Bennett v. Coal

• Decision Date: 05 March 1912
• Citation: 70 W.Va. 456
• Court: West Virginia Supreme Court
• Parties: Bennett v. Fedeeal Coal & Coke Co.

70 W.Va. 456

Bennett

v.Fedeeal Coal & Coke Co.

Supreme Court of Appeals of West Virginia.

Submitted June 14, 1911.

Decided March 5, 1912.

1. Interest When Allowable.

As a general rule, where plaintiff's demand is liquidated, or if unliquidated, can be readily ascertained by computation, interest thereon should be allowed, if the demand be for work done or material furnished, from the date the labor is done or material furnished, or from the date when by the terms of the contract payment should have been made. (p. 459).

2. Same Implied Contract.

When there is no express contract to pay interest, there is generally an implied contract to do so. (p. 459).

3. Same Payment of Principal Action to Recover.

Where the contract or obligation expressly stipulates for the payment of interest the interest becomes an integral part of the debt, and payment and acceptance of the principal sum will not, as a general rule, defeat a subsequent action to recover the interest not paid, carried by the contract, (p. 459).

4. Same Recovery Implied Contract.

But where the contract does not so specifically provide for payment of interest, hut the right thereto is by an implication, Interest is considered as damages, and not as forming the basis of the action, and is recoverable only along with the principal sum and as an incident thereto, and if the principal sum be accepted in settlement the right to the damages is lost and no separate subsequent action can be maintained therefor.. (p. 459).

5. Accoed and Satisfaction Balance Due for Interest.

The eld common law rule applied in Nivon v. Kiddy, 66 "W Va. 355, that payment by a debtor and receipt by the creditor of a less sum than is due upon an undisputed liquidated demand is not satisfaction of the debt, although the creditor agrees to accept it as such, is inapplicable to a balance claimed for interest due by way of damages on an implied agreement to pay interest, (p. 464).

6. Same Action to Recover Payment of Principal.

The fact that receipt of payment without interest may have been done under protest of a creditor will not change the legal effect of his act on his right to maintain a subsequent separate suit to recover the interest, (p. 465).

(Beannon, Peesident, absent).

Error to Circuit Court, Marion County. Action by John E. Bennett against the Federal Coal & Coke Company. Judgment for defendant, and plaintiff brings error.

Affirmed.

M. Powell, C. Powell and Scott C. Lowe, for plaintiff in error, W. S. Meredith, for defendant in error.

Miller, Judge:

Plaintiff brings error to the judgment below, setting aside the verdict in his favor and awarding defendant a new trial.

The suit wras in assumpsit, and except one item, "To one dump cart, $50.00," the purpose of the suit Is to recover interest on the principal sum, $21,085.00, for building certain coke ovens, during the year 1905-06, audited &nd credited by defendant to plaintiff, some months prior to payment.

The correctness of the judgment below and the rulings of the court on the trial, and in the giving and refusing of instructions to the jury, for the most part, depend upon the effect of a settlement made, December 4, 1906, and the following receipt, then executed and delivered by plaintiff to defendant as follows:

"Pittsburg, Pa.' Dec. 4th, 1906. "Received of Federal Coal & Coke Co., twenty-one thousand six hundred ninety-five dollars in form of 2-6 mo. notes for $10,000. each, and check for $1695.00 in settlement of account. $21,695.00. John R. Bennett."

It is conceded that the notes and the check receipted for cover the exact amount of the principal, and $610.00, included in the check for interest on the notes from their date to date of maturity, and that nothing was included, or intended to be included for interest prior to the date of the receipt and settlement, The interest which the plaintiff sues for in this action is the interest which he claims accrued to him on the principal sum, from April 1, 1906, when he alleges the principal sum should have been paid, and the date of his receipt and settlement, claiming to have accepted the notes and check under protest, and with the understanding on his part that the prior interest was to be adjusted between him and the president of the defendant company, when he should recover from his then illness, and be able to attend to business. The president died a few days afterwards, and the interest was never adjusted, wherefore this suit.

Refusing plaintiff's two instructions embodying the contrary proposition, the court below on the trial, at the instance of defendant and over the objection of plaintiff, instructed the jury in substance, that if they believed from the evidence that plaintiff and defendant made a settlement on December 4th, 1906, and that the plaintiff accepted from the defendant the two notes for ten thousand dollars each, and the check or voucher for $1695.00, and thereupon signed and delivered to the defendant the receipt above mentioned, plaintiff was not entitled in this action to recover any interest theretofore accrued on the items, and amount therein settled, and that he was estopped from recovering any such interest in the absence of an express contract on the part of the defendant to pay the same, made before or at the time of said settlement.

