Arizona Eastern Railroad Co. v. Head

• Decision Date: 10 April 1924
• Docket Number: Civil 2133
• Citation: 26 Ariz. 259,224 P. 1057
• Parties: ARIZONA EASTERN RAILROAD COMPANY, a Corporation, Appellant, v. CHARLES HEAD, Appellee
• Court: Arizona Supreme Court

224 P. 1057

26 Ariz. 259

ARIZONA EASTERN RAILROAD COMPANY, a Corporation, Appellant, v. CHARLES HEAD, Appellee

Civil No. 2133

Supreme Court of Arizona

April 10, 1924

On motion for 12 per cent interest on judgment. Motion denied.

(For opinion in case see ante, p. 137, 222 P. 1041.)

Mr. G P. Bullard, for Appellant.

Messrs Cox & Moore, for Appellee.

OPINION

ROSS, J.

The appellee obtained a judgment against the appellant in the sum of $10,500. Upon appeal to this court the judgment was affirmed on condition that the appellee would remit $6,500. Thereafter the appellee acquiesced in the order of the court by filing his written consent to the reduction of the judgment to $4,000. He has filed with us a motion asking that there be added to said judgment, as modified, interest at the rate of 12 per cent per annum from the date of filing the suit until the judgment is paid, the suit having been filed April 3, 1922. This motion is based upon paragraph 3161 of Civil Code 1913, and is a part of the chapter entitled "Liability of employers for injuries to workmen in dangerous occupations," and reads as follows:

"In all actions for damages brought under the provisions of this chapter, if the plaintiff be successful in obtaining judgment, and if the defendant appeals to a higher court, and if the plaintiff in the lower court be again successful; and the judgment of the lower court is sustained by the higher court or courts; then, and in that event the plaintiff shall have added to the amount of such judgment by such higher court or courts, interest at the rate of twelve per cent per annum on the amount of such judgment from the date of the filing of the suit in the first instance until the full amount of such judgment is paid."

We have had the same motion before us in several cases and in each and every one have refused to add the interest as requested because we felt that it was placing an unfair and unequal burden upon parties sued under the Employers' Liability Law, who appeal their case to the Supreme Court, and therefore a violation of the Fourteenth Amendment to the federal Constitution, as likewise of the provision in our Constitution which prohibits the legislature from enacting any special law "regulating the rate of interest on money" when a general law can be made applicable. However, because of press of business we have not heretofore stated our reasons for disallowing the interest as provided in paragraph 3161, supra.

Recently in the case of Twohy Bros. Co. v. Kennedy, 295 F. 462, in the United States Circuit Court of Appeals for the Ninth Circuit, said paragraph was held to be constitutional, and the interest therein provided for was allowed. We are cited to that opinion upon this motion as being final and determinative of what we should do in the premises. We shall notice that opinion further on.

Interest is the compensation paid for the use of money. It is allowed on the ground of some contract, express or implied, to pay it, or as damages for the breach of some contract, or the violation of some duty. Selleck v. French, 1 Conn. 32, 6 Am. Dec. 185; Bernhard v. Rochester German Ins. Co., 79 Conn. 388, 8 Ann. Cas. 298, 65 A. 134. In cases of torts, such as libel, slander, and actions for damages for personal injuries, interest is added, after the claim is liquidated, as compensation for the detention of the money from the judgment creditor. If the claim is unliquidated and is in dispute no interest is allowed upon the theory that the person liable does not know the sum he owes and therefore can be in no default for not paying. Cox v. McLaughlin, 76 Cal. 60, 9 Am. St. Rep. 164, 18 P. 100; Curtin v. State, 61 Cal.App. 377, 214 P. 1030; Philbrick v. Mundy, 93 N.J.L. 43, 106 A. 361.

The statutes of Arizona provide that all judgments shall bear interest from the time the verdict is rendered (paragraph 642, C.C. 1913) at the legal rate of 6 per cent per annum "unless a different rate is contracted for in writing" (paragraph 3505), except that public service corporations are required to pay 8 per cent per annum on deposits demanded of consumers (paragraph 5523), and except delinquent taxpayers who must pay 10 per cent on delinquent taxes (paragraph 4916), and the state, which is required to pay interest upon its overdue warrants at 5 per cent (chapter 102, Laws 1921). These last classifications, for the purpose of fixing different interest rates than are generally charged for the use of money, are unquestionably reasonable and well grounded. They need no amplification, for in each case the law bears equally upon all of a class, and the legislative judgment that a special interest rate in such cases is proper should be accepted as final.

