United States Fidelity & Guaranty Co. v. Clarke et al.

Supreme Court of Georgia1940-03-12No. No. 13069

190 Ga. 46

Summary · law.co

Holding. The judgment is reversed because the trial judge erred in refusing to allow interest on the fund portion belonging to the surety company. The county, having received and used money that ultimately belonged to the plaintiff, is liable for interest on that amount from the date the original judgment was entered.

A county received funds from a court-supervised receivership sale based on a judgment that was later reversed on appeal. The appellate court had previously remanded the case for the trial judge to enter a new decree. The central question on this appeal concerns whether the county must pay interest on the portion of the fund that actually belonged to the plaintiff surety company after the reversal of the original judgment.

The court held that when a party obtains and uses funds from a court-controlled account pursuant to a judgment that is subsequently reversed, that party becomes liable for interest on any portion of those funds that are later determined to belong to another claimant. This principle applies even when the party receiving the funds is a governmental entity like a county. The court noted that the trial judge had already ordered the personal sureties to post a bond guaranteeing repayment with interest at seven percent if reversal occurred, and the sureties had acknowledged this liability and benefited from the satisfaction of their debt obligation.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a party receiving court-controlled funds under a reversed judgment must pay interest on portions ultimately belonging to another claimant
Whether governmental entities are subject to interest liability in such circumstances
Whether the trial court abused its discretion in taxing administrative costs
The starting date for accrual of interest when a judgment is later reversed

Procedural posture

The case was previously before the appellate court, which reversed an earlier judgment and remanded for entry of a new decree; this appeal addresses the trial judge's refusal to award interest in the decree entered on remand.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Reid, Chief Justice.

1. When a judgment awarding a fund in the custody of a court of equity to one of several lien claimants was reversed by this court, such claimant in whose favor the judgment was rendered is liable for interest on all or any part of the fund thereafter found to belong to one of the other claimants, where it appears that upon the rendition of the judgment he took possession and has had the use of the fund. Smith v. Phillips, 175 La. 198 (143 So. 47) ; Kenton v. First National Bank, 93 Ky. 129 (19 S. W. 185) ; Albers v. Norton Co., 147 Ky. 751 (145 S. W. 757); Whitall v. Cressman, 18 Neb. 508 (26 N. W.s 245).

2. The amount of the fund in the custody of the court, which was raised by the sale of various pieces of property by the receiver and paid over under the judgment so reversed by this court, was not in dispute. The plaintiff (the party claiming interest) asserted a lien on all of the property represented by the fund, and the claim thus made was, as against the claimant to whom the fund was originally awarded, a liquidated demand, although by the answer of such claimant and the other defendants not only was the existence of any lien in favor of the plaintiff contested but it was asserted that such lien, if it existed, did not attach to a particular piece of the property.

No. 13069.

March 12, 1940.

Rehearing denied March 29, 1940.

3. The foregoing ruling is not altered by the fact that the party to whom the fund was originally paid, and against whom interest is sought, is a county. The county, having collected and used money which actually belonged to the plaintiff, is chargeable with interest the same as any other person would have been. See Hartley v. Nash, 157 Ga. 402 (121 S. E. 295).

4. Especially does it appear that interest should be allowed in this case, since, upon awarding the county the funds in satisfaction of its fi. fa. against Lamback and the personal sureties on his official bond, the court required by the same order that the personal sureties execute a bond to repay any amount of the fund that might thereafter be found to belong to the plaintiff surety company in the event of a reversal of the decree, with interest at seven per centum from that date (the time from which interest is claimed), and in all subsequent proceedings the personal sureties recognized their liability to the county by virtue of their bond. The personal sureties received the benefit of the award to the county, by virtue of the satisfaction of the fi. fa. held by the county against them, and were thereby relieved of interest on such fi. fa. from the date that the money was paid over to the county. The substantial legal effect of these facts and the order of the court is that the amount of the fund found to belong to the surety company (the decree awarding it to the county having been reversed by this court) drew interest from the date of the order awarding it to the county for the benefit of the surety company, with ultimate liability therefor in the personal sureties.

5. Where administrative costs are allowable out of a fund in the custody of a court of equity, the fixing and taxing of such costs is left to the discretion of the judge; and his action in such matters will not be disturbed unless it be a manifest abuse of such discretion. United States Fidelity & Guaranty Co. v. Clarke, 187 Ga. 774, 794 (2 S. E. 2d, 608). It does not appear that in taxing administrative costs in the present case the judge has abused his discretion.

6. The decree entered by the judge in accordance with the direction given by this court when the ease was formerly here was not erroneous for any reason assigned, except in the matter of interest, as to which we gave no direction and which he refused to allow. For this error the judgment must be Reversed.

All the Justices concur.

Bussey & Fulcher and William K. Miller, for plaintiff.

Curry & Curry, Isaac S. Peebles Jr., and Pierce Brothers, for defendants.