Van Rensselaer's Executors v. Jewett

By the Court, Whittlesey, J. The question presented in this case is important in determining the amount of damages upon a vast number of contracts simil ir to that now under consideration. In the indenture upon which this action is brought, the lessee covenanted to pay or deliver a specific number of bushels of wheat, oilier articles of personal prop — 137 — erty, on a specified day, at a fixed place, as rent of the premises occupied by him. He neglected to pay or deliver the wheat and the other articles according to his covenant—in other words, he neglected to pay his rent at the time, place, and in the manner in which he had covenanted to do'it; and the question presented for adjudication is whether he is legally chargeable with interest, upon the value of the wheat and other property, after the default. Upon the question of interest generally, there are many and conflicting decisions in the English courts, and in the courts of the different states of the Union. It will neither be necessary nor profitable on this occasion to refer to or collate this mass of scattered, and to some extent, irreconcilable authorities. This has been recently done with great industry and ability on the part of both counsel and judges, in a case involving a question of interest, which was elaborately examined in both the supreme court and the court for the correction of errors. In Reid v. The Rensselaer Glass Factory, (3 Cowen, 393,) in the supreme court, and the same case in the court for the correction of errors, (5 id. 587,) the whole doctrine touching the allowance of interest, in almost every conceivable case, was thoroughly discussed and considered; and all the previous adjudications relating to the subject were passed in review with appropriate commentaries and criticisms. ' We desire not to multiply references to decided cases, but rather, if it is possible, to seize the principle which governs or pervades these decisions, and to apply it to the particular state of facts under consideration. Unfortunately, in the present instance, this is' not easy, and perhaps it is not possible to do it -in any satisfactory manner. It is difficult, and I may say impossible to extract from the cases which it has been found necessary to examine, the principle which has governed the courts in the allowance of interest. At least there is no principle which can be adopted which will reconcile them all. Spencer, senator, in Reid v. Tne Rensselaer Glass Factory, supposes that in England all interest was unlawful and forbidden prior to the statute 37 Henry 8, ch. 9, — 138 — which, while it does not affirmatively allow, much less require, payment of interest, forbids the taking of more than ten per cent. The principle supposed to result from that fact is, that while neither by common or statute law is a party required to pay interest, so it follows inevitably that one cannot in any case be liable to pay interest except in pursuance arid by virtue of his own agreement. Hence he resolved the obligation to pay interest in all cases into the agreement of the parties express or implied. The principle, indeed, if sound, furnishes a clue to a great number of the cases found in the books; but if it is to be deemed so certain as to be taken as a law of construction, then it is equally clear that there are also a number of cases which are abnormal. One thing we are however able to see, that the courts have from time to time extended the allowance of interest to cases in which its allowance was not before recognized ; and that the courts of this country have awarded interest in cases as to which the English courts have stopped short. I cannot however perceive that in all cases the allowance is resolvable into any actual or implied agreement between the parties ; but it seems to me the rather to have been adopted in many cases as the application of a just and equitable rule of damages where a party has kept from another money or property beyond the day on which he had agreed to pay or deliver it. I think, too, I perceive a tendency to extend it to still other eases where the allowance of interest will furnish a rational and proper rule of damages, vacillating as yet between giving it to a jury as a rule which they may apply, and directing them as a rule which the law imposes and which the jury musí apply. Upon the very point now under consideration there have been two decisions in our own courts. The first case was Van Rensselaer’s Executors v. Plainer’s Administrators, (1 John. Rep. 276,) decided in 1806. I give the whole case as it is found in the reports. “ This was an action of covenant for rent, and payable in wheat. The question submitted to the court was, whether interest was recoverable on the arrears of rent ? Per Curiam. — 139 — We are of opinion that as a general rule, interest is not recoverable in such a case; and nothing appears in this instance to hinder the application of that rule.” The other case, Lush v. Druse, (4 Wend. 313,) was decided in 1830. That also was an action of covenant on a lease for non-payment of rent. The rent reserved was 18$ bushels of merchantable wheat, to be delivered annually on the first day of February in each year, at such place in Albany as the lessor, his heirs or assigns should appoint. The plaintiffs on the trial claimed interest on the value of the wheat from the time it was payable. The circuit judge reserved the question, and a verdict was taken subject to the opinion of the court, and interest was to be added if the plaintiff was entitled to recover interest. The case came before the supreme court upon various questions made in it. Chief Justice Savage delivered the opinion of the court. Upon the question of interest he says : “I can see no possible objection to the allowance of interest. The value of the wheat became due on the first of February in each year, in consequence of the default of the defendant in not delivering the wheat according to contract; and interest is as much the right of the creditor after the principal becomes payable as the principal itself.” It is urged by the counsel for the defendant that this last decision is a hasty one, and not well considered; that it has no reference to the previous decision the contrary way—is obiter, and not in harmony with the decisions of this court either before or since; and it is urged that it should not now be relied upon as sufficient to overrule the doctrine established in the prior