reported decision which determines the question, and therefore the court is free to adopt the rule which best commends itself to its judgment, says: "There are some considerations of a practical kind which would lead us to refuse the interest until after a demand, and perhaps a decision to that effect would not seriously conflict with the usages of business; but we think the rule allowing interest is, upon the whole, better grounded in the principles and analogies of the law, and more consonant with the modern ideas in regard to interest as exhibited both in jurisprudence and legislation. We adopt the rule allowing interest upon instalments of interest overdue and remaining unpaid." The court further says: "There is a reason for not allowing interest upon interest applicable to negotiable securities which we do not find referred to, namely, that it may not be known to the debtor to whom the interest is to be paid; but it may be replied that the same reason would hold in regard to the principal of a negotiable security payable at a particular day without interest, upon which, nevertheless, interest accrues after its maturity." The court in Catlin v. Lyman (1844) 16 Vt. 44, says: "It has long been settled in this state, doubtless upon the authority of the cases cited from Massachusetts, that the parties may make the interest payable at any time short of the time fixed for the payment of the principal sum. In such case, if the interest is not paid when it falls due, suit may be immediately brought for the sum due, and a recovery had for that, with interest upon it from the time it fell due, by way of damages for the delay. The interest is thus treated as a separate instalment of the principal sum. In such case, if no suit be brought until the whole sum be due, the interest will be computed on the several successive instalments of interest as so many distinct causes of action blended in one suit. But the interest upon the interest is allowed in these cases by way of damages for the delay of payment, and not as any portion of the stipulated interest. IV. Effect of time of or form of action. In some jurisdictions the right to interest on unpaid instalments of interest is dependent upon the time of bringing the action therefor, or perhaps the nature of the recovery sought. In an action for the interest instalments brought before the principal is due, it has been held that interest is proper from the time the instalments become due until the time of rendering judgment. Greenleaf v. Kellogg (1803) 2 Mass. 568. In Howard v. Farley (1865) 3 Robt. (N. Y.) 308, an action to recover one year's interest upon a bond, it was held that if the interest was demanded when due, the interest thereon would be recoverable, but there being no evidence of a demand before suit, recovery of interest could only be had from the commencement of the action. But where the action is brought after the principal has become due, and to recover both principal and interest, interest on the unpaid instalments is not proper. Ferry v. Ferry (1848) 2 Cush. (Mass.) 92. See the reported case (BLANCHARD V. DOMINION NAT. BANK, ante, 78). The disallowance of interest upon interest coupons on railroad bonds after payment demanded thereof was held correct in Shaw v. Norfolk County R. Co. (1860) 16 Gray (Mass.) 407, the court stating: "Interest upon interest, which has accrued upon a contract, upon which interest is by its terms payable at stated periods before the principal becomes due, is never allowed in making up judgment in suits thereon. This has often been determined and must now be considered as the settled law in this commonwealth upon that subject." In Hastings v. Wiswall (1812) 8 Mass. 455, where the action was to recover both principal and interest, it was claimed that the interest due, by the terms of the note, at the end of each year should be added to the principal, and interest cast on the aggregate of these two sums, and so from year to year to the time of judgment, but the court denied the motion, observing that the plaintiff might have brought his action for the interest at the expiration of each year, and that by neglecting this he might be considered as waiving his claim to compound interest. Accordingly, the clerk was directed to add simple interest to the principal for the time that the interest remained unpaid, and to enter up judgment for that amount, with costs. Hastings v. Wiswall is approved in Henry v. Flagg (1847) 13 Met. (Mass.) 64, a case in which there was an express promise to pay compound interest. The exact nature of the interest, however, is not clear; for, in another part of the opinion, the court speaks of a demand for annual interest. The right to compound interest in a bill to redeem a mortgage is denied also in Reed v. Reed (1830) 10 Pick. (Mass.) 398. The action in Stoner v. Evans (1866) 38 Mo. 461, was brought after the note became due, and the