Davis v. Hendrie

Wade, C. J.,

dissenting. The note sued upon in this case is a promise to pay a certain sum of money in six months after date, and then follow these words, “together with interest after maturity, at the rate of four per cent per month until paid,” and by virtue of the foregoing words the plaintiff seeks to recover four per cent per month upon the principal of the note, from and after its maturity to the time of the rendition of the judgment. I do not understand that he claims this as liquidated damages for breach of contract, or as a penalty for; if any such claim was *506made, it should he properly plead, but he claims it as interest, under and by virtue of the statute of the Territory authorizing parties to contract for a higher rate of interest than ten per cent per annum.

It is true enough that our statute authorizes and legalizes any rate of interest the parties shall mutually agree upon, but, if a party recovers five times the amount of interest that the legislature thought just and reasonable, he must do so by virtue of a contract, clear, explicit, certain, definite and positiv'e, and upon the construction of -which there can be no doubt. If a party so victimizes himself by his promise, he must do so in unmistakable terms. No doubtful construction can be given in favor of a contract of this grasping, unconscionable character. Courts cannot supply defects or deficiencies in an agreement of this character; they will not exhaust their ingenuity to find a consideration for such an agreement. The party must stand or fall by the words of his bond, for there is no equity in his cause to supply defects.

The simple inquiry presented by this record is this. Do the words above set forth constitute a contract with all its elements and parts, and such a contract as can be enforced ? By virtue of these words did the maker of the note agree to pay interest for a single moment after the note became due, and did the payee agree to forbear and waive his right to collect the money an instant after the maturity of the note ? We say there was no agreement to delay, and, so far from that, there was an express written agreement to the contrary. Can it be said the note is to run for an indefinite time, simply at the will of one of the parties against the wishes of the other, and in consideration thereof the four per cent per month is to be paid? This could not have been contemplated by the parties, for the express and direct promise is to pay at the end of six months, and when that time arrived payment could have been enforced at once, notwithstanding the pretended agreement as to interest, thus showing that there could have been no valid agreement that the note was to run for an indefinite period after its maturity. The fact *507that the time of payment was fixed in writing in the note, precludes the idea that there could have been a parol verbal agreement to extend the time; and the only agreement to extend the time must be found in the words above set forth, which say nothing about further time and make no intimation of delay in collecting the note.

Then, in the absence of any agreement upon the subject, if the note is to run after its maturity at four per cent per month, how long is it to run % There is no contract on this subject. The minds of the parties have not met and mutually consented to any thing upon this point; on the contrary, they fix a definite certain time when the note shall be paid, and when that time arrives payment can be enforced at once. The maker says I will pay this note at the end of six months, and the payee says you can have the money for just that time and no longer. This is the contract of the parties, simple, definite and certain, and we are asked to extend this six months’ contract over a period of more than two years, when such a thing was not dreamed of by either of the parties, and the court is called upon to make a contract for the parties where they have failed to make it themselves and to which they are utter strangers.

Then how long shall the note run after its maturity \ If the court is to make a contract for the parties upon this subject, it may fix any arbitrary time in the future. The parties have said the money shall be paid in six months, and if there is delay an instant beyond that time, it is wholly at the will and pleasure of either party without the consent of the other. This does not make a contract. This would authorize one party to make a contract for himself and another without the other’s consent. There is no mutuality in such a contract and no consideration for it, and to galvanize these words as to interest into a contract, the court must say that for a sufficient consideration the parties expressly agreed that the note should run after its maturity for an indefinite period, depending upon the will of either party, when in truth such an agreement is a direct contradiction of the written terms of the note.

*508This money is sought to be collected as interest. What is interest ? It is money paid for the forbearance of money. Here there is no agreement to forbear longer than six months. At-the end of that time the contract ceases. The parties promise with express reference to this time, and there is no contract to extend the time. If there is no agreement to forbear longer than six months, then the party can only recover statutory interest after that time. These words as to interest do not continue the written contract, and they furnish no protection as to one of the parties and no guarantee as to' the other. They do not change, vary or modify the absolute contract of the parties, and are not an agreement in and of themselves.

The evident design of this language was to terrify the maker of the note into a performance of his contract by threatening him with pains and penalties if he failed, but pains and penalties are not enforced in this manner. If the party failed to comply with his contract, the plaintiff had his remedy. He could have collected his money at the maturity of the note, and if he failed to do so it is his own fault and his own neglect.

This four per cent per month after maturity cannot be claimed as liquidated damages, for the reason that the words set forth do not make a contract, and for the further reason that liquidated damages are a certain fixed and definite sum, while four per cent per month for an indefinite period, depending upon the will or caprice of one of two parties, is about as uncertain as any thing imaginable.

For these reasons we think interest on the note should be computed at ten per cent per annum after its maturity. And for these reasons I am unable to agree with the majority of the court upon the question in this case.