Wyoming National Bank v. Brown

Potter, Chief Justioe. The plaintiff has applied for a rehearing in this case. The points urged in counsel’s brief are practically the same as those insisted on at the original hearing; and they were then fully considered by the court, although the opinion may not have specifically referred to them. Upon a careful review of the questions involved and an examination of the cases cited by counsel in his present brief, we are satisfied with the correctness of the conclusions already announced. (7 Wyo., 494). By the great preponderance and weight of authority a judgment is not a contract within the meaning of the constitutional prohibition against [155] laws impairing the obligation of contracts. 1 Black on Judgments, Secs.' 7-11. But counsel insists that the prior contract lends its force and obligation to the judgment to such an extent that it is impaired by a law reducing the rate of interest upon the judgment. We do not think so. The cases cited upon that point are inapplicable, except those adopting the view that the judgment is itself a contract. The contract has been merged in the judgment, or as has been said, it has been extinguished by the judgment, which is a higher security. “The liability of the debtor no' longer rests upon his voluntary agreement, but upon the adjudication of the court into which the former has passed. ’ ’ McDonald v. Dickson, 87 N. C., 404. A familiar principle will serve to clearly illustrate this. It is well settled that a judgment carries only such a rate of interest as may be established by law, notwithstanding that the contract or cause of action on which it was founded may bear a higher rate; and this is so because of the merger of the contract in the judgment, and thereafter the law, and not he parties,.* prescribes the interest. 2 Black on Judgments, Sec. 982. The Legislature recognized this principle by the proviso of the section of the law of 1895, under consideration, whereby it is enacted that when a judgment shall be founded upon a contract, verbal or written, by the terms whereof a rate of interest less than eight per cent shall have been agreed upon, the rate upon the judgment shall be the same as that provided for by the contract; but no such provision is made in the case of a judgment upon a contract bearing a rate greater than that ordinarily allowed upon judgments. In such case the rate of eight per cent governs the judgment. It is true, as stated by Brown in his work on judgments (Sec. 11), that statutes have been declared invalid, as obnoxious to the inhibition against the impairment of the obligation of contracts which vacated judgments, granted new trials, enacted shorter statutes of limitation, [156] greater exemptions of tbe debtor’s property, and tbe like-not, however, because they impaired tbe judgment, but on tbe ground that they destroyed tbe remedy on tbe original contract. And as to that class of cases tbe court in Morley v. Lake Shore Ry. Co., 146 U. S., 162, declared. them inapplicable to the consideration of a statute reducing tbe rate of interest upon judgments. Much that was said in tbe original opinion in discussing tbe principles underlying interest upon judgments is also pertinent here, and demonstrates tbe difference, in respect to interest between tbe contract and a judgment founded thereon. It is furtbur urged that tbe statute of 1895 ought not to be construed as affecting judgments already existing, because of the provision that judgments shall bear interest at tbe prescribed rate “from the date of tbe rendition thereof.” It is insisted that tbe use of tbe language quoted discloses an intention that the act should have effect only upon judgments recovered subsequent to the passage of tbe act. Inasmuch as tbe law previously in force allowing interest upon judgments was expressly repealed by tbe act of 1895, and there is no exception in the statute, we think it must be construed, at least tbe clause of tbe section preceding tbe proviso, as covering tbe case of all judgments, whether rendered before or after tbe date of tbe passage of tbe act. That is tbe only law authorizing interest upon judgments after its date. But it will not be so construed as reducing tbe rate prior to the time of the enactment of the statute. Tbe judgment creditor lias a vested right to tbe interest which accrued upon bis judgment under tbe law then in force up to tbe date of the change in tbe law. Hence, as to judgments already existing, the’ rate under tbe act of 1895 should be applied only from tbe time of its passage. This question was taken into consideration when our conclusions were originally announced, and tbe answer to the reserved question accorded with tbe view above expressed. Rehearing will he denied. Corn, J., and Knight, J., concur.