Court Opinion

ID: 9858700
Source: CourtListenerOpinion
Date Created: 2023-09-24 16:35:02.445715+00
Date Added: 2024-06-11T09:55:30.049138
License: Public Domain

ON MOTION FOR REHEARING
Republic National Bank' and Northwest National Bank have both filed motions for rehearing. Republic argues that it is entitled to recover prejudgment interest under article 5069-1.03 based upon its petition in the trial court which contained a prayer for general relief seeking “other relief, both general and special, at law and in equity, to which it may show itself justly entitled.”^ This motion is granted. Northwest in its motion for rehearing reasserts that the letter of credit is unenforceable as a guaranty agreement. This motion is overruled.
Prejudgment interest is that interest calculated on the sum payable to the plaintiff from the time of his loss or injury to the time of judgment. It is recoverable as a matter of right where an ascertainable sum of money is determined to have been due and payable at a date certain prior to judgment. Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S.W.2d 480, 488 (Tex.1978) (collected authorities); Black Lake Pipe Line Co. v. Union Construction Co., 538 S.W.2d 80, 95-96 (Tex.1976). One specific situation where prejudgment interest may be recovered is governed by statute. Article 5069-1.03 of our revised civil statutes provides in pertinent part:
When no specified rate of interest is agreed upon by the parties, interest at the rate of six percent per annum shall be allowed on all written contracts ascertaining the sum payable, from and after the time when the sum is due and payable . .
Tex.Rev.Civ.Stat.Ann. art. 5069-1.03.
Republic contends that its letter of credit falls within the purview of this statute and that it is entitled to prejudgment interest based on its general prayer • for relief. We agree. Texas courts have repeatedly recognized that under article 5069-1.03, an award of prejudgment interest may be predicated on a prayer for general relief if the plaintiff pleads and proves a written contract ascertaining a sum pay*117able at a date certain prior to judgment. T J Service Co. v. Major Energy Co., 552 S.W.2d 598, 601 (Tex.Civ.App.—Corpus Christi 1977, writ ref’d n. r. e.); King Optical v. Automatic Data Processing of Dallas, Inc., 542 S.W.2d 213, 217 (Tex.Civ.App.—Waco 1976, writ ref’d n. r. e.); Liberty Mutual Insurance Co. v. General Insurance Corp., 517 S.W.2d 791, 799 (Tex.Civ.App.—Tyler 1974, writ ref’d n. r. e.); Combined Insurance Co. of America v. Kennedy, 495 S.W.2d 306, 308 (Tex.Civ.App.—Eastland 1973, writ ref’d n. r. e.); Tennessee Life Insurance Co. v. Nelson, 459 S.W.2d 450, 454 (Tex.Civ.App.—Houston [14th Dist.] 1970, no writ); Dunnam v. Dillingham, 345 S.W.2d 314, 319 (Tex.Civ.App.—Austin 1961, no writ). For example, in the Kennedy case the plaintiff brought suit against the insurance company after it discontinued disability payments under an injury and sickness policy. Judgment was for the plaintiff and the insurance company appealed, contending, among other things, that prejudgment interest was unauthorized under the plaintiff’s pleadings and prayer. The court of civil appeals disagreed. After noting that the contract in question fell within the purview of article 5069-1.03, the court held that prejudgment interest was properly awarded on a prayer that requested “such other and further relief, general and special in law and in equity, including costs of court, to which plaintiff shall be entitled.” 495 S.W.2d at 308.
This line of cases does not conflict with the rule set forth in Black Lake Pipe Line Co. v. Union Construction Co., supra at 96. In that case the plaintiff sought prejudgment interest as an element of damages in his quantum meruit action and not on the basis of a written contract under article 5069-1.03. Where prejudgment interest is sought at common law as an element of damages, the plaintiff must plead for it. Such is not the case where prejudgment interest is sought on the basis of a written contract fitting the description of article 5069-1.03. An award of this statutory interest, or interest eo nomine as it is known, may be supported by a prayer for general relief. Combined Insurance Co. of America v. Kennedy, supra at 308; Dunnam v. Dillingham, supra at 319.
This distinction was recognized in San Antonio & A.P. Ry. Co. v. Collins, 61 S.W.2d 84 (Tex.Com.App.1933, judgm’t adopted), where the court stated:
The suit being, not on the contract, because no labor was performed, but for damages . . . the Court of Civil Appeals therefore erred in holding that this suit comes within the terms of article 5070, [present article 5069-1.03] and interest should be allowed as a matter of legal right, although not alleged or prayed for, under a prayer for general relief.
Id. at 90 (emphasis added). Therefore, if the suit is on a written contract fitting the requirements of the statute, the award of prejudgment interest may be supported by a prayer for general relief. •
We hold that, under article 5069-1.-03, prejudgment interest may be awarded based on a prayer for general relief if the plaintiff pleads and proves a written contract ascertaining a sum payable on a date certain. In the present case Republic has plead and proved an enforceable letter of credit. The letter of credit and accompanying documents met the requirements of the statute in that no interest rate is stipulated, an ascertainable sum is stated, and a specific time for payment is provided. Northwest should therefore be required to pay the applicable prejudgment interest rate under the statute inasmuch as it had the extended use and benefit of the principal sum.
Republic’s motion for rehearing is granted and the judgment is reformed to reflect interest at a rate of 6 percent from March 8, 1971 to October 6, 1977. Northwest’s motion for rehearing is overruled.
GREENHILL, C. J., not sitting.