Neb. Rev. Stat. § 45-104

Current with changes from the 2022 Legislative Session
Section 45-104 - Interest; other contract obligations

Unless otherwise agreed, interest shall be allowed at the rate of twelve percent per annum on money due on any instrument in writing, or on settlement of the account from the day the balance shall be agreed upon, on money received to the use of another and retained without the owner's consent, express or implied, from the receipt thereof, and on money loaned or due and withheld by unreasonable delay of payment. Unless otherwise agreed or provided by law, each charge with respect to unsettled accounts between parties shall bear interest from the date of billing unless paid within thirty days from the date of billing.

Neb. Rev. Stat. § 45-104

Laws 1879, § 4, p. 114;
R.S.1913, § 3349;
C.S.1922, § 2837;
C.S.1929, § 45-104;
Laws 1933, c. 85, § 2, p. 336;
C.S.Supp.,1941, § 45-104;
R.S.1943, § 45-104;
Laws 1980, LB 279, § 7.

1. Instruments in writing 2. Accounts 3. Money retained 4. Money loaned or due 5. Miscellaneous 1. Instruments in writing A will is an instrument in writing. Therefore, when interest is required to be paid on a pecuniary devise pursuant to section 30-24,102, the legal rate of interest called for is 12 percent per annum, as required by this section. In re Estate of Peterson, 230 Neb. 744, 433 N.W.2d 500 (1988). Where the parties had "otherwise agreed" by a provision in their lease, this section was superseded. Prudential Ins. Co. v. Greco, 211 Neb. 342, 318 N.W.2d 724 (1982). Where no interest rate is inserted in a form contract providing for interest and it appears from other matter typed into the form contract and parol evidence at trial that no interest payments were intended, this section does not require that interest be paid. Lovelace v. Stern, 207 Neb. 174, 297 N.W.2d 160 (1980). Where under signed agreement defendant was to pay upon completion of subcontracts and date of completion was not proved, the account was not settled and interest was allowable from date of judgment only. Andrews Electric Co. v. Farm Automation, Inc., 188 Neb. 669, 198 N.W.2d 463 (1972). Note providing interest from date, without specified rate, bears interest at legal rate. Praest v. Quesner, 113 Neb. 485, 203 N.W. 549 (1925). In action on official bonds, interest runs from time, under terms of statute and bond, when funds should have been accounted for and turned over to successor. Thomssen v. County of Hall, 63 Neb. 777, 89 N.W. 389 (1902). A written instrument whereby maker promises to pay a specified sum with interest at a specified rate per annum draws interest from date of instrument notwithstanding the instrument contains a condition that it shall not be due and payable until payee shall render an account of money received under bond. Jewett v. McGillicuddy, 55 Neb. 588, 75 N.W. 1099 (1898). Demand certificates, in absence of agreement, draw interest at legal rate from demand, and, if no demand, then from commencement of suit. Morse v. Rice, 36 Neb. 212, 54 N.W. 308 (1893). In action on executor's bond for money which he failed to pay, interest should be allowed at legal rate. Bell v. Arndt, 24 Neb. 261, 38 N.W. 750 (1888). Due bills draw interest from date, unless there is some provision therein to the contrary. Estate of Bennett v. Taylor, 4 Neb. Unof. 800, 96 N.W. 669 (1903). Where written contract provides that purchase price of goods shall be paid by a certain date, seller is entitled to interest from date buyer was obligated to make payment. City of Hastings v. Nebraska-Kansas Nat. Gas Co., 226 F.2d 419 (8th Cir. 1955). 2. Accounts When a bank or savings institution is found liable for unauthorized withdrawal of funds from depositor's account, the depositor is entitled to interest from the date of such withdrawals to date of judgment. Edquist v. Commercial Sav. & Loan Assn., 191 Neb. 618, 217 N.W.2d 82 (1974). A cotenant who collects rents and profits from real estate is required to pay interest on each year's rent to the other cotenants. Fraser v. Temple, 173 Neb. 367, 113 N.W.2d 319 (1962). Trial court properly added to verdict interest on unsettled account from six months after date of last item. Heusser v. McAtee, 151 Neb. 828, 39 N.W.2d 802 (1949). In absence of contract, unsettled accounts do not draw interest until six months after the date of the last item. Moore v. Schank, 148 Neb. 228, 27 N.W.2d 165 (1947). Where mechanics' lien is based on book account, interest commences six months after date of last item, in absence of other agreement. Walker v. Collins