SECTION IV.

PART-PAYMENT.

A part-payment of a debt is such a recognition of it as implies a new promise; even if it was made in goods or chattels, if they were offered as payment and agreed to be received as payment, or by negotiable promissory note or bill. Thus, in a case where one was sued for money due for a quantity of hay, and pleaded that it had been due more than six years, which was a good defence, the plaintiff proved in reply that defendant had given him within six years a gallon of gin as part-payment for his debt; and it was held that this took the case out of the statute of limitations, and the plaintiff recovered. But a payment has this effect only when the payment is made as of a part of a debt. If it is made in settlement of the whole, of course it is no promise of more. And a bare payment, without words or acts to indicate its character as a part-payment, would not be construed as carrying with it an acknowledgment that more was due and would be paid.

If a debtor owes several debts, and pays a sum of money, he has the right of appropriating that money to one debt or another as he pleases. If he pays it without indicating his own appropriation, the general rule is, that the creditor who receives the money may appropriate it as he will. There is, however, this exception: if there be two or more debts, some of which are barred by the statute, and others are not barred by it, the creditor cannot appropriate the payment to a debt that is barred, for the purpose of taking it out of the statute by such part-payment. (See Section 2 of Chapter XVI.)

SECTION V.

SOME STATUTORY EXCEPTIONS.

The original English statute of limitation, which those in this country are taken from, also provides that if a creditor, at the time when the cause of action accrues, is a minor, or a married woman, or not of sound mind, or imprisoned, or beyond the seas, the six years do not begin to run; and he may bring his action at any time within six years after such disability ceases to exist. And, also, if any person against whom there shall be a cause of action, shall, when such cause accrues, be beyond the seas (which means out of the country, and here, out of the State), the action may be brought at any time within six years after his return. Similar exceptions and disabilities are usually contained in our own

statutes.

The effect of these is, that the disability must exist when the debt accrued; and then, so long as the disability continues to exist, the statute does not take effect. But it is a general rule that, if tho six years begin to run, they go on without any interruption or suspension from any subsequent disability. Thus, if a creditor be of sound mind, or a debtor be at home, when the debt accrues, and one month afterwards the creditor becomes insane, or the debtor leaves the country, nevertheless the six years go on, and after the end of that time no action can be commenced for the debt. Or if the disability exists when the debt accrues, and some months afterwards ceases, so that the six years begin to run when it ceases, and afterwards the disability comes again, it does not interrupt the six years.

The effect of this is, that if, when a debt is due, the debtor is out of the State, the six years do not begin to run. If afterwards he returns to the State, they then begin to run; and, having begun, they continue to run, although he goes out of the State again, and returns no more.

In this country, a rational construction has been given to the disability of being out of the State, and its removal; and it is not understood to be terminated merely by a return of the debtor for a few days, if during those days he was not within reach. If, however, the creditor knew that he had returned, or might have known it by the exercise of reasonable care and diligence, soon enough to have profited by it, this removal of the disability brings the statute into operation, although the return was for a short time only.

SECTION VI.

WHEN THE PERIOD OF LIMITATION BEGINS.

It is sometimes a question from what point of time the six years are to be counted. And the general rule is, that they begin when the action might have been commenced. If a credit is given, this period does not begin until the credit has expired. If a note on time be given, the six years do not begin until the time has expired, including the additional three days of grace. If a bill of exchange be given, payable at sight, then the six years begin after presentment and demand; but if a note be payable on demand, or money is payable on demand, then the limitation begins at once, because there may be an action at once. If there can be no action until a previous demand, the limitation begins as soon as the demand is made. If money be payable on the happening of any event, then

the limitation begins when that event has happened. If several successive credits are given, as if a note is given which is to be renewed; or if a credit is given, and then a note is to be given; or if the credit is longer or shorter at the purchaser's option, as if it be agreed that a note shall be given at two or four months, —— then the six years begin when the whole credit or the longer credit has expired.

SECTION VII.

THE STATUTE DOES NOT AFFECT COLLATERAL SECURITY.

It is important to remember that the statute of limitations does not avoid or cancel the debt, but only provides that "no action shall be maintained upon it" after a given time. Therefore, it does not follow that no right can be sustained by the debt, although the debt cannot be sued. Thus, if one who holds a common note of hand, on which there is a mortgage or pledge of real or of personal property, without valid excuse neglects to sue the note for more than six years, he can never bring an action upon that note; but the pledge or mortgage is as valid and effectual as it was before; and, as far as it goes, his debt is secure; and for the purpose of realizing this security, by foreclosing a mortgage, for example, he may have whatever process is necessary, although he cannot sue the note itself. And the debtor cannot redeem the property pledged or mortgaged except by payment of the debt.'

