buildings and sheds on the premises in question. Sometime thereafter the defendant company wanted the land for railroad uses, and viewers were appointed. Notice of the defendant's desire for possession was given, but possession was not taken until three months after the time specified in the notice, and, the plaintiffs disregarding this notice, the defendants demolished the buildings, whereon this action was instituted. The court said: "If the company had entered immediately and demolished the buildings in the construction of its tracks, it would have been liable, just as its predecessor, Rieker, would have been, for the damages caused by want of reasonable opportunity to appellants to remove their property; but, such opportunity having been given, there were no damages, and the verdict was rightly directed for defendant." The In Kull v. Mastbaum & Fleisher (1921) 269 Pa. 202, 112 Atl. 631, the plaintiff made a claim for the value of personal property, alleged to have been taken by the defendant. court held that it appeared from the evidence that the premises had been abandoned, and said: "As to the claim of plaintiff that personal property was taken and wrongfully withheld from him, the record, as made up, showed, among other things, that the person in possession of the premises was Lavin, whom Kull had originally admitted as a subtenant, and that the personal property alleged to have been wrongfully retained by the defendant was at no time taken by the latter, a fact set forth in the part of the affidavit of defense put in evidence by plaintiff. Moreover, there was a failure to show that the goods in question could not have been secured by the plaintiff, had he requested their delivery from the one in possession. Under such circumstances, no recovery could be had on this branch of the case." ing to the defendants, which house, so the court found, had been abandoned by the plaintiffs. No intention to abandon the things left therein was found. The court said: "There having been such an abandonment, the Linvilles were authorized to take possession, and it became their duty to safely care for such property as they found there. If the taking possession of the premises was not wrongful, it seems clear that what was done with respect to the things found on the premises, as found by the court, did not constitute conversion. The Linvilles were unable to locate the owners; by taking possession of the premises they made themselves responsible for the property left there; they did not intend to appropriate same, and only held it for the owners, being willing to deliver possession at the place where they safely kept such property, or any place demanded by the owners. They told Mrs. Mozier that, if any of the parties came back, to tell them the things were at Linvilles' for them." Judgment for the defendants was affirmed. Browder v. Phinney (1905) 37 Wash. 70, 79 Pac. 598, was an action, in part, for damages for the alleged conversion of certain articles belonging to the plaintiff and removed from certain premises by the defendant, the owner of the premises, and stored by him in a warehouse, on the plaintiff's failure to accept the goods at his place of business. There was direct evidence that the plaintiff had agreed to a termination of the tenancy, that he had stated that he did not wish to retain the premises,whereupon the defendant entered thereon to make improvements, a few of the plaintiff's goods remaining on the property. It was declared that if the jury believed this testimony it would be sufficient to sustain a verdict for the defendant. In Clark v. Groger (1918) 102 Wash. 188, 172 Pac. 1164, it appeared that the plaintiff, who had had possession of certain corporate premises by sufferance, was called on by the corporation to remove therefrom his property, which, however, he failed to do, the plaintiff later bringing an action against the defendants, trustees of the corporation, for the conversion of the property in question. The court said: "A wilful or even an unlawful taking will not always amount to conversion. There must be some assertion of right or title that is hostile to the true owner. In the instant case, the trustees by resolution disclaimed any intention of claiming as owners. They not only admitted the title of the plaintiff, but made a demand that he remove his property. His answer to this demand was not made with a moving van, but by filing an action in damages for conversion. This phase of the case is learnedly treated in Lee Tung v. Burkhart (1911) 59 Or. 194, 116 Pac. 1066, where it is said: 'In an action of trover it is not sufficient that the facts show a mere trespass, without showing a conversion. . There may be an actual, wrongful exercise of dominion over chattels without constituting a conversion, if such dominion is not a denial or repudiation of the owner's right or title.' And this we understand to be the doctrine of Browder v. Phinney (1905) 37 Wash. 70, 79 Pac. 598. In answer to this it may be urged that the use of the malt, apples, and manufactured stock was the assertion of a right in derogation of the title of the plaintiff. This would be so ordinarily; but the personal liability of the defendants could not be extended over a time beyond which plaintiff should have removed his property in obedience to the demand of the trustees. He had his choice of remedies. He