Kitty Kallen’s 1950s treacle, “Little Things Mean a Lot,” rises to the level of aphorism when contemplating the Court of Appeals decision in Spodek v. Park Property Dev. Associates, a ruling that the holder of a note in default is entitled to interest from the date the sum is due on both the principal and interest portions until the date liability is fixed.[1]�
Not only is this holding meaningful (the whys to be discussed later) but it is also somewhat of a surprise. The reasons it was unexpected are at least twofold. First, the computation of interest predates even the ancient mortgages of old England so why this wheel finds reinvention in 2001 is indeed a revelation. Second, assessing interest on principal and interest appears on the surface like compounding -interest on interest – which is often condemned.[2]� Perhaps that is why no one pursued the issue with sufficient vigor to allow New York’s highest court to opine that no, this is simple interest.
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