It is not pretended or proven that there was any such express contract. Plaintiff relies solely on an implisd promise to pay interest from April 1, 1906, the latest date when by the terms of his contract, as he claims it, estimates were to have been furnished him, and the estimates, or principal sums paid.

The general rule of law in this, as in other jurisdictions, undoubtedly is, that where the demand of the plaintiff is liquidated, or if unliquidated, can be readily ascertained by computation, as in this case, interest thereon will be allowed, if the demand is for work done or materials furnished, from the time the material is furnished, or work completed, or from the time when by the terms of the contract payment should, have been made. 22 Cyc. 1513, 1514, 1540, 1543; Becker v. New York, 77 N. Y. App. Div. 635, 78 IN". Y. Suppl. 1064. It is equally well settled, as shown by the authorities cited, that when there is no express contract to pay interest, there is an implied contract to do so. Chapman v. Shepherd, 24 Grat. 377; Roberts v. Codec, 28 Grat. 207; Cecil v. Deyerle, Id. 775; McVeigh v. Howard, 87 Va. 603; Kent v. Kent, 28 Grat. 840, Cecil v. Hicks, 29 Grat, 1.

But what is the relationship of the interest to the principal? Is the interest a part of the debt, or only an incident to it, recoverable along with the debt, or by way of damages for the wrongful detention thereof? On the proper answer to these questions depends the answer to the question above propounded, what is the legal effect of the receipt given in December, 1906?

The authorities we believe to be uniform in holding, that where the contract or obligation to pay money bears interest on its face, by express stipulation, the interest becomes an integral part of the debt, as much so as the principal itself. 16 Am. & Eng. Ency. Law, 1032; 22 Cyc. 1570, and authorities cited in note 78, and the Virginia authorities above cited. At least payment of the principal sum will not defeat a subsequent action to recover the balance for interest carried by the contract. 22 Cyc. 570-1, and notes; 16 Am. & Eng. Ency. Law. 1033.

But the contract we have here is one which does not bear interest on its face; there is only an implied contract to pay in- terest. What is the relationship of interest to principal in such cases? Is it a mere incident to the demand, and recoverable only in an action on the demand itself, and by way of damages for the wrongful detention of the money, as counsel for defendant contend; or is it as in the case of an express contract, an integral part of the debt, recoverable by separate action after payment of the principal, as is argued by counsel for plaintiff? This is the pivotal question.

For the proposition that interest on an implied contract is a mere incident to the debt, and that after payment of the principal interest cannot be recovered by separate action, defendant's counsel rely upon the following authorities: Brewster v. Wakefield, (Minn.) 69 Am. Dec. 343; Graves v. County, 104 Fed. Rep. 61; Southern By. Co. v. Dunlop Mills, 76 Fed. Rep. 505; Smith v. Buffalo, 39 K Y. Suppl. 881; Fake v. Eddy, 15 Wend. 76; Stewart v. Barnes, 153 U. S. 456, and the leading case of Moore v. Fuller, 2 Jones (Law) 205, a North Carolina case, and 22 Cyc. 1572, 1573.

These authorities fully support the proposition contended for. In Stewart v. Barnes, supra, Judge Shiras says: "Interest in such cases is considered as damages, and does not form the basis of the action, but is an incident to the recovery of the principal debt. The right of action is the right to compel the payment of the money which is being retained. When he who has this right commences an action for its enforcement, he at the same time acquires a subordinate right, incident to the relief which he may obtain, to demand and receive interest. If, however, the principal sum has been paid, so that, as to it, an action brought cannot be maintained, the opportunity to acquire a right to damages is lost/'

Plaintiff's counsel reply that in the application of the rules of law concerning interest to this case, interest should not be classified, as defendant's counsel does, as (1) interest in the nature of damages, (2) interest due by express contract; that a proper classification would be, (a) interest in the nature of damages for the detention of money, (b) contractual interest, subdivided into, (1) interest due by express contract, (2) interest due by implied agreement, based on the presumed intention of the parties. They say the authorities are divided as to whether interest by way of damages may be recovered after acceptance by the creditor of the principal sum due. They admit, however,...