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buildings and sheds on the premises ing to the defendants, which house, in question. Sometime thereafter the so the court found, had been abandefendant company wanted the land doned by the plaintiffs. No intention for railroad uses, and viewers were to abandon the things left therein was appointed. Notice of the defendant's found. The court said: “There haydesire for possession was given, but ing been such an abandonment, the possession was not taken until three Linvilles were authorized to take posmonths after the time specified in the session, and it became their duty to notice, and, the plaintiffs disregarding safely care for such property as they this notice, the defendants demolished found there. If the taking possession the buildings, whereon this action of the premises was not wrongful, it was instituted. The court said: “If seems clear that what was done with the company had entered immediately respect to the things found on the and demolished the buildings in the premises, as found by the court, did construction of its tracks, it would not constitute conversion. have been liable, just as its predeces- The Linvilles were unable to locate sor, Rieker, would have been, for the the owners; by taking possession of damages caused by want of reason. the premises they made themselves able opportunity to appellants to re- responsible for the property left move their property; but, such oppor- there; they did not intend to approtunity having been given, there were priate same, and only held it for the no damages, and the verdict was owners, being willing to deliver posrightly directed for defendant."

session at the place where they safely In Kull V. Mastbaum & Fleisher kept such property, or any place de(1921) 269 Pa. 202, 112 Atl. 631, the manded by the owners. They told plaintiff made a claim for the value Mrs. Mozier that, if any of the parties of personal property, alleged to have came back, to tell them the things been taken by the defendant. The were at Linvilles' for them." Judgcourt held that it appeared from the ment for the defendants was afevidence that the premises had been firmed. abandoned, and said: As to the Browder Phinney (1905) 37 claim of plaintiff that personal prop- Wash. 70, 79 Pac. 598, was an action, erty was taken and wrongfully with in part, for damages for the alleged held from him, the record, as made conversion of certain articles belongup, showed, among other things, that ing to the plaintiff and removed from the person in possession of the prem- certain premises by the defendant, ises was Lavin, whom Kull had origi- the owner of the premises, and stored nally admitted as a subtenant, and by him in a warehouse, on the plainthat the personal property alleged to tiff's failure to accept the goods at have been wrongfully retained by the his place of business. There was didefendant was at no time taken by

rect evidence that the plaintiff had the latter, a fact set forth in the part agreed to a termination of the tenof the affidavit of defense put in evi

ancy,—that he had stated that he did dence by plaintiff. Moreover, there

not wish to retain the premises,was a failure to show that the goods

whereupon the defendant entered in question could not have been secured by the plaintiff, had he request

thereon to make improvements, a few ed their delivery from the one in pos

of the plaintiff's goods remaining on session. Under such circumstances,

the property. It was declared that if no recovery could be had on this

the jury believed this 'testimony it branch of the case.”

would be sufficient to sustain a verIn Alsbury v. Linville (1919)

dict for the defendant. Tex. Civ. App. —, 214 S. W. 492, dam

In Clark v. Groger (1918) 102 ages were sought for the alleged con- Wash. 188, 172 Pac. 1164, it appeared version of certain personal property that the plaintiff, who had had posbelonging to the plaintiffs, who had session of certain corporate premises occupied, as tenants, a house belong by sufferance, was called on by the

