Keyes v. Nims , 43 Cal. App. 1 ( 1919 )

In his petition for a rehearing the appellant calls our attention to the fact that, in our original opinion, we overlooked the proposition urged by him in the briefs that the court below erred in allowing the plaintiff interest on the latter's share of the amount for which the defendant sold the royalty contract with the Samson Company. [7] The failure to consider the question of interest was purely an oversight, and, as it is an important question herein, it should have been considered, but we do not see the necessity of granting a rehearing for that purpose, and we will, therefore, consider and dispose of the point on this application without ordering a rehearing.

Counsel for appellant take the position that the demand declared upon by the plaintiff was uncertain or unliquidated, and that, therefore, it was error to include in the judgment against appellant interest on the amount awarded the plaintiff from the date of the sale and the payment of the money to appellant, which was April 3, 1917. In support of this position there are cited many California cases, of which the leading ones are: Cox v. McLaughlin, 76 Cal. 60, [9 Am. St. Rep. 164, 18 P. 100]; Easterbrook v. Farquharson, 110 Cal. 311, [42 P. 811], and Edwards v. Arp, 173 Cal. 476, [160 P. 551].

The reason for the denial of interest on unliquidated demands is said to be "that the person liable does not know what sum he owes, and, therefore, can be in no default for not paying." (Cox v. McLaughlin, supra.) But it is further said in that case: "We are not prepared to say, in general terms, that no interest in any case can be recovered in an action upon contract for an unliquidated demand. Mix v. Miller, 57 Cal. 356, decided since the adoption of the code, and McFadden v.Crawford, 39 Cal. 662, decided previously, attest the doctrine that in this state interest is allowable on such demands under some circumstances. These were cases in which the contract had been fully performed by the creditors, the fruits thereof accepted by the debtors, without objection, and they were clearly in default, and in the latter case the only questionwas as to value." (Italics ours.) This language is approvingly adopted into the opinion in Easterbrook v. Farquharson,110 Cal. 317, [42 P. 811], supra.

In the case of Robinson v. American Fish Co.,17 Cal.App. 212, 220, [119 P. 388, 391], the defendant had agreed with the plaintiff and a number of assignors of the latter to purchase fish from them, to be delivered to the defendant in the city of San Francisco. Action was brought by plaintiff to recover the aggregate sum of $815.60, which amount represented the demands of the plaintiff and his several assignors for fish delivered by them to defendant. The court awarded judgment to plaintiff in the total sum sued for, together with interest thereon at the legal rate of seven per cent per annum from the date of the delivery of the fish. In that case, on appeal, it was strenuously insisted that the demands declared upon were unliquidated and that the trial court, therefore, erred in allowing interest from the date of the delivery of the fish. There was a dispute therein as to whether the price agreed upon for the fish was a cent and a half or two cents per pound. This court, disposing of the question of interest in that case, said:

"There is no merit in the contention that the plaintiff was not entitled to interest on the several pleaded claims from the twenty-third day of October, 1910 — the day on which the fish mentioned in the complaint were sold and delivered to appellant. The quantity of fish sold to and received by appellant and the price to be paid therefor were definitely fixed and known to appellant. It was not necessary, in other words, to resort to evidence in court or to an accounting or by an accord between the parties to establish the amount due. To the contrary, the amount was susceptible of ascertainment by simple computation. (Cox v. McLaughlin, 76 Cal. 60, [9 Am. St. Rep. 164, 18 P. 100], and cases therein cited; Easterbrook v.Farquharson, 110 Cal. 311, 317, [42 P. 811]; Courtney v.Standard Box Co., 16 Cal.App. 600, [117 P. 778].) Indeed, there seems to have been no dispute as to the quantity of fish delivered to appellant by Meng, and while there was some controversy involving the price per pound which Junta agreed to pay therefor — that is, whether the price agreed upon was a cent and a half or two cents per pound — still the total amount due at either price was capable of ready ascertainment by mere computation, and, therefore, required no accounting to reach the precise sum due. As is said in Courtney v. StandardBox Co., 16 Cal.App. 600, [117 P. 778], so it is true here: 'Whether interest has been allowed upon the theory that compensation is thus awarded plaintiff for the use of his money, past due (Civ. Code, sec. 1917), or as damages for defendant's (appellant's) wrongful withholding of said money from plaintiff (Civ. Code, sec. 3287), in either case the allowance was perfectly proper.' " (We also call special attention to the Courtney case, cited above in the Robinson case.) It should be stated that a petition for a hearing of the Robinson case by the supreme court after judgment by this court was denied.

The comparatively recent case of Howard v. Hobson Co.,38 Cal.App. 445, [176 P. 715], was an action by one broker against another to recover one-half of the amount in excess of that for which certain real estate was to be sold for the owner, an agreement having been entered into by and between the brokers whereby they were to divide equally between themselves such excess amount. Judgment went for the plaintiff, with legal interest from the date of the sale of the property by the other broker. The evidence disclosed that the expenses incident to the negotiation and consummation of the sale of the property were to be deducted from the amount which the brokers were to receive as their compensation for effecting the sale. The contention on appeal in that case as to interest was, among other objections urged against the allowance of interest, that the demand sued on was unliquidated, and that, consequently, interest was not allowable prior to the date of the entry of judgment. That contention was rejected, and, among other things, this court said:

"As above stated, the moment that the sale of the ranch was fully effected and completed by the defendant, that moment the latter became indebted to the plaintiff in an amount equal to one-half of the net sum received by the defendant over and above that paid for the property to the owner of the ranch; and at that moment of time the amount due the plaintiff became certain and definite or capable of becoming readily so by the simplest of arithmetical calculation by the defendant of the difference between the 'excess amount' and the amount of the expense which it was necessary for it to incur to negotiate and consummate the sale. The defendant, of course, knew precisely what the expense of selling the ranch amounted to, and, of course, knew the 'excess amount' received, by him from the sale over the purchase price. The amount due the plaintiff, therefore, constituted, within the meaning of the law, a liquidated demand." The supreme court, it should be remarked, denied a hearing in that case after judgment in this court.

