did not exercise "actual control over the managerial decisions of the enterprise in which the funds are to be utilized." Indeed, the jury found that McLaughlin had ousted ECM and assumed sole control over the partnership in which Lamoreau's funds had been invested. The note also does not meet the definition of "business loan" because Lamoreau has not signed an affidavit setting forth the intended use of the proceeds of the note.
Neither of the parties has cited to us, nor has our research revealed any interpretation of the "business loan" exception to Pennsylvania's maximum lawful rate of interest statute beyond that of the Secretary of Banking. Clearly, the McLaughlin/Lamoreau note does not fall under that interpretation. Moreover, our reading of the record persuades us that this was more of a personal debt in a business context than it was a business loan. Therefore, McLaughlin may collect only the usual legal rate of interest on the note, six percent per annum.
B. The Period for Which Interest Must be Paid
Lamoreau argues that he should not be required to pay interest from January 1, 1975, until October 1976, because McLaughlin had converted the partnership assets. The note, however, plainly states that interest was to be paid "on demand March 30, 1975." The jury found Lamoreau liable on this note, and it would be an intrusion into the jury's province for us now to hold Lamoreau liable on terms other than those clearly provided by the note. Therefore, Lamoreau is liable for interest payments for at least the stated period of the note, from October 9, 1974 to March 30, 1975.
The more difficult issue concerns the period after March 30, 1975, for which Lamoreau must pay interest.
McLaughlin contends that the note was a time note due on March 30, 1975, and that Lamoreau, by failing to satisfy the note on that day immediately went into default, so that in addition to the period of the note, interest should be paid from March 30, 1975 until judgment.
Lamoreau observes that although McLaughlin could have demanded payment as of March 30, 1975, he did not do so until suit on the note was filed. According to Lamoreau, as we have seen, because the note was a hybrid, both a time and demand note, he could not be put in default until McLaughlin at least made demand.
We conclude that if one is to give meaning to all its words, the note on its face is susceptible to no other interpretation than that it is payable on McLaughlin's demand, but not before March 30, 1975. Consequently, although the note became payable on March 30, 1975, Lamoreau could not be exposed to default until McLaughlin demanded payment. The equivalent of demand, McLaughlin's filing suit on the note, did not occur until August 31, 1976.
As of that date, Lamoreau was in default for refusing to satisfy his obligation under the promissory note.
In sum, the jury having found Lamoreau liable on the note, he must pay the stated interest of six percent per annum on the principal of the note from October 9, 1974, to March 30, 1975. Lamoreau is also liable to McLaughlin for interest at the legal rate on the total amount due under the note (principal and interest due as of March 30, 1975) from August 31, 1976, until judgment. (Additionally, Lamoreau is liable for post-judgment interest.)
II. Maryland Pre-Judgment Interest
The jury returned a judgment in the amount of $ 189,837.09 in favor of ECM against defendants McLaughlin and Laugro Company, Inc. In an Order of October 6, 1981, we amended the judgment in favor of ECM and against McLaughlin and Laugro Company, Inc., by adding the words following the last sentence: "with defendant Harry J. Rohlfing liable for $ 44,207.09 of the total judgment of $ 189,837.09."
ECM has moved to amend the judgment to include pre-judgment interest under Maryland law, which governed its suit against McLaughlin, Laugro Company, Inc. and Harry J. Rohlfing. ECM contends that it is entitled to interest on either (1) the amount of the judgment awarded by the jury; (2) the value of its share in the franchise; or (3) the value of ECM's total investment in the partnership. ECM contends that pre-judgment interest should be computed either from January 1975, the date when the jury found that McLaughlin wrongfully ousted ECM from the partnership, or from June 1976, the date that ECM demanded payment for its share in the partnership by filing this lawsuit. Defendants argue that ECM is not entitled to pre-judgment interest under any of ECM's theories because the damages recovered by ECM were unliquidated and Maryland law does not permit pre-judgment interest when damages are unliquidated.
We conclude that ECM must be awarded pre-judgment interest computed from January 15, 1975, until the date of the judgment. Defendants have shot wide of the mark in arguing that interest may not be awarded because ECM's damages were "unliquidated." Under Maryland law, pre-judgment interest "is recoverable as a matter of right in a tort action for the conversion of a chattel where the goods converted have "a readily ascertainable market value.' " I. W. Berman Props. v. Porter Bros., Inc., 276 Md. 1, 344 A.2d 65, 74-75 (Ct.App.1975) (quoting Taylor v. Wahby, 271 Md. 101, 314 A.2d 100, 106 (Ct.App.1974)). See also Charles County Broadcasting Co. v. Meares, 270 Md. 321, 311 A.2d 27 (Ct.App.1973); Andrews v. Clark, 72 Md. 396, 20 A. 429 (1890); Md. Law Ency., Interest & Usury § 4 (1961). In such a case, interest runs from the date of the conversion or wrongful withholding.
This case falls squarely within the category of cases in which Maryland courts grant pre-judgment interest. The gravamen of ECM's claim was that it had wrongfully been ousted from the partnership and that McLaughlin had converted the partnership assets to his own use. Moreover, the nature of the property at issue-an interest in a business partnership-is the kind of property which has a readily ascertainable market value.
Therefore, ECM may recover pre-judgment interest on the jury's award to be computed from January 15, 1975, until the judgment is satisfied.
The only remaining question on ECM's motion concerns the rate of post-judgment interest which may be awarded. Although both parties have submitted the issue to us on the assumption that Maryland law governs, we are obligated to address the choice of law issue pertaining to awards of interest. Under 28 U.S.C. § 1961, interest shall be levied on a money judgment recovered in a civil case in a district court
in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of entry of the judgment, at the rate allowed by State law.
Under Pennsylvania choice of law rules, which have not been recently examined on this point by any state or federal court, the question whether any such interest is payable and at what rate is governed by the law of the place where the obligation arose. Thorp v. American Av. & Gen. Ins. Co., 212 F.2d 821 (3d Cir. 1954); Clark v. Searight, 135 Pa. 173, 19 A. 941 (1890); 19 P.L.E. Interest & Usury § 2 (1959). Maryland law governed ECM's suit. Maryland interest law governs the liability of defendants for interest on ECM's property which had been converted, and also the pre-judgment interest to which ECM was entitled, because pre-judgment interest arises as a matter of right out of the underlying transaction which was governed by Maryland law. Pennsylvania law provides that "a judgment for a specific sum of money shall bear interest at the lawful rate from the date of the verdict or award...." Pa.Cons.Stat.Ann. tit. 42, § 8101 (Purdon Pamphlet 1980). The "lawful rate" of interest, as noted above, is determined by the law governing the obligation, which in this case is Maryland law. Therefore, Maryland law also supplies the rate of post-judgment interest.
The Maryland Constitution provides that, unless the Maryland Legislature otherwise directs, the legal rate of interest is six percent per annum. Md.Const.Art. 3, § 57. Effective July 1, 1980, pursuant to a statute passed by the Maryland Legislature, the legal rate of interest on judgments in Maryland is ten percent per annum on the amount of the judgment. Ann.Code, Courts and Judicial Proceedings, Md. § 11-107. Prior to July 1, 1980, it appears that the legal rate on interest on judgments was determined by reference to the State Constitution. We therefore rule that defendants must pay interest of six percent per annum on the principal amount of the judgment, $ 189,837.09, from January 15, 1975, to June 30, 1980, and ten percent per annum from July 1, 1980, until the judgment is satisfied.