Emlen v. Lehigh Coal & Navigation Co.

The opinion of the court was delivered, by

Read, J.

The general rule in this state is, that all debts draw interest, the legal rate of which, for one hundred and forty-one years, has been six per cent. This moderate and uniform rate has arisen, in a great measure, from our short and inexpensive proceedings in the case of mortgages, which securities have formed a permanent standard for other money contracts. There are, however, exceptions to the general rule, as in the case of banks, who are the debtors of their depositors, and of trustees wdio have not failed in the discharge of their trusts. And we must undoubtedly add the cases in which the United States and the several states have been prepared to pay their loanholders when their loan fell due, of which it is their practice to notify their creditors beforehand. It is true, that these governments cannot be sued except by their own consent, and can therefore impose terms upon their creditors; but this is not the only reason, for it is obvious that they cannot go round the world searching for the individuals to whom they owe money. The result is, that these debts are payable at a fixed and known place of payment, and at a fixed period, at which time and place the loanholder is to present his evidence of debt, and receive payment. Whether he does or not, interest stops from that moment.

Within the present century large loans have been effected by great municipalities, and by canal and railroad companies of large capital, which are assimilated in amount and extent to at least the loans by the state governments. The city of Philadelphia has a funded debt of nearly twenty-five millions of dollars, and the Pennsylvania Railroad Company has home mortgage-debts of over seven million five hundred thousand dollars. Both these large corporations have their known officers in the city of Philadelphia, and the only real difference between their situation and that of a state government is, that they can be sued. The same rule might therefore be properly applied to them, with perhaps the proper condition that they should be able to show that they always had on hand a sum sufficient to pay the principal and any interest that may be due. In the present case the defendants are one of those large canal and railroad companies whose office and place of business have always been in the city of Philadelphia, and they had in bank, when the bond of the plaintiff fell due, and at all times afterwards, cash to their credit sufficient to pay the loan to the plaintiff, principal and interest, and all other accruing and payable debts of the company, but they did not keep the principal of said loan, or the interest thereof, separate and apart from the rest of their funds. The plaintiff’s bond was dated 21st of April 1840 for $1900, payable on 1st October 1853, with six per cent, interest, payable quarterly. No interest was paid from 1842, when her attorney in fact, Mr. Wistar, died. The plaintiff having been abroad in Europe during the whole of this period, and having no fixed residence, and having no person here authorized to act as her agent until, by a power of attorney executed at London in September 1861, she appointed William S. Vaux her attorney in fact, who received the principal on the 12th October 1861, and the arrears of interest up to 1st October 1853, on the 3d December 1862.

On the 15th September 1853 the defendants published a notice in the newspapers of Philadelphia, that the certificates of the company, falling due on the 1st of October 1853, would be paid on presentation of said certificates at their office, and also that the interest on all certificates so falling due would cease on the 1st of October aforesaid.

The company were not bound to seek their creditors in a foreign country (Co. Litt. 210 b); and the only difference between us and the court below is, that we think it was not necessary for the defendants to set apart specifically for the benefit of their debtor, so as to be entirely beyond their own control, or subject, under any contingency, for their debts or other liabilities, a sum sufficient to cover the debt, principal and interest. We are of opinion that the company did show their willingness and ample ability to pay the debt at all times, and that it wms the negligence of the plaintiff only, which prevented her receiving it when it fell due. In Miller v. The Bank of Orleans, 5 Whart. 503, if it had been shown that the acceptors always had in bank a sum sufficient to pay their acceptances, although the balance to their credit was always being used for the general purposes of the business, they would not have been held liable to pay interest on it.

Judgment reversed, and judgment entered on the special verdict for the defendant.

Thompson, J., was absent at Nisi Prius when this case was argued.