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as payable upon a breach may be regarded as liquidated damages and may be recoverable in full (a).

A contract was made between the manager of a theatre and an actor for the services of the latter during a certain period, containing various stipulations as the times and manner of the performances, and the regulations of the theatre, and the payment of his salary at so much per night, and containing a clause that if either party should neglect to fulfil the said agreement, or any part thereof, such party should pay to the other the sum of £1000; it was held that the sum was a penalty, and not liquidated damages, because it was not limited to be paid upon breaches of an uncertain nature and amount, but extended to the breach of any stipulation by either party, including the neglect to pay a day's salary (b). By an agreement the defendant agreed to grant a lease, and the plaintiff agreed to execute a counterpart and pay the expenses, and for the true performance of the agreement each of the parties bound himself in the penalty of £500 to be recovered against the defaulter as liquidated damages; it was held that this sum was a penalty, because it was annexed to the non-payment of the expenses as well as the non-execution of the lease on the part of the plaintiff, and therefore the plaintiff could not recover it in full against the defendant upon a refusal to grant the lease (c). An agreement was made for the purchase of the stock in trade and effects of a public house at a valuation, the goods to be valued and possession given on or before a fixed day, and containing a clause, that in the event of either party not complying to every particular of the agreement he should forfeit and pay the sum of £50 and all expenses attending the same; it was held that the sum named was a penalty and not liquidated damages (d).

(a) Astley v. Weldon, 2 B. & P. 346; Davies v. Penton, 6 B. & C. 216; Kemble v. Farren, 6 Bing. 141; Horner v. Flintoff, 9 M. & W. 678; per Parke, B., Atkyns v. Kinnier, 4 Ex. 776, 783; per Alderson, B., ib. 784; per Coleridge, J., Reynolds v. Bridge, 6 E. & B. 528, 541; 26 L. J. Q. B. 12, 16; Betts v. Burch, 4 H. & N. 506; 28 L. J. Ex. 267.

(b) Kemble v. Farren, 6 Bing. 141; and see Astley v. Weldon, 2 B. & P. 346; Beckham v. Drake, 8 M. & W. 846, 853; Reindel v. Schell, 4 C. B. N. S. 97; 27 L. J. C. P. 146.

(c) Boys v. Ancell, 5 Bing. N. C. 390.

(d) Betts v. Burch, supra; and see Davies v. Penton, 6 B. & C. 216; see Reilly v. Jones, 1 Bing. 302.

Interest.

Under contracts at

common

law.

Upon agreements for the sale of a trade or business, containing terms restraining the seller from carrying on the same business within certain limits, or interfering with the customers, and other terms of a like kind, intended to secure the transfer of the business, with a stipulation for the payment of a fixed sum in case of breaking any of such terms, such sum is, in general, considered as liquidated damages, and not as a penalty, and is recoverable in full upon a breach of the agreement (a).

Interest upon a debt, or money demand, may be payable under the contract, or it may be recoverable as damages, either at common law or under the statute 3 & 4 Wm. IV. c. 42, ss. 28, 29.

By the common law, if the contract is silent respecting interest, it is presumed, in general, that it is not intended to be paid, and it cannot be claimed either as debt or damages. Thus, interest is, in general, not recoverable upon a claim merely for money lent (b); or for the price of goods sold (c). So, upon the principal sum payable under a policy of insurance interest was not recoverable before the statute 3 & 4 Wm. IV. c. 42, s. 29 (d). Interest is not recoverable upon a debt founded only on a contract implied in law, as for money received by the defendant for the use of the plaintiff; or for money paid for the defendant upon his implied request (e); or upon the debt created by a foreign judgment (ƒ), unless the judgment itself carries interest (g). And the same rule prevails in equity (h).

(a) Green v. Price, 13 M. & W. 695; Rawlinson v. Clarke, 14 M. & W. 187; Galsworthy v. Strutt, 1 Ex. 659; Atkyns v. Kinnier, 4 Ex. 776; Sainter v. Ferguson, 7 C. B. 716; and see S. C. 19 L. J. C. 170; Reynolds v. Bridge, 6 E. & B. 528; 26 L. J. Q. B. 12; Mercer v. Irving, E. B. & E. 563; 27 L. J. Q. B. 291.

