Bartlett v. Heersche

Prager, J.,

dissenting: I respectfully dissent from Syl. ¶ 3 and the corresponding portions of the opinion which deny interest on the judgment at the rate of 8% per annum after July 1, 1969. Interest is the compensation allowed by law, or fixed by the parties, for the use, detention, or forbearance of money. Legal interest has been defined as the rate of interest prescribed by law and prevailing in the absence of contract between the parties fixing the rate. In McDermott v. Sterling, 133 Kan. 521, 1 P. 2d 78, we stated that interest not contracted for is allowed by way of damages for nonpayment of money. We further stated that the interest statute prescribes the receivable rate when there is no agreement and the rate judgments shall bear. As pointed out in the opinion of the majority there is a split of authority on the application and effect of a statute changing the rate of interest allowed on judgments. The *376two line of cases on this subject are discussed in 45 Am. Jur. 2d, Interest and Usury, § 11, as follows:

“Where courts treat judgments as contractual, the interest rate provided has been held not to be affected by subsequent statutes changing the rate of interest, but many courts regard the allowance of interest on judgments as a matter of statutory grace, and hold that a state, without impairing the obligation of contracts, may reduce the rate of interest on judgments previously obtained in its courts, or may decree that all interest on judgments shall cease to accrue. The theory upon which this view is based is that interest on judgments is not a matter of contract, but is an obligation implied or imposed by law, and that the right to receive interest depends entirely upon what the state chooses to prescribe.”

In the case at bar I would interpret K. S. A. 1971 Supp. 16-204 to permit the recovery of interest at the rate of 8% per annum on all judgments rendered both before and after the effective date of the statute July 1, 1969. I would hold to this rule for the following reasons:

(1) I know of no decisions of this court holding that a judgment entered in an action to recover damages for personal injuries is contractual in nature. Hence the rationale of the cases which refuse to apply new statutory interest rates to existing judgments would not be applicable to Kansas.
(2) Since the purpose of interest allowed as damages is to compensate for nonpayment of money due but not paid, there appears to me to be no logical distinction to be made between a judgment entered before July 1, 1969, and a judgment entered thereafter. In each case money is due and unpaid and the same legal rate of interest prescribed by the legislature should logically apply.
(3) The wording of K. S. A. 1971 Supp. 16-204 does not justify a classification of judgments based upon the date of their rendition and the effective date of the statute. The statute states categorically “all judgments” of courts of this state shall bear interest from the day on which they are rendered, at the rate of 8% per annum, except as otherwise provided. In my opinion the words “all judgments” mean exactly what they say without regard to the date the judgment is entered. In this regard see the definition of “judgment” contained in K. S. A. 60-254 where a judgment is defined as “the final determination of the rights of the parties in an action.” The words in the statute “from the day on which they are rendered” are there for the sole purpose of establishing the time from which interest on a judgment is to be calculated. The phrase was not included in the statute to differentiate between various judgments rendered at different times in our courts.
(4) An examination of the relevant cases on this point which are set forth in 4 A. L. R. 2d 949 to 952, discloses that the majority of the cases regard the allowance of interest on judgments as a matter of statutory grace, and hence have held the rate of interest subject to later change by law, the change taking effect from the date of the statute.
*377(5) Finally, I have no quarrel with the opinion of the majority that the statute should be given prospective rather than retrospective effect. The effective date of the statute is July 1, 1969. I would apply the statute to all judgments as of that date and allow interest at 8% after that date. It would not give a retrospective effect to the statute by applying the law to “all judgments” existing on July 1, 1969, and entered thereafter.

I would affirm the trial court without modifying its finding that interest should be allowed at the rate of 8% per annum from July 1, 1969, until the judgment was paid.

Fontkon and Owsuey, JJ., join in the foregoing dissenting opinion.