a different sort, involves the entire breach of a contract which would ultimately require payment of the sum for which the instrument was given or the security pledged this measure of damages seems accurate, but though laid down broadly in the cases, the correctness of the rule seems open to question unless judgment in the case will merge not only the obligation primarily sued upon, but also all right upon the contract or debt to which the security relates.

§ 1412. Nature of interest.

Interest may be reserved by the terms of a contract between the parties, and is then called conventional interest, or it may be awarded by the law as damages though no agreement for interest has been made by the parties. Even where interest is reserved by contract a distinction is to be observed between cases where the provision for interest is properly to be construed (1) as involving an agreement for the continuance of an indebtedness, and a price therefor, and (2), as liquidated damages or penalty for violation of an agreement to pay an indebtedness at maturity.

§ 1413. On what claims interest is allowed as damages.

In discussing the measure of damages for breach of an obligation the endeavor must first be to determine the extent of the injury at the time of the breach, and then to consider whether added damages must be awarded for the delay which necessarily elapses between the time of the breach and the time of the beginning of the action or the time of the trial. Except where special consequential damages arising after the breach are recoverable the only additional element of damage recoverable is interest, and the inquiry therefore must be made, when is interest recoverable as well as the main element of damages? In England the question is settled by a statute, 39 which

"By 3 & 4 Wm. 4, c. 42, s. 28, it is enacted "That upon all debts or sums certain, payable at a certain time or otherwise, the jury on the trial of any issue, or on any inquisition of damages, may, if they shall think

fit, allow interest to the creditor at

a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums certain be payable, by virtue of some written instrument at a certain time, or if payable otherwise, then from the time when

enumerates the cases in which interest is recoverable, and this enumeration is held to be exhaustive.40 In the United States, however, the governing rules must be sought in judicial decisions, not always harmonious. In a few jurisdictions, the allowance of interest seems never to be an absolute right, but to be allowed by the jury in appropriate cases in their discretion.40 Generally, however, there are some definite rules of law. On a unilateral or independent contractual obligation to pay a liquidated sum of money at a certain time interest is almost universally allowed from the time when payment was due.41 And the fact that the contract provides that interest shall be paid to the date of maturity does not exclude the allowance by way of damages of interest after maturity. 42

Wherever payment is to be made on demand either by the terms of the contract or because credit is given but no time of payment is stated, interest runs from the time when demand is made. 43 There may, however, be an implication that payment

demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the Idate of such demand until the term of payment; provided that interest shall be payable in all cases in which it is now payable by law."

40 London, C. & D. Ry. Co. v. South Eastern Ry. Co., [1893] A. C. 429, 430.

40a District of Columbia v. Camden Works, 15 D. C. App. 198, 222; Shoop v. Fidelity &c. Co., 124 Md. 130, 139, 91 Atl. 753.

41 Armstrong v. American Exchange Bank, 133 U. S. 433, 470, 10 Sup. Ct. 450, 33 L. Ed. 747; Herman H. Hettler Lumber Co. v. Olds, 242 Fed. 456, 155 C. C. A. 232 (Mich.); New York Trust Co. v. Detroit &c. Ry. Co., 251 Fed. 514, 518, 163 C. C. A. 508; Park v. Wiley, 67 Ala. 310; Pacific Mutual Life Ins. v. Fisher, 106 Cal. 224, 39 Pac. 758; Braun v. Hess, 187 Ill. 283, 58 N. E. 371, 79 Am. St. Rep. 221; Henderson, etc., Mfg. Co. v. Lowell

Mach. Shops, 86 Ky. 668, 7 S. W. 142; Maine Central Institute v. Haskell, 73 Me. 140; Bassett v. Sanborn, 9 Cush. 58; Beardslee v. Horton, 3 Mich. 560; Judd v. Dike, 30 Minn. 380, 15 N. W. 672; Buzzell v. Snell, 25 N. H. 474; People v. New York, 5 Cow. 331; West Republic Mining Co. v. Jones, 108 Pa. 55; Fleming's Est., 184 Pa. 80, 88, 39 Atl. 27, 29; Spencer v. Pierce, 5 R. I. 63; Martin Bros. Co. v. Peterson, 38 S. Dak. 494, 162 N. W. 154; Sampson v. Warner, 48 Vt. 247; Butler v. Kirby, 53 Wis. 188, 10 N. W. 373.