(b) Calton v. Bragg, 15 East, 223; Edwards v. Vere, 5 B. & Ad. 282.

(c) Gordon v. Swan, 12 East, 419. (d) Kingston v. M'Intosh, 1 Camp. 518; Higgins v. Sargent, 2 B. & C. 348.

(e) Waiker v. Constable, 1 B. & P.

306; Tappenden v. Randall, 2 B. & P.
467, 472; De Havilland v. Bower-
bank, 1 Camp. 50; De Bernales v.
Fuller, 2 Camp. 426; Maberley v.
Robins, 5 Taunt. 625; Fruhling v.
Schroeder, 2 Bing. N. C. 77; Hicks v.
Mareco, 5 C. & P. 498.

(f) Hunter v. Bowes, cited in Hil
house v. Davis, 1 M. & S. 169, 173;
Atkinson v. Lord Braybrooke, 4
Camp. 380.

(g) See M'Clure v. Dunkin, 1 East, 436; Arnott v. Redfern, 3 Bing. 353, (h) Bell v. Free, 1 Swanst. 90; and see Rhodes v. Rhodes, Johns. 653; 29 L. J. C. 418.

1

There was no exception to the common law rule by reason of the instrument being in writing (a); or by reason of a day being fixed for payment (b); or by reason of the contract being under seal (c).

upon mer

Exceptions to the rule occur with certain mercantile in- Interest struments, as bills of exchange and promissory notes, upon cantile inwhich by mercantile usage interest is allowed without any ex- struments. press reservation or agreement to that effect (d). If a bill or note is expressly made payable "with interest," interest may be claimed according to its terms from the date of the bill or note (e). If the interest is not expressly made payable in the instrument, it is recoverable as damages and only from the time the bill or note becomes due (ƒ). The drawer or indorser can be charged with interest only from the time of his receiving notice of dishonour (g). If the instrument is payable on demand, interest is recoverable only from the time of demand, or from the commencement of an action, which operates as a demand (h).

tracts to

Upon a contract to give a bill or note, interest is recoverable Upon conin the same manner as if the bill or note had been given (1). give bill or Thus, where goods are sold under a contract to pay for them note. by bill and no bill is given, the amount of interest which would have become due upon such bill, if given, may be recovered as part of the price of the goods (j). So, where money was lent upon the the intended security of a bill of which the acceptance was refused, it was held that interest might be charged upon the loan (k). So, upon a guarantee of the payment of a bill or note interest may be reco

(a) Page v. Newman, 9 B. & C. 378. (b) Gordon v. Swan, 12 East, 419; Foster v. Weston, 6 Bing. 709.

(c) See Higgins v. Sargent, 2 B. & C. 348, 351.

(d) Per Abbott, C.J., Higgins v. Sargent, 2 B. & C. 348, 349.

(e) Roffey v. Greenwell, 10 A. & E. 222; Richards v. Richards, 2 B. & Ad. 447; Hopper v. Richmond, 1 Stark. 507.

(f) Gantt v. Mackenzie, 3 Camp. 51; and see Murray v. East India

Company, 5 B. & Ald. 204.

(g) Walker v. Barnes, 5 Taunt. 240.

(h) Pierce v. Fothergill, 2 Bing. N. C. 167; see ante, p. 455.

(i) Sutton v. Morgan, 5 Taunt. 758. (j) Slack v. Lowell, 3 Taunt. 157; Middleton v. Gill, 4 Taunt. 298; Marshall v. Poole, 13 East, 98; Farr v. Ward, 3 M. & W. 25; Davis v. Smyth, 8 M. & W. 399.

(k) Denton v. Rodie, 3 Camp. 493,

496.

Interest on

bonds.

Interest

upon mortgages, etc.

