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4 Ohio 341

Watkinson v. Root

Ohio Supreme Court

Decided December 15, 1829

Ohio Supreme Court · decided 1829-12-15

<p>This was an action of assumpsit to recover a sum of money, as interest, upon a special contract, and was reserved from Medina county.</p> <p>There was a contract between the parties, dated in April, 1826, by which the defendant agreed to pay the plaintiff four thousand five hundred and eighty-six dollars, in four equal annual payments, in the years 1830-31-32-33, with lawful interest, to be computed from July 1, 1825, and to be paid annually. This suit was brought in 1829, to recover the arrearages of interest which had accrued; and the only question was, whether interest was allowable upon the successive annual charges of interest, after they fell due.</p>

Relies on Cooley v. Rose · Foster v. Hooper

Decided 1829-12-15

By the Court:

¶1An agreement, after interest is due, to turn it into principal, is valid. 4 Term, 612; 2 H. Bl. 144.

¶2*It is, however, understood that in England, at least until recently, an agreement, at the time of an original contract, that if interest be not paid at the end of the year it shall be deemed principal, and carry interest, will not be enforced. 1 Johns. Ch., and cases cited. This is claimed to be a rule of policy, and it is supposed that a contrary rule would tend to oppression, hard dealing, and other evils. We deem it unnecessary to inquire into the correctness of this policy, although the current opinions of modern political economists render it at least doubtful.

¶3Such a contract as the present is prohibited by no statutory provisions, and we see no reason why it should not be enforced. 'The decision of a respectable court is found (Adams, N. H. 179) *342where interest upon interest was allowed, in a case similar to the present, and we are willing to follow the precedent, (a)

¶4 An action will lie to recover interest. .2 Mass. 613; 3 Mass. 221 Where money is payable on demand, interest is not recoverable until demand made. 4 Bibb, 246; 2 Bibb, 471.
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