42 Thorndike v. United States, 2 Mason, 1; Spaulding v. Lord, 19 Wis. 533.

43 National Bank V. Mechanics' Nat. Bank, 94 U. S. 437, 24 L. Ed. 176; Andrus v. Bradley, 102 Fed. 54, 107 Fed. 196, 46 C. C. A. 238, 53 L. R. A. 432, on appeal, sub nom. Parker v. Gaines (Ark.), 11 S. W. 693; Anderson v. Pacific Bank, 112 Cal. 598, 44 Pac. 1063, 32 L. R. A. 479, 53 Am. St. Rep. 228; Taft v. Stoddard, 142 Mass. 545, 8 N. E. 586; Nye v. Lothrop, 94 Mich.

is immediately due though no agreement was made in regard to the precise time of payment. Thus where goods are sold and delivered for cash,44 or with no agreement for credit,45 interest is allowed from the time when the goods were delivered; and such is the rule in actions for work or services which were furnished under an agreement for a liquidated price, or where market prices furnish an exact standard of value," or where there has been an account stated. An exception to this rule exists in regard to a running account. It may be supposed in such an account that there was no intention that each item was to be paid separately and that, therefore, credit was intended. For this reason, interest will not run until demand is made. 48 When, however, a balance of account has been struck, interest then begins to run. 49 And the fact that several

411, 54 N. W. 178; Horn v. Hansen, 56 Minn. 43, 57 N. W. 315, 22 L. R. A. 617; York v. Farmers' Bank, 105 Mo. App. 127, 79 S. W. 968; Irlbacker v. Roth, 25 N. Y. App. Div. 290, 49 N. Y. S. 538.

"Atlantic Phosphate Co. v. Grafflin, 114 U. S. 492, 5 Sup. Ct. 967, 26 L. Ed. 221; Yellow Poplar Lumber Co. v. Daniel, 109 Fed. 39, 48 C. C. A. 204; Waring v. Henry, 30 Ala. 721; District of Columbia v. Camden Iron Works, 15 D. C. App. Cas. 198, 222; Wyandotte & K. C. G. Co. v. Schliefer, 22 Kans. 468; Henderson C. M. Co. v. Lowell Machine Shops, 86 Ky. 668, 7 S. W. 142; Foote v. Blanchard, 6 Allen, 221, 83 Am. Dec. 624.

Shields v. Henry, 31 Ala. 53; Roberts v. Wilcoxson, 36 Ark. 355; Sturges v. Green, 27 Kans. 235; McAfee v. Dix, 101 N. Y. App. D. 69, 91 N. Y. S. 464.

*Richmond &c. Co. v. Richmond, etc., R. Co., 68 Fed. 105, 15 C. C. A. 289, 34 L. R. A. 625; Mix v. Miller, 57 Cal. 356; Fairchild v. Bay Point &c. R., 22 Cal. App. 328, 134 Pac. 338; Loomis #. Gillett, 75 Conn. 298, 53 Atl. 581; Sullivan v. Nicoulin, 113 Ia. 76, 83, 84 N. W. 978; McCreery v. Green, 38 Mich. 172; Mullally v. Dingman, 62

46

Neb. 702, 87 N. W. 543; Ruckman v. Bergholz, 37 N. J. L. 437; Martin v. Silliman, 53 N. Y. 615; Bradley v. McDonald, 157 N. Y. App. D. 572, 142 N. Y. S. 702; Faber v. New York, 222 N. Y. 255, 118 N. E. 609; Happy v. Prickett, 24 Wash. 290, 64 Pac. 528; Laycock v. Parker, 103 Wis. 161, 79 N. W. 327.