By usual course of dealing.

vered in the same
ranteed (a).

manner as upon the instrument gua

On a bond in a penal sum conditioned for the payment of a smaller sum, interest is payable on the sum secured by the condition without an express reservation of interest, because the penal sum is regarded as the debt (b); but no greater sum is recoverable for the principal and interest than the amount of the penalty (c). On a single bond without condition interest was not recoverable at common law (d). Where payment post diem was made by the obligor of a bond and accepted by the obligee, it was held that, as such payment was a bar to an action on the bond by the statute of Anne, the obligee could not afterwards recover interest for the delay in payment, because there remained no right of action to which such interest could be appended as damages (e).

Upon a mortgage deed containing a covenant to pay the principal and interest on a certain day, but no covenant to pay interest after that day, interest after default in payment on the day cannot be claimed as part of the debt, but may be recovered as damages, because the deed shows the intention of the parties that it should be a debt bearing interest (f). In an action against the vendor of land for a breach of contract in not completing the purchase, interest on the deposit money paid by the purchaser may be claimed and recovered as special damage for the loss of the use of the money (g); but it cannot be recovered in an action claiming merely to recover the deposit as money received for the use of the plaintiff (h).

Interest may become payable according to a customary course of dealing between the parties, showing that it was

(a) Per Tindal, C.J., Hare v. Rickards, 7 Bing. 254, 256.

(b) Farquhar v. Morris, 7 T. R. 124; see Cameron v. Smith, 2 B. & Ald. 305, 308.

(c) Wilde v. Clarkson, 6 T. R. 303; M'Clure v. Dunkin, 1 East, 436; Branscombe v. Scarbrough, 6 Q. B. 13.

(d) Hogan v. Page, 1 B. & P. 337; Foster v. Weston, 6 Bing. 709.

(e) Dixon v. Parkes, 1 Esp. 110; see ante, p. 473.

(f) 1 Wms. Saund. 201 n. (r); Atkinson v. Jones, 2 A. & E. 439; Price v. Great Western Ry. Co., 16 M. & W. 244.

(g) De Bernales v. Wood, 3 Camp. 258; Farquhar v. Farley, 7 Taunt. 592; Hodges v. Earl of Litchfield, 1 Bing. N. Č. 492.

(h) See ante, p. 584; Maberley v. Robins, 5 Taunt. 625; Bradshaw v. Bennett, 5 C. & P. 48.

intended by them that interest should be paid (a); and even compound interest may be charged according to a customary course of dealing (b).

debt or

Interest which is reserved or agreed for in the terms of Interest as the contract is recoverable as a debt (c). Interest which is damages. not so reserved or agreed for is not a debt, but is recoverable only as damages; accordingly, it was held that interest on an overdue bill of exchange, which did not in terms reserve interest, could not be added to the amount of the bill, so as to constitute a good petitioning creditor's debt in bankruptcy (d). A tender of a debt duly made prevents any claim for interest arising after the tender (e).

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under the statute 3 & 4 Wm. IV.

c. 42.

By the statute 3 & 4 Wm. IV. c. 42, s. 28, it is enacted Interest that upon all debts or sums certain, payable at a certain time or otherwise, the jury on the trial of any issue or any inquisition of damages, may, if they shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time, or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term of payment; provided that interest shall be payable in all cases in which it is now payable by law."

Interest under this statute can be claimed only through the intervention and allowance of a jury. Thus, the plaintiff in an action, having agreed to refer his claim without any stipulation for the referee to allow the interest which a jury might have given him, was held to have lost his claim to it (f). So, a mere claim for interest under the statute was

(a) Bruce v. Hunter, 3 Camp. 467; Denton v. Rodie, 3 Camp. 493, 496; Gwyn v. Godby, 4 Taunt. 346.

(b) Bruce v. Hunter, supra; and see Eaton v. Bell, 5 B. & Ald. 34.

(c) Herries v. Jamieson, 5 T. R. 553; Hudson v. Fawcett, 7 M. & G. 348; Nordenstrom v. Fitt, 13 M. &

W. 723.

(d) Cameron v. Smith, 2 B. & Ald.
305; and see Dixon v. Parkes, 1 Esp.
110; cited ante, p. 586; Churcher v.
Stringer, 2 B. & Ad. 777.

(e) Dent v. Dunn, 3 Camp. 296.
(f) Berrington v. Phillips, 1 M. &
W. 48.

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