Sheckels v. District of Columbia

Background

A claimant, whose testator began a suit in 1880 under an Act allowing certain claims against the District of Columbia, sought payment from the District. The Court of Claims entered judgment for $7,306.25, finding the claim due April 1, 1876, but limited interest to the date of the judgment. The District did not appeal the 1916 judgment, and the sole issue before this Court was whether interest should run from the original due date or only from the judgment date.

Reasoning

The Court examined the 1880 Act together with the general rule in the Revised Statutes that interest is not allowed against the government before judgment unless a contract expressly provides for it. Sections of the 1880 Act created a special payment method using 3.65% coupon bonds dated August 1, 1874, and required that coupons maturing after the claim’s due date accompany bonds. An 1881 amendment let the Treasurer sell bonds and pay judgments from sale proceeds. Because the special bond fund was capped at $15,000,000 and almost all bonds had already been issued, the Court concluded only part of the claim could receive that limited bond-based interest, and any portion not paid in that way carried no pre-judgment interest. The Court therefore upheld the judgment’s restriction of interest to the date of rendition.

Real world impact

People holding similar claims against the District will usually not receive interest before a court issues a judgment unless their debt contractually provided for interest or they are paid from the special dated bonds, which were limited in supply.

Dissents or concurrances

Justice McReynolds did not participate in the decision.