Source: https://supreme.justia.com/cases/federal/us/290/163/
Timestamp: 2019-04-23 04:05:06+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 290 › Funkhouser v. J. B. Preston Co., Inc.
1. Section 480, New York Civil Practice Act, as amended, providing that interest shall be added to recoveries in actions for unliquidated damages caused by breach of contract, did not impair the obligation of an earlier contract which did not create an obligation not to demand such interest, either by its own terms or when read with the law applicable when it was made. P. 290 U. S. 166.
2. The purpose of the statute was to supply a definite, uniform rule of compensation for delay in settling unliquidated damages in lieu of the uncertain rules previously developed by judicial decision. Provision of the enlarged remedy was consistent with the contract here involved and cannot be regarded as an unreasonable exercise of legislative power. Pp. 290 U. S. 166-168.
3. Statutes supplying improved means for ascertaining the loss sustained through a breach of contract, to the end that the injured party may have full compensation, concern the procedure for enforcing the obligation of the contract. P. 290 U. S. 167.
4. The mere fact that such procedural legislation is retroactive does not imply a lack of due process or bring it in conflict with the contract clause of the Federal Constitution. P. 290 U. S. 167.
261 N.Y. 140, 184 N.E. 737, affirmed.
Appeal from a judgment entered on remittitur from the Court of Appeals of New York. It reversed that part of a judgment of the Appellate Division which disallowed interest on the verdict in an action for breach of contract.
This action was brought for breach of a contract, made in 1923, for the sale by appellee to appellants of red slate granules to be delivered in agreed quantities in that year and in the three years following. The trial, in 1930, resulted in a verdict for appellee, to the amount of which interest was added pursuant to the statute. On appeal, the Appellate Division struck out the allowance of interest as not permissible with respect to a claim arising before the statute was enacted. 235 App.Div. 200, 256 N.Y.S. 681. The Court of Appeals entertained the question presented under the contract clause of the Federal Constitution (Art. I, § 10), and decided that the allowance of interest did not impair the obligation of the contract. 261 N.Y. 140, 184 N.E. 737, 739. The court directed that the item of interest be restored, and from the judgment entered accordingly, this appeal is taken.
"The question of the allowance of interest on unliquidated damages has been a difficult one. The rule on this subject has been in evolution. Today, however, it may be said that, if a claim for damages represents a pecuniary loss, which may be ascertained with reasonable certainty as of a fixed day, then interest is allowed from that day. The test is not whether the demand is liquidated. Was the plaintiff entitled to a certain sum? Should the defendant have paid it? Could the latter have determined what was due, either by computations alone or by computation in connection with established market values, or other generally recognized standards?"
difficulties from the real obligation to make full compensation for breach of contract. . . . The rule of law was that, if the defendant could not determine on any fixed day what was due, no interest could be recoverable because defendant knew not what, if anything, he should pay. That was a rule of convenience, not an agreement to forego interest. The implied obligation of the contract was to pay interest in accordance with the rules of law existing when the case was tried."
that such legislation is retroactive does not bring it into conflict with the guarantees of the Federal Constitution (League v. Texas, supra, p. 184 U. S. 161), and when the action of the legislature is directed to the enforcement of the obligations assumed by the parties and to the giving of suitable relief for nonperformance, it cannot be said that the obligations of the contract have been impaired. The parties make their contract with reference to the existence of the power of the state to provide remedies for enforcement and to secure adequate redress in case of breach. Henley v. Myers, supra.
their conception of the demands of justice and practicality. Miller v. Robertson, 266 U. S. 243, 266 U. S. 258. "The disinclination to allow interest on claim of uncertain amount seems based on practice, rather than theoretical grounds." Williston on Contracts, vol. 3, § 1413. Whether there shall be a definite rule is a matter within the legislative discretion, as is that of providing for interest upon judgments. Morley v. Lake Shore & M.S. Ry. Co., 146 U. S. 162, 146 U. S. 168; Missouri & Arkansas Co. v. Sebastian County, 249 U. S. 170, 249 U. S. 173.
"In every action now pending or hereafter brought wherein any sum of money shall be awarded by verdict, report, or decision upon a cause of action for the enforcement of or based upon breach of performance of a contract, express or implied, other than a contract to marry, interest shall be recovered upon the principal sum whether theretofore liquidated or unliquidated and shall be added to and be a part of the total sum awarded."
Jefferson Branch Bank v. Skelly, 1 Black 436, 66 U. S. 443; Mobile & Ohio R. Co. v. Tennessee, 153 U. S. 486, 153 U. S. 492-493; Louisiana Railway & Navigation Co. v. Behrman, 235 U. S. 164, 235 U. S. 170-171; Appleby v. New York, 271 U. S. 364, 271 U. S. 380; Coombes v. Getz, 285 U. S. 434, 285 U. S. 441; Shriver v. Woodbine Bank, 285 U. S. 467, 285 U. S. 475.
See Sedgwick on Damages (9th Ed.) vol. I, §§ 312-315; Williston on Contracts, Vol. III, § 1413. Compare Restatement of the Law of Contracts, American Law Institute (1932), vol. 1, § 327.
See Bernhard v. Rochester German Ins. Co., 79 Conn. 388, 398, 65 A. 134; Sedgwick on Damages, supra, § 315.

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