GAYDEN v. KIRK

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Docket Number

No. 37266.

Judges

Alexander, J.

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GAYDEN v. KIRK.

Campbell Campbell, for motion.

(a) That the judgment of the circuit court affirming the judgment of the county court, was in error in that it decreed interest on the fund interplead into court against appellant.

(b) That this court should not decree interest against appellant on the fund interplead into court.

The foregoing two grounds were not submitted to this court on appeal inasmuch as no question thereof would arise until after affirmance by this court. State v. Carraway, 134 So. 846.

In our opinion and one which we think is upheld by the majority of the courts of the United States and the laws of Mississippi, the appellant as substituted defendant, has no more right to claim interest against appellant upon the affirmance of the judgment than would the original defendant, Pacific Mutual Life Insurance Company.

We direct attention at length to the opinion of the court in the case of Franklin Bank v. Bruns, 84 Ohio St. 19, 95 N.E. 386, Ann. Cas. 1912B 1002, and we take the following quotations therefrom: — "In 22 Cyc. 1559, the proposition is stated, that where a fund is in litigation, or the amount of a disputed claim is deposited in court, or subject to its order, interest is not recoverable thereon during the time it remains so deposited.

The rule is stated in 2 Black on Judgments (2nd Ed.) Sec. 983, viz: `In respect to interest, a decree has the same force as a judgment when it contests with other liens or claims for money. But this only refers to a decree in personam, binding all the property of the debtor, and rendered against the defendant without reference to the sale of particular property and the distribution of the funds arising therefrom,'

"And this principle is approved in National Bank v. Heard, 65 Ga. 189.

"In Van Gordon v. Ormsby, 60 Ia. 510, 15 N.W. 306, the court says: `The money was paid into court to await the order of the court. It does not appear that the intervenors acted otherwise than in good faith, and we do not think that they should be made to pay interest simply because they failed to establish their right to the money.'

"This rule was followed in Anderson v. Wilkinson, 10 Smed. M. 601, (18 Miss.)."

Following this case is a lengthy annotation which states the general rule to be: "As interest is allowed usually on the theory that the debtor is in default and has the use of claimant's money thereafter, the general rule is that when the fund is paid into court and cannot be paid out without order of the court such fund will not bear interest during such time as it is within the custody of the court."

In 30 Am. Jur. 233, Sec. 27, Interpleader, it is stated: "Generally, when a particular fund is paid into court in compliance with an order of interpleader, and cannot be paid out without an order of the court, this fund does not bear interest while it is within the court's custody."

There is no statutory authority giving an appellate court the right to adjudge interest against an unsuccessful appellant as a penalty. Section 39, Code 1942, provides as follows: "All judgments and decrees founded on any contract shall bear interest, after the rate of the debt on which the judgment or decree was rendered. All other judgments and decrees shall bear interest at the rate of six per centum per annum."

Suppose, in the instant case, instead of appealing, the appellant had accepted the decree of the county court as final; suppose further, that the clerk of the court had failed to pay over the sum interplead to appellee, and that she had ben forced to compulsory process to enforce the judgment, could she demand interest of appellant? The answer, of course, must be no.

Therefore, it is plain that Section 39 does not require appellant to pay interest, inasmuch as she is not required to pay anything under the judgment, so if she is required to pay interest now, it must be a penalty and authorized by a statute. A perusal of Section 1616 Code 1942, providing for appeals from county court, will show that no penalty in the nature of interest for taking an appeal is assessed against an appellant. The same is true of Section 1163, Code 1942, providing for giving bond with supersedeas.

B.B. Allen, R.M. Allen, Bridgforth Love, contra.

We want to be very frank in this discussion with the court, as we are more interested in the precedent to be here set than we are in the outcome of this point from a personal view point. On reading the order, and considering the case of Crystal Springs Bank v. New Orleans Cattle Loan Co., 132 Miss. 454, 96 So. 309, which was a case where interest on a fund in the hands of a receiver that was in litigation was held not subject to taxation of interest, we were inclined to doubt our position.

We are constrained to remark that this matter should properly be raised by motion to retax or to correct, instead of by a suggestion of error, and shall view this as a motion accordingly, as it appears to us it should have been.

True it is, that the funds in this case were paid into court and have not been used in the interim by appellant, yet at the same time our client has been kept out of its use by the action of appellant, and she has been denied use of the money she is entitled to; so that it would appear to us that when we got our judgment we were then entitled to our money, and when it was interfered with by the appellant and we were delayed in getting it, then appellant owes appellee interest on this fund from which appellee has been deprived by appellant.

Section 39 Code 1942 provides: "All judgments and decrees founded upon any contract, shall bear interest, after the rate of the debt on which the judgment or decree is rendered. All other judgments and decrees shall bear interest at the rate of six per cent per annum."

