North v. Mallett, 3 N.C. 151, 2 Hayw. 151 (1801)

Nov. 1801 · North Carolina Superior Court

3 N.C. 151, 2 Hayw. 151

Wilmington,

November Term, 1801.

North and Prescot vs. Mallett.

¡¡pASE for money due by two notes of hand payable January, ^ 1784. Payments were made in part by twa notes in 17S3, also there were several other payments, and in 1785 a payment was made to the amount of the balance of the principal, and an offer was then made to pay any balance which might be then due, if the plaintiff would agree to credit to the amount of the notes, which he refused. It was stated by counsel that a calculation had been made by agreement, and that on the 20th May, 1785, when Mallett offered to close the accounts, 820 dollars St 60 cents were due as interest and not as principal, and to calculate interest on that sum would be giving interest on interest. To support this position he stated, that the mode of calculating interest at the time this contract was entered into, and during the whole transaction, till May, 1785, was to find the interest on the principal sum till the time of settlement, and the interest on the several payments from the day on which they were made, to the ti rpe of settlement also, and then to strike the balance. Pursuing this method in the present case, as the several pavments made, «mounted to more than the principal, the balance due on. the xsOffr-May, 1785, must certainly be con:..dered as interest mpreljv And although the rule for calculating interest ha: been" since »!• lered, and that what is here contended for was erroneous in principle,' yet as it was the mode in use when the parties contracted and paid, it ought now to be adhered to.

Per curiam,

Hall, Judge.

The payment ought in the first place to be applied to the discharge of the interest accrued, and if a balance of payments remains then to deduct it from the principal. If the plaintiff received the notes as payment the defendant should be credited from the day of the receipt, otherwise it •is, if he only made them his by delay and keeping them in his possession. The defendant may stop interest when he pleases by tendering the principal and interest, but it is not a legal tender to say, here I am ready ; he must have the money ready also.