On Rehearing.
SIBLEY, Circuit Judge.We ordered a rehearing that we might reconsider especially whether interest as damages, as contrasted with interest required by the contract or a statute, ought to be awarded from the dates on which by the final establishment of lower rates in Arkansas the right matured to have refunds made in Texas, as to the first and third periods in controversy; and from the date of the unreversed decree as to the second period; and whether the running of interest should not be suspended for any time during which the City resisted settlement by the Gas Company with its patrons.
The statement of the case made in our former opinion stands. We adhere to the conclusions that no statute awards interest, and none is promised in the contract. The _ remainder of the opinion expresses the views of the lower court and may be cor- ■ rect. under the general principles of equity jurisprudence; but we feel constrained to depart from them in part for the reasons which follow.
This being a case in which this court exercises jurisdiction only because of diversity of citizenship, we are bound, though it be a case in equity, to follow the rules of law established for like cases in the courts of Texas where law and equity are merged. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487; Wichita Royalty Co. v. City National Bank, 306 U.S. 103, 59 S.Ct. 420, 83 L.Ed. 515.
The Texas courts recognize the difference between interest contracted for or required by statute and interest allowed as damages for the detention of money; but the later cases hold that interest of the last named sort is not allowed as a matter of discretion, but is due as a matter of law if the amount of recovery, whether under a contract or for a tort, depends on conditions existing at the due date, though unascertained and disputed till the time of the trial. In such cases interest is to be added as matter of law by the court in entering judgment on the verdict of the jury when it is certain the jury has not already included it. Watkins v. Junker, 90 Tex. 584, 40 S.W. 11; Ewing v. Foley, Inc., 115 Tex. 222, 280 S.W. 499, 44 A.L.R. 627; Texas & N. O. Ry. Co. v. Dingfelder & Balish, 134 Tex. 156, 133 S.W.2d 967; First State Bank v. Commercial State Bank, Tex.Civ.App., 34 S.W.2d 297; Taylor-Link Oil Co. v. Anderson, Tex.Civ.App., 92 S.W.2d 499; Harrison v. Barngrover, Tex.Civ.App., 118 S.W.2d 415; Joy v. Peacock, Tex.Civ.App., 131 S.W.2d 1012. The amount of each refund due in this case depended on simple fixed factors, to-wit, the rate charged and the rate finally established in Arkansas. Because not paid when due, interest at the legal rate is owing as a matter of law as damages for detaining the money, unless waived. But the refund id this case was not due to be made as soon as the money was collected, for under the contract an involuntary lower rate was not *295to be put into effect in Texas until it was finally established in Arkansas. City of Texarkana v. Arkansas Gas Co., 306 U.S. 188, at page 202, 59 S.Ct. 448, at page 455, 83 L.Ed. 598.1 Until then the Gas Company could collect and keep the money under the current Texas rate. The duty to make refund of the overcharge- did not arise until Dec. 5, 1933, as to the first period in controversy, and Oct. 10, 1938, as to the third, being the dates on which the respective litigations in Arkansas came to an end.
As to the second period, interest was not claimed in the pleadings nor insisted on in the trial, and a decree was rendered for the refunds of that period without interest. That part of the decree stands unreversed by the mandate of the Supreme Court. In the leading case of Ewing v. Foley, supra, it is stated that when interest is not-claimed in the pleadings or in the trial it is waived and cannot afterwards be added. But this decree itself, standing unreversed, should draw interest from its date, July 21, 1937, according to Rule 30 of this Court and of the Supreme Court; and Article 5072, Revised Civil Statutes of Texas, is to the same effect.
It appears that for some period the City, whose contract with the Gas Company is being enforced for the benefit of the latter’s patrons, itself complicated the situation by taking partial assignments from the patrons and prayed the court to stop the Gas Company from settling with the patrons until the further order of the court, and this was done. During any time that the Gas Company was prevented by the City from making payments which it was endeavoring to make, the City cannot demand interest as damages for nonpayment. The facts do not clearly appear in this regard, and may be ascertained hereafter.
The Gas Company did settle with numerous patrons before the issue about interest was pressed. It is earnestly argued that acceptance by these of the principal without claiming interest is a waiver of interest allowable as damages. Such is the general rule. 30 Am.Jur., Interest, § 12; Stewart v. Barnes, 153 U.S. 456, 14 S.Ct. 849, 38 L.Ed. 781; Nelson v. Chicago Mill & Lumber Corp., 8 Cir., 76 F.2d 17, 100 A.L.R. 87; United Brothers v. Kennedy, Tex.Civ.App., 193 S.W. 253. This issue was not presented in the court below, and the facts concerning it have not been developed. The matter is left open for consideration by the district court.
The judgment of affirmance heretofore made is set aside, and the decree appealed from is reversed in so far as it denies all interest and the cause is remanded for further proceedings not inconsistent with this ,opinion.
“The lower rates for Texas are to he effective only when the utility is ‘finally compelled to, or should voluntarily, place , in’ effect the lower rates for Arkansas. * * * We construe ‘finally compelled’ as meaning the entry by a court of the final order which makes effective a challenged rate order. No right to demand the lower rate and no cause of action to enforce the right arises until that time.”