Court Opinion

ID: 3691071
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:33:28.655109+00
Date Added: 2024-06-11T15:33:00.791508
License: Public Domain

The trial court found that the defendants on January 29, 1983 became obligated to pay to plaintiffs $57,780 as and for a real estate commission. The majority affirms that decision. The trial court also held that the defendants must pay plaintiffs interest on that sum from the time they should have paid it. The majority, however, says that interest cannot be allowed from the date the commission was due, but only from the date of the judgment.
The question, as I see it, is whether the plaintiffs have been further damaged by the defendants' wrongful refusal to pay the commission when it was earned. To ask the question is to give the answer. Of course, they have been further damaged. If the purpose of an award of damages is to fully compensate the wronged person, as it is, how can it possibly be said that the *Page 272 
plaintiffs, who have been wronged, have been fully compensated when they have been deprived of $57,780 for more than two years?
For those interested in a more indepth study of prejudgment interest, a look at the following authorities would be helpful. McCormick, Damages (1935) 205, Section 50 et seq.; 1 Sedgwick, Damages (9 Ed. 1920), Section 300; Note, Recovery of Prejudgment Interest on an Unliquidated State Claim Arising within the Sixth Circuit (1977), 46 U. Cin. L. Rev. 151; Annotation, Allowance of Prejudgment Interest on Builder's Recovery in Action For Breach of Construction Contract (1974), 60 A.L.R. 3d 487; Annotation, Interest on Damages for Period Before Judgment for Injury to, or Detention, Loss, or Destruction of, Property (1954), 36 A.L.R. 2d 337; 22 American Jurisprudence 2d (1965) 256, Damages, Section 179 et seq.
The term "interest" includes two distinct forms of compensation. Conventional interest, sometimes called interest eonomine, is compensation allowed by law or fixed by the parties for the use or detention of money. Interest as damages is compensation allowed as additional damages for loss of use of the money due during the lapse of time since the accrual of the claim. McCormick, supra, at Section 50.
Conventional interest was not allowed at common law. It was considered usurious and its taking was a punishable offense. With the advent of modern commercial practice, however, the recovery of interest was authorized by statute and parties were permitted, within limits, to contract for interest. Prejudgment interest, that is, interest as damages, is a judicial creation. Its allowance is not dependent on the existence of statutory authorization.
Because of the common-law stigma associated with interest eonomine, the courts were slow to accept the concept of interest as damages. Initially, interest as damages was allowed only on liquidated claims. This was broadened both by a more expansive definition of what is a liquidated claim and also by allowing interest not only on liquidated claims but also unliquidated claims capable of ascertainment. The better view is to recognize that the object of interest as damages is to fully compensate the wronged person for pecuniary loss and it matters not if that loss is liquidated or unliquidated.
McCormick traces the distinction between liquidated claims and unliquidated claims to a survival of the medieval distaste for interest as "usurious." McCormick, supra, Sections 51 and 55. The move away from the illogical distinction between liquidated and unliquidated claims has varied from a re-definition of what is a liquidated claim to a complete rejection of the distinction itself. 22 American Jurisprudence 2d (1965), Damages, Sections 179, 181 and 185.
The United States Supreme Court has noted whether the claim be liquidated or not, that "when necessary in order to arrive at fair compensation, the court in the exercise of sound discretion, may include interest or its equivalent as an element of damages."Miller v. Robertson (1924), 266 U.S. 243, 258. And in Funkhouser
v. J.B. Preston Co. (1933), 290 U.S. 163, 168-169, the Supreme Court said:
"* * * It has been recognized that a distinction, in this respect, simply as between cases of liquidated and unliquidated damages, is not a sound one. Whether the case is of the one class or the other, the injured party has suffered a loss which may be regarded as not fully compensated if he is confined to the amount found to be recoverable as of the time of breach and nothing is added for the delay in obtaining the award of damages. Because of this *Page 273 
fact, the rule with respect to unliquidated claims has been in evolution (Faber v. New York [222 N.Y. 255, 118 N.E. 609],supra), and in the absence of legislation the courts have dealt with the question of allowing interest according to their conception of the demands of justice and practicality. Miller v.Robertson, 266 U.S. 243, 258. `The disinclination to allow interest on claim of uncertain amount seems based on practice rather than theoretical grounds.' Williston on Contracts, vol. III, § 1413. * * *"
The Ohio Supreme Court long ago recognized that merely because a claim was unliquidated did not preclude prejudgment interest as damages. In Lawrence RR. Co. v. Cobb (1878), 35 Ohio St. 94, an abutting landowner sued a railroad for damage caused by an excavation in front of the lot whereby access to the lot was destroyed. In approving prejudgment interest as damages the court said at 98-99:
"Nor was there error in the charge of the court in respect to the amount of damages. The rule of damages in such case is compensation for the injury, or, in other words, that the injured party should be made whole. And while it is true that such a claim is not one, which, under the statute, bears interest, nevertheless, if reparation for the injury is delayed for a long time by the wrong-doer, the injured party can not be made whole unless the damages awarded include compensation, in the nature of interest, for withholding the reparation which ought to have been promptly made."
Where the city unlawfully took land, the owner was entitled to not only the value of the land taken but also prejudgment interest. Longworth v. Cincinnati (1891), 48 Ohio St. 637,28 N.E. 274.
Prejudgment interest as compensation must be looked at from the perspective of the wronged party and not the perspective of the wrongdoer. It is not punishment, as is sometimes suggested, but compensation. Therefore, it matters not if the failure to pay a lawful claim is due to the wrongdoer's deliberate delay or an honest dispute as to the amount due. The additional damage to the wronged party is the same.
Although I am prepared to go as far as Cavnar v. QualityControl Parking, Inc. (Tex. 1985), 696 S.W.2d 549, wherein the Supreme Court of Texas in personal injury and wrongful death cases now allows prejudgment interest as damages for both pecuniary and non-pecuniary losses, I do feel that prejudgment interest as damage should not be precluded on pecuniary loss, merely because the claim is unliquidated.
I also disagree with the majority's application of the very rule which they purport to follow, that is, the amount due could not be ascertained until trial. The contract between the parties provided (as both the trial court and this court have determined) that the broker was due six percent of the sale price as commission. I fail to see how this amount can be said to be incapable of ascertainment. Furthermore, the sellers admitted owing some commission but not the total amount claimed. And yet, this court does not even allow interest on the undisputed amount. The logic of this also escapes me.
I would affirm the judgment below. *Page 274