case of Van Rensselaer's Ex'rs v. Plainer's Adm'rs. The case of Lush v. Druse, which is the object of these criticisms, bears marks of thorough examination and mature deliberation. The points raised were certainly not hastily decided or ill considered. It is true, the question of interest was disposed of with brief remarks from the court; but even in this respect it bears evidence of more deliberation than characterizes the previous case. The decision was not obiter. The question of interest was made at the trial, and was reserved by the circuit judge; and it was stipulated that interest should be added to the ver — 140 — diet if ths court should decide that it was recoverable. The question of interest was argued before the supreme court by the plaintiff’s counsel, and the right to recover it insisted upon, The defendant’s counsel would seem indeed not to have arguoa that point, but he relied upon it as one raised at the trial am presented by the case then before the court. It was a point upon which the decision of the court was required, and as to which it was clearly and deliberately made. It is to be regretted, indeed, that many of the decisions of our courts upon points of this character are barren of reasons to sustain them. Such is in a marked manner the case with the first decision upon this point, which the defendant’s counsel would have us take as the rule. All that the court say there is, that they are of opinion that as a general rule interest is not recoverable in such a case. It was doubtless an opinion and decision announced from the bench when the point was presented, without any farther deliberation than such as occurred at the moment. The opinion thus expressed was undoubtedly in consonance with the English decisions at that day, and such doubtless would have been the judgment of the king’s bench upon that very point. The case of Clark v. Barlow, (4 John. Rep. 183,) which determines that interest is recoverable on rent payable in money, is equally barren of any reason for the decision. Though this case was in hostility to the English decisions, it established a doctrine which has ever since governed our own courts. All that the court say in making the decision is, “We are of opinion that in an action of covenant brought to recover a sum certain due for rent and payable in money, the plaintiff is entitled to recover the interest.” Decisions are therefore not the less authoritative because the reasons therefor are not elaborated as much as would be desirable to understand the principles upon which they are based. There is no question, I believe, but what theEnglish authorities are opposed to the allowance of interest in such a case as the present, and upon the facts in Lush v. Druse. When an obligation was giv.en for the payment of specific sums of money in goods at — 141 — specific times, interest was not allowed on default in payment. (Foster v. Weston, 6 Bing. 709.) Such is not the doctrine of our own courts in such cases. (Pinney v. Gleason, 5 Wend. 393.) On the argument of Lush v. Druse, the case of Spencer v. Tilden, (5 Cowen, 144,) was cited by the plaintiff’s counsel as an authority for the allowance of interest on contracts for the delivery of personal property after the day for delivery had elapsed and default made. In that case the obligation was to pay $360 or twelve cows and twelve calves on a day certain, The day elapsed without either being paid, and the court gave such a construction to the instrument as to make it a contract merely for the delivery of the cows and calves; and the damages allowed were the value of the cattle on the day of delivery and the interest thereon from that day. The question of interest seems indeed not to have been discussed or even considered on the argument or decision before this court; and it is perhaps not fairly a case to authorize the allowance of interest on a contract payable in personal property. But Sellick v. French, (1 Conn. Rep. 32,) decided in 1814, by the supreme court of errors of Connecticut, is a well considered case. One of the propositions respecting the allowance of interest is laid down as follows: “ When there is a written contract to pay money or other thing on a day certain, and the contract is broken, then interest is allowed by way of damages for the breach, as in the case of notes and bills of exchange.” In contracts for the payment of a sum of money certain on a prescribed day, the debtor, in case of default in payment, must pay interest from the day the payment should have been made. This is because he detains from the creditor, against his will, a sum of money which he was entitled to have, and interest is the legal compensation or damage allowed for such detention. (See Crawford v. Willing, 4 Dall. 289.) What is there in principle to distinguish a contract for the payment of a specific amount of wheat on a day and at a place certain, from a like contract for the payment of money 1 If default be made in the payment of the wheat at the day and place specified, the party who was entitled to receive it is then entitled to the value — 142 — in money as its value was on that day. The debtor cannot afterwards absolve himself from the contract by tendering the wheat in specie, nor in any other way than by the payment of its value in money. The party who was entitled to receive the wheat cannot afterwards insist upon having the wheat in specie, or the value in money at any future day; he can, after default has been made in the delivery, only have the value of the wheat in money, reckoning such value as of the day when it should have been delivered. At least such I understand to be the doctrine of the cases as collected in Clark v. Pinney, (7 Cowen, 681.) The legal result of the failure to deliver on the day, is that the delinquent is bound to pay and the creditor is entitled to receive the amount of money which was the value of the wheat on that day. The parties stand to each other on such a contract, after failure to deliver at the day, precisely as they do on a money contract after failure to pay. In either case the debtor owes so much money, and the amount he owes is not susceptible of variation; only in one case the amount is certain, being specified in the contract, and in the other it has to be ascertained by computing the value of the property on the day fixed for the delivery. But that is certain which is capable of being made certain. There is no difficulty in ascertaining the value of the