[8] In the present case the defendant, according to the findings, which are sufficiently supported, became indebted to the plaintiff in the sum to which the latter was entitled as a partner the moment that he (defendant) sold the royalty contract and received the money therefor. The plaintiff, it is true, sued for one-half of the amount received by the defendant for the royalty contract, while the court awarded him one-third of the amount only. But this did not make the demand uncertain or unliquidated. The defendant, it appears, at all times had control and management of the enterprise. He knew whether Clarke had or had not paid over his share of the amount agreed upon as the necessary total amount to launch the enterprise. The plaintiff appears to have had very little knowledge of what was going on in the prosecution of the ends of the copartnership, and it is probable, having heard that Clarke had withdrawn from the concern, that he sued on the theory that Clarke had never paid over his share of the working capital of the firm, and was, therefore, as a matter of fact, never a partner, and hence conceived that he was entitled to one-half of the profits of the enterprise, or of the amount for which the defendant sold the royalty contract. But, whether the defendant was entitled to one-half of the amount received for the royalty contract or to one-third only is entirely immaterial, so far as the question of interest is concerned. The defendant knew, as we may assume from the findings, that the plaintiff had an interest in the partnership. What that interest was was a disputed question between them, but it was either a one-half or a one-third interest. As to this, then, the only question to be determined was as to the extent of the plaintiff's interest. Whether it was found to be one-half or only one-third, in either case the demand was certain, definite, and liquidated.

The cases holding that interest is not allowable is where the demand is based upon a quantum valebat or a quantum meruit, in which it must be determined upon the evidence what the amount is, or where the amount of the demand must be determined by an accounting or by an examination of numerous accounts and counterclaims. This is not such a case, as we have shown. As stated, the amount of the demand here was ascertainable by a mere determination of the question whether the plaintiff's interest was one-half or only one-third in the partnership, and the defendant himself, if he knew the plaintiff had any interest at all, knew whether it was the one or the other. Therefore, when we consider the reason upon which is founded the rule that, generally speaking, interest will not be allowed on an unliquidated demand prior to the date of the entry of judgment therefor, viz., "that the person liable does not know what sum he owes, and therefore can be in no default for not paying," we readily perceive that the demand sued on here does not come within that rule — that is, that it is not unliquidated in the sense that interest is not payable upon it from the date the money was received by defendant.

The case of Easterbrook v. Farquharson, supra, cited by the appellant, was where the plaintiff leased to the defendant's assignor certain real property, upon which the lessor was to and did erect a building, under an agreement that on the last day of the term of the lease the lessor would pay the lessee two-thirds of the appraised value of the building, to be ascertained by three appraisers, one of whom was to be selected by the lessor, one by the lessee, and the third by the two so selected. The two appraisers appointed by the parties failed to select a third, and themselves failed to agree upon the value of the building. Some six months thereafter, nothing further having been done in the matter of the appraisement of the value of the building, although the lessor and lessee in the meantime had considerable negotiations looking to an adjustment of the matter, the lessor brought suit, setting forth the facts and the impracticability of securing an appraisement by the scheme agreed upon by him and the lessee, averring his readiness at all times to pay the defendant (lessee) two-thirds of the cash value of the building, and asking the court to determine the value of the building at the date of the termination of the lease, and so fix the amount due from him to defendant. The trial court found the value of the building, and, while in its findings it did not fix upon the plaintiff or his appraiser the responsibility for failure to agree upon an appraisement, nevertheless allowed interest on the amount found to represent the value of the building from the date of the termination of the lease. The supreme court held that the allowance of interest from the date of the termination of the lease was erroneous, and said: "To entitle respondent to interest as damages he must bring himself within the terms of section 3287 of the Civil Code. That section awards interest to every person who is entitled to recover damages, certain, or capable of being made certain, by calculation, where the right of recovery is vested in him upon a particular day. But damages are the compensation for the unlawful act or omission of another (Civ. Code, sec. 3281), and, as has been said, appellant had been guilty of no wrong. He went into court asking a settlement of his account with respondent, and under section 1917 of the Civil Code the sum bore interest only from the day of its judicial ascertainment."

It is plainly manifest that the above case is not in point here, and is no authority against the allowance of interest in the present case from the date the right of recovery was vested in the plaintiff, which was the time when the defendant received the money for the royalty contract.

It is not necessary to review the case of Edwards v. Arp,173 Cal. 476, [160 P. 551], supra, also cited by appellant in the petition, it being only necessary to say that in its facts it presents an entirely different situation upon the question of interest from that we find here.

The appellant further asks in his petition that the case be reopened for a further review of questions considered in the original opinion. We are satisfied with the views expressed and the conclusion announced in the former opinion as to the legal nature of the agreement between the parties hereto and the effect of making Clarke a party to said contract. We may repeat, though, what we have already said, that we do not consider that the contract sued on is at variance with the one proved. The fact merely is, according to the result reached by the trial court from the proofs, that the plaintiff sued upon the theory that he had a larger interest in the partnership than he in fact was entitled to. Thus the situation is the same as where a party sues for a certain sum alleged to be due under a contract with the defendant, but the proof shows that he is entitled to judgment for a less sum than that demanded by his complaint. Such a result, of course, does not mean that the plaintiff sued on one contract and proved and recovered on another.

The petition for a rehearing is denied.

Chipman, P. J., and Burnett, J., concurred.