Opinion ID: 1244243
Heading Depth: 2
Heading Rank: 3

Heading: Fisher was entitled to 12% pre-judgment interest.

Text: As part of the purchase agreement on May 21, 1990, Roger Duba, as president of U.S. Lumber and its guarantor, signed a promissory note to pay Fisher the remaining $500,000 with interest at twelve (12) percent per annum from the date hereof on or before January 10, 1991. In addition, Duba marked through this quoted phrase and, in his own handwriting, wrote no interest R. Duba 5/21/90 in the margin of the promissory note. Due to this alteration, Plaintiffs contend that the parties expressly intended that no interest would apply and, as such, the prejudgment interest should be zero. Although Fisher makes no argument on the alteration, we notice that nowhere on the promissory note is there any indication whatsoever that Fisher has agreed to the delineation of the interest. (If this Court were to ignore Duba's marks on the promissory note, SDCL 21-1-13.1 sets prejudgment interest at the contract rate. Thus, the note's twelve percent (12%) rate would apply.) At most, Fisher agreed to a zero interest rate being charged under the expectation that the lump sum of $500,000 would be paid as due. No installment plan with an interest rate was necessary. In sum, prejudgment interest was warranted. Honomichl v. Modlin, 477 N.W.2d 599 (S.D.1991). The trial court set the prejudgment interest rate for the $500,000 based upon SDCL 54-3-5: Unless there is an express contract in writing fixing a different rate, interest is payable on all moneys at the Category F rate of interest as established in § 54-3-16 after they become due on any instrument of writing, and on moneys lent, or due on any settlement of accounts, from the day on which the balance is ascertained, and on moneys received to the use of another and detained from him. SDCL 54-3-16, prior to its 1994 amendment, set the Category C rate of interest at 15% per year. On the contrary, Plaintiffs seek to apply the Category B rate of 12% interest found in SDCL 21-1-13.1, which provides: Any person who is entitled to recover damages, whether in the principal action or by counterclaim, cross claim or third-party claim, is entitled to recover interest thereon from the day that the loss or damage occurred, except during such time as the debtor is prevented by law, or by act of the creditor, from paying the debt. Prejudgment interest is not recoverable on future damages, punitive damages or intangible damages such as pain and suffering, emotional distress, loss of consortium, injury to credit, reputation or financial standing, loss of enjoyment of life or loss of society and companionship. If there is a question of fact as to when the loss or damage occurred, prejudgment interest shall commence on the date specified in the verdict or decision and shall run to, and include, the date of the verdict or, if there is no verdict, the date the judgment is entered. If necessary, special interrogatories shall be submitted to the jury. Prejudgment interest on damages arising from a contract shall be at the contract rate, if so provided in the contract; otherwise, if prejudgment interest is awarded, it shall be at the Category B rate specified in § 54-3-16. The court shall compute and award the interest provided in this section and shall include such interest in the judgment in the same manner as it taxes costs. (Emphasis added.) SDCL 54-3-5 specifies interest due on any instrument of writing. The parties are in agreement that the promissory note is indeed an instrument of writing. This instrument specifies that its purpose is to guarantee compliance with the agreement to purchase Fisher's share of the casinos. The agreement also reflects this guarantee. Hence, the promissory note serves in the broader capacity to enforce the provisions of the sale contract; it is more than an instrument of writing. Both of the above statutes concern interest due on contracts. Although SDCL 54-3-5 has been used to award prejudgment interest, the language is not specific to such ends. On the other hand, SDCL 21-1-13.1 is very specific on awarding prejudgment interest in contract actions. It is well-established that terms of a statute relating to a particular subject will prevail over general terms of another statute. Nelson v. School Bd. of Hill City, 459 N.W.2d 451, 454 (S.D.1990); Meyerink v. Northwestern Pub. Serv. Co., 391 N.W.2d 180, 184 (S.D.1986). As such, SDCL 21-1-13.1 prevails here. Additionally, due to the potential applicability of either statute, SDCL 21-1-13.1 controls because it is the more recent enactment. In re Estate of Smith, 401 N.W.2d 736, 740 (S.D.1987); Kneip v. Herseth, 87 S.D. 642, 214 N.W.2d 93 (1974). Thus, the proper interest rate was 12%. Affirmed in part, reversed in part. MILLER, C.J., WUEST and AMUNDSON, J., concur. SABERS, J., dissents. KONENKAMP, J., not having been a member of the Court at the time this case was submitted to the Court, did not participate.