of contracts for interest, and to leave parties...