court, in holding that no interest could be recovered on the unpaid instalments of annual interest, says that the holder of the note might have recovered such instalments by action thereon. See Catlin v. Lyman (1844) 16 Vt. 44, supra. That compound interest is not allowable in computing the amount due on a bond is held in Dean v. Williams (1821) 17 Mass. 417. In Lewin v. Folsom (1898) 171 Mass. 188, 50 N. E. 523, it is stated to have long been regarded as settled law in Massachusetts that interest upon interest cannot be recovered simply on the strength of a demand. In Tisbury v. Vineyard Haven Water Co. (1906) 193 Mass. 196, 79 N. E. 256, it is stated that where interest is to be allowed on money due, the computation is to be of simple interest, unless there is an express requirement to the contrary. V. Statutory provision. It has been held under a statute making all liquidated demands bear interest from the time the same are due and payable, that instalments of interest payable at stated intervals, according to the terms of a note, bear interest from the time due. Calhoun v. Marshall (1878) 61 Ga. 275, 34 Am. Rep. 99. According to the court the annual sums due for interest on a note which provides that the interest is payable annually are fixed and certain, and the maker is bound to pay them on the date stipulated; so that the liability for interest is within the words of the statute, making all liquidated demands bear interest from the time they are due and payable. It is further stated: "If notes for this annual interest had been separately given they could have been sued for and recovered separately from the principal, and such notes would have borne interest. What difference can it make that the same contract is as clearly expressed in the same paper, where the promise is also made to pay the principal debt at a time certain? Suit could have been brought for the interest on the 15th of May of each year as well on these as on separate notes, and the notes which contained a promise to pay the principal debt at a certain date and this annual interest in May would have been evidence of the promise to pay the interest then, just as certain and complete as if promised in a separate note. There can be no difference in principle." The court then referred to Scott v. Saffold (1867) 37 Ga. 384, in which it was held that a contract which contained the words "interest to be paid annually at 10 per cent, otherwise counted as principal," was good, and that interest upon the annual interest arising under such contract was collectable. The court further says: "That case is like this, except that the words 'otherwise counted as principal' are not in the note here sued on; but the legal effect of the two contracts is the same." A statute is referred to in Preston v. Walker (1868) 26 Iowa, 205, 96 Am. Dec. 140, and Hamilton County v. Chase (1915) Iowa, 152 N. W. 580, supra, III., but its provisions are not set out. On the contrary, a statute providing for interest on any bond, bill, promissory note, or other instrument of writing after maturity, has been held to authorize interest only on the principal; it does not authorize interest on interest. Denver Brick & Mfg. Co. v. McAllister (1882) 6 Colo. 261. A Michigan statute (Howell's Stat. § 1599) under which some cases in that state were decided allowed interest on any defaulted instalment of interest at the rate specified in the contract. Rix v. Strauts (1886) 59 Mich. 364, 26 N. W. 638. See also Voight v. Beller (1885) 56 Mich. 140, 22 N. W. 270, for reference to this statute. The Michigan statute does not allow interest on interest unless there are instalments of interest provided for in the written contract. Rix v. Strauts (Mich.) supra. Nor can the interest on a note which contains no provision for instalments of interest be computed after the maturity of the note and added to the principal, and the interest computed from that time on the sum of principal and interest. Buchtel v. Mason (1887) 67 Mich. 605, 35 N. W. 172. The right to interest on interest falling due on a note was denied under this statute in Jones v. Shaw (1885) 56 Mich. 332, 23 N. W. 33, for the time payments were suspended to determine the title to land for the purchase price of which the note was given. A Civil Code provision is referred to in Salvador v. Palencia (1913) 25 Philippine, 661, as authority for the proposition that interest due shall earn legal interest from the time it is judicially demanded, even if the obligation should have been silent on this point. VI. Interest coupons. a. Rule that coupons bear interest. 1. In general. According to the great weight of authority, interest coupons or notes executed by the maker of a note or bond to evidence instalments of interest do bear interest after maturity, although there is no provision for interest. (See infra as to necessity of demand and effect of readiness to pay.) United States.