Long v. Long

34 Pa. D. & C.3d 135, 1983 Pa. Dist. & Cnty. Dec. LEXIS 82
CourtPennsylvania Court of Common Pleas, Somerset County
DecidedJuly 1, 1983
Docketno. 493 Civil 1981
StatusPublished

This text of 34 Pa. D. & C.3d 135 (Long v. Long) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Somerset County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Long v. Long, 34 Pa. D. & C.3d 135, 1983 Pa. Dist. & Cnty. Dec. LEXIS 82 (Pa. Super. Ct. 1983).

Opinion

COFFROTH, P.J.,

This case is here on defendant’s preliminary objections to plaintiffs, amended complaint in assumpsit and trespass1. We state and answer the issues raised as follows;

[136]*136Part I, Demurrer To Count II

The demurrer states only the generality that Count II “fails to state a cause of action” without giving any reason why that is so, in violation of Civil Rule 1028(a) which states that:

“Preliminary objections shall state specifically the grounds relied on.”

Commonwealth v. Penner, 34 Somerset L. J. 364, 5 D.&C.3d 499 (1977); Spickler v. Lombardo (No. 3), 34 Somerset L. J. 131, 136 (1976); Pittsburgh National Bank v. Garrity, 31 Somerset L. J. 333 (1976); Weber v. Sipe et al., 41 Somerset L. J. 305 (1982). Although specific grounds were briefed and argued without objection by plaintiffs, the court is not bound by plaintiffs’ waiver; the questions argued are technical in nature and insufficiently substantial to induce us to waive the rule. See Pittsburgh National Bank v. Garrity, supra, 336-337, on waiver. The demurrer is overruled.

Part II, Demurrer To Count III

Overruled for the same reasons stated above in respect of the demurrer to Count II.

Part III, motion to strike the averments of the amended complaint insofar as they allege “entitlement to interest, at the rate of 12 percent, as consequential damages, on the damages allegedly suffered by them [plaintiffs]”.

As is apparent from defendants’ brief, the only objection is to charging interest at a rate in excess of six percent per annum, not to charging interest at the latter rate.

The same question arose on preliminary objections to the original complaint where we said:

“(2) The stated amount of damages claimed includes a calculation of pre-judgment interest at the rate of 12 percent per annum on the theory that [137]*137‘plaintiffs could have earned’ that amount of interest on the royalties on the stripping lease had they received them in accordance with the memorandum of agreement. Plaintiffs will be entitled only to ‘lawful interest’ on any principal amount recovered. With few exceptions, lawful interest in Pennsylvania is six percent per annum. See: Act of 1974 P.L. 13, §201 et seq., 41 P.S. §§201 et seq., and cases there cited to §202. If plaintiffs claim in excess of that rate in the amended complaint, the factual and legal basis therefor shall be stated.”

In an effort to meet that requirement, plaintiffs have inserted in the amended complaint new paragraphs 21a, 21b and 21c, the latter two of which undertake to state the basis for a claim of interest at a rate higher than six percent per annum, and read as follows:

“21b. Defendants at the time that they refused to sign the lease, as aforementioned, foresaw or in the exercise of reasonable diligence could have foreseen that in addition to the loss of royalties, plaintiffs would lose earnings on said royalties and the said defendants foresaw or could have foreseen that said loss would be at the respective market rates of interest for such sums during the period of time involved, which plaintiffs have estimated on Exhibit C at 12 percent per annum.
“21c. Interest at 12 percent per annum or at the applicable market rates for such sums of money as are involved during the time periods involved is sought as consequential damages for breach of a covenant or agreement to enter into the lease and is not sought for breach of an agreement to pay money for which, in the absence of an agreement to the contrary, the statutory rate of interest would be due. The higher rate is claimed as independent consequential damages flowing from the breach which [138]*138were or should have been foreseeable by defendants.”

Defense counsel argues that existing law imposes a six percent maximum on pre-verdict interest; plaintiffs’ counsel acknowledges that the cases have generally so held, but urges us to update that notion in order to reflect a “market rate” more in line with actual rates during the period of time in question, so as to provide a fair and full measure of compensatory damages to plaintiffs.

We note here that our problem relates only to pre-verdict interest. Interest on verdicts (and judgments) is governed by Judicial Code §8101, 42 Pa. C.S., which provides as follows:

“§8101. Interest on judgments”
“Except as otherwise provided by another statute, a judgment for a specific sum of money shall bear interest at the lawful rate from the date of the verdict or award, or from the date of the judgment, if the judgment is not entered upon a verdict or award.”

The “lawful rate” there referred to is six percent per annum as prescribed by §202 of the Act of 1974 P.L. 13, 41 P.S. §202, which provides as follows:

“§202. Legal rate of interest”
“Reference in any law or document enacted or executed heretofore or hereafter to legal rate of interest’ and reference in any document to an obligation to pay a sum of money ‘with interest’ without specification of the applicable rate shall be construed to refer to the rate of interest of six percent per annum.” Code §8101 supra does not bar or in any way apply to pre-verdict interest. Sack v. Feinman, 489 Pa. 152, 161, 414 A.2d 1059 (1980).

The legal rate of interest in Pennsylvania, in the absence of an express contract for a lower rate, [139]*139in cases not covered by a specific statute to the contrary, is six percent per annum. PLE, Interest and Usury, §21. The standard six percent rate is contained in §201 of the Act of 1974 P.L. 13, 41 P.S., which provides as follows:

“§201. Maximum lawful interest rate”
“Except as provided in Article III of this act, the maximum lawful rate of interest for the loan or use of money in an amount of fifty thousand dollars ($50,000) or less in all cases where no express contract shall have been made for a less rate shall be six percent per annum.”2

The first significant feature of §201 is that it applies only to “interest for the loan or use of money”. The phrase “loan. ... of money” is clear; it refers to those cases in which the parties create a debt which “involves the relationship of debtor and creditor, of borrower and lender, and ordinarily signifies an exchange of cash [money] for a promise to return it with an increment of interest, and where money is paid with the intent that the person receiving it shall have unrestricted use thereof, being liable to [140]*140[repay] a similar amount. . . .”26 CJS, Debt page 3. The disjunctive clause “or use of money” is not quite so clear; but the tenor of the authorities is that it is a synonym for “loan”, Kenin Trust (No. 1), 343 Pa. 549, 563 note 4 (1942), intended to cover cases whose form may vary from that of a typical loan but whose substance is a loan, that is, “the hire of money”, Melnicoff v. Huber Investment Co., 12 D.&C. 405, 407 (1929), cited with approval in Equitable Credit & Discount Co. v. Geier, 342 Pa. 445, 455 note 7, 22 A.2d 53, 58 (1941) and Equipment Finance, Inc. v. Grannas, 207 Pa. Super. 363, 366, 218 A.2d 81, 82 (1966).

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Bluebook (online)
34 Pa. D. & C.3d 135, 1983 Pa. Dist. & Cnty. Dec. LEXIS 82, Counsel Stack Legal Research, https://law.counselstack.com/opinion/long-v-long-pactcomplsomers-1983.