Court Opinion

ID: 3622683
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:04:08.171539+00
Date Added: 2024-06-11T13:58:48.334061
License: Public Domain

I agree with Judge GRAY on all the questions in the case, except the question of interest. I think the ruling at the trial on that question was correct, and that the action of the General Term in striking out the item of interest cannot be sustained. The right of the plaintiffs to recover interest as part of the damages has long been settled by numerous decisions of this court. The defendant agreed in writing to buy from the plaintiffs a ferryboat for $15,000. The jury found that there was a breach of the contract on the part of the defendant in refusing to receive the boat when tendered in conformity with the contract, and they awarded as damages to the plaintiffs the difference between the contract price and the market value of the vessel at the time and place of delivery, with interest on that sum from the date of the breach. The trial of the action took place many years after the alleged breach, and the interest amounts to nearly twice the sum which was found to be the difference between the contract price and the market value. The learned General Term held that interest was not allowable upon such a claim, and, therefore, modified the plaintiffs' judgment by striking out the interest and affirming the recovery for the remainder of the claim.
In an action to recover damages for the breach of an executory contract for the sale of personal property, the circumstance that the demand is unliquidated is no answer to a claim for interest on the sum which represents the difference between the contract price and the market value at the time of the breach. If the amount which the party in default is bound to pay in satisfaction of the contract can be determined by computation or by reference to market values, then interest must be allowed as matter of law as part of the damages to be *Page 490 
computed on the sum which the defaulting party should have paid at the time of the breach in order to make his contract good. InVan Rensselaer v. Jewett (2 N.Y. 135) the rule is thus stated in the head note: "Where a debtor is in default for not paying money, delivering property, or rendering services, in pursuance of his contract, he is chargeable with interest from the time of default on the specified amount of money, or the value of the property or services, at the time they should have been paid or rendered." In Dana v. Fiedler (12 N.Y. 50) the court reiterates this rule in the following language: "Interest is a necessary item in the estimate of damages in this class of cases. The party is entitled on the day of performance to the property agreed to be delivered; if it is not delivered, the law gives, as the measure of compensation then due, the difference between the contract and market prices. If he is not also entitled to interest from that time as matter of law, this contradictory result follows, that while an indemnity is professedly given, the law adopts such a mode of ascertaining its amount, that the longer a party is delayed in obtaining it, the greater shall its inadequacy become. It is however conceded to be law, that in these cases the jury may give interest by way of damages, in their discretion. Now, in all cases, unless this be an exception, the measure of damages in an action upon a contract relating to money or property is a question of law, and does not at all rest in the discretion of the jury. If the giving or refusing interest rests in discretion, the law, to be consistent, should furnish some legitimate means of influencing its exercise by evidence, as by showing that the party in fault has failed to perform, either willfully or by mere accident, and without any moral misconduct. All such considerations are constantly excluded from a jury, and they are properly told that in such an action their duty is to inquire whether a breach of the contract has happened, not what motives induced the breach.
"That by law a party is to have the difference between the contract price and the market price, in order that he may be indemnified and because that rule affords the measure of his *Page 491 
injury when it occurred; that he may not as matter of law recover interest, which is necessary to a complete indemnity; that nevertheless the jury may, in their discretion, give him a complete indemnity, by including the amount of interest in their estimate of his damages; but that he may not give any evidence to influence their discretion, presents a series of propositions, some of which cannot be law. The case of Van Rensselaer v.Jewett (2 N.Y. 141) establishes a principle broad enough to include this case, and has freed the law from this as well as other apparent inconsistencies in which it was supposed to have become involved. The right to interest, in actions upon contract depends not upon discretion but upon legal right, and in actions like the present is as much a part of the indemnity to which the party is entitled as the difference between the market value and the contract price."
It may be observed that the claim involved in that case was for the recovery of damages for the non-delivery of merchandise purchased under an executory contract, and the only question discussed was whether interest was in the discretion of the jury or belonged to the successful party as matter of right and as part of his indemnity for the breach of the contract. The rule was again stated in the case of Adams v. Fort Plain Bank
(36 N.Y. 255) in these words: "The principle which governs the allowance of interest was clearly enunciated in Van Rensselaer
v. Jewett (2 N.Y. 135), that, whenever a debtor is in default for not paying money in pursuance of his contract, justice requires that he should indemnify the creditor for the wrong which has been done him, and just indemnity, though it may sometimes be more, never can be less, than the specified amount of money, with interest from the time of the default until the obligation is discharged. And, if the creditor is obliged to resort to the courts for redress, he ought, in all such cases, to recover interest in addition to the debt, by way of damages. * * * But the courts in this and other states, have, for many years, been tending to the conclusion which we have finally reached, that a man *Page 492 
who breaks his contract to pay a debt, shall indemnify the creditor, so far as that can be done, by adding interest to the amount of damage which was sustained by the breach."
