meruit. It is also almost invariably chargeable as damages in cases of default in the payment of a liquidated debt; and upon damages for violation of contracts where such damages are determinable by some certain standard. In cases of tort [582] interest is allowed not only upon money, but the value of property wrongfully taken, converted, or lost by culpable neglect. It is recoverable, also, upon pecuniary elements of damage although the principal injury may involve a claim for unliquidated damages. $321. Right not absolute. It will appear more fully hereafter that the right to interest as compensation is not absolute, as it is where there are agreements made to pay it. In some jurisdictions the allowance of it is discretionary with the jury, and in others it cannot be allowed in a numerous class of cases as interest, though the lapse of time between the origin of the cause of action and the time of trial may be considered by the jury in estimating the damages. In cases where the right to recover interest is not absolute the plaintiff may properly be deprived of it if he has been guilty of laches in making his demand or in prosecuting his action, either for the time anterior to judgment or for such other period as the jury may find that his laches continued. The rate of interest allowed as compensation is that provided by law when the liability is established." § 322. Tacit agreement to pay interest on accounts. As will be presently seen more at large interest is not allowed 1 In Maryland a subscription for stock in a corporation, the amount subscribed being payable in fixed instalments, is not such a contract as interest is recoverable on as matter of right. Frank v. Morrison, 55 Md. 399. The jury may allow it. Musgrove v. Morrison, 54 id. 161. Interest on a note given as a subscription to a railroad company and payable one year after the completion of the road, in the absence of an agreement, is due only from the time payment is demanded. Stevens v. Corbitt, 33 Mich. 458. 2 Redfield v. Ystalyfera Iron Co., 110 U. S. 174; Bann v. Dalzell, 3 C. & P. 376; Newell v. Keith, 11 Vt. 214; Adams Exp. Co. v. Milton, 11 Bush, 49; Bartells v. Redfield, 27 Fed. Rep. 286; S. C., 23 Blatch. 486; Stewart v. Schell, 31 Fed. Rep. 65; United States v. Sanborn, 135 U. S. 271; Brinkly v. Willis, 22 Ark. 9; Clark v. Hershy, 52 id. 473. A party who claims damages for a tort, liability for which has been denied, may defer bringing an action until a pending case involving the same question is settled. Frazer v. Bigelow Carpet Co., 141 Mass. 126. 3 First Nat. Bank v. Fourth Nat. Bank, 89 N. Y. 412; Sanders v. Lake Shore & M. S. Ry. Co., 94 id. 641. upon open running accounts. Where there is no definite credit, the parties deal upon the assumption,— by the debtor, that although he has no claim to forbearance, yet payment will be requested; and, on the part of the creditor, that the account has no time to run and will be paid on demand. Hence interest is not payable before demand for the same reason that it is never payable, except by agreement, while the debtor has a right to retain the money; in such cases it is not payable on the ground of default until the creditor has put the debtor under a present duty to pay by rendering the account or requesting payment. Where, by the custom of a place, of a trade or of a particular dealer, moneys owing on account are to carry interest after a certain period, whether demanded or not, persons who contract debts at that place, in that trade or to that dealer, with notice of that custom at the time of contracting, tacitly acquiesce in it, and by a natural implication tacitly agree to the liability which it imposes.1 1 Auzerais v. Naglee, 74 Cal. 60; Hummel v. Brown, 24 Pa. St. 310; Watt v. Hoch, 25 id. 411; Newell v. Griswold, 6 Johns. 45; Barclay v. Kennedy, 3 Wash. C. C. 350; Loring v. Gurney, 5 Pick. 15; Raymond v. Isham, 8 Vt. 258; Consequa v. Fanning, 3 Johns. Ch. 587; Wood v. Smith, 23 Vt. 706; Esterly y. Cole, 1 Barb. 235; S. C., 3 N. Y. 502; Knight v. Mitchell, 3 Brev. 506; Wills v. Brown, 3 N. J. L. *548; Dickson v. Surginer, 3 Brev. 417; Black v. Reybold, 3 Harr. (Del.) 528; Higgins v. Sargent, 2 B. & C. 349; McAlister v. Reab, 4 Wend. 483; Reab v. McAlister, 8 id. 109; Veiths v. Hagge, 8 Iowa, 163; Knox v. Jones, 2 Dall. 193; Farmers', etc. Co. v. Mann, 4 Robt. 356; McKnight v. Dunlop, 4 Barb. 36. In Meech v. Smith, 7 Wend. 315, an action upon the account of a forwarding merchant, on the trial the plaintiff proved an account of about $34 for the transportation of a quantity of flour by him for the defendant from R. to N. Y. in 1827. The plaintiff claimed interest on his account and offered to prove the universal custom of forwarding merchants to charge interest upon such accounts; that such custom was well known to the defendant when he contracted with the plaintiff, and that he had settled several accounts of a similar description with the plaintiff in which interest