interest

The most general term that can be employed to denote a right, claim, title, or legal share in something. In its application to real estate or things real, it is frequently used in connection with the terms "estate," "right," and "title."

More particularly it means a right to have the advantage accruing from anything; any right in the nature of property, but less than title. The word "interest" is used throughout the Restatement of Torts, Second, to denote the object of any human desire. Sec. 1.

The word "interest" is used in the Restatement of Property both generically to include varying aggregates of rights, privileges, powers and immunities and distributively to mean any one of them. Sec. 5. "Interest" which may disqualify a judge from hearing a suit is a personal proprietary or pecuniary interest or one affecting individual rights of the judge, and liability, gain or relief to judge must turn on outcome of suit. Mears v. Hall, 263 Ark. 827, 569 S.W.2d 91, 94.

For use of money.

Interest is the compensation allowed by law or fixed by the parties for the use or forbearance of borrowed money. Jones v. Kansas Gas & Electric Co., 222 Kan. 390, 565 P.2d 597, 604.

Basic cost of borrowing money or buying on installment contract. Payments a borrower pays a lender for the use of the money. Cost of using credit or funds of another. A corporation pays interest on its bonds to the bondholders.

See also add on interest

- adverse interest

- against interest

- beneficial interest

- community of interest

- compelling state interest

- compound interest

- conflict of interest

- contingent interest in personal property

- coupons

- equitable interest

- executory interests

- future interests

- identity of interests

- insurable interest

- leasehold interest

- legal interest

- lessee's interest

- lessor's interest

- ownership

- pecuniary interest

- possessory interest

- public interest

- security interest

- senior interest

- terminable interest

- usury

- vested interest.

@ absolute interest

Person has absolute interest in property when such is so completely vested in individual that no contingency can deprive him of it without his consent. So, too, he is the owner of such absolute interest who must necessarily sustain the loss if the property is destroyed.

See also fee simple

- title.

@

Easement.

An easement is an "interest" in land and involves the title. Allen v. Smith, Mo.App., 375 S.W.2d 874, 878.

See easement.

@ accrued interest

Interest earned but not yet paid.

+ accrued interest

Interest that has been earned but is not yet received nor receivable

See also accruing interest.

@ accumulated interest

Interest on bonds and other debts which is due or overdue but not yet paid.

@ compound interest

Interest upon interest; i.e. interest paid on principal plus accrued interest. Exists where accrued interest is added to the principal sum, and the whole treated as a new principal for the calculation of the interest for the next period. Interest added to principal as interest becomes due and thereafter made to bear interest. Wieland v. Loon, 79 S.D. 608, 116 N.W.2d 391, 393.

+ compound interest

Interest that is paid not only on the principal, but also on any interest earned but not withdrawn during earlier periods. Interest upon interest; i.e., when the interest of a sum of money is added to the principal, and then bears interest, which thus becomes a sort of secondary principal

@ conventional interest

Interest at the rate agreed upon and fixed by the parties themselves, as distinguished from that which the law would prescribe in the absence of an explicit agreement.

@ excessive interest

See usury.

@ ex-interest

In the language of stock exchanges, a bond or other interest-bearing security is said to be sold "ex-interest" when the seller reserves to himself the interest already accrued and payable (if any) or the interest accruing up to the next interest day.

@ gross interest

The total interest paid by the borrower which includes administrative costs and expenses to lender

+ gross interest

Total interest payment by borrower including administrative, service, and insurance charges

@

- interest rate

@ interest upon interest

See compound interest, above.

@ New York interest

Computation of interest on the exact number of days in a month and not on a thirty day month.

+ New York interest

System of computing interest by using the exact number of days in a month and not 30 days uniformly

See also Boston interest

@ nominal interest

The interest stated on the security and not the rate based on the price of the security.

@ ordinary interest

Interest computed entirely on the principal with no interest computed on the interest past due.

@ simple interest

That which is paid for the principal or sum lent, at a certain rate or allowance, made by law or agreement of parties. Interest calculated on principal where interest earned during periods before maturity of the loan is neither added to the principal nor paid to the lender. That paid on the principal lent as distinguished from compound interest which is interest paid on unpaid interest. B. F. Saul Co. v. West End Park North, Inc., 250 Md. 707, 246 A.2d 591, 598.

Difference between "simple interest" and "compound interest" is that "simple interest" does not merge with principal and thus does not become part of base on which future interest is calculated. Stewart v. Isbell, 155 Mich.App. 65, 399 N.W.2d 440, 446

@ imputed interest

In taxation, taxable income resulting from the purchase at a bargain of assets for less than their fair value; such occurs when one is so placed as to take advantage of an opportunity not available to others. An estimated charge for interest for use of capital though no cash payment is provided.

See also cost (imputed cost).

For certain long-term sales of property, the IRS has the authority to convert some of the gain from the sale into interest income if the contract does not provide for a minimum rate of interest to be paid by the purchaser. The application of this procedure has the effect of forcing the seller to recognize less long-term capital gain and more ordinary income (i.e., interest income). I.R.C. No. 483.

See also cost (imputed cost)

@

Insurance

See insurable interest

Intervention

Word "interest" as used in provision of Federal Rule of Civil Procedure that on timely application anyone shall be permitted to intervene in an action when representation of his "interest" by existing parties is or may be inadequate and he is or may be bound by judgment in action means specific legal or equitable interest in case. Toles v. U. S., C.A.N.M., 371 F.2d 784, 785, 786.

See Fed.R.Civil P. 24.

Interest sufficient to support intervention as of right must be significant, must be direct rather than contingent, and must be based on a right which belongs to the proposed intervenor rather than to an existing party to the suit. Vazman, S. A. v. Fidelity Intern. Bank., D.C. N.Y., 418 F.Supp. 1084, 1085.

An "interest" in the subject of an action so as to render the holder thereof a necessary party or a proper intervenor does not include a mere, consequential, remote or conjectural possibility of being in some manner affected by the result of the action but must be such a direct claim upon the subject matter of the action that the holder will either gain or lose by direct operation of the judgment to be rendered. Bunting v. McDonnell Aircraft Corp., Mo., 522 S.W.2d 161, 169.

Penalty.

Interest as a penalty is exaction for past-due obligations; it is compensation for delay in payment (e.g. interest imposed by IRS on overdue taxes). Wayne Tp. in Passaic County v. Ricmin, Inc., 124 N.J.Super. 509, 308 A.2d 27, 30.

See also penalty

@ interested party

For purposes of administrative hearing, are those who have a legally recognized private interest, and not simply a possible pecuniary benefit. First Nat. Bank v. Oklahoma Sav. and Loan Bd., Okl., 569 P.2d 993, 996

@ interest equalization tax

Tax imposed on each acquisition by a U.S. person of stock of a foreign issuer, or of a debt obligation of a foreign obligor if such obligation has a period remaining to maturity of a year or more. I.R.C. No. 4911(a). This tax expired in 1974

@ interest-free loans

Bona fide loans that carry no interest (or a below-market rate). If made in a nonbusiness setting, the imputed interest element is treated as a gift from the lender to the borrower. If made by a corporation to a shareholder, a constructive dividend could result. In either event, the lender may have interest income to recognize. I.R.C. No. 7872

@

- interest rate