interest(redirected from rate of interest)
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A comprehensive term to describe any right, claim, or privilege that an individual has toward real or Personal Property. Compensation for the use of borrowed money.
There are two basic types of interest: legal and conventional. Legal interest is prescribed by the applicable state statute as the highest that may be legally contracted for, or charged. Conventional interest is interest at a rate that has been set and agreed upon by the parties themselves without outside intervention. It must be within the legally prescribed interest rate to avoid the criminal prosecution of the lender for violation of Usury laws.
n. 1) any and all, partial or total right to property or for the use of property, including an easement to pass over a neighboring parcel of land, the right to drill for oil, a possibility of acquiring title upon the happening of some event, or outright title. While most often referring to real property, one may have an interest in a business, a bank account, or any article. 2) the financial amount (money) paid by someone else for the use of a person's money, as on a loan or debt, on a savings account in a bank, on a certificate of deposit, promissory note, or the amount due on a judgment. Interest is usually stated in writing at the time the money is loaned. There are variable rates of interest, particularly on savings accounts which depend on funding from the federal reserve or other banks and are controlled by the prevailing interest rates on those funds. Maximum interest rates on loans made by individuals are controlled by statute. To charge more than that rate is usury, the penalty for which may be the inability of a creditor to collect through the courts. The interest rates demanded by lending institutions are not so restricted. The maximum legal interest often granted by the courts on judgments is set by the law of the state. Simple interest is the annual rate charged for a loan, and compound interest includes interest upon interest during the year. 3) one's involvement in business or activities or with an individual which is sufficient to create doubt about a witness being objective---damaging his/her credibility---or it is sufficient connection to give a person "standing" (the right based on interest in the outcome of the lawsuit or petition) to bring a lawsuit on a particular matter or act on behalf of other people. (See: real property, personal property, future interest, compound interest, standing)
INTEREST, estates. The right which a man has in a chattel real, and more particularly in a future term. It is a word of less efficacy and extent than estates, though, in legal understanding, an interest extends to estates, rights and titles which a man has in or out of lands, so that by a grant of his whole interest in land, a reversion as well as the fee simple shall pass. Co. Litt. 345.
INTEREST, contracts. The right of property which a man has in a thing,
commonly called insurable interest. It is not easy to give all accurate
definition of insurable interest. 1 Burr. 480; 1 Pet. R. 163; 12 Wend. 507
16 Wend. 385; 16 Pick. 397; 13 Mass. 61, 96; 3 Day, 108; 1 Wash. C. C. Rep.
2. The policy of commerce and the various complicated. rights which different persons may have in the same thing, require that not only those who have an absolute property in ships and goods, but those also who have a qualified property therein, may be at liberty to insure them. For example, when a ship is mortgaged, after, the mortgage becomes absolute, the owner of the legal estate has an insurable interest, and the mortgagor, on account of his equity, has also an insurable interest. 2 T. R. 188 1 Burr. 489; 13 Mass. 96; 10 Pick. 40 and see 1 T. R. 745; Marsh. Ins. h. t.; 6 Meeson & Welshy, 224.
3. A man may not only insure his own life for the benefit of his heirs or creditors, and assign the benefit of this insurance to others having thus or otherwise an interest in his life, but be may insure the life of another in which he may be interested. Marsh. Ins. Index, h. t.; Park, Ins. Index, h. t.; 1 Bell's Com. 629, 5th ed.; 9 East, R. 72. Vide Insurance.
INTEREST, evidence. The benefit which a person has in the matter about to be
decided and which is in issue between the parties. By the term benefit is
here understood some pecuniary or other advantage, which if obtained, would
increase the, witness estate, or some loss, which would decrease it.
2. It is a general rule that a party who has an interest in the cause cannot be a witness. It will be proper to consider this matter by taking a brief view of the thing or subject in dispute, which is the object of the interest; the quantity of interest; the quality of interest; when an interested witness can be examined; when the interest must exist; how an interested witness can be rendered competent.
3.-1. To be disqualified on the ground of interest, the witness must gain or lose by the event of the cause, or the verdict must be lawful evidence for or against him in another suit, or the record must be an instrument of evidence for or against him. 3 John. Cas. 83; 1 Phil. Ev. 36; Stark. Ev. pt. 4, p. 744. But an interest in the question does not disqualify the witness. 1 Caines, 171; 4 John. 302; 5 John. 255; 1 Serg. & R. 82, 36; 6 Binn. 266; 1 H. & M. 165, 168.
4.-2. The magnitude of the interest is altogether immaterial, even a liability for the most trifling costs will be sufficient. 5 T. R. 174; 2 Vern. 317; 2 Greenl. 194; 11 John. 57.
5.-3. With regard to the quality, the interest must be legal, as contradistinguished from mere prejudice or bias, arising from relationship, friendship, or any of the numerous motives by which a witness may be supposed to be influenced. Leach, 154; 2 St. Tr. 334, 891; 2 Hawk. ch. 46, s. 25. It must be a present, certain, vested interest, and not uncertain and contingent. Dougl. 134; 2 P. Wms. 287; 3 S. & R. 132; 4 Binn. 83; 2 Yeates, 200; 5 John. 256; 7 Mass. 25. And it must have been acquired without fraud. 3 Camp. 380; l M. & S. 9; 1 T. R. 37.
6.-4. To the general rule that interest renders a witness incompetent, there are some exceptions. First. Although the witness may have an interest, yet if his interest is equally strong on the other side, and no more, the witness is reduced to a state of neutrality by an equipoise of interest, and the objection to his testimony ceases. 7 T. R. 480, 481, n.; 1 Bibb, R. 298; 2 Mass. R. 108; 2 S. & R. 119; 6 Penn. St. Rep. 322.
7. Secondly. In some instances the law admits the testimony of one interested, from the extreme necessity of the case; upon this ground the servant of a tradesman is admitted to prove the delivery of goods and the payment of money, without any release from the master. 4 T. R. 490; 2 Litt. R. 27.
8.-5. The interest, to render the witness disqualified, must exist at the time of his examination. A deposition made at a time when the witness had no interest, may be read in evidence, although he has afterwards acquired an interest. 1 Hoff. R. 21.
9.-6. The objection to incompetency on the ground of interest may be removed by an extinguishment of that interest by means of a release, executed either by the witness, when he would receive an advantage by his testimony, or by those who have a claim upon him when his testimony would be evidence of his liability. The objection may also be removed by payment. Stark. Ev. pt. 4, p. 757. See Benth. Rationale of Jud. Ev. 628-692, where he combats the established doctrines of the law, as to the exclusion on the ground of interest; and Balance.
INTEREST, MARITIME. By maritime interest is understood the profit of money
lent on bottomry or respondentia, which is allowed to be greater than simple
interest because the capital of the lender is put in jeopardy. There is no
limit by law as to the amount which may be charged for maritime interest. It
is fixed generally by the agreement of the parties.
2. The French writers employ a variety of terms in order to distinguish if according to the nature of the case. They call it interest, when it is stipulated to be paid by the month, or at other stated periods. It is a premium, when a gross sum is to be paid at the end of the voyage, and here the risk is the principal object they have in view. When the sum is a per centage on the money lent, they call it exchange, considering it in the light of money lent at one place to be returned in another, with a difference in amount between the sum borrowed and that which is paid, arising from the difference of time and place. When they intend to combine these various shades into one general denomination, they make use of the term maritime profit, to convey their meaning. Hall on Mar. Loans, 56, n.