Opinion
(April Term, 1796.)
Rule prescribed for calculation of interest when there are partial payments.
THIS case, which had been reserved for the consideration of the Court for three or four years last past, now came on to be decided. The Court said it was no longer necessary to keep this cause waiting for the opinion of the Court, as it had already been considered by the judges and they had proceeded, in consequence of that consideration, to direct in several cases which occurred within the present circuit how interest should be calculated; that on the Western Circuit last spring MACAY, J., had concurred in giving such directions, or had given them himself. [General Davie, at the bar, said MACAY, J., had told him his opinion was as the directions had been given this circuit.]
The interest must be calculated by the following rule: It must be calculated upon the principal, from the time it commenced to the day of the first payment; if the payment was equal and no more than equal to the interest then due, it must extinguish the interest; (280) if it exceeded the interest, the balance, after extinguishing the interest, must be deducted from the principal; if the payment was less than the interest, then the balance of interest must remain until the next payment. Interest must then be calculated upon the principal remaining, to the time of the next payment, which next payment must be applied in the first place to the whole of the interest then due, and so toties quoties. And in the present case, let the interest be calculated by this rule. And the plaintiff had judgment. Vide 4 Term, 613.
Cited: Overby v. Fayetteville, 81 N.C. 61; Reade v. Street, 122 N.C. 303; Aiken v. Cantrell, 127 N.C. 416.