Holland v. Mosteller, 51 N.C. 582, 6 Jones 582 (1859)

Aug. 1859 · Supreme Court of North Carolina
51 N.C. 582, 6 Jones 582

J. D. HOLLAND v. GEORGE MOSTELLER.

It fs not usuury for the endorsee of a note, to take a new note from the maker at the end of six months, • payable immediately, including the accrued interest.

Debt on a bond for $100$. tried before Bailey, J., at the last Spring Term of Catawba Superior Court. Plea — -usury.

The evidence was, that the defendant gave several notes to other persons, which come by endorsement to the plaintiff, and that when they had been due six months, the plaintiff and defendant came to a settlement, computing the interest for that time, and adding it to the principal, and for the aggregate amount, the defendant gave the bond,.sued on,, payable immediately.

His Honor instructed the j nry, that this was not usury, to which defendant excepted.

Yerdict and judgment for the plaintiff, and appeal by the defendant.

Bymwm,. for the plaintiff.

Avery, for the defendant.

Ruffin, J,

It is certainly not usurious to take á bond or note on a settlement, for a balance or amount due, including interest up to that timeso as to make the whole bear interest afterwards; for there is no agreement for compound interest, and in fact, no compound interest, as such, received. It was said, indeed, by Chief Justice Abbott, to be settled, that where a party advances money to another on account, he may charge interest, and at the end of each year, make a rest,, adding the principal and interest together, so as to make both capital; Eaton v. Bell, 5 Barn. and Ald. 34; and he cites, with approbation, Lord Eldost’s decision in Ex parte Bevan, 9 Ves. 223, that where, upon such an account, the parties agreed at the end of six months to settle the account, and that the balance of account, including, the intermediate *583'interest, should cany interest, it was good, such rest not having been originally agreed for, and it thus not appearing that the loan was made in.contemplation of compound interest for fractions of a year. That is much stronger than the present case, for there was never a loan of money here, but the transaction was an isolated one, and the plaintiff was entitled to recover and collect the whole .sum due, as well for interest as principal on the notes purchased by him ; but instead of demanding payment, took a new security for the debt, bearing the legal rate of interest thereafter. It is no more usury than taking a note for an open account, which did not bear interest, or upon a.general settlement of notes and accounts bona fide, made at .a shorter interest' of one year from the commencement of the account, or the last settlement.

Pee Oueiam, Judgment affirmed.

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