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Carolson Commercial Corporation v Sawej Brothers Company [1986] MHSC 7; 1 MILR (Rev) 24 (4 February 1986)

1 MILR (Rev.) 24

IN THE SUPREME COURT
REPUBLIC OF THE MARSHALL ISLANDS

S.Ct. CIVIL NO. 84-01
(High Ct. Civil No. 1984-081)

CAROLSON COMMERCIAL CORPORATION,
Plaintiff-Appellant,

-v-

SAWEJ BROTHERS COMPANY,
Defendant-Appellee.

APPEAL FROM THE HIGH COURT

FEBRUARY 4, 1986

BURNETT, C.J.
SOLL, A.J., and TENNEKONE, A.J. (sitting by designation)

SUMMARY:

Appellant sought to enforce judgment against Appellee in the amount of $3,488.11 with interest at the rate of 9%. Appellant earlier waived right to receive interest, but on condition of receiving regular payments by specific dates. The court ruled that Appellee's failure to make timely payments automatically reinstated interest obligation.

DIGEST:

1. STATUTES – Construction and Operation: Title 8, § 1 of the Trust Territory Code provides every judgment for the payment of money bears an interest rate of 9% a year from date it is entered.

2. STATUTES – Same: Neither 8 TTC § 55 nor 8 TTC § 75 authorizes a court to forgive any part of a judgment obligation absent consent of the holder of the judgment.

OPINION OF THE COURT BY BURNETT, C.J.

On October 19, 1981, Appellant had judgment against Appellee in the amount of $3,488.11 including costs, with interest at the rate of 9%.

The matter next came before the court March 1, 1983, on Appellant's Motion for an Order in aid of Judgment. The parties stipulated in open court for payment of the amount then due at the rate of $600.00 per month, commencing April 1, 1983, and on the first day of each month thereafter until final satisfaction. Appellant further agreed to waive interest on the judgment if all payments were so made; failure to pay on or before the dates due would result in reinstatement of the interest obligation. The court approved the stipulation, and entered its written Order on March 15, 1983, in confirmation of that approval.

With exception of the first, succeeding payments were made late by periods ranging from 5 to 39 days, the last having been made on September 9, 1983. Appellant returned to the trial court seeking enforcement of the Order. It was denied on April 13, 1984, and this appeal followed.

It is clear that the amount in dispute represents interest which Appellant claims is due by reason of Appellee's failure to make payment on the dates ordered.

It is equally clear that, prior to the court's Order of March 13, 1983, and the stipulation on which that Order was based, Appellant had a fixed and certain right to the payment of interest. This right was based not only on the judgment but on statute as well.

[1] Title 8, § 1 of the Trust Territory Code, provides:

Every judgment for the payment of money shall bear interest at the rate of nine percent a year from the date it is entered ....

The right to receive interest could, of course, be waived by the Appellant, and he did so, conditioned on receiving regular payments on the judgment, and by specific dates. The court could not have entered its Order providing for the conditional waiver had it not been agreed to by the parties. To do so would be violative of the due process clause of the Constitution, Article II, § 4(1).

[2] The Order was obtained by Appellant under 8 TTC § 55 which requires the court to "determine the fastest manner in which the debtor can reasonably pay a judgment ...." Nothing is said which might purport to give the court authority to forgive any part of the judgment obligation.

Appellee urges that 8 TTC § 55 authorizes the court to "modify" an Order in Aid of Judgment. In the ordinary situation there is no doubt the court can modify a schedule of payments, both as to time and amount, as changed circumstances and justice may require. Aside from the fact that neither Appellee nor the court took any steps to "modify" the Order, this is not the typical situation. Only Appellant held the right to waive any part of the obligation – neither Appellee nor the court had the power to do so.

Appellee's failure to make payments at the times ordered automatically brought to bear the final sentence of the Order:

"then the judgment shall bear interest as provided in the judgment."

Appellant was entitled to enforce the judgment. It was error to refuse to do so.

Reversed and remanded to the trial court for further proceedings consistent with the views expressed herein.

Michael A. White for Appellant
Joseph C. Lehman for Appellee