Court Opinion

ID: 8184571
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:06:52.190173+00
Date Added: 2024-06-11T16:40:22.136449
License: Public Domain

Newman, J.
On a contract which stipulates for interest, interest at the agreed rate, or, in the absence of an agreed rate, at the rate prescribed by the law at the date of the contract, will be the rate recoverable until the repayment of the principal sum. Spencer v. Maxfield, 16 Wis. 178. A change of the legal rate would not affect the rate of interest recoverable upon such a contract.
But where the contract is silent upon the subject of interest, and in many cases of torts, a different rule obtains. There damages, rather than interest, are to be admeasured. In awarding damages the law aims at indemnity. The purpose is to indemnify the plaintiff for the loss which he has suffered by reason of the defendant’s failure to pay the money when it became due. The law assumes, for want of a more certain datum, that interest at the legal rate during the period through which the money has been withheld is a fair measure of such loss; for if the money had come to hand it is fair to presume it would have produced that rate. But when a change of the legal rate of interest has been made during the period of the default, it is manifest that neither the rate in force at the time of the happening of the default nor the new rate in force at the time of judgment would be a fair measure for the whole period; but a fairer measure for all cases is the rate in force during the period, as varied by legislation. And this is the rule found to be established by nearly or quite all the decided cases. Wilson v. Cobb, 31 N. J. Eq. 91; Jersey City v. O'Callaghan, 41 N. J. Law, 349; Reese v. Rutherfurd, 90 N. Y. 644; *676Sanders v. L. S. & M. S. R. Co. 94 N. T. 641; O'Brien v. Young, 95 N. Y. 428; White v. Lyons, 42 Cal. 279; Stark v. Olney, 3 Oreg. 88.
In Reese v. Rutherfurd, supra, it is said, in effect, that the right to recover as damages interest at the rate in force at the time of the default down to the time when the legal rate is changed is in the nature of a vested right, of which the plaintiff cannot be deprived by retroactive legislation. The interest was computed on the correct principle.
By the Court.— The judgment of the circuit court is affirmed.
Pinney, J., took no part.