Herrmann v. Gleaso

126 F.2d 936 (6th Cir. 1942)

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Nature of the Case

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Facts

Herrmann (P) leased its premises in 1919 for 99 years to the City National Bank of Lansing, Michigan. For the period ending April 1, 1927, a fixed rental was prescribed, payable quarterly in advance. The lease provided that for each ten-year term thereafter, the rental should be agreed upon by the parties, and, in case of failure so to agree, it should be determined by referees. The parties agreed on rentals of $600 per month, payable quarterly in advance, for the period from April 1, 1927, to March 31, 1937, and these sums were accordingly paid during that time, by the City National Bank, until it was taken over by the Capital National Bank. Thereafter, a receiver (D) was appointed for this bank, and the same rentals were paid by the receiver for three years after his appointment until the expiration of such ten-year period. P and D were unable to agree on rentals for the new ten-year period, beginning on April 1, 1937, and referees were appointed, in accordance with the lease provisions, to determine the rentals to be paid. The referees rendered an award, determining that the fair rental for the period beginning April 1, 1937, and ending March 31, 1947, 'is $725.00 per month, payable quarterly in advance.' The award was dated September 1, 1939. On October 12, 1939, D paid P a sum equivalent to the rentals up to and including that date, and for the ensuing quarter. P demanded interest on the payments for the period of twenty months during which no rental had been paid. P sued D for the interest, and the District Court held that interest is allowable only when provided for by contract, express or implied; or by statute; or when, as damages, it becomes due after a default by the person liable to pay; that appellants had established no right to interest by express or implied contract; or by statute; and since the receiver could not be in default until the amount of rental was ascertained, interest could not be allowed prior to the award. P appealed.