could comply with the request of the trustees and remove his property, or he could undertake to sell it to the corporation, or to the trustees as individuals, by resort to a claim for damages as for a conversion. He chose to hold the trustees as individuals, and must fail, for it is shown that his loss, if any, is due to his own omission. He cannot recover upon a personal liability the value of that which he might have had for the taking. His remedy, if any, is against the corporation." In Opperman v. Littlejohn (1910) 98 Miss. 636, 35 L.R.A. (N.S.) 707, 54 So. 77, a case not within the scope of the annotation, it was said that after the expiration of a lease, within a reasonable time, all of the effects of the tenant must be taken from the premises, and if this is not done the landlord may remove them, or, if necessary to obtain the use of his property, 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.] 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 BLANCHARD v. DOMINION NAT. BANK. (130 Va. 633, 108 8. E. 649.) 79. 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 & Hutton, for plaintiff: The provision in the original notes and the renewal notes, that interest is to be paid semiannually, which interest is also secured by the deed of trust, makes said forbearance and assurance usurious, and defendant is only entitled to recover the principal sum loaned. Meem v. Dulaney, 88 Va. 674, 14 S. E. 363; Turner v. Turner, 80 Va. 379; Munford v. McVeigh, 92 Va. 446, 23 S. E. 857; Greer v. Hale, 95 Va. 533, 64 Am. St. Rep. 814, 28 S. E. 873. Messrs. Peters & Lavinder for defendant. Prentis, J., delivered the opinion of the court: This is the sequel to the case of Blanchard v. Dominion Nat. Bank, 125 Va. 586, 100 S. E. 463. There the appellant, who was the indorser of certain notes, claimed that they had been paid. That question having been decided against him, the case was remanded for further proceedings. One of the objections then urged is thus stated in that opinion: "Objection is made to the decree appealed from, on the ground that it is uncertain because it fails to state from what time the amounts due the [plaintiff] should bear interest." This point is thus decided: "The decree did not finally dispose of the case, but referred it to a commissioner to take certain accounts, which would of necessity disclose not only the amount of the bank's claim, but the time from which it bore interest. This decree properly ordered accounts of liens and their priority before directing a sale under the trust deed." After the former appeal was determined and the case remanded, the commissioner stated the account and compounded the interest on the debt semiannually. The appellant excepted to this, claiming that the amount of the debt was irrevocably fixed by the former decree at $4,584, and that, as no other time was thereby fixed, the interest thereon could only be computed from the date of the decree, October 10, 1918, and also upon the ground that, in case his first exception should be overruled, the commissioner erred in compounding the interest. At the hearing the court entered a decree in favor of the creditor, Dominion National Bank, for the sum of $4,866.18, with simple interest thereon from June 6, 1914, balance due by the debtor as of that that being the aggregate of the ་ date. The chief contention of the appellant upon this appeal is that, because the notes provide for semiannual payments of interest thereon, therefore the debt was usurious. No authority is cited supporting this proposition, and so far as we are informed it has never been sustained by any court anywhere. This is said by the learned annotator in a note to 46 Am. St. Rep. 189: "The interest specified in these statutes [referring to usury] is usually designated as a certain rate per annum. This has never, so far as we are aware, been considered either as forbidding loans for a short period of time, or as requiring that interest shall be computed at yearly intervals only. On the contrary, it is well settled that interest may be made payable semiannually, or quarterly, or at such recurring periods as may receive the assent of the parties." And he cites numerous cases to support the text. In Meyer v. Muscatine, 1 Wall. 391, 17 L. ed. 566, this is said on the subject: "This objection has no foundation. When a statute fixes the rate of interest per annum, it has always been held that parties may lawfully contract for the payment of that rate, before the principal debt becomes due, at periods shorter than a year,"-citing Mowry v. Bishop, 5 Paige, 98. In Brown v. Vandyke, 8 N. J. Eq. 795, 55 Am. Dec. 250, it was held that an agreement between commission merchants and their customers that rests shall be made in their accounts quarterly, and that interest should be calculated upon the balance thus found to be due quarterly, was not usurious, saying in this connection: "Business men must be allowed to make their own bargains; and when they do so understandingly, and are are not entrapped or deceived, their bargains must be enforced. If the parties dealing with commission merchants agree that rests shall be made quarterly, it has long been settled that such a mode of stating accounts and calculating interest perfectly legal." is In Goodrich v. Reynolds, W. & Co. 31 Ill. 490, 83 Am. Dec. 243, it is held that a reservation in a note that