was charged without objection. Exception was taken upon the rejection of this testimony. Savage, C. J., said: "On the question of interest, I think the court erred. Interest is always properly chargeable where there is either an express or implied agreement to pay it. The facts offered to be proved are sufficient, in my judgment, to authorize a jury to infer that there was an agreement to pay interest; it was the uniform custom of all those engaged in the same business to charge interest; it was the custom of the plaintiff to charge it; he had charged it in former accounts against the defendant, and it had been paid without objection, be [583] This interest is part of the debt, a compensation for forbearance, not damages for withholding money due. A tacit agreement is of the same nature and force as an actual one, but not being expressed, it is, of course, to be established. fore the contract was made on which this suit is brought. In the case of Trotter v. Grant, 2 Wend. 415, there was no evidence that the defendant knew the plaintiff's custom to charge interest, nor had he ever settled an account in which interest was charged; there were in that case no sufficient facts from which an agreement to pay interest could be implied, and, the account being unliquidated, interest could not be recovered." See Liotard v. Graves, 3 Cai. 226; Williams v. Craig, 1 Dall. 313; Dodge v. Perkins, 9 Pick. 368; Rayburn v. Day, 27 Ill. 46; Harrison v. Handley, 1 Bibb, 443; Von Hemert v. Porter, 11 Met. 210; Warren v. Tyler, 81 Ill. 15. In Koons v. Miller, 3 W. & S. 271, the court say: The practice of the merchants of Philadelphia to charge interest on their accounts after six months has endured more than half a century; and it is so universal that their customers deal with them avowedly on the basis of it. It is so notorious as to be recognized abroad; as may be seen in Bispham v. Pollock, 1 McLean, 411, in which the circuit court of the United States for the district of Indiana left its existence, as the existence of any foreign law must be left, to the jury. Its existence is so notorious at home, however, that we are bound to take notice of it as part of the law. That it has not been sooner recognized by judicial decision has arisen from the fact that it has not before been thought a subject of dispute; but the principle is as well known and observed in the collection of merchants' debts as any other custom peculiar to the state." To the same effect are Watt v. Hoch, 25 Pa. St. 411; Adams v. Palmer, 30 id. 346. In Fisher v. Sargent, 10 Cush. 250, assumpsit was brought for goods sold and delivered. The plaintiffs were traders in Boston, and at the trial offered testimony tending to prove a custom among merchants and traders there to charge interest on their accounts after a credit of four or six months; but offered no evidence as to the credit given in this particular transaction, or that payment had been demanded. The jury were instructed that they might, upon this evidence, allow interest after six months-to which exceptions were taken. These were overruled. Bigelow, J., said: “Ordinarily, in the absence of any evidence of usage, or of a special agreement between the parties, interest cannot be recovered upon an open running account for goods sold and delivered, when there was no specific term of credit agreed on between the parties. This is the general rule; but it may be varied by proof of the usage of a particular trade or business to charge interest after the expiration of a certain period. In such cases, parties having knowledge of the usage are presumed to contract with reference to it, and will be as much bound by it as if it entered specially into the agreement of bargain and sale. Such usage may be shown by proof of the practice among merchants and traders generally in a town or city, or by evidence of the mode of dealing in a particular branch or class of trade. It is undoubtedly true that in order by circumstances. Contracting a debt with a custom in [584] view which contemplates the payment of interest before steps have been taken to liquidate an account or to obtain payment, affords one example of such intent. Dealing with knowl to render the usage of a particular trade or place binding upon a party, so as to make it part of a contract, it must be made to appear that it was known to the party who is to be affected by it. But this knowledge may be established by presumptive as well as by direct evidence. "It may be inferred from the uniformity and long continuance of the usage; from the fact that a party has for some time been in the particular trade to which it relates; from the previous dealings between the parties, or from any other facts tending to show its general notoriety. Whether such facts exist in any particular case is a proper question for a jury. In the case at bar there was evidence tending to prove the usage, and its knowledge by the defendant, from which it was competent for