Yerteau v. Bacon's Estate
| Decision Date | 12 July 1893 |
| Citation | 27 A. 198,65 Vt. 516 |
| Parties | EDWARD YEARTEAU v. BACON'S ESTATE |
| Court | Vermont Supreme Court |
GENERAL TERM, 1892
Judgments reversed; and judgment on auditor's report for $ 1,470, with interest to be computed by the clerk from the findings of the auditor on the basis of annual rests; and judgment on verdict for $ 722.81 and interest.
H.S Peck, Seneca Haselton, W.L. Burnap and Henry Ballard for the defendant.
Before TAFT, ROWELL, MUNSON AND START. JJ.
The charges on book are for the board of an illegitimate daughter of the deceased from the fifth to the twentieth year of her age. The auditor finds that the plaintiff agreed to board the child "for the sum of ten dollars per month," but that nothing was said as to the length of service or the time of payment. The credits are seven small payments, irregular both in date and amount. No bill was presented nor other demand of payment made until the fall of 1888.
The court below confined the plaintiff's recovery to the board of the daughter during her minority. We think this restriction was error. The circumstances under which the arrangement was made afford no ground for holding that the parties contracted with reference to the statutory period of emancipation. The putative father had not been placed under any legal obligation to provide for the child's maintenance. The natural affection or sense of moral obligation which led him to do so would not be determined by the arbitrary line which the law has drawn as the limit of incapacity. The daughter's inability to provide for herself in any occupation which the father might wish her to pursue may have been as great just after eighteen as just before. The contract itself was without terms of limitation, and it is not found to have been terminated by the action of either party. If there were any circmstances from which it could be inferred as a matter of fact that the deceased had taken this action, it was for the auditor to draw the inference. We see no ground on which the court can say as matter of law that the contract ended upon her becoming of age.
The judgment below includes interest on each sum of ten dollars from the end of the month for which the charge is made. It is contended in behalf of the estate that interest can be allowed only from the time payment was demanded. It thus becomes necessary to determine upon what basis interest is allowable on a claim of this character. Our rules regarding the allowance of interest were developed in special recognition of the situation of our people and their methods of business, and are somewhat at variance with those that prevail in other jurisdictions. As long ago as the decision in Langdon v. Castleton, 30 Vt. 285, it was said that these rules had become so well established by repeated decisions, and had come to be so thoroughly understood and generally relied upon by the community, that they ought not to be unsettled upon the authority of foreign precedents. These considerations have acquired additional force with the lapse of time, and the disposition of any case now arising should certainly be in harmony with our previous decisions.
It is the fundamental principle of our decisions that interest is to be allowed on whatever remains unpaid after it has become the debtor's duty to pay it. The solution of the question presented lies in the proper application of this doctrine. Our attention has been specially directed to two cases as helpful in determining the application. In Newel v. Keith, 11 Vt. 214, the charge was for general advice and assistance extending through a series of years and until the death of the debtor, and was presented to the commissioners in gross on the basis of fifteen dollars per year; and it was held that interest should be allowed only from the debtor's decease. In this case there was no fixed compensation for any particular service, no information given the debtor as to what the charge would be, no charge in fact made by the creditor until the service was completed, and no certainty that the creditor would finally take the proper compensation which the debtor had said she expected to pay. It is apparent that here it was the duty of the creditor to present his demand if he desired payment, and that the debtor could not be in default until this was done. In Tebo v. Ballard, 36 Vt. 612, there was a contract for nine months' service at a certain price per month, and the service having been interrupted by sickness, suit was brought before the end of the term to recover the amount earned; and it was held that the suit was prematurely brought. In the opinion it is said: "In contracts of this kind, where there is no time stipulated when payment for service is to be made, the law implies that it is to be made at the end of the term." But the cases referred to are those where the contract is for a specified time, and where ordinarily no part of the compensation is collectible unless the contract is fully performed, and where consequently no part of the compensation can be held to be payable until the term of service is completed.
It was early considered in this State, in cases where items of account were accruing at short intervals, and for a considerable period of time, and where there was no understanding as to time of payment or compensation for delay, that interest should not be computed on each item from its date, but that on the other hand it should not be denied for the whole time that settlement was delayed. The result was the establishment of a rule that in cases of ordinary running accounts, where there was no understanding to the contrary, express or implied, annual rests should be made and interest allowed on the balance from each annual rest. In these cases the law implies a contract to pay interest on whatever may remain unsatisfied after the expiration of a year; on the ground that a year is by common understanding the usual period of credit in matters of open account, and that the party in debt should have seen to the adjustment of the account at that time, and upon his failure to do so may properly be held to have contemplated the subsequent accruing of interest. A common application of the rule has been in cases of store and shop accounts, and accounts for miscellaneous services not rendered under special contract, without regard to the existence of counter demands. The rule has been mainly discussed, however, in its application to cases of mutual deal, where the balance varies from time to time, and where the book of neither party will ordinarily contain the whole account, and perhaps neither party be able to say how the account stands at any given time. Bates v. Starr, 2 Vt. 536; Wood v. Smith, 23 Vt. 706; Brainerd v. Champlain Trans. Co., 29 Vt. 154; Langdon v. Castleton, 30 Vt. 285; Birchard v. Knapp's Est., 31 Vt. 679; Goodnow v. Parsons, 36 Vt. 46; Sumner v. Beebe, 37 Vt. 562; Carpenter v. Welch, 40 Vt. 251.
But the rule has not been restricted to accounts of the nature above described. In Spencer v. Woodbridge, 38 Vt. 492, it was applied in a case very similar to this. In that case the plaintiff was employed by the defendants at a fixed monthly salary, and remained in their service some over three years. The plaintiff presented no bill until just before the bringing of the suit, and it was insisted that he was entitled to interest only from the time of the demand. The plaintiff had at different times called for money on account and had failed to obtain it, but this fact was given no bearing except as showing that the defendants had knowledge of the account. The whole reasoning of the court was upon the ground of the rule above considered; and it was held that "as the parties should settle as often at least as once a year, interest will be allowed on the annual balances due."
The period of a month was named by the parties to this contract only as a measure of the compensation, and not to fix the time of payment. No question can arise as to the completion of the service being the time of payment, for the contract was not for any definite period. But the contract having continued for a series of years, and a demand having then been made, the question is presented whether the law will treat the debtor as under an obligation to pay at the end of every month, or at the end of every year, or not until demand. Doubtless the plaintiff could have terminated the contract or have compelled its modification at any time, and so have controlled the time of payment. But the mere asking for money before the expiration of a year would not entitle him to interest upon it from the time of asking, if he suffered the contract to go on as before. On the other hand his right to have interest allowed from the end of each year in no way depended upon his calling for payment. There is no feature of the case which can be held to have entitled the debtor to any information, notice or demand. He knew that the service contracted for had been rendered and that his obligation to pay for it was complete. It was his duty to attend to the payment, after the expiration of the usual period of credit, if he did not wish to become chargeable for interest. But while we do not think the creditor should be denied interest because of his neglect to demand payment, we do not consider that the debtor should be charged with interest from the end of each month because of the failure to settle monthly. We think that upon a contract of this character it would be contrary to the general tenor of our decisions, either to compute interest from the close of each month, or to deny interest for the whole time that payment was deferred. We see no reason why the rule of annual rests may not be applied in this case as properly as in the case of Spencer v....
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