the interest thereon shall be paid semiannually is not usurious. In Gooddale v. Wallace, 19 S. D. 405, 117 Am. St. Rep. 969, 103 N. W. 651, 9 Ann. Cas. 545, it is held that the fact that upon the face of the notes the interest was payable monthly, instead of annually, does not make them usurious. In Cook v. Courtright, 40 Ohio St. 248, 48 Am. Rep. 681, under a statute which allowed interest at a specified rate "upon the amount of such note payable annually," it was held that the reservation of the prescribed legal rate of interest on the face of the note, but making it payable semiannually, is not usurious. It is observed in this connection that the Virginia statute provides (Code 1919, § 5551) that "legal interest shall continue to be at the rate of $6 upon $100 for a year, and proportionately for a greater or less sum, or for a longer or shorter time." In Brown v. Johnson, 43 Utah, 1, 46 L.R.A. (N.S.) 1157, 134 Pac. 590, Ann. Cas. 1916C, 321, it is also held that, under a statute permitting any rate of interest not exceeding 12 per cent per annum, a note calling for interest at the rate of 1 per cent per month is not usurious. 27 R. C. L. 229. To hold that such a contract violates the usury statute of Virginia would be to condemn contracts and business transactions which are of everyday occurrence in this state as well as elsewhere. The statute forbids the taking of a greater rate of interest than 6 per cent, and where the time is twelve months, or more, there is no violation of either the letter or spirit of the statute to for semiannual Usury-provision contract that the payments of legal rate due shall be payable in instalments during the specified period. The point made is without merit. interest. The court eliminated the compound interest which the commissioner allowed, and this is assigned as cross error by the bank. While it is true that a debtor may enter into a contract under some circumstances to capitalize overdue interest, and to pay interest thereon, no such contract is shown to exist in this case. Where the principal of the debt is ascertained, and there has been a continuing default in the payment of interest, although the contract provides for its payment upon recurring and for specified. periods, a court, in settling the account, in the absence of a specific agreement to pay lawful interest upon the instal- Interest-on ments thus in de- overdue payfault, will only allow simple interest principal sum due. 46 Am. St. Rep. 190, note. The decree is without error in this respect. ment. upon the The notes provide for the payment of 10 per cent attorneys' fees in case the notes should be placed in the hands of an attorney for collection, and by authority of this provision the court allowed an attorney's fee of $500. This sum is (130 Va. 633, 108 8. E. 649.) less than the amount authorized by the contract of the debtor. If he If he had not appealed from that decree, it is not probable that we would have adjudged the fee insufficient. Inasmuch, however, as the debtor appealed from the decree as a whole, has thus delayed his creditor in the collection of the debt justly due, and is responsible for the expense caused by the litigation thus prolonged, we think that this fee should be increased to compensate for the additional labor thereby imposed. We therefore sustain the cross error assigned by the appellee, and will provide in our decree for an additional fee of $100, this being within the 10 per cent limitation specified in the notes. As thus amended, the decree will be affirmed. Kelly, P., and Burks, J., absent. ANNOTATION. Right to interest on overdue instalments of interest, in absence of provision I. Introduction, 81. therefor. 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: I. Introduction. The present annotation does not deal with the right to compound interest generally, or the right to compute it annually, but deals only with cases in which the interest is, by the contract, due in instalments. In such a case the question arises whether, in case of default in the payment of the instalments, interest may properly be charged thereon. Two rules have been established by the courts as to the right to recover interest on such instalments-one, that it is recoverable; the other, that it is not. These rules will be taken up in detail in the subsequent subdivisions of this annotation. Many courts have referred to simple interest upon the instalments of interest as compound interest. This seems to be a confusion of terms. In compounding interest each instalment of interest is, on the date it becomes due, added to the principal and itself becomes principal, and this is repeated as each instalment falls due, while in allowing simple interest upon each 27 A.L.R.-6. 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. instalment of interest from the time it falls due until it is paid,—or, as it is sometimes called, annual interest,there is no compounding in the true sense. These terms, although their use as above stated, is confusing, have necessarily been used herein unless from the context the kind of interest to which the courts had reference is apparent. It may be that the general disinclination of the courts to allow compound interest is, because of this confusion, responsible in some cases for disallowing what is not compound interest. II. Rule that interest is not recoverable. |