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Opinion of the Court.
are not liable to pay interest on claims against them, in the absence of express statutory provision to that effect. It has been established as a general rule, in the practice of the government, that interest is not allowed on claims against it, whether such claims originate in contract or in tort, and whether they arise in the ordinary business of administration, or under private acts of relief, passed by Congress on special application. The only recognized exceptions are where the government stipulates to pay interest, and where interest is given expressly by an act of Congress, either by the name of interest or by that of damages.” 127 U. S. 260.
In United States v. McKee, where a claim against the United States for moneys and supplies furnished during the Revolutionary War had been referred by Congress to the Court of Claims with directions to be governed in its adjustment and settlement “ by the rules and regulations heretofore adopted by the United States in the settlement of like cases,” interest was allowed by that court, and by this court on appeal, because Congress was shown to have allowed interest in many private acts for the settlement of similar claims. 10 C. Cl. 231, 235; 91 U. S. 442, 451.
In United States v. Bank of Metropolis, 15 Pet. 377, cited at the bar, no question of interest was suggested by counsel, or considered by the court.
In North Carolina, as elsewhere, in an action against a private person, to recover a sum certain and overdue, interest may doubtless be recovered, either according to the dictum in Devereaux v. Burgwin, 11 Iredell, 490, 495, on the ground of a “promise to pay being implied from the nature of the transaction;" or, as more accurately stated in other cases, as damages for non performance of the defendant's contract. State v. Blount, 1 Haywood, 4; IIunt v. Jucks, 1 Haywood, 173; AlcKinlay v. Blackledge, 2 Haywood, 28. See Young v. Godbe, 15 Wall. 562, 565; Ilolden v. Trust Co., 100 U. S. 72, 74; Price v. Great Western Railway, 16 M. & W. 244, 248; Cook v. Fowler, L. R. 7 H. L. 27, 32, 36, 37; Union Institution for Savings v. Boston, 129 Mass. 82.
But it is equally well settled, by judgments of the Supreme
Opinion of the Court.
Court of North Carolina, that the State, unless by or pursuant to an explicit statute, is not liable for interest, even on a sum certain which is overdue and unpaid.
In Attorney General v. Cape Fear Navigation Co., 2 Iredell Eq. 414, 454, decided in 1843, in a suit on behalf of the State to recover dividends due to it as a stockholder, the corporation, by way of set-off, claimed interest for the State's failure to pay its subscription at the time when it was payable; and Chief Justice Ruffin, in delivering judgment, laid down, as undoubted law, that "the general rule is, that the State never pays interest, unless she expressly engages to do so.”
In Bledsoe v. State, 64 No. Car. 392, 397, decided in 1869, under a clause in the Constitution of the State providing that “the Supreme Court shall have original jurisdiction to hear claims against the State; but its decision shall be merely recommendatory; no process in the nature of execution shall issue thereon; they shall be reported to the next General Assembly for its action;" a claim was made for fuel and provisions furnished to the State Insane Asylum, under written contract of the superintendent, from October, 1863, to April, 1865, with interest from the times of delivery. Upon the question of interest, the court said: “It was decided by this court, in Attorney General v. Cape Fear Navigation Co., 2 Iredell Eq. 444, that the State is not bound to pay interest, unless there is a special contract to that effect. The contract, in this case, must be understood to have been made with reference to the law, as it then stood. But because of the changes in and the disturbed condition of the government, and because payment has been delayed for a long time, we recommend a departure from the rule, so far as to allow interest from the end of the war, say May 1, 1865, until January 1, 1869, when the plaintiff presented his claim to the General Assembly.”
Whether interest not stipulated for in a contract is to be awarded as damages for nonperformance of the contract, or on the ground of an implied promise to pay it, a private person is no less chargeable with interest on debts certain and overdue for money or goods, than on promissory notes or
Opinion of the Court.
bonds obligatory; and the State is no more chargeable with interest in the one case than in the other. The scope
and effect of the bonds now sued on cannot be determined without a careful consideration of the provisions of the statutes from which the officers who executed the bonds derived their authority.
Under the original act of January 27, 1849, the obligations of the State for money borrowed were required to be signed by the Treasurer and countersigned by the Comptroller, “in sums not less than one thousand dollars each, pledging the State for the payment of the sum therein mentioned, with interest thereon at the rate of interest not exceeding six per cent per annum, payable semi-annually at such times and places as the Treasurer may appoint, the principal of which certificates shall be redeemable at the end of thirty years from the time the same are issued."
