R.C. 1343.02 provides that when a written instrument calls for the payment of interest, the interest accrues until the instrument is paid. In Mayer v. Medancic, 2009-Ohio-6190 [PDF], the Supreme Court was called upon to determine whether that statute permits compound interest, or only simple interest.
The Court held that the statute does not provide for compound interest, and that therefore only simple interest is available — unless the written instrument or some more specific statute provides otherwise. But the Court also held that interest accrues after default on all sums which were due and payable before the default; if the written agreement called for interest to be paid before the default, then R.C. 1343.02 allows interest to accrue on that prior interest (in addition to any principal, of course).
This post was written by Jeffrey M. Nye.
