Garard v. Monongahela College

Mr. Justice Trunkey

delivered the opinion of the court,

This action is for the recovery of interest for nine years on two hundred dollars, and is founded on an instrument under seal whereby the defendant promises to pay said sum in eight equal annual instalments, the first to be due and payable when the sum of fifty thousand dollars has been secured by cash or bonds for the endowment of Monongahela College. He further promises to pay the interest annually on any unpaid amount of said two hundred dollars, which interest shall be payable in advance on the first day of July, and shall be subject to the order of the Board of Trustees for the payment of salaries of professors and teachers.

Interest was paid for the first three years. This fact tends to show,'as the plaintiff contends, that the parties understood the writing to mean that if the college should secure in cash and bonds an endowment fund of fifty thousand dollars, then the defendant shall pay the two hundred dollars in eight equal annual instalments; and on failure to secure so much for said fund, said two hundred dollars shall not be due and payable, but the defendant shall pajr the interest of two hundred dollars annually forever; in either case the interest to begin on the first of July after the date of the bond. But the payment of interest is by no means conclusive in favor of such construction. It is obvious that the parties contemplated that the named sum for endowment could and would be raised. In that view the defendant paid the interest, and after the lapse of a reasonable time for securing the amount he stopped payment. Such payment is not enough to change the promise into something else than is written.

According to a statement in the plaintiff’s argument, it has secured only about thirty thousand dollars for the proposed fund. There can be no pretence that the first instalment is due and payable. By the letter of the instrument no interest is due until that instalment becomes due. Then the interest will be due on all unpaid instalments, in advance. Without the express stipulation that the seven undue instalments shall bear interest from the date the first becomes due, none would bear interest until payment of the principal could be made or demanded. The stipulation for interest constitutes the second part of the argument, and has full effect in its application to undue instalments. It obligates payment of interest on seven eighths of the debt before the same is due. But when there is no debt there is no interest, and the instrument is conditional, so that there is no debt until the whole of fifty thousand dollars is secured.

The meaning of the instrument is plain; and though the purpose of raising the fund is most worthy, and for three years the defendant generously' paid interest on money lie did not owe, its words should not be violently wrested so as to make an obligation to pay twelve dollars annually for all time, in ease the college fails to secure the designated sum for endowment. If that was intended it could easily have been expressed. If the defendant has been bound to pay interest at all, he is bound perpetually. The instrument on its face does not import such undertaking. It is conditional, and unless the condition be performed there is no contract that can be enforced ; were it true that until the sum of two hundred dollars becomes payable, the defendant is liable to pay the interest, he could not tender said sum and stop the interest, for the college is not bound to receive it before it is due.

Judgment reversed and procedendo awarded.