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corporation to remove therefrom his of the malt, apples, and manufactured property, which, however, he failed stock was the assertion of a right in to do, the plaintiff later bringing an derogation of the title of the plaintiff. action against the defendants, trus- This would be so ordinarily; but the tees of the corporation, for the con- personal liability of the defendants version of the property in question. could not be extended over a time beThe court said: “A wilful or even an yond which plaintiff should have reunlawful taking will not always moved his property in obedience to amount to conversion. There must be the demand of the trustees. He had some assertion of right or title that his choice of remedies. He could is hostile to the true owner. In the comply with the request of the trusinstant case, the trustees by resolu- tees and remove his property, or he tion disclaimed any intention of could undertake to sell it to the corclaiming as owners. They not only poration, or to the trustees as indiadmitted the title of the plaintiff, but viduals, by resort to a claim for dammade a demand that he remove his ages as for a conversion. He chose property. His answer to this demand to hold the trustees as individuals, was not made with a moving van, but and must fail, for it is shown that his by filing an action in damages for loss, if any, is due to his own omisconversion. This phase of the case is sion. He cannot recover upon a perlearnedly treated in Lee Tung v. sonal liability the value of that which Burkhart (1911) 59 Or. 194, 116 Pac. he might have had for the taking. 1066, where it is said: 'In an action His remedy, if any, is against the corof trover it is not sufficient that the poration." facts show a mere trespass, without In Opperman v. Littlejohn (1910) showing a conversion.

There 98 Miss. 636, 35 L.R.A.(N.S.) 707, 54 may be an actual, wrongful exercise So. 77, a case not within the scope of of dominion over chattels without the annotation, it was said that after constituting a conversion, if such the expiration of a lease, within a dominion is not a denial or repudia- reasonable time, all of the effects of tion of the owner's right or title.' the tenant must be taken from the And this we understand to be the doc- premises, and if this is not done the trine of Browder v. Phinney (1905) landlord may remove them, or, if nec37 Wash. 70, 79 Pac. 598. In answer essary to obtain the use of his propto this it may be urged that the use erty, may destroy them. R. S.

F. T. BLANCHARD

V.
DOMINION NATIONAL BANK, Impleaded, etc.

Virginia Supreme Court of Appeals - September 22, 1921.

(130 Va. 633, 108 S. E. 649.) Interest - on overdue payment.

1. Merely making interest payable semiannually does not authorize the capitalizing of interest which becomes overdue.

[See note on this question beginning on page 81.] Usury — provision for semiannual nually does not render the debt usuri

payments of interest.
2. Making interest payable semian- [See 27 R. C. L. 229.]

ous.

CROSS APPEALS from a decree of the Circuit Court for Washington County in favor of the defendant bank, entered upon the report of a com(130 Va. 633, 108 8. E. 649.) missioner, in a suit to enjoin the sale of certain real estate under a deed of trust to secure a debt; plaintiff appealing from the decree in defendant's favor, and defendant appealing from so much of the decree as eliminated the compound interest allowed by the commissioner. Amended and affirmed.

The facts are stated in the opinion of the court.

Messrs. A. H. Blanchard and Hutton amount of the debt was irrevocably & Hutton, for plaintiff:

fixed by the former decree at $4,The provision in the original notes 584, and that, as no other time was and the renewal notes, that interest

thereby fixed, the interest thereon is to be paid semiannually, which interest is also secured by the deed of

could only be computed from the trust, makes said forbearance and as

date of the decree, October 10, 1918, surance usurious, and defendant is and also upon the ground that, in only entitled to recover the principal case his first exception should be sum loaned.

overruled, the commissioner erred Meem v. Dulaney, 88 Va. 674, 14 S. in compounding the interest. E. 363; Turner v. Turner, 80 Va. 379; At the hearing the court entered Munford v. McVeigh, 92 Va. 446, 23 a decree in favor of the creditor, S. E. 857; Greer v. Hale, 95 Va. 533, Dominion National Bank, for the 64 Am. St. Rep. 814, 28 S. E. 873.

sum of $4,866.18, with simple inMessrs. Peters & Lavinder for defendant,

terest thereon from June 6, 1914, Prentis, J., delivered the opinion balance due by the debtor as of that

that being the aggregate of the of the court:

date. This is the sequel to the case of

The chief contention of the apBlanchard v. Dominion Nat. Bank, 125 Va. 586, 100 S. E. 463. There

pellant upon this appeal is that, bethe appellant, who was the indorser

cause the notes provide for semiof certain notes, claimed that they

annual payments of interest thereon,

therefore the debt was usurious. had been paid. That question having been decided against him, the

No authority is cited supporting

this proposition, and so far as we case was remanded for further pro

are informed it has never been susceedings. One of the objections then urged is thus stated in that

tained by any court anywhere. opinion: “Objection is made to

This is said by the learned annothe decree appealed from, on the

tator in a note to 46 Am. St. Rep.

