Lewis v. Stran-Steel Corp.

• Decision Date: 22 February 1978
• Docket Number: STRAN-STEEL,No. 76-594,76-594
• Citation: 58 Ill.App.3d 280,373 N.E.2d 714,15 Ill.Dec. 368
• Parties: , 15 Ill.Dec. 368 Willie H. LEWIS, Plaintiff-Appellant, v.CORPORATION, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 714

373 N.E.2d 714

58 Ill.App.3d 280, 15 Ill.Dec. 368

Willie H. LEWIS, Plaintiff-Appellant, v. STRAN-STEEL CORPORATION, Defendant-Appellee.

No. 76-594.

Appellate Court of Illinois, First District, Third Division.

Feb. 22, 1978.

Philip E. Howard, William J. Harte, Chicago, John Gervasi, Palos Park, for plaintiff-appellant.

Baker & McKenzie, Francis D. Morrissey, John Patrick Healy, Donald J. Brown, Chicago, for defendant-appellee.

McGILLICUDDY, Justice.

This appeal presents the single issue of whether section 3 of "An Act in relation to the rate of interest * * * " (hereinafter referred to as the Interest Act) in effect in 1967 (Ill.Rev.Stat.1967, ch. 74, par. 3), and as amended effective August 29, 1969 (Ill.Rev.Stat.1975, ch. 74, par.3), requires or permits the computation of interest on interest with respect to judgments awarded by the Circuit Court of Cook County (compounded interest), or whether such interest must be computed annually on the principal sum of the judgment alone (simple interest).

On October 23, 1967, the plaintiff obtained, in the Circuit Court of Cook County, a judgment in the amount of $241,000 against the defendant. The judgment was ultimately affirmed by the Illinois Supreme Court on March 29, 1974 (Lewis v. Stran-Steel Corp. (1974), 57 Ill.2d 94, 311 N.E.2d 128). On July 22, 1974, the defendant tendered $334,191.17 in satisfaction of the judgment indebtedness. This sum represented $241,000 as the principal amount of the judgment, $92,525.31 as simple interest computed at the rates of 5% Per annum from October 23, 1967 to August 29, 1969, and 6% Per annum from August 29, 1969 (the effective date of an amendment to section 3 of the Interest Act which increased the rate of interest from 5% To 6%), to July 22, 1974, and $665.86 as costs. The plaintiff refused the tender as total satisfaction of the amount due, claiming that the interest due amounted to $109,937.87, an amount obtained at the applicable rates of 5% And 6% Compounded annually from the date of the judgment.

In order to prevent the interest from running on the entire principal sum, the parties agreed that the plaintiff would accept the tendered amount in partial satisfaction without prejudice to his right to proceed to collect the alleged outstanding balance of $17,412.56, which sum was allocated by the plaintiff to be due on the principal amount of the judgment, plus interest on this sum. The plaintiff then filed a petition in the Circuit Court of Cook County seeking to collect the balance which he claimed was still due and owing to him. The Circuit Court denied the plaintiff's petition and held that the payment of $334,191.17 tendered by the defendant on July 22, 1974, fully satisfied the judgment entered on October 23, 1967. The plaintiff appeals from the order and seeks from this court a construction of section 3 which requires or permits compounded interest on judgment indebtedness.

Section 3 of the Interest Act provides:

"Judgments recovered before any court or magistrate shall draw interest at the rate of 5% (6%) per annum from the date of the same until satisfied. When judgment is entered upon any award, report or verdict, interest shall be computed at the rate aforesaid, from the time when made or rendered to the time of rendering judgment upon the same, and made a part of the judgment. Provided, however, that the judgment debtor may by tender of payment of judgment, costs and interest accrued to date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of appeal, writ of error, or other steps to reverse, vacate or modify the judgment." (Ill.Rev.Stat.1967 (1975), ch. 74, par. 3.)

The plaintiff contends that the phrase, "shall draw interest at the rate of 5% (6%) per annum " (emphasis added), indicates that it was the intent of the legislature that the interest be compounded annually. Under this method of computation the interest which would accrue at the end of each anniversary of the judgment indebtedness would then be added to the principal amount of the judgment and itself draw interest during each successive period of time until the indebtedness is satisfied. The plaintiff also contends that the question of whether the interest on judgments should be compounded interest or simple interest is one of first impression in the Illinois courts. The defendant argues that the above quoted phrase merely indicates, through use of the words per annum, the frequency at which...