Burchfield v. Haffey

The opinion of the court was delivered by Horton, C. J.:

Upon the trial, the court charged the jury as follows:

“If you find from the evidence that Gurnsey did not notify Haffey of his failure to comply with the terms of his contract, and that Haffey was not informed of that fact until he received notice that his contract had been canceled, the measure of his damages is the amount he would have received from the United States during the time Gurnsey was to carry the mail, according to the terms of his contract, from the time he ceased to carry the same, less the amount he was pay Gurnsey *45 for said service, not to exceed the sum of three hundred dollars with interest thereon at the rate of seven per cent, per annum from the time Haffey made demand of the defendants therefor.”

i contractmeasur’e of damages. Complaint is made of this direction. "We do not think the jury were misdirected. Haffey was entitled as his damages fo what by the refusal of Gurnsey to perform his contract of May 19,1880, not exceeding amoun£ 0f koricL He had no opportunity to supply the service after Gurnsey’s refusal. When they signed the bond, the sureties should have known that under the rules of the post office department if the mail was not carried as provided for by the contract, the contract might be canceled. There is a conflict in the authorities upon the question of allowing interest as damages beyond the penalty of the bond. The weight of American authority, however, is in favor of allowing interest. Sutherland, in his work on Damages, says:

“The penalty is the limit of liability at the time of the breach. Interest is afterward given, not on the ground of contract, but as damages for its violation, for delay of payment after the duty to pay damages for breach of the condition to the amount of the penalty had attached.” (Yol. 2, pp. 14-19.)

In the notes to Sedgwick on Damages, it is stated:

“In the case of debt on bonds for the payment of money only, it seems now settled that interest may be recovered after default, even though it exceeds the penalty, and whether the action be against principal or surety.” (Yol. 2, 7th ed., pp. 261— 264.)

2. Penaitond; intereltf’ The penalty of the bond covers the misconduct of the principal ; but the interest allowed on the penalty is for the misconduct of the sureties — for the delay in payment. If the damages were paid when due, they would have earned interest. The statute provides:

“ Creditors shall be allowed to receive interest at the rate of seven per cent, per annum, when no other rate of interest is agreed upon, for any money after it becomes due; . . *46 and for money due and withheld by an unreasonable and vexatious delay of payment.” (Comp. Laws 1879, ch. 51, § 1.)

The authorities upon the question of allowing interest, even though it exceeds the penalty, are collected in the notes to the text cited, and to them we refer.

3. case, over- Our attention is called to the case of Simmons v. Garrett, McCahon’s Rep. 82. In view of the provisions of the present statute concerning interest, and the weight of the current authorities, that decision, rendered over twenty years ago, is not satisfactory to us, and therefore must be overruled.

We have examined the other questions submitted, but find nothing tenable against the rulings of the trial court.

The judgment of the district court must be affirmed.

All the Justices concurring.