There is nothing in that statute to show that certificates issued under it are to be negotiable from hand to hand, or assignable by the mere act of the holder, so as to create a contract between the State and any assignee. On the contrary, the statute requires that they shall be registered at large by the Comptroller at the time of his countersigning them; and the only transfer provided for is on the books of the Treasurer, and by surrender of the old certificate and issue of a new one instead thereof to the assignee.
In that act, as no other date is mentioned for the payment of the principal than the date at which it “shall be redeemable,” it would be difficult (as is admitted by the learned counsel for the United States, citing Vermilye V. Adams Erpress Co., 21 Wall. 138, 145) to attribute to the word “redeemable” any other meaning than “payable ;” and the provision that the interest shall be “payable semi-annually at such times and places as the Treasurer may appoint,” naturally relates to interest before the date fixed for payment of the principal, and could hardly be extended to imply an authority to the Treasurer and the Comptroller to bind the State to pay interest after that date.
But any doubt upon this point is removed by the act of De
Opinion of the Court.
cember 22, 1852, pursuant to the provisions of which the bonds in suit were issued.
This act makes new requirements, differing in many respects from, and in so far superseding, the requirements of the former act. It requires all certificates thereafter issued for money borrowed by the State, to be under seal of the State signed by the Governor and countersigned by the Treasurer. It clearly shows that they are to be negotiable, as well by requiring them to “be made payable to or bearer," as by requiring a registry of a memorandum of their original issue only. It omits the provision that the principal “shall be redeemable” at the end of thirty years, and instead thereof prescribes that “the principal shall be made payable by the State at a day named in the certificate or bond.” It requires "coupons of interest to be attached to the certificates;” and both the certificates and the coupons are required to be made payable, either at such bank or place in the city of New York as the Treasurer may designate, or at the public treasury in Raleigh, if preferred by the purchaser.
From the general principle, that an obligation of the State to pay interest, whether as interest or as damages, on any debt overdue, cannot arise except by the consent and contract of the State, manifested by statute, or in a form authorized by statute, it appears to us to follow as a necessary consequence that no authority to the officers of the State to bind it by such an obligation can be implied from the act of 1852, requiring the certificates or bonds issued under it to be made payable at a day named in them, and to have coupons of interest attached to them, and making no mention whatever of interest after the date at which the principal is payable.
In the light of the provisions of this statute, the agreement in the bonds sued on, that the principal sum shall be “ redeemable in good and lawful money” at the place and day therein designated, must be deemed equivalent to an agreement that they shall be payable on that day; and if the further provision by which interest is payable half-yearly “from the date of this bond and until the principal be paid, on surrendering the proper coupons hereto annexed,” could, upon the face of
Opinion of the Court.
the bonds, and without regard to the laws under which they were issued, be construed to include interest after the date at which the principal is payable, and for which interest there were no coupons to be surrendered, it cannot be allowed such an effect, because the State of North Carolina has never authorized its officers to incur any such obligation in its behalf.
This disposes of all the suggestions made in behalf of the United States, except the argument that, the bonds being payable in New York, the payment of interest is to be governed by the law of New York, according to which it is said that the State would be liable to pay interest, like a private person. People v. Canal Commissioners, 5 Denio, 401.
But these bonds are obligations of the State of North Carolina; they were executed, delivered and registered in North Carolina by high officers of the State; the rate of annual interest is fixed at six per cent, the legal rate in North Carolina, and not seven per cent, the then legal rate in New York; and the fact that the bonds were made payable at a particular bank in New York, pursuant to the authority conferred by the statute of North Carolina upon its Public Treasurer, instead of being made payable, as by that statute they might have been, at Raleigh, the capital of the State, cannot affect the extent of the obligation of the State of North Carolina. The manifest object of the alternative, allowed by the statute, of making the bonds payable either at New York or at Raleigh, was to promote the convenience of bondholders; and not to submit the obligation, the construction or the effect of the bonds to the operation of different laws, according to the place at which they should actually be made payable. The case, therefore, falls within the general rule, well established in this court, that contracts are to be governed, as to their nature, their validity and their interpretation, by the law of the place where they are made, unless the contracting parties appear to have had some other place in view. Liverpool Steam Co. v. Phænix Ins. Co., 129 U.S. 397, 453.
Judgment for the defendant.
MR. JUSTICE MILLER, MR. JUSTICE FIELD and MR. JUSTICE HARLAN dissented.