-Gelpcke v. Dubuque (1864) 1 Wall. 175, 17 L. ed. 520 (city bonds); Aurora v. West (1868) 7 Wall. 82, 19 L. ed. 42 (city bonds); Genoa v. Woodruff (1876) 92 U. S. 502, 23 L. ed. 586 (municipal bonds); Cromwell v. Sac County (1878) 96 U. S. 51, 24 L. ed. 681 (county bonds); Walnut v. Wade (1881) 103 U. S. 683, 26 L. ed. 526 (town bonds); Koshkonong v. Burton (1882) 104 U. S. 668, 26 L. ed. 886 (town bonds); Pana v. Bowler (1883) 107 U. S. 529, 27 L. ed. 424, 2 Sup. Ct. Rep. 704 (town bonds); Scotland County v. Hill (1889) 132 U. S. 107, 33 L. ed. 261, 10 Sup. Ct. Rep. 26 (county bonds); Cairo v. Zane (1893) 149 U. S. 122, 37 L. ed. 673, 13 Sup. Ct. Rep. 803 (city bonds); Edwards v. Bates County (1896) 163 U. S. 269, 41 L. ed. 155, 16 Sup. Ct. Rep. 967 (rule recognized); Hollingsworth v. Detroit (1844) 3 McLean, 472, Fed. Cas. No. 6,613 (city bonds); Rich v. Seneca Falls (1881) 19 Blatchf. 558, 8 Fed. 852 (town bonds); Nash v. El Dorado Co. (1885) 24 Fed. 252 (county bonds); Wilson v. Neal (1885) 23 Fed. 129 (county bonds); New England Mortg. Secur. Co. v. Vader (1886) 28 Fed. 265 (mortgage coupons); Huey v. Macon County (1888) 35 Fed. 481; Hughes County v. Livingston (1900) 43 C. C. A. 541, 104 Fed. 306, writ of certiorari denied in (1901) 181 U. S. 623, 45 L. ed. 1033, 21 Sup. Ct. Rep. 926 (county bonds); Ouray County v. Geer (1901) 47 C. C. A. 450, 108 Fed. 478 (county bonds). Alabama. Caldwell v. Dunklin (1880) 65 Ala. 461 (county bonds). Colorado. Lake County v. Linn (1902) 29 Colo. 446, 68 Pac. 839 (county bonds); Cripple Creek v. Adams (1906) 36 Colo. 320, 85 Pac. 184. Florida.-Jefferson County v. Hawkins (1887) 23 Fla. 223, 2 So. 362 (county bonds); Internal Improv. Fund v. Lewis (1894) 34 Fla. 424, 26 L.R.A. 743, 43 Am. St. Rep. 209, 16 So. 325 (railroad bonds issued under special legislative sanction). In so far as there is a contrary opinion expressed in Columbia County v. King (1870) 13 Fla. 451, supra, it is overruled in Jefferson County v. Hawkins (Fla.) supra. Illinois. Harper v. Ely (1873) 70 Ill. 581 (private mortgage or trust deed); Humphreys v. Morton (1881) 100 Ill. 592 (railroad bonds); Benneson v. Savage (1889) 130 Ill. 352, 22 N. E. 838; Cook v. Illinois Trust & Sav. Bank (1897) 68 Ill. App. 478 (private mortgage bonds). But see United States Mortg. Co. v. Sperry (1891) 138 U. S. 313, 34 L. ed. 969, 11 Sup. Ct. Rep. 321, infra. Kentucky.-Kentucky Title Co. v. English (1899) 20 Ky. L. Rep. 2024, 50 S. W. 968. Maryland. Com. v. State (1870) 32 Md. 501 (canal bonds). Minnesota.-Welsh v. First Div. St. Paul & P. R. Co. (1878) 25 Minn. 314. Pennsylvania.-North Pennsylvania R. Co. v. Adams (1867) 54 Pa. 94, 93 Am. Dec. 677; Philadelphia & R. R. Co. v. Smith (1884) 105 Pa. 195. South Carolina.-Langston v. South Carolina R. Co. (1871) 2 S. C. 248. Texas.-San Antonio v. Lane (1869) 32 Tex. 405 (city bonds). Canada. London & C. Loan & Agency Co. v. Rural Municipality (1890) 7 Manitoba L. R. 128 (per Taylor, Ch. J.). At least, interest is recoverable after demand and refusal to pay. Beaver County v. Armstrong (1862) 44 Pa. 63 (county bonds). The owner of lost coupons evidencing the interest on railroad bonds, who had tendered an indemnity, was held entitled to recover interest from the time of demand, in Fitchett v. North Pennsylvania R. Co. (1863) 5 Phila. (Pa.) 132. The court in Gibert v. Washington City, V. M. & G. S. R. Co. (Va.) supra, says that the interest coupons attached to railroad bonds carried interest from the time the company was in default in paying them. It appears, however, that the master, in making up the statement of liens, calculated and allowed interest on all overdue coupons from the date of their maturity. Not all cases have considered the necessity of demand. Those that have done so hold that interest runs from the maturity of the coupon, without demand, but that if the maker of the note or obligor of the bond shows that he was ready and willing to pay at its maturity no interest can be recovered. North Pennsylvania R. Co. v. Adams (Pa.) and Hamilton v. Wheeling Pub. Serv. Co. (W. Va.) supra; Walnut v. Wade (1881) 103 U. S. 683, 26 L. ed. 526; Huey v. Macon County (1888) 35 Fed. 481. See National Exch. Bank v. Hartford, P. & F. R. Co. (1866) 8 R. I. 375, 91 Am. Dec. 237, 5 Am. Rep. 582, infra; Langston v. South Carolina R. Co. (1871) 2 S. C. 248. The United States Supreme Court expressly stated in Walnut v. Wade (1881) 103 U. S. 683, 26 L. ed. 526, that the failure to present the coupons for payment does not prevent the running of interest, but if the obligor of the bond shows that it had money ready to pay the coupons at the time and place where they were payable, this would be a defense to the claim for interest. It is stated in Huey v. Macon County (Fed.) supra, that interest coupons bear interest from the day they are payable, even though no demand for payment is made on that day. In North