Court Opinion

ID: 9738656
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:59:59.166323+00
Date Added: 2024-06-11T07:24:07.668131
License: Public Domain

Windrum, District Judge,
concurring.
I concur in the opinion of the Honorable Judge Buckley and adopt his reasoning as expressed therein, with additional comments, except where in conflict herewith.
I have no quarrel with the general principle of law that where interest is provided for but the rate is not mentioned, the legal rate is to be paid. I do believe, however, that where interest is provided for but the rate thereof is “_,” there is a patent ambiguity.
In 1910, in the case entitled Hornstein v. Cifuno, 86 Neb. 103, 125 N.W. 136 (1910), the court was called upon to determine whether or not the legal rate of interest was due and payable from the maker of the following note, to wit: “$400. Omaha, Neb., Jan. 4,1907. One year after date we promise to pay to the order of Liberato Varriano four hundred and no-100 dollars at Omaha, Nebraska. Value received with interest at the rate of_per cent, per annum from_ until paid. . . .” Id. at 104, 125 N.W. at 136.
Chief Justice Reese, in writing the opinion, stated that the legal effect of such a note was the same as if there had been a period after the word “interest” and all the rest of the note would be disregarded. Many cases cite this case with approval. I submit that the court changed the agreement of the parties by placing a period after the word “interest” as the note still said “Value received with interest at the rate of_per cent, per annum from_until paid,” no matter what the court said it said. That is entirely different than stating “Value received with interest.” The ambiguity lies in that the parties could have intended that the note draw interest at the legal rate or that the *182parties could have intended that the note draw interest at the rate of_percent, which, in effect, would be no interest.
From the Hornstein v. Cifuno case it was an easy step to announce as a principle of law “A promissory note which, by its terms, provides for interest from date, without any specified rate, bears interest at the rate of 7 per cent. per annum from its date.” Such was syllabus point no. 2 in Praest v. Quesner, 113 Neb. 485, 203 N.W. 549 (1925).
The notes there construed provided for interest at the printed rate of 10 percent. However, the word “ten,” indicating the rate of interest, was stricken and nothing was inserted in lieu thereof.
Obviously, the legal rate of interest in 1925, at the time that case was decided, was 7 percent. Suppose that the printed rate in the note had been 7 percent: would the holding have been the same? I do not believe so, as it would have resulted in the anomalous situation of determining that, while the rate of interest was stricken by the parties, the parties intended the note to draw interest at the same rate, notwithstanding that the rate of interest was so stricken by the parties. Such reasoning would be ludicrous. However, the case cited as authority was Hornstein v. Cifuno, supra.
I realize that the two cases involved different situations. However, Praest v. Quesner is analyzed to point out the fallacious reasoning thereof, which is an extension of the fallacious reasoning in the case of Hornstein v. Cifuno.
It is the experience of the writer of this opinion that these problems are generally generated when printed notes are utilized between close members of the family and, oftentimes, there is no interest whatsoever intended. It would seem to the writer of this concurring opinion that it would be a better rule of law that, where a note provides for interest at the rate of “_ percent,” it shall be construed as patently ambiguous and parol evidence would be admissible *183to determine the intent of the parties. Anyone signing such a note or receiving such a note could expect that a lawsuit would ensue. Both the payee and the maker would be inconvenienced by their carelessness. Under the present rule of law in Nebraska, the payee of the note always recovers interest at the legal rate, regardless of the actual intent of the parties, and the maker has no recourse whatsoever. Such a rule is patently unfair. Why should the law favor one over the other? To do so completely ignores the common experience of mankind.
The legal principles announced in Hornstein v. Cifuno, supra, and Praest v. Quesner, supra, were erroneous when pronounced and should be overruled. The principles therein announced do not become more valid with age.