47 Switzler Advertising Co. v. Orr, 198 Ill. App. 98.

48 South Carolina v. Port Royal, etc., R. Co., 89 Fed. 565; Tyree v. Parham's Ex., 66 Ala. 424; Rogers v. Yarnell, 51 Ark. 198, 10 S. W. 622; Heald v. Hendy, 89 Cal. 632, 27 Pac. 67; Crosby v. Mason, 32 Conn. 482; Phillips v. Rehm, 64 Ill. App. 477; Marrone v. Ehrat, 175 Ill. App. 649; Hunt v. Nevers, 15 Pick. 500, 26 Am. Dec. 616; Morrill v. Weeks, 70 N. H. 178, 46 Atl. 32; Ledyard v. Bull, 119 N. Y. 62, 23 N. E. 444; Miles v. Bowers, 49 Oreg. 429, 90 Pac. 905; Gibson's Est., 228 Pa. 409, 77 Atl. 627.

49 Young v. Godbe, 15 Wall. 562, 21 L. Ed. 250; Hartshorn v. Byrne, 147 Ill. 418, 35 N. E. 622 (affirming 45 Ill. App. 250); Luetgert v. Volker, 153 Ill. 385, 39 N. E. 113; Crosby v. Otis, 32 Me. 256; Walden v. Sherburne, 15 Johns. 409.

sales have been made at different times by the plaintiff to the defendant does not necessarily prove that there was a continuing account; and, if there was not, interest runs from the dates when each item fell due. 50 Interest is not generally allowed until action has been brought on claims which are unliquidated and where market rates or prices furnish no definite or exact test of the amount due, 51 unless the defendant's obligation was unilateral and performance was due at a fixed time. In such a case as, for instance, where goods or services have been paid for in advance, the plaintiff is entitled to interest from the time when the goods or services should have been rendered. 52 In any event interest is ordinarily given from the date of the writ; 53 but in case of damages based on anticipated profits of uncertain amount, in some jurisdictions at least, interest is not allowed until verdict, or judgment.55 The disinclination to allow interest on claim of uncertain amount seems based on practice rather than theoretical grounds.

50 Martin Bros. Co. v. Peterson, 38 S. Dak. 494, 162 N. W. 154.

51 Hewes v. Germain Fruit Co., 106 Cal. 441, 39 Pac. 853; Macomber v. Bigelow, 123 Cal. 532, 56 Pac. 449, 126 Cal. 9, 58 Pac. 312; Dexter v. Collins, 21 Col. 455, 42 Pac. 664; Coburn v. Muskegon Booming Co., 72 Mich. 134, 40 N. W. 198; Swanson v. Andrus, 83 Minn. 505, 86 N. W. 465; Wiggins Ferry Co. v. Chicago & A. R. Co., 128 Mo. 224, 27 S. W. 568, 30 S. W. 430; Underwood Typewriter Co. v. Century &c. Co., 165 Mo. App. 131, 146 S. W. 448; Wittenberg v. Mollyneaux, 59 Neb. 203, 80 N. W. 824; Carricarti v. Blanco, 121 N. Y. 230, 24 N. E. 284; Faber v. New York, 222 N. Y. 255, 262, 118 N. E. 609; Anthony v. Moore, etc., Co., 136 N. Y. App. Div. 933, 120 N. Y. S. 402; Hoisting Machinery Co. v. Federal Terra Cotta Co., 179 N. Y. App. D. 653, 167 N. Y. S. 85. (See also Tuzzeo v. American Bonding Co., 226 N. Y. 171, 123 N. E. 142.) Interest was allowed on the market value of a vessel as fixed by the jury, in Rederiaktiebolaget Amie v.

54

Universal Transp. Co., 250 Fed. 400, 162 C. C. A. 470. See also Babayan v Reed, 257 Pa. 206, 101 Atl. 339.

