Bond v. Pickett Cotton Mills, Inc.

Hoke, J., after stating tbe case: Tbe decisions of this State recognize tbe position, and some of tbe distinctions growing out of it, that interest may be a charge for tbe use of money expressly stipulated for by tbe contract, or it may be imposed by way of damages for its wrongful detention. King v. Philips, 95 N. C., 245. When considered in tbe nature of damages, and unless otherwise provided by statute, it is very generally held that there must be some kind of default established on tbe part of a debtor before interest can be collected. Thus, in case of agency and except in case of fraudulent conversion, etc.; tbe liability will not arise until demand made. Porter v. Grimsley, 98 N. C., 550; Neal v. Freeman, 85 N. C., 441. And in case of unliqui-dated demands generally, interest is not allowed except when *23 collectible by tbe usage of trade or by reason of vexatious or unreasonable resistance- or delay in regard to tbe principal sum. Tbis last position, and some of our former decisions applying it, bave been very mucb modified with us by a statute in tbe Revisal of 1905, sec. 1954, to tbe effect, “Tbat all-sums of money due by contract of any kind whatsoever, except money due on penal bonds, shall bear interest,” etc. From tbis it would seem to follow in tbis State tbat whenever a recovery is bad for breach of contract and tbe amount is ascertained from tbe terms of tbe contract itself or from evidence relevant to tbe inquiry, tbat interest should be added (Kester v. Miller Bros., 119 N. C., 475); a requirement that does not seem to bave been sufficiently recognized on tbat point in Lewis v. Rountree, 79 N. C., 122. In cases, howev.er, not coming within tbis statutory provision, tbe principle, as stated, prevails here and elsewhere, tbat interest by way of damages is not allowed as a conclusion of law unless there has been some adequate default on tbe part of a debtor in reference to withholding tbe principal sum or part of it. Smith v. Smith, 101 N. C., 461; United States v. Denver, 106 U. S., 536; Thornedyke v. Wells Memorial Association, 146 Mass., 699; Ledyard v. Ball, 119 N. Y., pp. 62-74; Shipman v. The State of Wisconsin, 458; 22 Cyc., 1496. In tbe present case tbe contract contains no express stipulation for tbe payment of interest. Tbe amount involved is not a debt due from tbe defendant company, in tbe ordinary sense, bringing plaintiffs’ claims within tbe meaning of tbe statutory provision as to interest. On tbe contrary, it is considered as a trust fund, to be distributed, under tbe statute, among tbe creditors who shall make tbe proper proof as to tbe amount and status of their Maims. It has been so decided in Manufacturing Co. v. Anderson, 165 N. C., 285, in which tbe position is made tbe basis or reason for upholding a pro rata distribution instead of one by priorities according to tbe date of tbe respective claims. Until ascertained and declared by tbe referee, tbe number and amount of tbe claims entitled to share in tbe distribution could not be known, and, after amendments allowed and *24 made .under tbe public-local law referred to, and until same was declared invalid by decision of tbis Court, tbe amount to be paid by defendant was necessarily uncertain. Tbe defendant company, therefore, was not in a position to make a valid tender to any of tbe claimants, and, on tbe facts in evidence, unless ordered to do so, it should not be penalized for not paying tbe money into court. In addition, it is found by tbe referee, as stated, “That Tbe Pickett Cotton Mills, Incorporated, bas at all times been ready and willing to pay over to respective claimants tbe amount it holds in its bands as a balance due tbe contractor, but bas never actually made a legal tender thereof.” From these considerations, we concur with bis Honor’s view, that no default is attributable to defendant company, and that, on tbe facts presented by tbe record, it is not properly chargeable with interest. On tbe ruling as to costs, tbe question, under our decisions and in actions of tbis character, is referred to tbe discretion of tbe court (Revisal, sec. 1267), and we concur, also, in' bis Honor’s view, that tbe costs in tbis case should be paid out of the fund held for distribution. Partin v. Boyd, 104 N. C., 422; Smith v. Smith, supra; Gully v. Macy, 89 N. C., 1343. There is no error, and tbe judgment of tbe lower court is Affirmed.