Opinion
November 5, 1931.
January 25, 1932.
Present: RUGG, C.J., WAIT, SANDERSON, FIELD, JJ.
Interest.
By reason of the provisions of G.L.c. 107, § 3, an oral agreement to pay more than six per cent upon money lent cannot be enforced in a suit in equity under G.L.c. 214, § 3 (7).
BILL IN EQUITY under G.L.c. 214, § 3 (7), filed in the Superior Court on November 12, 1930.
In the Superior Court, the suit was heard by Sisk, J. A final decree entered by his order is described in the opinion. The defendant Beal appealed.
The case was submitted on briefs.
E.R. Greenhood, for the defendant Beal.
G.W. Cox, for the plaintiff.
This is an appeal from a final decree entered upon a bill to reach and apply which established that the defendant was indebted to the plaintiff in a certain sum with interest at twelve per cent from a date stated. The defendant contends that the allowance of interest at a greater rate than six per cent per annum was error. The contention is sound. G.L.c. 107, § 3, provides that, with exceptions not here material, no greater rate of interest than six per cent "shall be recovered in a suit unless the agreement to pay it is in writing." Since St. 1867, c. 56, it has been competent for parties to a transaction to agree upon and to pay and receive any rate of interest; but recovery by proceedings in court has been allowed at a greater rate than six per cent only when the agreement to pay the greater rate is in writing. See Marvin v. Mandell, 125 Mass. 562, 564.
In the case before us there was no agreement in writing with reference to the rate of interest. There was evidence from which a promise to pay interest at the rate of twelve per cent could be found. That, however, is not enough to sustain the decree in this regard. A written agreement was essential to recovery by decree.
In all other respects the decree is unchallenged and is to be affirmed. It must be modified by providing that interest at the rate of six per cent per annum be paid on the principal sum from May 17, 1930, and the suit is remanded for entry of a decree in accord herewith.
Ordered accordingly.