In this case the appeal is taken only from so much of the judgment of the Court below, as allows interest at three per cent. per month from the date of the several advances of money made by the plaintiffs to the defendants until paid.
The only controversy is as to the excess of thirty-six per cent. per annum over ten per cent. per annum; or twenty-six per cent. per annum.
There is no controversy as to the power or the good faith of the agents of the appellant to makethe written agreement for three per cent. per month interest, neither is it pretended that the rate of interest is unreasonable or excessive. The Court, therefore, is obliged to treat the agreement in all respects as though made by the appellant himself in person, upon full knowledge and reflection, and not under any undue advantage.
The agreement is in writing, and in that respect conforms to our statute. (Act to regulate interest, etc. Sec. 2.)
The first objection of the appellant is to the allowance by the Court below of interest, beyond ten per cent. upon the advances, from their dates respectively down to February 13, 1854, on the ground that the written agreement to pay three per cent. per month interest upon them, was without consideration and void.
Money lent and advanced is a good consideration to support a promise in writing, at any time before payment, to pay interest upon the loan from its date, unless when forbidden by some enactment against usury.
It is contended:
1. Upon general principles of law without reference to the statute of California, (Act to regulate interest, etc.,) and as settled in the United States, that he is not liable to paythe first part of the excess of interest over ten per cent. per annum, though he has given his written agreement for it, because, he says, not that the agreement was made under duress, obtained by fraud, or is unreasonable or oppressive in itself, but because it is nudum pactum and void for want of consideration.
As to the second portion of the excess of interest accrued since the date of the agreement, February 13, 1854, the appellant contends he is not liable, because, he says, his written obligation, though it specifies interest at three per cent. per month in totidem verbis, is not in fact an agreement to pay such interest after that date.
This, also, is a strained and harsh construction of the agreement, to which, as we respectfully submit, this Court will not assent, unless forced to it by the express words of the agreement.
Whatever doubt there may be in the English Courts on the subject, it has been from a very early period established as law in the Courts of the United States that a loan of money, so long as it remains unpaid, is a good consideration to support a promise in writing to pay interest from the date of the loan. And in default of any expressagreement, the law will imply a promise to pay interest. See Reed v. Renn's Glass Factory, 3 Cowen, 393, where this whole question received a very complete and able discussion, both at the bar and on the bench. See, to the same effect, Gibbs v. Bryant, 1 Pick. 118; Weeks v. Hasty , 13 Mass. 218; Ilsley v. Jewett, 2 Metc. 168: Sims v. Willing , 8 S. & R. 103; Craven v. Pickett, 1 Vesey, Jr., 62; Lewis v. Bradford , 8 Ala. 632-4; Chitty on Contr. 558; Bouvier's Law Dict., Art. Interest; Pawling v. Pawling, 4 Yeates' Penn. R. 220; Dow v. Drew , 3 N.H. 40; Hawkes v. Saunders, Cowp. 289; Fake v. Eddy's Ex'rs. 15 Wend. 76, 80; Stearns v. Brown, Pickering, 530, 533; 1 American Leading Cases, notes to Selleck v. French, p. 344; Mowry v. Bishop, 5 Paige, 98.
By reference to our statute, it will at once be seen that the agreement is sustained on that ground alone. Sec. 2, is: " Parties may assert in writing for the payment of any rate of interest whatever, on money due or to become due, on any contract." (Griswold v. Sharpe , 2 Cal. R. 23.)
JUDGES: The opinion of the Court was delivered by Mr. Justice Terry. Mr. Chief Justice Murray concurred.
OPINION
TERRY, Judge
The defendant, by an instrument in writing, acknowledged that he was indebted to plaintiffs in the sum of twenty-five thousand dollars for moneys advanced at different times before the date of the instrument, and also a further indebtedness of three per cent. per month on said sum, to be computed from the dates of the several advances.
The Court below rendered judgment in favor of plaintiffs for principal and interest, in accordance with the terms of the instrument. It is contended by the defendant that the judgment is erroneous; because,
1. The promise to pay interest at three per cent. for the time prior to the acknowledgment was without consideration; and, therefore, void.
2. The acknowledgment, by its terms, refers only to past and present indebtedness, and cannot operate as a promise to pay interest for the future.
Our statute provides that parties may stipulate in writing for any rate of interest for the use of money, but where there is no written contract, fixes the rate at ten per cent. per annum.
In this case, the advances were made without any written contract as to the rate of interest; and at the date of the acknowledgment, defendant was legally indebted to plaintiffs in the sum advanced, with ten per cent. per annum interest, from the date of the advances.
The indebtedness was the sole consideration for the acknowledgment; and, in our opinion, was not sufficient to support a contract for the payment of a greater amount than was then due. This view is supported by numerous authorities from the Courts of the different States. In Crampton v. The Administrator of Ballard (10 Vt. 251), held, " That money received under a legal liability to repay it with interest, does not form any legal consideration for a promise beyond that." (See, also, Logan v. Mathews, 6 Barr, 417.) The case of Shirly v. Harris (3 McLean, 330), is almost identical with the one under consideration. The party agreed in writing to pay ten per cent. per annum on a note given before that time, if the note was not promptly met at maturity. The Court held that, " As regards the ten per cent., we think, it cannot be recovered; there was no consideration to support the obligation. Six per cent. is the legal rate of interest in Indiana, though a higher rate, not exceeding ten per cent., will be valid if agreed to in writing. The note on which this interest was to be paid, was given before the date of the one on which this action was brought; there is no consideration, then, for the payment of the ten per cent. interest; it was a voluntary undertaking, and cannot be enforced."
Upon the second point, we do not think the objection of appellant is well founded. The acknowledgment is sufficiently explicit to show clearly that it was the intention of the parties, that interest should be paid at the specified rate from the date of the advances till the payment of the debt, and although the promise, so far as it relates to the time prior to the acknowledgment, is void, for want of consideration, the forbearance of plaintiff was a sufficient consideration to support the promise as to the time subsequent and until final payment.
The judgment of the Court below must be reversed with costs, and the cause remanded for further proceedings.