| Wyo. | Jun 8, 1898
(After stating tbe case as above) In reason, and by tbe very great preponderance of authority, where there is either an express or implied contract to pay interest until the principal sum shall be paid, interest at the agreed rate, or, in the absence of an agreed rate, at the rate prescribed by law at the date of the contract, will be the rate recoverable until payment of the principal, or until the contract is merged in a judgment. State v. Guenther, 87 Wis., 673" court="Wis." date_filed="1894-05-01" href="https://app.midpage.ai/document/state-v-guenther-8184571?utm_source=webapp" opinion_id="8184571">87 Wis., 673; O’Brien v. Young 95 N. Y., 429; Morley v. Lake Shore R. Wy. Co., 146 U. S., 163.
It is also well settled that when the creditor, upon a breach of the contract, elects to merge it in a judgment, interest as agreed upon by the parties ceases, and the judgment will bear such interest as is prescribed by statute. There is no difference whatever in principle where the statute provides that the judgment shall bear the same rate as the contract bore, for it is equally true in such cases that the rate which the judgment bears is the one fixed by statute, and it does not become the j udgment rate by agreement of the parties. And it has never been seriously contended that by such change in the interest rate upon the contract being merged in a judgment, any right of either party to the contract is impaired or encroached upon. At common law judgments bore no interest, though compensation by way of damages might be recovered for unreasonable delay in payment. Indeed, the interest upon judgments allowed by statute is not interest
TJpon the propositions so far stated we think there can be no serious controversy. But it is contended that the judgment is a contract, of which the rate of interest fixed by statute at the time it is rendered is a part, and that the terms of such contract can not be subsequently changed or modified by statute. And if a judgment is a - contract in the sense of the term as used in our constitutions and statutes, there is apparently no escape from this conclusion. It has been stated by many judges and text-writers that a judgment is a contract, but we think this is true only, as stated in an Alabama case, in ‘ ‘ a very recondite and remote sense of the term.” Keith v. Estill, 9 Port., 669" court="Ala." date_filed="1839-06-15" href="https://app.midpage.ai/document/keith-v-estill-6529590?utm_source=webapp" opinion_id="6529590">9 Porter, 669. In this sense all men as members of society enter into a contract to perform whatever the law prescribes, and a judgment inflicting a punishment and a' judgment for money are alike contracts in this sense. But it can not be properly said that one convicted of felony serves a term of imprisonment in performance of a contract, or that a pardon by the executive is a mere release of his contract to serve such term. A judgment does not come within any definition of a contract as the term is used in our constitutions and statutes. It is lacking in the element of an agreement or convention of the parties — the meeting of the minds of the parties — which is essential to a valid contract; for, usually at least, a judgment is against the will of the defendant. . We are of the opinion that, in the recognized legal sense, a’ judgment is not a contract. Wyman v. Mitchell, 1
But the right of the judgment creditor to the rate of interest in force by statute at the time of the rendition of the judgment is also urged upon a somewhat different ground. It is said, “It is an implied condition of every agreement that the party failing to comply with its terms shall be liable to the party injured in such sum as the law will give him at the time the default is adjudged.” But the question at once suggests itself: Why imply the particular condition stated? If it is a matter of implied contract at all, why should it not be implied that the rate should be such as the law provided at the time the agreement was made rather than at the time the default is adjudged? Story says, “Implied contracts are such as reason and justice dictate from the nature of the transaction, and which, therefore, the law presumes that every man undertakes to perform.” Would-not the law rather presume an agreement for a rate or sum fixed and known to the parties, than one largely conjectural and dependent upon the will of a future Legislature? In that case the act in force at the making of the contract would control, even if at the time judgment was awarded, it had been repealed and a new rate established by the Legislature. But. no court, it is believed, has gone so far as to adopt this view. Indeed, it is difficult to understand how a law not yet in existence can be incorporated into, and become a part of, a contract. It is true a contract may be affected by a law subsequently enacted within the limitation that its obligation shall not be impaired. But this falls very far short of the proposition that a statute to be enacted in the future becomes incorporated into, and a part of, a contract at the time such contract is made; it clearly can not be incorporated afterward at the time the statute is
Is it not the more reasonable view, that it is not a matter of contract at all, and, judgments not bearing interest at the common law, he may, if left to his common law remedy, recover such damages as he can prove have accrued to him by being deprived of the use of his money; or, if regulated by a statute or statutes, such sum or rate as the statute or statutes have fixed as the value of the use of the money during the time he has been unreasonably deprived of it? This, in our opinion, is the correct view.
An act reducing the rate of interest which judgments shall bear, passed after the rendition of the judgment, is a conclusive determination by the Legislature that the damages accruing to the judgment creditor by being deprived of the use of the amount due are measured by a lower rate of interest during the period subsequent to the taking effect of the act than from the rendition of the judgment up to that time. If this view is correct, the plaintiff in this case has received all damages which accrued while its judgment remained unpaid, and none of its rights have been destroyed or interfered with by legislation. The defendants’ obligation to pay interest being simply that which the law imposed, they discharged that obligation by paying what the law exacted.
The specific answer to the question reserved is.that the interest should be calculated at the rate of twelve per cent up to February 11, 1895, and at eight per cent thereafter.