Pearson v. Ryan

• Decision Date: 20 February 1919
• Docket Number: No. 424.,424.
• Citation: 105 A. 513
• Parties: PEARSON v. RYAN.
• Court: Rhode Island Supreme Court

105 A. 513

PEARSON

v. RYAN.

No. 424.

Supreme Court of Rhode Island.

Feb. 20, 1919.

Appeal from Superior Court, Providence and Bristol Counties; Chester W. Barrows, Judge.

Petition in equity to enforce mechanic's lien by Pere A. Pearson against Peter J. Ryan. From decree rendered, defendant appeals. Affirmed and remanded.

Thomas F. Farrell, of Providence, for appellant.

Hugo A. Clason, of Providence, for appellee.

BAKER, J. This is an appeal by the respondent from a decree establishing a lien entered by the superior court on a petition in equity to enforce a mechanic's lien in accordance with the provisions of chapter 257 of the General Laws. The evidence shows a written agreement by and between the parties, in which the complainant agreed "to build a bungalow" for the respondent and "to furnish all labor and materials" therefor, and the respondent agreed to pay the complainant "the sum of $3,315 in payments as follows: $1,500 when ready for lathing and $500 when plastered; balance of contract when the house is completed." The account filed by the complainant gives credit for two payments on account and for certain materials furnished by the respondent, and claims a balance due of $1,124.28, with interest. While there is nothing in the papers of the case to show it, the transcript indicates a claim of damages by the respondent by way of recoupment for unsatisfactory workmanship and materials.

Upon hearing the parties the court allowed the respondent's claim to the amount of $307.50, and found that there was a balance due the petitioner on his account of $816.78, on which interest from the date of giving notice of the claim was allowed to the amount of $69.12, making a total of $885.90 for which the lien was established. The notice of a claim of lien and the demand of payment were given and made August 29, 1916, and legal proceedings were commenced the following day. The decree was entered March 13, 1918. The only reason of appeal now urged is that the allowance of the item of interest is against the law, in that the petitioner's claim was unliquidated. If the allowance of interest is held to be proper, the amount allowed is not questioned.

Broadly speaking, it is generally held that interest on unliquidated demands will not be allowed as damages. Undoubtedly there is a clear distinction between a claim for damages entirely unliquidated, as, for example, claims for damages arising from assault and battery, from seduction, or from slander and libel, which are wholly at large, and a liquidated claim, where there is an express contract to pay a sum certain at a fixed time. In the former cases, the amount of damages is unknown until determined after the presentation of evidence by a decision, award, or verdict. In the contract case, both parties know what the claim is, and when it is due and payable. It is in dealing with cases lying between these extremes, where the distinction is less clear and obvious, that courts have so differed in their interpretation and application of the rule as to interest that their decisions are far from harmonious as to when interest may be allowed. The question as applied to the precise state of facts presented in the case at bar does not appear to have been considered in any reported case of this court. The respondent cites in his brief three Rhode Island cases in support of his claim, namely, Spencer v. Pierce, 5 R. I. 63, Durfee v. O'Brien, 16 R. I. 213, 14 Atl. 857, and Dary v. Providence Police Association, 27 R. I. 377, 62 Atl. 513.

In Spencer v. Pierce, supra, the question arose on the disallowance of interest by the master in the case on certain sums allowed by him to foe due "for labor and service." The court said, on page 71:

"The well-settled American rule * * * gives interest, though not stipulated for, as an invariable legal incident of the principal debt, from the day of default, whenever the debtor knows precisely what he is to pay, and when he is to pay it"

—citing People v. New York, 5 Cow. (N. Y.) 331, 334, and recommitted the master's report, saying, on page 72:

"We therefore instruct the master to allow interest at 6 per cent. per annum, from the day of default in payment, on all sums allowed by him for labor or service, the amount of which is certain, or can be made certain by computation, under the contract of the parties, and in which the time of payment is fixed, by the terms of the contract, or by the course of deal ing between the parties."

In Durfee v. O'Brien, supra, it is said (16 R. I. on page 217, 14 Atl. 860):

"The time when the payments are due, and the agreement to pay interest, being definite, the charge for interest was properly allowed."

This is clearly a liquidated claim under the rule.

Dary v. Providence Police Association, supra, was an action of assumpsit to recover moneys claimed to be due as sick benefits. There was a plea of the general issue, accompanied by an affidavit of valid defense that the claim for sick benefits had been waived. The case was heard on an agreed statement of facts. As to interest, while the court stated the rule enunciated in Spencer v. Pierce, supra, and cited in Durfee v. O'Brien, supra, it held that a beneficial association ought not to be treated as a delinquent debtor, before demand made upon it, in order to create the relation of debtor and creditor, but allowed interest from the date of the writ, that being the time of the earliest proof of demand. In this case the right to recover at all was denied by the defendant, and apparently in good faith.

Some other decisions of this court relative to the allowance of interest may properly be considered in this connection.

In Hodges v. Hodges, 9 R. I. 32, the master in a matter of accounting disallowed interest on advances made by a husband for the improvement of his wife's estate, in the absence of any evidence of an agreement to pay interest, and the court held that interest should have been allowed and cited as a correct statement of law the following:

"On the money lent, interest in this country is always recoverable, because the defendant has had a use from the plaintiff's money. For the same reason, on money paid on account, or to the use or benefit or at the request of another, interest is allowed from the time of payment, and not merely from the time of notice or demand. * * * Money lent, and money paid, carry interest when they form matter of account, as well as when they are detached transactions."

Weeden v. Berry, 10 R. I. 288, was an action of assumpsit for goods, wares, and merchandise sold and delivered and for work and labor done. The declaration also contained certain common counts, but no count for interest. The case was sent to referees, who allowed plaintiff interest. It was objected to such allowance that there was no count in the declaration claiming interest. The award of interest was upheld. The decision implies that by the terms of the reference, under which power was committed to "determine all questions of law or of fact" in the case, it was within the discretion of the referees to allow interest as damages.

In Cross v. Brown, Steese & Clarke, 19 R. I. 220, 240, 33 Atl. 147, the question as to whether a garnishee should be required to pay interest on its debt due the principal defendant during the time it was restrained by the attachment from paying the debt was considered, and answered in the affirmative, on the ground that the garnishee had had the use of the money in the meantime after it was due, and that a contrary decision would work an injustice, both to the principal defendant and the attaching plaintiff.

In Lonsdale Co. v. City of Woonsocket, 25 R. I. 428, 56 Atl. 448, damages were sought for a continuing trespass resulting from the diversion of water to which the complainant was entitled as a riparian proprietor. The amount of water so diverted and the amount of the resulting damages were both in controversy, and there was conflicting evidence on each point. On the damages, as determined by him, the master allowed simple interest from the date of the filing of the bill, and the court on page 444 (56 Atl. 454) held this finding to be correct. If interest on unliquidated damages in a tort action is properly allowable from the time of commencing legal proceedings, no reason is apparent why a less liberal rule should apply in actions ex contractu.

In Sedgwick on Damages (8th Ed.) § 315, the author says:

"Where interest is...