American Iron & Steel Manufacturing Co. v. Seaboard Air Line Railway

Citations

• 233 U.S. 261
• 34 S. Ct. 502
• 58 L. Ed. 949
• 1914 U.S. LEXIS 1286

Syllabus

<p>Whatever may have been the English and early American rule, the present tendency in this country is to allow interest on contracts to pay money from the date the debt becomes due; and so held as to goods sold in Virginia on a credit of thirty days.</p> <p>The acceptance of goods sold on a credit of a specified number of days is equivalent to a promise to pay the money on that day, Atlantic Phosphate Co. v. Grafflin, 114 U. S. 492, and interest accrues as an incident of the debt and not merely as damages.</p> <p>The general rule that interest is not allowed after property of the insolvent is in custodia legis, is not based on loss of interest-bearing quality, but is a necessary and enforced rule incident to equality of distribution between creditors of assets which, in most cases, are insufficient to pay all debts in full.</p> <p>On the facts certified in this case, held that interest was recoverable on a debt for goods sold on a thirty day credit at the legal rate of interest from the expiration of the credit until payment, including the period that the assets of the debtor were in the hands of a receiver in a'suit to foreclose a mortgage.</p>