Otis v. Lindsey
Supreme Judicial Court of Maine
Assumpsit on a promissory note of hand for $72, 36, given by the defendant to the plaintiff in payment of two smaller notes which had been standing some years, and for a small sum of money lent. It appeared that in ascertaining the amount for which the new note should be given, the sum due on the old notes was computed upon the principles of compound interest. This the defendant insisted was usurious, and the right of the plaintiff to recover was resisted upon that ground.
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Assumpsit on a promissory note of hand for $72, 36, given by the defendant to the plaintiff in payment of two smaller notes which had been standing some years, and for a small sum of money lent. It appeared that in ascertaining the amount for which the new note should be given, the sum due on the old notes was computed upon the principles of compound interest. This the defendant insisted was usurious, and the right of the plaintiff to recover was resisted upon that ground. A verdict was returned for the plaintiff subject to the opinion of the whole Court upon the question. argued that the…
1Opinion of the Court
The opinion of the Court was delivered by
Mellen C. J.
The note declared on in this case is clearly not usurious. Compound interest is not usury. In the note before us, nothing more than lawful interest was cast upon interest which had become due. No law prohibits such a transaction. Ord on Usury 36; Hamilton v. Le Grange, 2 Hen.Bl. 144; 4 T. R. 613, S. C., Doe v. Warren, 7 Greenl. 48. Though, according to this last decision, such interest upon interest is not recoverable on the ground that by operation of law it becomes principal and bears interest. Yet, after interest has accrued, the parties…
2Cited by4 opinions
- Stanford v. CoramMontana Supreme Court · 1902
- Sanford v. LundquistNebraska Supreme Court · 1907
- United States Mortgage Co. v. SperryUnited States Circuit Court · 1885
- BENEFICIAL FINANCE CO.(MAINE) v. FuscoSupreme Judicial Court of Maine · 1964