is an illustration. Such agreements may be based upon a wrong principle but in view of a general and common practice they could not be condemned as unconscionable. For one party to a contract to take advantage of the ignorance or necessities of another may well be condemned as ethically wrong. Taking candy from a child is the acme of meanness. When a party should be relieved of the obligation of a contract because the other party to it has reaped an unexpected or undue profit, is to be determined by the circumstances of each individual case.
The Master has given to the consideration of this case painstaking care. He has supported his conclusions by reasons set forth in a Report of gratifying clarity and bearing every evidence of considerate judgment. We accept his conclusions as sound and adopt them.
This disposes of all the questions raised by the exceptions to this voluminous Report except those which relate to the question of the allowance of interest. The United States excepts to the allowance of any interest and the Steel Company to the allowance made as inadequate. We have been unable to find these specific exceptions other than 3 and 4 of the Steel Company. The question was however argued before us and we will assume that it is raised by appropriate exceptions. The question of interest allowance is commonly treated in the reported cases in a more or less perfunctory way. There seems to be a disposition to treat it as a matter of course by allowing interest. Controversy is commonly over the rate of allowance. Interest is however a matter of contract, express or implied, or is an element in the assessment of damages. Here the contract was to pay a sum of money based upon a percentage of savings in the cost of the construction of these ships. There was no agreement to pay interest. The interest doctrine of the law of Pennsylvania in damage cases has been well stated by the Master. In tort cases it is not allowed qua interest but is allowable as an element in the assessment of the damages suffered by the plaintiff. The rate of allowance is not controlled by the usury Statutes except that what is commonly called the lawful rate cannot be exceeded. The reason for this limitation is obvious. In breach of contract cases what is really the like rule applies. Damages for the breach must be assessed. Deferred payment is an element.
We have in mind numerous cases, many of which have been cited to us, which rest upon a fiction. The fiction is that the damages became payable on the breach and there was then an implied promise to pay at once or to pay interest on deferred payments. Here there is no room for an implied promise. The promise was express to pay this bonus based upon a percentage of savings. Payment was not due until the saving was determined. This means here that the sum due does not bear interest until ascertained and hence not until judgment recovered. This in theory is no hardship to the contractor. He may press his claim promptly to judgment. He cannot turn it into an investment bearing, as is claimed here, six per cent. interest, thereby doubling the final payment to be made.
The Master was fully jusfitied in assessing the damages, in considering the interest item at a two per cent. rate.By the same token he might have excluded it altogether, which we think he should have done. There is in the allowance of interest something in the nature of a penalty for delayed payment. We do not think any such penalty was incurred here.
It has been urged upon us that no interest should be allowed because interest is not recoverable against the United States. We refuse to so hold but are in accord with the finding of the Master that the judgment to be entered is one against the Fleet Corporation.
To give definiteness of date to the decree and judgment to be entered none is now entered but leave is granted to enter a formal decree and judgment in accordance with this opinion and the conclusions stated below.
1. The Bill in Equity should be dismissed for want of Equity and the Cross-Bill for the additional reason of want of jurisdiction.
2. Judgment should be entered in the action at law of the Bethlehem Shipbuilding Corporation, Ltd. for the sum found by the Master without interest.
3. The other actions at law should be disposed of in accordance with the stipulations of the parties.
4. The Exceptions filed to the Report of the Master should be dismissed except the exception, if any, to the interest allowance which should be sustained.
5. As thus modified, if there is such exception, the Report of the Master should be approved and confirmed.
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