Court Opinion

ID: 6245324
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:57:09.3977+00
Date Added: 2024-06-11T08:59:16.364881
License: Public Domain

Opinion by
Mb. Justice Gbeen,
The only question between these parties is the determination of the time from which the interest on the amount which was to be contributed by the plaintiffs to the cost of the tunnel, should be computed. It is quite singular that so important an omission from the contract of the parties as this is, should happen in an instrument otherwise so carefully prepared. There is no dispute that interest is to be allowed to the defendants on the moneys expended by them, in the construction of the *334tunnel, up to the amount of $133,333.34. The language of the sixteenth article of the contract on this subject is: “ Interest being allowed them on their expenditure up to that amount and charged them on the monthly payments when such deduction shall cease. It being the intention of this clause that the party of the first part shall be liable to contribute only the said sum of one hundred and thirty-three thousand three hundred and thirty-three dollars and thirty-four cents, with interest, no matter what the actual cost may be.” The plaintiff contends that interest should not commence to run until the tunnel was completed, which was October 31, 1895. But it required six years to construct the tunnel, and the defendants were constantly expending their money from the commencement of the work, which was the 31st day of December, 1889. As the plaintiff was to become the owner of a one-third interest in the tunnel from the expiration of the lease to the defendants, and as they were to get the benefit of the increased royalties which would result to them from the coal in the Ebervale mines if the tunnel was successfully opened, it was entirely equitable that they should share in the expense of its construction. But they were not to pay anything toward the cost of construction while it was being built, and in point of fact the defendants paid the entire cost of construction which amounted to $423,815.35. Now if the plaintiff was to be an owner, and was to pay part of the cost of construction, and was to pay also interest on a defined part of the cost, it is difficult to say why the interest to be paid should not be computed while the expenditures of the defendants were being made. We do not discover any sufficient reason for holding either that the interest should be paid on the first sum, $133,333.34, that was expended, or that it should be deferred until the last sum of that amount was paid out. There is nothing of that kind in the agreement, and as the parties were jointly interested in defraying the actual cost of construction, it is far more conscionable, and more reasonable, that interest should be allowed as the expenditures were made. The proper mode of ascertaining the time from which the interest payments should be computed in such circumstances would be by equating the date of all the expenditures on account of construction, and allowing interest from that date. This was the method adopted by the learned court below, and it meets with our entire approval.
*335The argument that interest could not commence to run until after the completion of the tunnel, because the lessor was to pay nothing unless the tunnel was opened successfully, is of no force. By the absolute terms of the contract the lessor was to contribute if the tunnel was successfully opened, and that is the contingency which has transpired. The obligation of the lessor to contribute is therefore just as complete as if there had been no alternative condition. As the lessor agreed to contribute to the actual expenditures in the event which has transpired, and to pay also interest on the expenditures, it is but reasonable that the interest payments should be computed as of the time the expenditures were being made. If any other time was intended it should have been expressed in the agreement. If the tunnel was not a success there could not be any interest due, because there would then be no principal due, and the contention that interest would not commence to run until after completion in the event of nonsuccess is fallacious, because in that event interest could never commence.
Judgment affirmed.