Scottish-American Mortgage Co. v. Wilson
United States Circuit Court
On Exceptions to Master’s Report. On June 9, 1881, the defendant made a note to the order of the plaintiff, to pay, on the first day of July, 1886, the sum of §65,000, at the rate of 7 per cent, per annum, payable semi-annually. In the note was a condition that if the note was not paid at maturity it should bear interest at the rate of 12 per cent, per annum from the date thereof.
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On Exceptions to Master’s Report. On June 9, 1881, the defendant made a note to the order of the plaintiff, to pay, on the first day of July, 1886, the sum of §65,000, at the rate of 7 per cent, per annum, payable semi-annually. In the note was a condition that if the note was not paid at maturity it should bear interest at the rate of 12 per cent, per annum from the date thereof. To the note were attached 10 interest coupons, calling for the payment, at the semi-annual period of the note, of the amount of the interest at 7 per cent. In each coupon was a clause that if not paid when due the…
1Opinion of the CourtFoster, J.
Had the agreement between the contracting parties stipulated for 12 per cent, interest on default of any covenant in the mortgage, commencing from the date of such default, and not relating back to the date of the contract, there could hardly be a doubt but it *312would have been a valid contract, and not in the nature of a penalty. I can see no objection to parties entering into an agreement that on failure of payment or other covenant the whole debt shall become due at the election of the creditor, and shall then and thereafter draw a greater rate of interest. The master reports and the…
2Cases cited5 opinions
- Tiernan v. HinmanIllinois Supreme Court · 1855
- Shiell v. M'NittNew York Court of Chancery · 1841
- Reeves v. StippIllinois Supreme Court · 1878
- Horner v. HuntIndiana Supreme Court · 1822
- Jasper County v. TavisSupreme Court of Missouri · 1882
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