In actions to recover damages for the breach of a contract to perform work or labor, or to render services of any kind, the claim is generally unliquidated, and the amount of the indemnity for the breach can be determined only by proof of the value of the work or of the services. The value in such cases rests largely in opinion, and it frequently happens that there is no fixed market value upon which the damages can be based, and yet this court has held that in such cases interest is recoverable, as matter of law, upon the sum representing the damages from the time of the breach (McCollom v. Seward, 62 N.Y. 316;McMahon v. N.Y.  Erie R.R. Co., 20 N.Y. 463), and the rule has been applied in a great variety of cases where actions were brought to recover damages for the breach of a contract to buy or sell goods or to perform work or render services. (Mygatt v.Wilcox, 45 N.Y. 306; Mercer v. Vose, 67 id. 56; White v.Miller, 78 id. 396; De Lavallette v. Wendt, 75 id. 579;Wilson v. City of Troy, 135 id. 104; Selleck v. French, 1 Am. Lead. Cas. [5th ed.] 615.)
I think this case is clearly within the principle decided in these cases. The rule is based upon the most obvious principles of justice, and this case will furnish a good illustration of the injustice which the principle adopted by the court below sanctions. The defendant has had the use of the money which it was bound to pay to the plaintiffs in satisfaction of the contract for nearly thirty years, and at the end of this long period it has been held that it is not bound to pay the plaintiffs any more than at the day of the breach. The ancient rule, long since repudiated, that interest cannot be allowed upon unliquidated demands, when applied to a case like this, simply sets a premium on injustice. It encourages litigation, since the party in default upon his contract may always contest the claim without any liability to have it increased by the lapse of time, and all this upon the pretense *Page 493 
that there was no way in which he could find out how much he ought to pay his neighbor for a violation of his contract.
But even that well-worn argument is not urged in this case since resort is had to what may properly be called a pure fiction in order to sustain the decision below, depriving the plaintiffs of a great part of the damages which the jury awarded them. It is said that the General Term may have disallowed the item of interest upon its view of the facts, that is to say, it may have held that there was no proof, or not sufficient proof, of the market value of the vessel at the time of the breach, and hence interest was not recoverable. I am not willing to impute any such reasoning to the learned court below. If there was no proof or not sufficient proof of market value, then the plaintiffs could not have recovered anything for the plain reason that they failed to make out their case. The right to recover the principal sum depended upon precisely the same evidence as the right to recover the interest, and, hence, if there was any defect at all in the proofs, it went to the whole judgment and not simply to a part of it. We cannot, with any propriety, impute to the learned court below the conclusion that the proof of market value was sufficient to permit the plaintiffs to recover the principal, but insufficient to permit them to recover the interest, when both elements of damage depended upon precisely the same facts. If the plaintiffs failed to prove the market value of the vessel there was no other proof in the case upon which a claim for damages could be based, and if they did prove it for one purpose, they proved it for all purposes.
Now, as matter of fact, every one must know that it was impossible for the court below to take any such view of the case. The fact that the judgment was affirmed as to the principal sum and reversed as to the interest, when both items rested on the same evidence, shows very clearly that it did not attempt to do such an inconsistent thing. Certainly we should not assume that the learned court below decided that there was proof of market value to sustain the verdict for the principal sum, but no such evidence to sustain the award of *Page 494 
interest, without first looking into the opinion for such a strange conclusion. The ground upon which the court proceeded is there stated with the utmost clearness, and it is scarcely necessary to add that no such reasoning process as is now attributed to the court was even suggested. It was held as matter of law that interest could not be recovered since the claim was unliquidated. That view has some support in the earlier cases, but to assume that the court denied the right to interest because the proof of market value was not sufficient, while it held just the other way as to the right to recover the principal, would hardly be respectful to that learned tribunal.
There is no possible ground to sustain this judgment by reference to the facts. It can be sustained only upon the ground that the learned court below placed it — that interest on an unliquidated claim of this character cannot, as matter of law, be allowed in computing the damages. That, I think, was formerly the law, but the modern decisions, more in conformity with good sense and justice, have established a different rule. The rule now is that in actions to recover damages for breach of an executory contract for the sale of personal property, the plaintiff is entitled to recover interest on the sum representing the damages at the date of the breach, when that sum can be ascertained by computation or by reference to market values. In this case that sum was ascertained by the jury under the charge of the court by reference to the market value of the vessel, and in no other way, and it, therefore, follows that the plaintiffs had the same right to recover the interest as they had to recover the principal.
The judgment below, in so far as it modified the recovery, should be reversed and the judgment entered upon the verdict affirmed, with costs in all courts.
HAIGHT, MARTIN and VANN, JJ., concur with GRAY, J., for affirmance. BARTLETT, J., concurs with O'BRIEN, J., for reversal. PARKER, Ch. J., not sitting.
Judgment affirmed. *Page 495