189: “The interest specified in ground that it is uncertain because

these statutes [referring to usury] it fails to state from what time the amounts due the [plaintiff] should

is usually designated as a certain bear interest."

rate per annum. This has never, so This point is thus decided : "The

far as we are aware, been consid

ered either as forbidding loans for decree did not finally dispose of the case, but referred it to a commis

a short period of time, or as resioner to take certain accounts,

quiring that interest shall be com

puted at yearly intervals only. On which would of necessity disclose not only the amount of the bank's

the contrary, it is well settled that claim, but the time from which it

interest may be made payable semibore interest. This decree properly annually, or quarterly, or at such ordered accounts of liens and their recurring periods as may receive

And he priority before directing a sale un

the assent of the parties." der the trust deed.”

cites numerous cases to support the

text. After the former appeal was determined and the case remanded,

In Meyer v. Muscatine, 1 Wall. the commissioner stated the account 391, 17 L. ed. 566, this is said on and compounded the interest on the the subject: "This objection has no debt semiannually. The appellant

The appellant foundation. When a statute fixes excepted to this, claiming that the the rate of interest per annum, it

interest.

has always been held that parties 46 L.R.A.(N.S.) 1157, 134 Pac. 590, may lawfully contract for the pay. Ann. Cas. 1916C, 321, it is also held ment of that rate, before the princi- that, under a statute permitting any pal debt becomes due, at periods rate of interest not exceeding 12 shorter

than

a year,”—citing per cent per annum, a note calling Mowry v. Bishop, 5 Paige, 98. for interest at the rate of 1 per cent

In Brown v. Vandyke, 8 N. J. Eq. per month is not usurious. 27 R. C. 795, 55 Am. Dec. 250, it was held L. 229. that an agreement between com- To hold that such a contract viomission merchants and their custom- lates the usury statute of Virginia ers that rests shall be made in would be to condemn contracts and their accounts quarterly, and that business transactions which are of interest should be calculated upon everyday occurrence in this state the balance thus found to be due as well as elsewhere. The statute quarterly, was not usurious, saying forbids the taking of a greater rate in this connection: “Business men of interest than 6 per cent, and must be allowed to make their own where the time is twelve months, or bargains; and when they do so un- more, there is no violation of either derstandingly, and are not en- the letter or spirit

Usury-provision trapped or deceived, their bargains of the statute to for nemlannual must be enforced. If the parties contract that the payments of dealing with commission merchants legal rate due shall agree that rests shall be made quar- be payable in instalments during terly, it has long been settled that the specified period. The point such a mode of stating accounts made is without merit. and calculating interest

is The court eliminated the comperfectly legal."

pound interest which the commisIn Goodrich v. Reynolds, W. & sioner allowed, and this is assigned Co. 31 Ill. 490, 83 Am. Dec. 243, as cross error by the bank. While it is held that a reservation in a it is true that a debtor may enter note that the interest thereon shall into a contract under some circumbe paid semiannually is not usuri- stances to capitalize overdue interous. In Gooddale v. Wallace, 19 S. est, and to pay interest thereon, no D. 405, 117 Am. St. Rep. 969, 103 such contract is shown to exist in N. W.651, 9 Ann. Cas. 545, it is held this case. Where the principal of that the fact that upon the face of the debt is ascertained, and there the notes the interest was payable has been a continuing default in the monthly, instead of annually, does payment of interest, although the not make them usurious.

contract provides for its payment In Cook v. Courtright, 40 Ohio St. upon recurring and for specified 248, 48 Am. Rep. 681, under a stat- periods, a court, in settling the acute which allowed interest

count, in the absence of a specific specified rate “upon the amount of agreement to pay lawful interest such note payable annually,” it was upon

the instalheld that the reservation of the pre- ments thus in de- overdue pay. scribed legal rate of interest on the fault, will only alface of the note, but making it pay- low simple interest upon

the able semiannually, is not usurious. principal sum due. 46 Am. St.