CHAPTER XXVII.

INTEREST AND USURY.

SECTION I.

WHAT INTEREST IS, AND WHEN IT IS DUE.

Interest means a payment of money for the use of money. In most civilized countries the law regulates this; that is, it declares how much money may be paid or received for the use of money; and this is called legal interest; and if more is paid or agreed to be paid than is thus allowed, it is called usurious interest. By interest is commonly meant legal interest; and by usury, usurious interest.

Interest may be due, and may be demanded by a creditor, on either of two grounds. One, a bargain to that effect; the other, by way of damages for withholding money that is due. Indeed, it may be considered as now the settled rule, that wherever money is withheld which is certainly due, the debtor is to be regarded as having promised legal interest for the delay. And upon this implication, as on most others, the usage of trade, and the customary course of dealings between the parties, would have great influence.

Thus, in New York, it was held that, where it was known to one party that it was the uniform custom of the other to charge interest upon articles sold or manufactured by him after a certain time, the latter was allowed to charge interest accordingly.

In general, we may say that interest is allowed by law as follows: on a debt due by judgment of court, it is allowed from the rendition of judgment; and on an account that has been liquidated, or the balance ascertained, from the day of the liquidation; for goods sold, from the time of the sale, if there be no credit, and if there be, then from the day when the credit expires; for rent, from the time that it is due, and this even if the rent is payable otherwise than in money, but is not so paid; for money paid for another or lent to another, it begins from the payment or loan.

Interest is not generally recoverable upon claims for unliquidated damages, nor in actions founded on tort. By unliquidated damages is meant damages not agreed on, and of an uncertain amount, and which the jury must determine. By torts is meant wrongs, or injuries inflicted. But although interest cannot be given under that name, in actions of this sort, juries are sometimes at liberty to consider it in estimating the damages.

It sometimes happens that money is due, but not now payable; and then the interest does not begin until the money is payable. As if a note be on demand, the money is always due, but it is not payable until demand; and therefore is not on interest until demand. But a note payable at a certain time, or after a certain period, carries interest from that time, whether it be demanded or not.

The laws which regulate interest and prohibit usury are very various, and are not perhaps precisely the same in any two of ou States. Formerly usury was looked upon as so great an offence. that the whole debt was forfeited thereby. The law now, however, is generally, at least-much more lenient. The theory that money is like any merchandise, worth what it will bring and no more, and that its value should be left to fix itself in a free market, appears to be gaining ground. In many States there are frequent efforts so to change the statutes of usury that parties may make any

bargain for the use of money which suits them; but when they make no bargain, the law shall say what is legal interest. And, generally, the forfeiture is now much less than the whole debt.

At the close of this chapter will be found a statement of the asury laws of the States.

There is no especial form or expression necessary to make a bargain usurious. It is enough for this purpose if there be a substantial payment, or promise of payment, of more than the law allows, either for the use of money lent, or for the forbearance of money due and payable. One thing, however, is certain: there must be a usurious intention, or there is no usury. That is, if one miscalculates, and so receives a promise for more than legal interest, the error may be corrected, the excess waived, and the whole legal interest claimed. But if one makes a bargain for more than legal interest, believing that he has a right to make such a bargain, or that the law gives him all that he claims, this is a mistake of law, and does not save the party from the effect of usury.

It may be well to remark, that the law makes a very wide distinction between a mistake of fact and a mistake of law. Generally, it will not permit a party to be hurt by a mistake of fact; but it seldom suffers any one to excuse himself by a mistake of law, because it holds that everybody should know the law, and because it would be dangerous to permit ignorance of the law to operate for any one's benefit.

The question has been very much discussed, whether the use of the common tables, which are calculated on the supposition that a year consists of 365 days, is usurious. In New York, it has been held that it is; but in Massachusetts, and some other States, it is held that the use of such tables does not render the transaction usurious. We think this latter the better opinion.

If a debtor requests time, and promises to pay for the forbearance legal interest, and as much more as the creditor shall be obliged to pay for the same money, this is not a usurious contract. And, even if usurious interest be actually taken, this, although strong evidence of an original usurious bargain and intent, is not conclusive, but may be rebutted by adequate proof or explanation.

When a statute provides that a usurious contract is wholly void, such a contract cannot become good afterwards; and therefore a note which is usurious, if it be therefore void by law in its inception, is not valid in the hands of an innocent indorsee. But it is otherwise where the statute does not declare the contract void on account of the usury. If a note, or any securities for a usurious bargain, be delivered up by the creditor and cancelled, and the