Court Opinion

ID: 9684842
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:16:13.865652+00
Date Added: 2024-06-11T18:18:00.417796
License: Public Domain

McCown, J.,
dissenting.
I respectfully dissent from that portion of the majority opinion which affirms the case of Interstate Savings & Loan Assn. v. Strine, 58 Neb. 133, 78 N. W. 377, and holds that, under the provisions of section 45-105, R. R. S- 1943, the plaintiff is not entitled to interest on the judgment awarded it.
Not only does the majority opinion reaffirm the Strine case, it actually extends it. The Strine case reached its holding with no reference whatever to section 45-103, R. R. S. 1943, dealing with interest on all decrees and judgments. The majority opinion here states: “Section 45-105, R. R. S. 1943, is a special statute governing usurious contracts and judgments to be entered thereon, and takes precedence over the general statute providing for interest on judgments, section 45-103, R. R. S. 1943.” (Emphasis ours.)
The Strine case in 1899 apparently overlooked, and certainly did not consider, the doctrine of merger. The majority opinion here still does not mention the doctrine of merger, under which a judgment becomes a new cause of action and wipes out the old cause of action. This is done on the strength of the language that the plaintiff shall “recover only the principal without interest.” This court now concludes that “the legislative intent is clear that no interest can be recovered on the judgment.” The opinion determines that the Legislature specifically intended to discard the doctrine of merger as applied to judgments entered upon portions of usurious contracts specifically declared to be valid by the same statutory enactment.
Restatement, Judgments, § 47, p. 181, states the rule of merger: “Where a valid and final personal judgment in an action for the recovery of money is rendered in favor of the plaintiff, (a) the plaintiff cannot' thereafter maintain an action against the defendant on the *68cause of action; but (b) the plaintiff can maintain an action upon the judgment.” The comment is particularly applicable here: “a. The doctrine of merger. Where the plaintiff brings an action against the defendant and a valid and final judgment for the payment of money is rendered in favor of the plaintiff, the original claim of the plaintiff is extinguished and a new cause of action on the judgment is substituted for it. In such a case, the plaintiff’s original claim is merged in the judgment. It is immaterial whether or not the plaintiff’s original claim was valid. It is immaterial whether or not the defendant had a defense to the action if he did not rely upon it, or if he did rely upon it and judgment was nevertheless given against him. It is immaterial whether the judgment was rendered upon a verdict or upon a demurrer or other objection to the pleadings or upon confession or default.”
The majority opinion determines that section 45-105, R. R. S. 1943, is a special statute as to interest on judgments. It appears in Chapter 45 dealing only with interest. Section 45-103, R. R. S. 1943, deals with interest on judgments and decrees; section 45-104, R. R. S. 1943, deals with interest on other contract obligations; and section 45-106, R. R. S. 1943, deals with interest on warrants or orders of municipal subdivisions. The conclusion that it is a special statute, applying to judgments, is reached in spite of the fact that section 45-105, R. R. S. 1943, itself, in the first sentence states “the contract shall not on that account be void, but if in any action on such contract * * (Emphasis ours.) The only portion of section 45-105, R. R. S. 1943, which ever mentions the word “judgment” says “judgment shall be for the principal, deducting interest paid.”
Our belief that the Strine case overlooked the doctrine of merger, and the relevancy of section 45-103, R. R. S. 1943, is confirmed by the case of Male v. Wink, 61 Neb. 748, 86 N. W. 472, which clearly involved the same issue of interest ■ on the judgment itself. This' court said: *69“Plaintiffs are entitled to a decree of foreclosure for the sum of $115.12 (the principal amount, deducting interest paid), and for the amount of taxes by them paid on the mortgaged premises, with ten per cent interest thereon from the date of such payment. The decree is accordingly reversed, and the cause remanded with directions to enter a decree in favor of the plaintiffs in accordance with this opinion, without costs to them.” (Parenthetical insert ours.) The implication as to interest on the judgment seems clear, although the Strine case was not referred to.
Various legislative and constitutional provisions dealing with time sales contracts have been adopted recently in specific response to this court’s prior holdings that usurious time sales contracts were void. All of the legislative enactments and declarations refer to contracts or to interest or charges contracted for. These enactments specifically state that the contracts shall not be void. So far as we can determine, not one of the legislative enactments refer to judgments nor interest on judgments.
' The majority opinion treats section 45-105, R. R. S. 1943, as though the words “the plaintiff shall recover only the principal, without interest,” not only designated the amount for which the judgment should be entered, but also specifically said that the judgment itself should be without interest. In the portion of section 45-105, R. R. S. 1943, dealing with situations where interest shall have been paid, the only place where the word “judgment” is used, the specific direction of the statute is that “judgment shall be for the principal, deducting interest paid,” and there is no reference whatever to interest on the judgment.
As this court held in Patterson v. Spelts Lumber Co., 166 Neb. 692, 90 N. W. 2d 283, the provisions of section 45-103, R. R. S. 1943, for the payment of interest on all decrees and judgments . for the payment of money: “* * * refer to judgments or decrees for .money which *70is immediately due and collectible where its nonpayment is a breach of duty on the part of the judgment debtor.” The judgment here is clearly that.
It seems to us a strained construction to treat section 45-105, R. R. S. 1943, as a special statute intended to apply not only to interest on usurious contracts before judgment, but also as intended to apply to judgments for the portion of such contracts which the same statute specifically declares to be valid, and which by judgment and merger become immediately due and collectible. We believe that the majority opinion here not only raises serious questions as to the doctrine of merger and of special and general legislation, but affirms a decision which we believe to be erroneous. Subsequent action of this court, the electorate, and the Legislature has also altered the problems of interpretation.
We believe that the case of Interstate Savings & Loan Assn. v. Strine, 58 Neb. 133, 78 N. W. 377, should be overruled, and that the plaintiff should have judgment for the sum of $1,350, with interest from November 20, 1964, with all costs to be taxed to the plaintiff.
I am authorized to state that Boslaugh and Smith, JJ., join in this dissent.