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Pinkstaff v. Pennsylvania R. Co.

DECEMBER 17, 1963.




Appeal from the Circuit Court of Cook County; the Hon. HAROLD WARD, Judge, presiding. Order reversed and cause remanded with directions.


Rehearing denied January 28, 1964.

On November 5, 1957 plaintiff had judgment in the amount of $50,000 against defendant on a jury verdict in a FELA action growing out of a switching operation on one of defendant's terminal tracks in which plaintiff was injured. Plaintiff was dissatisfied with the amount of the judgment. Motion for a new trial was overruled. Plaintiff then appealed to this court where the judgment was affirmed (23 Ill. App.2d 507, 163 N.E.2d 728 (1959)). On review in the Supreme Court of Illinois the judgment was again affirmed (20 Ill.2d 193, 170 N.E.2d 139 (1960)); ultimately, petition for certiorari to the Supreme Court of the United States was denied on April 17, 1961 (365 U.S. 878). Following this ruling of the Supreme Court, a dispute arose between the contending parties as to whether interest ran during the three and one-half years of unsuccessful appeals. The amount of interest in dispute at the time certiorari was denied was approximately $9000, and would now amount to over $12,000. To resolve the interest dispute, counsel for defendant on August 31, 1961 paid into the office of the clerk of the Circuit Court the sum of $49,250.70, computed on the following basis:

Judgment .................... $50,000.00 Costs in trial court ........ 36.10 Interest from 4-17-61 (the date when the United States Supreme Court denied certiorari) to 8-31-61 (the date of tender) ...... 931.50 _______________________ Total ....................... $50,967.60

Less Railroad Retirement Lien .................... 1,576.00

Net ......................... 49,391.60

Less Appellate Court costs of defendant ............ 140.90 _______________________ Net Balance ................. 49,250.70

Plaintiff was notified of the deposit of this sum but refused to accept it as a tender, contending that defendant improperly computed interest and costs, and arbitrarily deducted amounts for a lien and appellate court costs, and also claiming that he was entitled to interest for the entire period of unsuccessful litigation carried on by plaintiff, the judgment creditor.

On March 16, 1962, some six months after the deposit was made, plaintiff's counsel notified defendant that he would appear in the Circuit Court on motion to set for hearing and determination the issue of the sums due and owing plaintiff. Pursuant to hearing of plaintiff's motion an order was entered finding "that at no time had the defendant made such a tender of the payment of the judgment, interest, and costs as would stop the running of interest on the said judgment," and directing "that plaintiff have and recover the sum of $50,000, plus the costs in the trial court and plus the statutory sum of interest at the rate of five per cent on the said judgment . . . from November 5, 1957 until the same is satisfied in full." Defendant appeals from this judgment.

The question at issue is whether defendant should be required to pay interest on the judgment during the pendency of approximately three and one-half years of unsuccessful appeals to reviewing courts by the judgment creditor who considered the amount of the judgment inadequate and, for other reasons as well, challenged its validity. The entire controversy is centered on the provision of section 3 of the interest statute (Ill Rev Stats 1961, c 74, § 3). The relevant language of the act, in full force and effect at all times in the proceedings in this cause, reads as follows:

"Judgment, award, report or verdict — Interest. § 3. Judgments recovered before any court or magistrate shall draw interest at the rate of 5% per annum from the date of the same until satisfied. When judgment is entered upon any award, report or verdict, interest shall be computed at the rate aforesaid, from the time when made or rendered to the time of rendering judgment upon the same, and made a part of the judgment; Provided, however, that the judgment debtor may by tender or payment of judgment, costs and interest accrued to date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of appeal, writ of error, or other steps to reverse, vacate or modify the judgment."

This proviso in the statute was not added until 1955. Plaintiff's counsel asserts that under the language of the statute the resolution of the issue presented rests upon a determination of whether defendant has ever in fact made such a tender as, he claims, is required by the statute. The intent and meaning of the statute are of paramount importance, and the issue has been resolved by several fairly recent opinions significantly similar on the facts. The law of Illinois is explicit. It has been repeatedly held that interest is not allowable in such a situation. The United States Circuit Court of Appeals has comprehensively reviewed and stated the law on this subject in Quality Moulding Co. v. American Nat. Fire Ins. Co., 287 F.2d 313 (7th Cir 1961), decided after the proviso amendment to the interest statute became effective. The case had its genesis in the Municipal Court of Chicago and was transferred to the United States District Court on grounds of diversity of citizenship. The defendants there had moved that they not be required to pay interest from February 20, 1959, the date of the tenders, to March 2, 1960, the period during which plaintiff's unsuccessful appeal was pending. The court denied defendants' motion. The United States Court of Appeals, applying the law of Illinois, as it was required to do, reversed the district court and said in part (pp 314-315):

"It is a recognized principle of law in Illinois that interest will not be awarded to a judgment creditor covering the period of its unsuccessful appeal from a judgment in its favor. Kinne v. Duncan, 323 Ill. App. 363, 55 N.E.2d 545. The principal that one causing a delay in the satisfaction of a judgment is not entitled to interest thereon is recognized in Illinois. Moll v. Sanitary District of Chicago, 228 Ill. 633, 81 N.E. 1147; 23 ILP Interest § 64. Other jurisdictions have also adopted the principle that a judgment creditor who appeals from a judgment in its favor and attacks the judgment as invalid, is not entitled to interest if it is unsuccessful on its appeal. 47 CJS Interest § 59.

"In Kinne v. Duncan, supra, the Illinois court cited and quoted with approval State ex rel. Southern Real Estate & Financial Co. v. City of St. Louis, 234 Mo App 209, 115 S.W.2d ...

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