Court Opinion

ID: 7946350
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:20:53.373726+00
Date Added: 2024-06-11T16:33:56.732660
License: Public Domain

ON MOTION EOR REHEARING.
Ostrander, O. J.
We should content ourselves by refusing the rehearing asked for by appellant without giving reasons therefor but for the fact that counsel for appellant, and counsel in other causes in which the point is involved, insist that the rule for ascertaining the present worth of contributions to be made from time to time, during a course of years, stated by the trial judge and *709approved by this court, is not the proper rule. It is said that when the result of the application of the rule is a sum of money in hand which will produce, if placed at interest at the legal rate, a yearly return equal to or greater than the amount of the estimated annual contribution, it is manifest that an incorrect result has been reached. As stated by the appellant:
“The judgment rendered would pay plaintiff more in interest than the amount of the contribution from her husband if living. She, if entitled to anything, is entitled to the amount of his contributions during the time the jury finds that he would have lived. The judgment as rendered gives her an income in perpetuity which is in excess of his contributions.”
Counsel have presented a computation, which appears to be mathematically correct, showing that a principal sum of $5,566.40, placed at interest at 5 per cent, per annum, will yield sufficient to pay $330 annually for 38 years, at the end of which time the principal sum will be exhausted. It appears to be conceded that the jury estimated the annual contribution lost to plaintiff as equal to $330 and the decedent’s expectancy of life as 38 years. The verdict returned was for $6,919.96. That this sum is the present worth of $330 for 38 years, if the computation follows the rule laid down by the court, cannot be doubted. We shall not restate the various arguments which have been made. The total of the contributions which in the case presented is lost to plaintiff is $12,540. It is convenience, and convenience only, which considers the contributions as annual. They would not have been made annually, but daily, and weekly. It is convenience, and convenience only, and an effort to ascertain and apply a rule which can be conveniently applied to the facts and result in substantial right, which considers the division of the total annual contribution for the first year by $1.05. The rule considers $1 in hand as worth $1.05 at the end of a year and, conversely, that $1.05 payable in one year may be presently paid with $1. The rule is simple, and, if *710it is the true rule for one year, is the true rule for any number of years. With variations depending upon the, interest rate, and upon whether simple or compound interest may be received, it is, so far as we are informed, the rule in common use for determining the sum of money required to secure a given annuity for any number of years, and the present worth of a sum payable in the future. Plaintiff, it is supposed, has lost by the conduct of defendant $12,540, which would have been paid to her from time to time during a period of 88 years. If defendant were now to assume to make the contributions, year by year, it would cost it $12,540 in the end; no less, no more. To presently compensate her for this loss, the present value of these contributions is to be estimated. This is the problem which is, in fact, presented. It is idle to argue, in support of a rule for such estimation, that it is such sum as, if presently placed at interest at 5 per cent, per annum, will yield her annually an amount equal to the estimated annual contribution and also exhaust the principal at the end of the period. Such a rule cannot in fact be applied to produce such a result. There are too many contingencies, in fact, the risk and cost of which neither plaintiff nor the fund should be charged with. By the rule adopted, and which we approve, plaintiff has discounted her demand, allowing defendant interest upon each installment at the rate of 5 per cent, per annum for the period which is anticipated. Whatever the result, it is, in our opinion, the correct result.
Bird, Hooker, Moore, McAlvay, Brooke, Blair, and Stone, JJ., concurred.