the jury to infer a contract to pay interest on the articles as charged by the plaintiff.” though provision is made for recovery of interest on written contracts, yet there is no prohibition of a stipulation for the payment of interest on a verbal agreement, or on a contract not in writing. And if such an agreement be not criminal, or contrary to good morals or public policy, it would seem that it should be binding. And accordingly, in Pridgen v. Hill, 12 Tex. 374, a suit on an account upon which the party had agreed to pay interest, it was held that such agreement was valid and might be enforced in law. In the previous cases of Cloud v. Smith, 1 Tex. 102; Close v. Fields, 2 id. 232; Crook v. McGreal, 3 id. 487; Davis v. Thorn, 6 id. 486; Wetmore v. Woodhouse, 10 id. 33, the question of a verbal, distinct, positive agreement to pay interest on a debt acknowledged to be due was not presented; and although there are expressions in the opinions in those cases which would seem to restrict the recovery of interest to debts on written contracts, and such is the general rule under the statute, yet we deem it no departure from the principle of those decisions, with reference to the facts then before the court, to hold, when a new fact is presented, viz.: an agreement to pay interest, that it shall be enforced, though it be not in writing; nor the debt on which it was stipulated, in writing; such agreement not being prohibited by law, nor subversive of sound policy or good morals. . . . But the subject is one which may be, and, as we have seen, has been, regulated by statute. This has provided for In Adriance v. Brooks, 13 Tex. 279, Hemphill, C. J., said the act of 1840 undertook to regulate the subject of interest; and unlike the English statute of 37 Henry 8, it gave an affirmative and not an indirect and negative sanction to its allowance. It differed also from the English statute by dividing interest into two olasses, viz. that which is allowed by law, and that which may be agreed upon by the parties; and there was the further distinction, not known to the earlier English statutes, that the contracts on which the law provided that interest should be recovered, or in which the parties might stipulate for interest, should be written contracts. But the stipulation and recovery of in edge of such a custom, making no objection to it, or proceed[585] ing after objection without any waiver of the custom by the creditor, is a consent to pay interest as the custom requires.1 And a continuance of the dealing after paying one account containing such interest is to furnish by this circumstance additional evidence of such consent in the subsequent transaction. Whether there is in a given case such an agreement is for the jury.3 The custom in such cases is an evidentiary fact to show the intention of the parties. It has no other effect. It does not alter the law. It derives all its force from being sanctioned and adopted by the parties. It can have no validity to bind the debtor to pay interest or fix a rate or mode of computation; nor will his acquiescence or tacit consent bind him to a liability which he could not by express agreement legally assume. It is a legal usage of merchants to cast interest on the items of their mutual accounts and strike a balance at the end of the year, and make that balance the first item of principal for the ensuing year; but the law does not make it binding on the debtor except under a specific agreement after [586] the mutual dealings are passed. A learned English terest on written contracts. And, on the grounds stated, we have also supported verbal agreements to pay interest. But this case is neither upon a written contract, nor was there any agreement to pay interest. The ground upon which it is claimed is the fact that the defendant had previously paid interest on similar accounts. This we deem insufficient. Had the contract been in writing, the statute would have allowed interest; or had he verbally agreed to pay, we would not have permitted him to violate his engagement. Thus far we will go beyond the cases expressly provided for by the statute. But we will not go further, and scrutinize the acts of the parties to judge whether an implied obligation to pay interest, as an incident of the debt, has been created." 1 Where a statute does no more than prohibit a recovery of interest beyond the legal rate on a contract not in writing, interest in excess of that rate may be included in an account stated and recovered. The rate, being known and assented to by the debtor, and not being in violation of positive law, affords a sufficient consideration for the promise involved in such an account. Auzerais v. Naglee, 74 Cal. 60; Marye v. Strouse, 6 Sawyer, 205. 2 Warren v. Tyler, 81 Ill. 15. 3 See Ayers v. Metcalf, 39 Ill 307; Fisher v. Sargent, 10 Cush. 250, Cole v. Trull, 9 Pick. 325. 4 Von Hemert v. Porter, 11 Met. 210; Marrs v. Southwick, 2 Port. 351; Jones v. Ennis, 18 Hun, 452. |