Constr. Co., 121 Neb. 157, 236 N.W. 334 (1931). Unsettled accounts draw interest at legal rate beginning six months from date of last item, whether it be debit or credit, but greater rate may be agreed upon. Woodbury Granite Co. v. Miller, 102 Neb. 304, 167 N.W. 68 (1918); Lindell v. Deere, Wells & Co., 66 Neb. 87, 92 N.W. 164 (1902); Garneau v. Omaha Printing Co., 52 Neb. 383, 72 N.W. 360 (1897). In partnership accounts, interest may be allowed on an advancement, but not on withdrawals until replacement is demanded. Clark v. Warden, 10 Neb. 87, 4 N.W. 413 (1880). Interest on claim against receiver was properly allowed from date of contract which amounted to an account stated. Lupton v. Chase National Bank of New York, 89 F.Supp. 393 (D. Neb. 1950). 3. Money retained As used in this section, "money received to the use of another" indicates that the money is received on behalf of another person, such as an agent receiving money on behalf of his principal. Brook Valley Ltd. Part. v. Mutual of Omaha Bank, 285 Neb. 157, 825 N.W.2d 779 (2013). Where delay in payment of a specific legacy is caused by litigation which precluded speedy administration of estate, executor is not ordinarily chargeable with interest until a reasonable time has elapsed after difficulty has ceased. In re Kierstead's Estate, 128 Neb. 654, 259 N.W. 740 (1935). Money sought to be reclaimed as a trust fund from receiver of insolvent state bank bears interest at legal rate, as it is money received to the use of another and retained without the owner's consent. Hall v. Citizens State Bank of Superior, 122 Neb. 636, 241 N.W. 123 (1932). Agent chargeable with interest at legal rate from time money was wrongfully withheld from principal. Pearlman v. Snitzer, 112 Neb. 135, 198 N.W. 879 (1924). Interest may be allowed at legal rate on money due and withheld by unreasonable delay of payment. Mullally v. Dingman, 62 Neb. 702, 87 N.W. 543 (1901). A claim against an insolvent bank for specific money deposited and adjudicated to be a trust fund draws interest as money received to the use of another and retained without the owner's consent. Capital Nat. Bank v. Coldwater Nat. Bank, 49 Neb. 786, 69 N.W. 115 (1896), 59 A.S.R. 572 (1896). 4. Money loaned or due Where stockholders of a corporation resisted payment of additional judgment rendered on account of failure of same stockholders to pay share of original judgment, they were liable for interest on money due and withheld by unreasonable delay. First Nat. Bank of Omaha v. Cooper, 91 Neb. 624, 136 N.W. 1023 (1912). Allowance of interest on purchase money refunded is in discretion of court and cannot exceed legal rate. State Bank of Nebraska v. Green, 10 Neb. 130, 4 N.W. 942 (1880). Where, by express agreement, the amount of merchandise sold during each month was, at the end of the month, due and payable, sales for each month would draw interest from time account fell due. Beck v. Devereaux, 9 Neb. 109, 2 N.W. 365 (1879). Where amount due is liquidated, and there is evidence that makes it possible to compute with exactness the amount owed, the prevailing party is entitled to prejudgment interest. Kaus v. Bideaux, 709 F.2d 1221 (8th Cir. 1983). 5. Miscellaneous This section allows parties to contractually agree to a rate of prejudgment interest that will apply to a liquidated claim. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001). Under this section, an agent is chargeable with interest at the legal rate from the time that the money is wrongfully withheld from the principal. Cheloha v. Cheloha, 255 Neb. 32, 582 N.W.2d 291 (1998). This section only provides the interest rate on prejudgment interest in specific types of actions; it does not provide an alternative statute for recovery independent of section 45-103.02. Records v. Christensen, 246 Neb. 912, 524 N.W.2d 757 (1994). In order to receive prejudgment interest, a litigant must comply with section 45-103.02. Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993). Prejudgment interest is allowed where the amount of the claim is liquidated; if reasonable controversy exists concerning the claimant's right to recover or the amount of such recovery, the claim is unliquidated, and prejudgment interest is not allowed. Knox v. Cook, 233 Neb. 387, 446 N.W.2d 1 (1989). Applicant for attorney fees is not entitled to interest until fee is calculated and evaluated. State v. Ryan, 233 Neb. 151, 444 N.W.2d 656 (1989). Prejudgment interest is allowable only when the amount of the claim is liquidated. Graff v. Burnett, 226 Neb. 710, 414 N.W.2d 271 (1987). Where the parties have contracted for a particular lawful rate of interest, a court should award the contract rate rather than the statutory rate. Lease Northwest v. Davis, 224 Neb. 617, 400 N.W.2d 220 (1987). Amount due as interest prior to judgment by reason of agreement of the parties is not prejudgment interest as the term is used in this section. First Nat. Bank v. Bolzer, 221 Neb. 415, 377 N.W.2d 533 (1985). Prejudgment interest is properly disallowed where the claim is unliquidated. A claim is unliquidated when there exists a reasonable controversy as to plaintiff's right to recover and as to the amount of such a recovery, if any. Philip G. Johnson & Co. v. Salmen, 211 Neb. 123, 317 N.W.2d 900 (1982). Holder of an agister's lien on cattle covered by security agreement is not protected as to amount of interest in excess of that permitted hereunder. Mousel v. Daringer, 190 Neb. 77, 206 N.W.2d 579 (1973). A claim is liquidated if the evidence furnishes data which if believed makes it possible to compute the amount with exactness without reliance on opinion or discretion and on a liquidated claim prejudgment interest is allowed as a matter of right. Abbott v. Abbott, 188 Neb. 61, 195 N.W.2d 204 (1972). Interest properly allowed from date checks and warrants involved were deposited in treasurer's bank account. City of Bellevue v. Western Surety Co., 184 Neb. 678, 171 N.W.2d 772 (1969). Computation of interest by trial court was properly made. Western Pipe & Supply, Inc. v. Heart Mountain Oil Co., Inc., 179 Neb. 858, 140 N.W.2d 813 (1966). This section has no application to situation where damages are allowed to be offset against cash payment due on completion of building contract. Jones v. Elliott, 172 Neb. 96, 108 N.W.2d 742 (1961). In action based on quantum meruit, interest was not allowable until judgment. Umberger v. Sankey, 154 Neb. 881, 50 N.W.2d 346 (1951). On rescission of contract, party rescinding is liable for interest on money withheld from date of rescission. James v. Hogan, 154 Neb. 306, 47 N.W.2d 847 (1951). A claim adjudicated to be trust funds payable from assets of insolvent state bank in preference to depositors' claims is in effect a judgment, which bears interest at legal rate from date rendered. State ex rel. Sorensen v. Plateau State Bank, 126 Neb. 407, 253 N.W. 433 (1934). Provisions of United States Constitution do not forbid states to legislate on rates of interest. Klattenburg v. Qualsett, 114 Neb. 18, 205 N.W. 577 (1925). Cities are liable for interest in default, same as other debtors. Murphy v. City of Omaha, 33 Neb. 402, 50 N.W. 265 (1891). Section applies to barred claims revived by acknowledgment. Devereaux v. Henry, 16 Neb. 55, 19 N.W. 697 (1884). Claims bear interest, as matter of law, without any contract therefor, and no express allegation of interest is required. Peterson v. Mannix, 2 Neb. Unof. 795, 90 N.W. 210 (1902). Generally, prejudgment interest accrues on the unpaid balance of liquidated claims arising from an instrument in writing from the date the cause of action arose until the entry of judgment. Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624, 790 N.W.2d 462 (2010). This section provides the interest rate for prejudgment interest upon the happening of events outlined in this section. Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624, 790 N.W.2d 462 (2010). Constructive trustee who usurps a corporate opportunity is not entitled to interest. I.P. Homeowners, Inc. v. Radtke, 5 Neb. App. 271, 558 N.W.2d 582 (1997). In a suit where amounts of debts and set-offs were known, prejudgment interest should have run from a date six months after the last transaction affecting the account. Ford Motor Co. v. Auto Supply Co., Inc., 615 F.2d 757 (8th Cir. 1980). The trial court was correct in denying prejudgment interest when the amount due and owing on plaintiff's claim depended upon the interpretation of several contract clauses. Omaha Paper Stock Co. v. Harbor Ins. Co., 596 F.2d 283 (8th Cir. 1979). Excess judgment suit against insurer sounds in tort and no prejudgment interest is allowable. Lienemann v. State Farm Mut. Auto Fire & Cas. Co., 540 F.2d 333 (8th Cir. 1976). Section cited in denying interest on items of drayage, etc., in corporate receiver's report. Brictson Mfg. Co. v. Close, 25 F.2d 794 (8th Cir. 1928). Where amount claimed is a matter of reasonable controversy and is unliquidated, interest runs from date of judgment. Socony Mobil Oil Co. v. Klapal, 205 F.Supp. 388 (D. Neb. 1962).

For other provisions for interest on claims of $4,000 or less, see section 25-1801.