Watson v. McManus

Opinion by

Mr. Justice Fell,

These are cross appeals and may be considered together. That of the city of Philadelphia, relates to its liability for .interest on a judgment against it after the date of a decree in another proceeding enjoining the plaintiff in the judgment from collecting it, pending litigation between him and another person to whom he had assigned his claim against the city, to determine to whom the judgment should be paid. The appeal of the plaintiff relates to his right to recover interest on the judgment after a decree awarding an injunction to restrain the city from paying the plaintiff in the judgment, no injunction having been issued and the city having taken- no steps to pay the money into court.

McManus, one of the defendants, obtained a judgment against the city in an action on a contract. Watson, the plaintiff here, claimed the money due on the judgment by virtue of an assignment by McManus, in consideration of advances made to him to enable him to carry out his contract. Proceedings in equity between these parties were pending for the adjustment of an account for advances made and moneys received and expended by Watson, -and he filed a bill for an injunction to restrain McManus from collecting his judgment. A demurrer to the bill was sustained April 20, 1904, and the preliminary injunction was thereby dissolved. Watson then filed an amended bill making the city a party, under which an injunction was awarded January 15, 1907, restraining Mc-Manus from collecting, and the city from paying, the judgment until a final decree should be entered in the equity suit between Watson and McManus. After decree in the latter proceeding in favor of Watson, the court in this proceeding by decree directed the judgment obtained by McManus against the city to be marked to the use of Watson and authorized him to enforce the payment of the same, with interest from the date of the entry of the judgment, February 2, 1904, to the date of the awarding of the injunction against the city, January 15, 1907.

The contention of the city, the appellant in the first appeal, is that it is not liable for interest on the judgment after the date of the injunction, February 20,1904, restraining McManus from collecting, because it was not in default. It was not a party to the proceeding, and the injunction fell when the demurrer was sustained on April 20, 1904, and there was no injunction in the proceeding to which it was a party either against Mc-Manus or against it until January 15,1907, the date to which the running of interest against it was limited by the court. In the meantime it had an appeal pending in which it contested the amount of the judgment, which was decided against it April 10, 1905. In the opinion of this court on that appeal it was said in reference to an order staying execution: “When the judgment was entered, it was the duty of the city to pay, and if there was another claimant to the fund, the proper practice would have been to ask for a rule on the plaintiff to show cause why leave should not be granted to pay the money into court in discharge of the judgment;” and the record was remitted with leave to the city to ask for a rule to show cause why it should not be permitted to pay the money into court: McManus v. Philadelphia, 211 Pa. 394. By Act of 1700, sec. 2, 1 Sm. L. 7, judgments bear interest from the time obtained until time of sale or until satisfaction be made. By this act, interest is a legal incident of every judgment: Cochran v. Cummings, 4 Dallas, 252; Commonwealth v. Miller, 8 S. & R. 452. It is as distinctly a substantive part of the debt as if the obligation to pay it was founded on a contract for interest. “Where the terms of an obligation comprehend interest, it is inaccurate to say interest is added by way of damages, for it is a substantive part of the debt as much as the principal is:” Hummel v. Brown, 24 Pa. 310. During a considerable portion of the time after judgment had been entered against the city, it resisted payment by an appeal. After final judgment against it, it could have relieved itself of any obligation for interest by paying the amount of the judgment into court. Not having done this, it is liable for interest.

The cross appeal by the plaintiff, Watson, presents the question of the liability of the city for interest after January 15, 1907, the date of the awarding of the injunction restraining McManus from collecting, and the city from paying, the judgment. After that date, the city could not pay, and it cannot be said that it was in default nor that it was under any duty except to obey the order of the court. This order had been procured by the plaintiff and payment had been stopped by him. The statutory provision for interest on a judgment should not be extended to require payment of interest to one at whose instance the payment of the principal has been stopped. A debtor, directed not to pay by order of court, cannot be said to be in default but rather to be in the position of one who has made a tender. The rights of the parties are not affected by the fact that an injunction was not actually issued and served. The city had knowledge of the order awarding an injunction and very properly observed it without compulsion.

The appeals are dismissed and the decree of the court is affirmed.