Riney v. Hill

• Decision Date: 31 March 1851
• Citation: 14 Mo. 500
• Parties: RINEY v. HILL.
• Court: Missouri Supreme Court

14 Mo. 500

RINEY

v.HILL.

Supreme Court of Missouri.

March Term, 1851.

APPEAL FROM CLARK CIRCUIT COURT.

DRYDEN, for Appellant. 1. The rule of the law in the computation of interest where partial payments have been made, is, that interest shall be cast on the principal debt to the first payment, add the interest thus produced to the principal and from their aggregate amount deduct the partial payment--then on the remainder (provided the payment was sufficient to discharge the previously accrued interest) cast interest to the second partial payment, add and deduct as before, and so on from payment down to the day of the rendition of the judgment: Penrose v. Hart, 1 Dal. R. 378; Smith v. Shaw, 2 Wash. C. C. R. 167; Dear v. Williams, 17 Mass. R. 417; Fay v. Bradley, 1 Pick. 194; Meredith v. Banks, 1 Halst. 408; Commonwealth v. Miller, 8 Serg. & Rawle, 452, 458; 4 Hen. & Munf. 431; 3 Wash. C. C. R. 350, 396. 2. If neither debtor nor creditor make an application of a partial payment the law will apply it so as first to extinguish the interest: Fields v. Holland, 6 Cranch, 27, 28; Gwinn v. Whitaker, 1 Har. & Johns. 754; Norwood v. Manning, 2 Not. & McCord, 395; 2 Haywood's (N. C.) R. 17. 3. A debt is a sum certain due from the debtor. Interest is a compensation to the creditor for the forbearance of payment of the debt--it is an incident of the debt--without a debt and without forbearance of payment interest cannot have an existence. A sum paid by a debtor to his creditor does not create a debt, because there is no obligation on the latter to repay to the former, but it is the extinguishment of a previous debt, and the sum so paid cannot be recovered by action. If then in such case there be no principal there can be no incident. 4. Waiving the question whether the law will imply an obligation on the part of the creditor to pay his debtor interest at any rate per centum on money paid by the latter in discharge of a pre-existing debt--a question too absurd to be tolerated--yet an obligation to pay more than six per cent. can in no case be raised by implication of law, but can only be created by an express “agreement in writing.” See 2nd section of the Interest law, p. 333, Rev. Code of 1845. And now although there is no pretense there was an express agreement either verbal or written in this case on the part of Riney, the creditor, to pay Hill, the debtor, interest, nevertheless the Circuit Court not only made Riney pay interest, but computed it upon him at the rate of ten per centum. 5. The rule adopted by the Circuit Court to compute interest as well on the partial payments as on the principal debt destroys the distinction between set-off and payment and converts the debtor into the creditor of his creditor in all cases.

BIRCH, J.

This was a submission, without action, under the twentieth article of the new Practice act, the facts agreed upon being substantially as follows: On the 7th day of April, 1837...