52 Kinston Mfg. Co. v. Freeman, 247 Fed. 54, 159 C. C. A. 272; Pujo. v. McKinlay, 42 Cal. 559; Garrard v. Dawson, 49 Ga. 434; Andrews v. Clark, 72 Md. 396, 20 Atl. 429; Bickell v. Colton, 41 Miss. 368; Van Rensselaer v. Jewett, 5 Denio, 135, 2 N. Y. (Comst.) 135, 51 Am. Dec. 275; Bicknall v. Waterman, 5 R. I. 43.

53 Griffing Bros. Co. v. Winfield, 53 Fla. 589, 604, 43 So. 687; Dame v. Wood, 75 N. H. 38, 70 Atl. 1081; Mercer v. Vose, 67 N. Y. 56; Charman v. Tatum, 54 N. Y. App. D. 61, 66 N. Y. S. 275; Tucker v. Grover, 60 Wis. 240, 19 N. W. 62.

54 Swanson v. Andrews, 83 Minn. 505, 86 N. W. 465. See also Great Northern R. Co. v. Philadelphia &c. Co., 242 Fed. 799, 155 C. C. A. 387 (Minn.).

55 Welsbach Street Lighting Co. v. Wichita, 101 Kan. 452, 168 Pac. 1090, 102 Kan. 4, 169 Pac. 193.

§ 1414. Interest on a penal bond.

As said by the Supreme Court of the United States, 56 "There has been much contrariety of opinion upon the question whether, in any case, the obligee in a penal bond can recover interest in addition to the penalty. The weight of authority in England is adverse to the recovery." In this country the tendency of the decisions in the state courts seems to be in favor of the allowance of such interest." 58 The court added, "In this court, although the question seems not to have frequently arisen, the English rule has usually but not invariably been followed.50 In the state of the decisions, we may safely apply the rule followed by Mr. Justice Clifford in a case at the circuit, and we need go no further in order to overrule the contention raised by the Government at the trial of the present case: 'Sureties, if answerable at all for interest beyond the amount of the penalty of the bond given by their principal, can only be held for such an amount as accrued from their own default in unjustly withholding payment after being notified of the default of the principal.'" 60 But in a later decision the Court followed the law of the State where the contract was made and allowed interest in excess of the penalty

"Citing 1 Wms. Saunders, 58, Note; White v. Sealy, 1 Doug. 49; Wilde v. Clarkson, 6 Term. Rep. 303 (disapproving Ld. Lonsdale v. Church, 2 Term. Rep. 388); Tew v. Winterton, 3 Bro. Ch. 489; 29 Eng. Reprint, 660, 663, note.

Citing Perit v. Wallis (Pa. Sup. Ct.), 2 Dall. 252, 255, 1 L. Ed. 370; Williams v. Willson, 1 Vt. 266, 273; Judge of Probate v. Heydock, 8 N. H. 491, 494; Wyman v. Robinson, 73 Me. 384, 387, 40 Am. Rep. 360; Carter v. Thorn, 18 B. Mon. 613, 619, to which may be added Holmes v. Standard Oil Co., 183 Ill. 70, 55 N. E. 647.

"Citing, M'Gill v. Bank of United

States, 12 Wheat. 511, 515, 6 L. Ed 711; Farrar v. United States, 5 Pet. 373, 385, 8 L. Ed. 159; Ives v. Merchants' Bank, 12 How. 159, 164, 165, 13 L. Ed. 936; United States v. Broadhead, 127 U. S. 212, 32 L. ed. 147.

60 United States v. Hills, 4 Cliff. 618; Fed. Cas. No. 15,369. This is in effect the same rule applied in Ives v. Merchants' Bank, 12 How. 159, 13 L. Ed. 936. See also United States v. Quinn, 122 Fed. 65, 58 C. C. A. 401. This rule was followed in Tuzzeo v. American Bonding Co., 226 N. Y. 171, 123 N. E. 142, the court holding the defendant liable for interest on the penal sum only from the time when he could have safely paid the same, providing he then unjustly withholds

"