Stokely v. Thompson

• Decision Date: 01 January 1859
• Citation: 34 Pa. 210
• Parties: Stokely versus Thompson.
• Court: Pennsylvania Supreme Court

34 Pa. 210

Stokely versus Thompson.

Supreme Court of Pennsylvania.

ERROR to the Common Pleas of Greene county.

Downey & Rowe, for the plaintiff in error, cited Dodge v. Perkins, 9 Pick. 368; People v. New York, 5 Cow. 331, 334; Buck v. Fisher, 4 Wh. 516; Miller v. Bank of Orleans, 5 Id. 503; Hamilton v. Le Grange, 2 H. Bl. 144; Greenleaf v. Kellogg, 2 Mass. 568; Wilcox v. Howland, 23 Pick. 167; Cooley v. Rose, 3 Mass. 221; Fries v. Watson, 5 S. & R. 220; Knettle v. Crouse, 6 Watts 123; Addams v. Heffernan, 9 Watts 530; Pawling v. Pawling, 4 Yeates 220; Bainbridge v. Wilcocks, 1 Bald. 536.

Sayers, for the defendant in error, cited Sparks v. Garrigues, 1 Binn. 165; 7 Greenl. 78; Connecticut v. Jackson, 1 Johns. Ch. 14; Benschotten v. Lawson, 6 Id. 313.

The opinion of the court was delivered by THOMPSON, J.

The defendant purchased a tract of land from the plaintiff, and covenanted to pay for it in annual instalments with interest; "and upon the full and complete payment of the said sum of money, together with interest, at the times mentioned," the plaintiff bound himself to make to him a deed in fee simple therefor.

In this action to recover for a breach of covenant by the vendor for not making a deed to the vendee, the defendant, who is the plaintiff in error, set up as a defence that there was a balance of purchase-money due and unpaid, and that he was not obliged to make a deed until full and complete payment by the plaintiff below. To maintain this position, he claimed that as interest on the unpaid purchase-money was not paid annually, he was entitled to interest on the interest thus unpaid, or compound interest. By this process, his vendee would have still been in debt to him on the articles. But the court below overruled this view of the case; and for doing so this writ of error was sued out, and the case is here on this point alone.

Interest is a compensation for the detention or use of money; and it has its origin in the usages of trade, by contract, or by statute, and hence the laws and practice in regard to it are as diversified as the trade, habits of the people, or their peculiar laws may be. While it assimilates in certain matters, in various communities, it differs widely in others. In Massachusetts, it has been held in several cases, where interest was sued for and recovered, being payable annually, that interest might be recovered as if the suit had been on an instalment; and so in some of the other states of this Union. But it will not advance our present purpose to enter into a disquisition in regard to diversities in different communities on this subject.

Pawling's Executors v. Pawling's Administrators, 4 Yeates 220, where the subject is elaborately and learnedly discussed by Mr. Justice YEATES, was a case where an agreement was endorsed on the bond, almost a year after its date, in which it was recited that "whereas from our local circumstances, or from some other cause, the said interest" — referring to the annual interest to be paid by the terms of the bond — "or some part thereof, may remain unpaid for a considerable time after due," and the obligor agreed to pay interest on the interest, if it remained unpaid at the expiration of three months after due: it was held, that interest on the unpaid interest was recoverable, and that the contract was not usurious. In a note to Selleck v. French, 1 Conn. R. 32, in 1 Am. Lead. Cases 633, it is said "an agreement to pay interest on interest is not usurious nor illegal;" 3 New Hamp. Rep. 40; "and the better opinion is that at law, such an agreement made either at or after the time of the original contract will be enforced:" citing cases of Pawling v. Pawling, 4 Yeates 220; Camp v. Bates, 11 Conn. Rep. 448; Gibbs v. Chisolm, 2 Nott & McCord's Rep. 38. But in Connecticut v. Jackson, 1 Johns....