Plaintiff bank lent a loan to Defendant shipping company, which was secured inter alia by mortgage charged over two ships of the shipping company and guarantees provided by other Defendants. The shipping company failed to repay the principal and interest, so the bank sued it for the outstanding principal and interest, as well as default interest, and also claimed for the enforcement of ships’ mortgages. As to the interest and default interest, the bank contended that they should be calculated as compound interest and the compound interest should be accrued from compound interest. The court held that the bank could recover the outstanding principal, interest and default interest, and those debts had priority for clearance from the proceeds of the sale of the mortgaged ships. The court also held that other Defendants, as guarantees, should be jointly and severally liable for the debts. However, the court judged that pursuant to the current law, the compound interest could not be accrued from compound interest in a financial loan agreement.