Browne v. Steck , 2 Colo. 70 ( 1873 )

Hallett, C. J.

By the revenue act of 1864 (13 Stat. at Large, 295), an instrument not stamped according to law might be stamped in the presence of the court, and by the act of 1866 (14 Stat. at Large, 143), authority was conferred on the collector of the district to affix the proper stamps in all cases in which they had been omitted. Under the act of 1866, the collector was authorized to remit the penalty prescribed by the act, within twelve calendar months.from the 1st day of August in that year, upon satisfactory proof that the omission to stamp the instrument was not intentional. This act was subsequently amended (16 Stat. at Large, 257) as to the time within which the collector should have power to remit the penalty, by striking out the date 1866 and inserting 1871, and thereby it was required that the instrument should be presented to the collector within twelve calendar months from the 1st day of August, 1871. In this instance, the promissory note was presented to the collector in February, 1871, prior to the time fixed by the act of 1870, but we think that the collector had full power to remit the penalty at that time. The limitation expressed in the act of 1866, as well as the amendment of 1870, was designed to insure diligence on the part of the holders of unstamped instruments, and the act should be regarded as extending the time within which the collector might remit the penalty to the 1st day of August, 1872. The seventh, eighth and ninth interrogateries propounded to the witness Rogers were designed to elicit the facts respecting the indorsement of the note, which, under the issue joined on the fourth plea of defendant Browne, were a proper subject of inquiry. The objection that Rogers did not disclose the nature of the authority given him by Wilcox is not sufficient to sustain an exception to the deposition. Whether the authority to Rogers was by parol, or in writing, and the exact language by which it was conferred, might have been ascertained upon cross-examination, and defendants below having neglected to interrogate the witness upon those points, it was no objection that the testimony was not as full as it might have been made. It is also claimed that this deposition should have been put in evidence before the plaintiff closed his case, the affirmative of the issue being upon him. But if this should be conceded, the order in which testimony is to be introduced rests in the discretion of the court, and it is no ground of error that the deposition was received after the defendants had closed their case. As to the weight of the testimony, there is no such preponderance in favor of the defendants below as requires that a new trial shall be awarded. The witnesses Wilson and Rogers are opposed throughout, and we know of no rule which requires that the court should accept the testimony of one of them in preference to that of the other. It is true that Rogers does not state that the payments of $63.80 and $90, mentioned by Wilson, were not made, but he was asked to state what payments had been made, by which, under the obligation of his oath, he was required to state all payments of which he had knowledge. Nothing less than this would be the whole truth, and when he answered that the payments indorsed on the note had been made, he should be understood as affirming that there were no others. Independent of this, it is by no means clear that a jury or a court trying an issue of fact is bound to give full credit to the testimony of a party to the suit. Ordinarily, the presumption in favor of a verdict will not yield to the uncorroborated testimony of a party to the suit, or, at all events, this must be the case when the cause comes up on error. A question of greater difficulty arises out of the stipulation in the note to pay interest, after maturity, at the rate of ten per cent per month. The damages awarded for the detention of money after the day of payment are measured by the value of the money during the time which it has been withheld. This is the reasonable rule of compensation, which restores the plaintiff to that which he has lost by reason of the breach of the contract, and compels the defendant to surrender that which he has gained by the failure to keep his obligation. Beckwith v. Hartford, P. & T. R. R., 29 Conn. 269. In law, the sum thus awarded is regarded as damages for the breach of contract, which, it has been held, may not be regulated by the parties. Talcott v. Marston, 3 Minn. 339; Daniels v. Ward, 4 id. 168.

There is unquestionably a technical difficulty in enforcing a contract for the payment of interest after the same contract has been broken by the non-payment of the principal sum, but this difficulty may be overcome by regarding the interest agreed upon, as damages which the law will award, as a compensation to the injured party. I concede that in this view the parties will be allowed to liquidate the damages to be awarded for the non-payment of money, but to this there can be no objection, where, as with us, there is no law against usury, and the agreement of the parties, as to interest, is expressly sanctioned. Although the authorities are not uniform upon the point, I conceive that the rule, that the parties to a contract for the payment of money may not liquidate the damages to be recovered upon breach thereof, was invented to support the statute against usury. Orr v. Churchill, 1 H. Black. 232.

By our statute the rate of interest is not arbitrarily fixed at ten per cent, but it is declared that such shall be the rate when no other is established by the parties. The theory of the law is, that money may be worth more or less than ten per cent per annum, and that the parties to the contract may determine its value ; but if no agreement is made respecting it, the value shall be ten per cent per annum. Under this statute the parties may determine the value of the use of the money before it falls due, and it would seem that their estimate of its value, after it falls due, should be accepted, as the true measure of damages, until it is shown to be incorrect. The law seeks to indemnify the plaintiff for the loss he has suffered by the breach of the contract, and it is fair to presume that the rate fixed by the parties affords a just rule of indemnity. If, however, the rate of interest specified in the contract greatly exceeds the real value of the money, it is to be regarded as a penalty for the non-payment of the principal sum, rather than a just recompense for detaining it. Where it is clearly apparent that the rate is fixed for the purpose of enforcing payment, and not for the purpose of compensating the lender, there can be no better reason for exacting the penalty, than in the case of a penal bond. Whether the penalty grows with the lapse of time, or is given in a gross sum, the principle is the same. If it is alleged that the interest specified should be regarded as a penalty, evidence of the going rate of interest at the date of the contract should be heard in order that the court may determine the fact. In this the court will not nicely consider whether the rate agreed upon slightly exceeds the going rate, but if the parties have gone far beyond the just valuation of the use of the money, the fair inference is that it was intended as a penalty. These views have not been adopted without consulting numerous authorities bearing upon the subject, which do not proceed upon any uniform rule. These authorities are collected in 1 Am. Lead. Cas. 503, and in the briefs of counsel in the case of Young v. Thompson, 2 Kan. 83. From what has been said it will appear that the stipulation in the note to pay interest after maturity was prima facie sufficient to establish the measure of damages to be recovered for the breach of the contract. If it was, in fact, intended as a penalty to enforce payment of the principal sum, this might have been shown by proof that the going rate of interest at the date of the note was much less than that expressed in the instrument. Ho such proof was offered, and therefore the court was at liberty to accept the stipulation of the parties, as establishing the measure of damages. Estimating the damages according to the stipulation in the note, and rejecting the payments which were mentioned by Wilson, as not having been indorsed upon the note, the judgment appears to have been rendered for a less sum than was due upon the note, but of this plaintiffs in error cannot complain.

The judgment of the probate court is affirmed, with costs.

Affirmed.