Before we discuss interest properly so called, we must say a word about another analogous but not identical title of compensation, namely, the _poena conventionalis_. It was a very general practice, about the legitimacy of which the scholastics do not seem to have had any doubt, to attach to the original contract of loan an agreement that a penalty should be paid in case of default in the repayment of the loan at the stipulated time.[1] The justice of the _poena conventionalis_ was recognised by Alexander of Hales,[2] and by Duns Scotus, who gives a typical form of the stipulation as follows: 'I have need of my money for commerce, but shall lend it to you till a certain day on the condition that, if you do not repay it on that day, you shall pay me afterwards a certain sum in addition, since I shall suffer much injury through your delay.'[3] The _poena conventionalis_ must not be confused with either of the titles _damnum emergens_ or _lucrum cessans_, which we are about to discuss; it was distinguished from the former by being based upon a presumed injury, whereas the injury in _damnum emergens_ must be proved; and for the latter because the damage must be presumed to have occurred after the expiration of the loan period, whereas in _lucrum cessans_ the damage was presumed to have occurred during the currency of the loan period. The important thing to remember is that these titles were really distinct.[4] The essentials of a _poena conventionalis_ were, stipulation from the first day of the loan, presumption of damage, and attachment to a loan which was itself gratuitous.[5] The _Summa Astesana_ clearly maintained the distinction between the two titles of compensation,[6] as also did the _Summa Angelica_.[7] [Footnote 1: Ashley, _op. cit._, vol. i. pt. i. p. 399.] [Footnote 2: Biel, _op. cit._, iv. 15, 11.] [Footnote 3: Cleary, _op. cit._, p. 93.] [Footnote 4: _Ibid._, p. 95.] [Footnote 5: Cleary, _op. cit._, p. 94.] [Footnote 6: Endemann, _Studien_, vol. i. p. 20.] [Footnote 7: ccxl.] The first thing to be noted on passing from the _poena conventionalis_ to interest proper is that the latter ground of compensation was generally divided into two kinds, _damnum emergens_ and _lucrum cessans_. The former included all cases where the lender had incurred an actual loss by reason of his having made the loan; whereas the latter included all cases where the lender, by parting with his money, had lost the opportunity of making a profit. This distinction was made at least as early as the middle of the thirteenth century, and was always adopted by later writers.[1] [Footnote 1: Ashley, _op. cit._, vol. i. pt. ii. p. 399.]