However, under the Employers' Liability Law, if a defendant is dissatisfied with the manner in which his case was tried, although he may appeal, as may all other dissatisfied litigants, he does so at the risk of being penalized, in the event he loses in the appellate court, by the imposition of interest at the rate of 12 per cent per annum, not from the date the claim was liquidated by judgment or verdict, but from the date of the filing of the complaint. If the same defendant had been sued under the Workmen's Compensation Act or the Lord Campbell's Act, or on any other account, the judgment would bear interest at the rate of 6 per cent per annum from the rendition of the verdict. The relationship in the Workmen's Compensation Law would be the same, employer and employee, and perhaps more frequently than otherwise the litigation under Lord Campbell's Act would be that growing out of the relation of master and servant or employer and employee. Now it is difficult to see what good reason can exist for imposing a rate of interest twice as high on a judgment obtained under the Employers' Liability Law as one obtained under the Workmen's Compensation Act or Lord Campbell's Act, and dating from the time of the filing of the complaint rather than the date of verdict. Is the classification based upon the incident of the remedy pursued by the employee, rather than upon any distinction in the class of employment, reasonable and well grounded, or is it not extremely arbitrary and capricious?

The rule laid down in Barbier v. Connolly, 113 U.S. 27, 28 L.Ed. 923, 5 S.Ct. 357 (see, also, Rose's U.S. Notes), is that special burdens "do not furnish just ground of complaint if they operate alike upon all persons and property under the same circumstances and conditions." The identity of circumstances or conditions in this case is not made the criteria for the classification, but rather the incident of the remedy selected by the complaining party. As a common-sense proposition, is it giving equal protection to a defendant under the Employers' Liability Law who appeals his case for review, to charge him interest at the rate of 12 per cent from the date of the filing of complaint against him, whereas every other dissatisfied defendant or defeated party may appeal his case and be charged only 6 per cent interest from the date of the rendition of verdict against him? The discrimination is not only in the rate of interest charged, but in the time it begins to run.

In the Twohy Bros. case, relied upon by the movant, there is cited Louisville R. Co. v. Stewart, 241 U.S. 261, 60 L.Ed. 989, 36 S.Ct. 586 (see, also, Rose's U.S. Notes), as sustaining the right to impose this additional interest. The question there was as to whether the appellate court of Kentucky violated the "due process" provision of the Fourteenth Amendment by adding 10 per cent interest to the judgment. But it seems the statute of Kentucky was a general one applying to all defendants alike. The court said:

"But the railroad company obtained a supersedeas and the law of the state makes ten per cent the cost of it to all persons if the judgment is affirmed."

Looking up the statute referred to in the above opinion we find it in Louisville etc. v. Sharp, 91 Ky. 411, 16 S.W. 86. That statute allows to every judgment creditor whose judgment is superseded 10 per cent damages. It has no favorites, nor does it unduly burden any particular litigant.

A judgment debtor is a judgment debtor, whether he becomes such on a written contract or an implied contract or on account of the violation of some duty. His "circumstances and condition" as a litigant, or in connection with the facts giving a right of action, may very materially differentiate him and his duties and rights from others, but after the entry of judgment against him that difference disappears. His obligation to pay without appealing, if he is an employer engaged in a hazardous occupation, is no greater than if he suffered judgment upon a promissory note or for negligence in operating his automobile, or for money had and received as upon an implied contract. We can see no difference in judgment debtors, their duties and obligations, upon which to predicate a classification for the purpose of making it easier or less expensive for one to appeal his case than another. Indeed, the legislature has not attempted to allow interest at 12 per cent against all appellants from judgments for damages occasioned in hazardous occupations, but only those sued under the Employers' Liability Law. It does not reach those sued under the Workmen's Compensation Law or Lord Campbell's Act, however hazardous the employment may be.

Other cases cited by the Circuit Court of Appeals in Twohy Bros. v. Kennedy, supra, to support its opinion are cases in which laws allowing the plaintiff an attorney's fee for instituting and prosecuting the action have been sustained. For instance, in Atchison etc. R Co. v. Matthews, 174 U.S. 96, 43 L.Ed. 909, 19 S.Ct. 609 (see, also, Rose's U.S. Notes), the court had...