Pennsylvania R. Co. v. Adams (1867) 54 Pa. 94, 93 Am. Dec. 677, it is stated that the facts in the Armstrong Case (Pa.) supra, were that interest was recovered from the time the coupons fell due, although they were never presented for payment, the county having provided no funds to meet the interest on their bonds; and it is held in the Adams case that payment, tender, and readiness to pay are all affirmative pleas, casting the burden of proof upon the defendant. Accordingly, where there is no readiness to pay averred, interest was properly allowed at the time the coupons fell due. In Philadelphia & R. R. Co. v. Smith (1884) 105 Pa. 195, it is noted that the affidavit of defense did not aver any readiness or willingness to pay the coupons or warrants when they became due. In Hamilton v. Wheeling Pub. Serv. Co. (1921) 88 W. Va. 573, 21 A.L.R. 433, 107 S. E. 401, it is held that a public service company might defeat the recovery of interest on coupons evidencing the interest payment on its bonds by showing its continued readiness to pay the principal represented by them. According to this court, if the company issuing the bonds stood ready at all times to pay the interest called for by the maturing coupons, it would not be just to permit a holder to exact interest thereon by neglecting or failing to present them for payment when due. In Hollingsworth v. Detroit (1844) 3 McLean, 472, Fed. Cas. No. 6,613, no question is made whether, when due, a demand of payment was made of the coupons, or whether such demand was necessary; the point not being raised, the court held it not necessary to consider it. Several coupons were involved in Kentucky Title Co. v. English (1899) 20 Ky. L. Rep. 20, 24, 50 S. W. 968, and recovery on one of them was defeated because of the failure of the holder to make proof and demand of the obligor's administrator within the time required by statute. Although the court in Com. v. State (1870) 32 Md. 501, recognizes this rule as the settled doctrine of American law, it was held in that case that the interest on the coupons which had not been paid could not be paid in preference to the claims of the state of Maryland, a creditor of the canal company. Interest coupons which fall due subsequently to the exercise by the holder of the note of his option to declare the whole sum due upon default do not bear interest. Stubbings v. O'Connor (1899) 102 Wis. 353, 78 N. W. 577. An attempt was made in Ouray County v. Geer (1901) 47 C. C. A. 450, 108 Fed. 478, to distinguish municipal bonds from bonds issued by individuals, but the distinction was denied by the court, which states that the bond and coupon were issued by the municipality in the exercise of contractual powers as distinguished from governmental powers, hence the municipality was not entitled to invoke for its protection any immunity per taining to it as a sovereign or governing body. Compare with Pekin v. Reynolds (1863) 31 Ill. 529, 83 Am. Dec. 244, infra, VI. b. In New York interest coupons bear no interest so long as they remain in the hands of the holder of the bonds. Williamsburgh Sav. Bank v. Solon (1893) 136 N. Y. 465, 32 N. E. 1058; Klein v. East River Electric Light Co. (1901) 33 Misc. 596, 67 N. Y. Supp. 922. A judgment of the lower court allowing interest on the coupons was modified by the court of appeals in Beattys v. Solon (1893) 136 N. Y. 662, 32 N. E. 1062, apparently by deducting the interest. The decision in Stanton v. Taylor (1892) 64 Hun, 633, 19 N. Y. Supp. 43, which is in accord with the decision of the lower court in Beattys v. Solon, would seem to state the law no longer. But interest should be allowed upon such coupons from the time they are detached from the bonds and passed into separate ownership. Long Island Loan & T. Co. v. Long Island City & N. R. Co. (1903) 85 App. Div. 36, 82 N. Y. Supp. 644, affirmed on the opinion below in (1904) 178 N. Y. 588, 70 N. E. 1102 (railroad bonds). In Connecticut Mut. L. Ins. Co. v. Cleveland, C. & C. R. Co. (1863) 41 Barb. (N. Y.) 9, interest was allowed on the unpaid interest coupons on railroad bonds without making it a condition that the coupons should be detached and in the hands of one other than the holder of the bond. It is held incumbent upon one seeking to recover interest on such coupons to plead and prove the circumstances which entitle him to recover the interest under this rule. Klein v. East River Electric Light Co. (N. Y.) supra. On the contrary, it has been expressly held that interest on the coupons after maturity is recoverable, although attached to the bonds and in possession of the holder. Rice v. Shealey (1905) 71 S. C. 161, 58 S. E. 868; Hamilton v. Wheeling Pub. Serv. Co. (1921) 88 W. Va. 573, 21 A.L.R. 433, 107 S. E. 401. The court in Hamilton v. Wheeling Pub. Serv. Co. (W. Va.) supra, recognizes that, according to the rule in New York, so long as the past-due coupons remain in the |