McCutchen v. Town of Freedom ( 1870 )

Berry, J.

By the Court This action is brought upon forty-two pieces of scrip, or evidences of indebtedness, of which the following is a sample. •

“Letter B, No. 5, State of Minnesota, County of Waseca, Town of Freedom; Freedom Town Bond. Bounty to Yolunteers. The town of Freedom will pay to Melvin J. Whipple, a volunteer irom said town, or bearer, the sum of one hundred (100) dollars, with interest at the rate of twelve per cent, annually, payable two years from date, for and in consideration of services by him rendered in the army of the United States, as a volunteer from said township. Bated this 10th of April, 1865.” (Signed and stamped.)

The defendant interposed a demurrer which the district court disallowed, ordering judgment for the plaintiff, for the amount of the principals of the several pieces of scrip, or evidences of indebtedness, together with interest on each of the same at the rate of _ twelve per cent, per annum, until the maturity of each respectively, and at the rate of seven per cent, per annum after such maturity.

The question is whether this allowance of interest was right. Ch. 20. Laws of 1869, upon which the counsel for plaintiff mainly relies, provides; “That the action of the supervisors of any town in this State, in *. * issuing * * scrip, or other evidence of indebtedness, to pay bounties to soldiers, * * * and pursuant to such action by them heretofore had, * * and' any tax which has been levied by any of the authorities specified in this act for the payment of the principal and interest, or either, of any * * scrip, or other evidences of indebtedness, issued for the purpose herein before mentioned, be and the same is hereby legalized, and made valid, and the levy and collection of a tax for the payment of the principal and interest thereof shall be legal, and binding on such * * town, the same as if such action had been fully authorized bylaw, and such tax shall be collected in the same manner as other * * town taxes are now collected. ”

It is contended by the defendant’s counsel: 1st. Thát as interest is not recoverable at common law upon public indebtedness, the act cited should be strictly construed, and that as it does not expressly legalize the agreement to pay interest, no interest should be allowed :

2d. That if any interest should be allowéd, it should be allowed at the rate of seven per cent, only, till maturity, and no interest should be allowed after maturity.

We think neither of these positions tenable. The act of 1869 is to-be construed neither strictly, nor liberally, but fairly, and in such way as to árrivedf possible at the intent of the legislature. This act provides that the action of the supervisors in issuing scrip, or evidences of indebtedness to pay bounties to soldiers, be, and the same is hereby legalized, and made valid. • What was their action in this case? It was the issuing of scrip, or evidences of indebtedness in which they expressly agreed to pay certain principal sums, with interest thereon at twelve per cent, per annum.

The agreement to pay interest was just as much a part of their action as was the agreement to pay the principals, and we are of opinion that the former was legalized, equally with the latter. This opinion is fortified by a reference to subsequent clauses of the act, by which taxes which have been levied for the payment of principal and interest of the scrip issued are legalized, and made valid, and by which the future levy and collection of taxes for the payment of such principal and interest is made legal and binding. These provisions would be absolutely senseless unless the act contemplated the existence of an obligation to pay interest. Interest after the maturity of the paper at seven per cent, per annum, (which was rather in the nature of damages for the detention of money due, than interest strictly so called) was properly allowed under Sec. 1, Ch. 23, Gen. Stat., which provides, that “ interest for any legal indebtedness shall bo at the rate of seven dollars upon one hundred dollars for .a year, ” &c.

The counsel for the respondent argued, that if the act of 1S69, was held to legalize the agreement made by the town in this case to pay twelve per cent, interest, it would also legalize an agreement to pay twenty-dive per cent. This does not necessarily follow; but if it did, it would furnish no good reason for putting any other construction upon the act of 1869, than that which we have expressed.

Order affirmed.