In the case of Aetna Insurance Co. v. Natchez Hotel, 160 Miss. 818, 134 So. 582, held that where decree against insurance company included interest to time funds were paid into court, decree properly provided that amount due should bear interest. We invite this court to a reading of point 4 of this opinion commencing at top of page 584. This court there cited Work v. Glaskins, 33 Miss. 539 and Smith v. German Bank, 60 Miss. 69, and quoted from the Works v. Glaskins case.

It will be noted that in the Crystal Springs Bank case, supra, did not consider or have under consideration Section 39, Code 1942, which provides, "All other judgments and decrees shall bear interest at the rate of six per centum per annum."

We have been deprived of our money through the action of appellant, and interest being an incident to the right to this money, we are entitled to this right. And this is true, irrespective of the fact that appellant has not had use of the money in the interim. We have been caused to suffer the loss of our interest, and under the rule that where one of two innocent persons must suffer, the loss must fall on him by whose conduct the loss has been made possible. So that it occurs to us that the better rule should be that in a case of this kind, interest follows as an incident to the establishment of our right to this money by judgment of the courts, and from that date, and that this right is enforceable as against the party causing that loss.

1. Appeal — suggestion of error, when may be treated as motion to correct judgment.

When a so-called suggestion of error raises the point that in statutory interpleader interest was erroneously charged against the original defendant, an incidental matter not stressed on the appeal and not assigned for error, the court would treat the suggestion as a motion to correct the judgment.

2. Interpleader — statutory — proceeding in rem.

When an insurance company sued upon a life insurance policy, by a party who claims to be the sole beneficiary, interpleads, under the statute, a third party, who also claims the proceeds of the policy as the sole beneficiary, pays the entire sum demanded into court and is by order of the court relieved of any further defense, the action thence proceeds as one in rem and the company is not liable to any personal judgment for the sum demanded nor for any further interest on it after payment into court.

3. Judgments — statutes — interest — not applicable to a proceeding in rem in interpleader.

The statute, Sec. 39, Code 1942, which provides that all judgments shall have interest has reference to judgments in personam, and not to a proceeding by statutory interpleader wherein upon payment of the money into court the original defendant becomes in effect no longer a party, and the interpleaded defendant and the original plaintiff bear to each other no relation of debtor and creditor, and this is not altered by the fact that the trial court erroneously entered judgment against the original defendant.

Headnotes as approved by Alexander, J.

Alexander, J.

At a former day of this term, we affirmed an award of the impleaded fund to appellee.

(Hn 1) The point is raised that the judgment entered by the clerk erroneously included interest on such fund between the date of the judgment in the county court and that upon affirmance in the circiut court. Such interest is also carried forward into our judgment. This point, being incidental, was not stressed upon the appeal here and not assigned for error. We entertain the suggestion as in substance a motion to correct the judgment.

(Hn 2) The judgment below was rendered against appellant, and was in effect a judgment in personam rather than in rem, as properly it should have been. 48 C.J.S., Interpleader, Section 47; Lokey v. Ward, 228 Ala. 559, 154 So. 802.

While the defendants in interpleader actions are rival claimants to an impounded fund and adversary parties with reference thereto, their aim is not directed against each other but from a common vantage point converges upon the fund as a res. Plausibly enough, appellee argues that once a judgment is directed for A, he has the right to stretch forth his hand to possess it, and when he is restrained by B's appeal with supersedeas, there is being unjustly withheld from him that which is his own.

This argument begs the questions whether A retains such right and whether B's course in prolonging the litigation and suspending A's right is unjust. The issues and merits of the case are, by successive appeals, carried forward to a final determination, and since the impleading plaintiff is not liable for interest after payment into court, there is no one against whom interest can be charged as an incident to a principal obligation because neither A nor B owe each other such sum. The fund, after appeal, retains its character as a deposit in court. An adjudication of the right thereto partakes not at all of a personal judgment against the other, except in the matter of costs which may be adjudged in the discretion of the court.

(Hn 3) It is therefore unavailing to argue that Code 1942, Section 39, provides that all judgments shall bear interest. This was not the sort of judgment contemplated thereby for the statute was directed to judgments in personam which became liens against the judgment debtor and are thereby exposed to process by execution. 30 Am. Jur., Interpleader, Section 27. See Black on Judgments, 2d Ed., Section 983; Annotation, Ann. Cas. 1912B, 1005.

Although the judgment in the circuit court was, as above stated, against the appellant rather than against the fund, the incidents of a proper judgment in an interpleader case must be taken into account. The litigation was, by the appeal with supersedeas, still pending in the court, and the issue remained open. Appellee has not been deprived of monies owed her by appellant, for neither was, as to the other, debtor or creditor. Compare Anderson v. Wilkinson, 10 Smedes M. 601, 18 Miss. 601.

The judgment will be correct so as to exclude therefrom any interest upon the impleaded fund.

So ordered.

GAYDEN v. KIRK.

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