It is observed in this connection Rep. 190, note. The decree is withthat the Virginia statute provides out error in this respect. (Code 1919, § 5551) that “legal in- The notes provide for the payterest shall continue to be at the ment of 10 per cent attorneys' fees rate of $6 upon $100 for a year, and in case the notes should be placed proportionately for a greater or in the hands of an attorney for colless sum, or for a longer or shorter lection, and by authority of this time.”

provision the court allowed an atIn Brown v. Johnson, 43 Utah, 1, torney's fee of $500. This sum is

at a

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Interest-on

ment.

(130 Va, 633, 108 8. B. 649.) less than the amount authorized by should be increased to compensate the contract of the debtor. If he for the additional labor thereby imhad not appealed from that decree, posed. We therefore sustain the it is not probable that we would

cross error assigned by the appellee, have adjudged the fee insufficient.

and will provide in our decree for Inasmuch, however, as the debtor

an additional fee of $100, this being appealed from the decree as a

within the 10 per cent limitation whole, has thus delayed his creditor in the collection of the debt justly specified in the notes. due, and is responsible for the ex

As thus amended, the decree will

be affirmed. pense caused by the litigation thus prolonged, we think that this fee Kelly, P., and Burks, J., absent.

ANNOTATIONI.

Right to interest on overdue instalments of interest, in absence of provision

therefor.

I. Introduction, 81.
II. Rule that interest is not recoverable:

a. In general, 81.

b. Theory, 84. III. Rule that interest is recoverable, 84. IV. Effect of time of or form of action,

87. V. Statutory provision, 88. VI. Interest coupons:

VI.—continued.
a. Rule that coupons bear inter-

est:
1. In general, 89.

2. Theory, 93.
b. Rule that coupons do not bear

interest, 94.

c. Statutory provisions, 96. VII. Rule after maturity of principal

debt, 96.

use

1. Introduction.

instalment of interest from the time The present annotation does not it falls due until it is paid,-or, as it deal with the right to compound in- is sometimes called, annual interest

, terest generally, or the right to com- there is no compounding in the true pute it annually, but deals only with sense. These terms, although their cases in which the interest is, by the as above stated, is confusing, contract, due in instalments. In such have necessarily been used herein a case the question arises whether, in unless from the context the kind of case of default in the payment of the

interest to which the courts had refinstalments, interest may properly be erence is apparent. It may be that the charged thereon.

general disinclination of the courts Two rules have been established by

to allow compound interest is, because the courts as to the right to recover

of this confusion, responsible in some interest on such instalments—one,

cases for disallowing what is not comthat it is recoverable; the other, that

pound interest. it is not. These rules will be taken

II. Rule that interest is not recoverable. up in detail in the subsequent subdivisions of this annotation.

a. In general. Many courts have referred to sim- It is the view of some cases that ple interest upon the instalments of instalments of interest falling due at interest as compound interest. This stated intervals, according the terms seems to be a confusion of terms. In of a note or other contract, do not compounding interest each instalment bear interest after maturity. of interest is, on the date it becomes Colorado. Denver Brick & Mfg. due, added to the principal and itself Co. v. McAllister (1882) 6 Colo. 261. becomes principal, and this is repeat- Illinois.-Leonard v. Villars (1860) ed as each instalment falls due, while 23 Ill. 377. in allowing simple interest upon each Indiana. Niles v. Sinking Fund

27 A.L.R.–6.

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