Opinion ID: 1235661
Heading Depth: 1
Heading Rank: 3

Heading: The disallowance by the trial court of plaintiffs' claim of interest was improper.

Text: Plaintiffs, in their cross-appeal, contend that the trial court erred in denying interest at six per cent per annum on the money misappropriated by defendants and owed by them to the plaintiffs, which the trial court held, after an accounting, to be the sum of $47,844.35. Defendants contend, to the contrary, that a defendant cannot be charged with interest prior to the time when the exact amount is either ascertained or ascertainable; that this was impossible in this case until after all of the evidence was considered and a decree rendered, and that, in any event, interest is not generally allowed in a partnership account, even for a fiduciary breach,    unless under the peculiar facts and circumstances surrounding the case the equities demand that interest be charged, quoting from Greenan v. Ernst, 408 Pa. 495, 184 A.2d 570, 579 (1962). Defendants also quote from our decision in Liggett v. Lester, supra, 237 Or. at 61, 390 P.2d at 355, as follows:    Ordinarily, interest is not chargeable in an accounting by one partner to another.    Nevertheless, the trial court may, in its discretion, add interest to the share owed by a partner guilty of a fiduciary breach,    or of improper use of partnership funds.    (Emphasis added) By that statement in Liggett we did not mean to say that the allowance or disallowance of interest in such a case is a question which is to be left entirely within the discretion of the trial court and that its decision on that question will not be reversed in the absence of a showing of an abuse of discretion. On the contrary, although we accord great weight to the decision of the trial court on this question, as we ordinarily do on all such questions in suits in equity, it must be kept in mind that this is an appeal in a suit in equity, which we try de novo. We believe that if, as in this case, we find upon a review of the record that the evidence clearly demonstrates that a partner has been guilty of a breach of his fiduciary duty to his partners by arranging for and receiving payment of a commission without first making a disclosure of that fact to his partners and securing their consent to such payment under circumstances as aggravated as those in this case, such a fiduciary should be held chargeable with interest on the amount received by him in breach of his fiduciary duty. Accordingly, we hold that the denial of interest by the trial court was improper in this case. Cf. Duniway v. Barton, supra , and Stephan v. Equitable S & L Assn., 268 Or. 544, 573, 522 P.2d 478 (1974).