property in money, on the day and at the place of delivery, and thus ascertaining the precise amount of the debt. As a matter of principle, equity and fair dealing, of mutual justice between party and party, it is difficult to perceive why a creditor in a money contract should be entitled to interest after default in payment, and a creditor in a wheat contract should not be entitled to interest after default in delivery, when the effect upon both classes of creditors is precisely the same. Is it the difficulty of ascertaining the value of the wheat on the day that makes the difference in principle? If I purchase wheat now, to be paid for on the first day of February next at its value on that day, and I neglect to pay, I shall have to pay the value of the wheat on that day, with interest from the de fault until payment be made. I shall have to pay interest be — 143 — cause my term of credit expired on that day; and I must ascertain at my peril what the value of wheat is on that day, or the courts will find means of ascertaining it at my cost. The difficulty of ascertaining the value on the day does not, in all cases, make the contract so uncertain as to amount, as not to carry interest. Why then should it in any case? If a party in an action on a contract, for the non-delivery of personal property, is confined to the day of delivery for determining the value of the property, and cannot have interest, he is in a much worse situation than one who can bring trover; as in the latter form of action the plaintiff may have the value of the property at any time between conversion and trial, and that with interest too, if the jury choose to allow it. Thus, in one form of action, the plaintiff gets the use of the property, as he should, it being all the time equitably his, while in the other he gets neither the use in value nor the interest on the value. But it is urged that the principle that interest cannot be recovered on unliquidated damages applies to this case. It has been decided with as much barrenness of reasons as in most of the other decisions in relation to interest, that it is not recoverable on unliquidated damages. (Anon. 1 John. 315 ; Holliday v. Marshall, 7 Id. 211.) Neither can interest be recovered on an unliquidated account for work, labor and services. (Doyle's Adm'rs v. St. James' Church, 7 Wend. 178.) But it is recoverable for the value of labor upon a special contract for a specific compensation per month. (Still v. Hall, 20 Wend. 51.) The case before us hardly comes within the definition of unliquidated damages, or unliquidated accounts, so far as any definition is conveyed by the decisions in such cases. When one is sued on a quantum meruit for work and services, as there has been no special agreement, he does not know how much will solve the debt. The amount is quite uncertain, and it requires a judgment or verdict to render it certain. In this case the debtor knew precisely what would satisfy his covenant. He had it in his power to protect himself by delivering the requisite number of bushels of wheat at the place and on the day designated. The plaintiff’s damages are not unliquidated — 144 — and uncertain, unless it is because the value of the wheat on the day of delivery was uncertain, and this we have already seen is capable of being reduced to a certainty. There is a class of cases like that of Dox v. Dey, (3 Wend. 356,) which was an action of assumpsit brought for the breach of a contract for the sale and delivery of a certain specified quantity of wheat. The circuit judge instructed the jury that the plaintiffs were entitled to the value of the wheat' on the day of the demand, and that they might allow interest by way of damages, if they thought proper to do so. The court by Marcy, J. say, “ the judge did not direct the jury to allow interest on the sum which they should find the wheat to be worth, but in ascertaining the plaintiff’s damages he observed they might, if they thought proper from the nature of the transaction, include interest as.an item in making up the amount of damages. There was not, in this remark, any direction contrary to law.” The defendant’s counsel insist that the principle of these cases should be applied to the one before us, and that if interest is allowable at all upon this contract, it is so only in the discretion of the jury, and that it should have been submitted to them. So Spencer, senator, says, in Reid v. The Rensselaer Glass Factory, “ interest is allowed also in another class of cases by juries, as a measure of damages under the advice of the court, but in their absolute discretion ; which class must be carefully distinguished from that where it is allowed by the courts, as the judgment of law.” In torts it is left to the discretion of the jury to allow interest on the value of the property by way of damages. (Beals v. Gurnsey, 8 John. Rep. 446; Baker v. Wheeler, 8 Wend. 505.) In actions of assumpsit on implied or uncertain contracts, and indeed on specific contracts, as in Dox v. Dey, it may be so left to the discretion of the jury. But where the contract is like the lease under consideration, for the delivery of a precise quantity of wheat on a specific day and place, the difference between leaving it to the discretion of a jury to find interest from" the day fixed for delivery by way of damages, and directing them that interest is due upon the value of the wheat from such day as the judgment of law, wil — 145 — soon grow to be trifling. In such certain and precise cases we want some certain, precise and fixed rule, and the reasonable and equitable rule is to allow interest in all such cases where the contract is definite and clear; where it is uncertain, or where the action is on an implied contract, it may be left to the discretion of the jury to embrace or reject interest as an item to be taken into account in making up the damages. I have come to the conclusion that the case of Lush v. Druse was decided deliberately and after full consideration; that it lays down a rule reasonable, just and equitable in itself, and proper for general application to similar cases; that if the rule which it promulgated were less just and reasonable than it is, still, as the authority of that case has been suffered to remain unquestioned for so many years; as many may be presumed to have reposed upon the principle it sanctioned, it would be unjust and unwise now to disturb it. I am therefore of the opinion that a new trial should be denied.