Case Name: DES MOINES MUTUAL HAIL & CYCLONE INSURANCE ASSOCIATION, a Foreign Corporation, Respondent, v. JOHN STEEN and John Steen as Treasurer of the State of North Dakota and the State of North Dakota, Appellants
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1919-09-18
Citations: 43 N.D. 298
Docket Number: 
Parties: DES MOINES MUTUAL HAIL & CYCLONE INSURANCE ASSOCIATION, a Foreign Corporation, Respondent, v. JOHN STEEN and John Steen as Treasurer of the State of North Dakota and the State of North Dakota, Appellants.
Judges: Bronson, J., being disqualified, did not participate, Honorable Chas. M. Cooley, of First Judicial District, sitting in his stead.
Reporter: North Dakota Reports
Volume: 43
Pages: 298–313

Head Matter:
DES MOINES MUTUAL HAIL & CYCLONE INSURANCE ASSOCIATION, a Foreign Corporation, Respondent, v. JOHN STEEN and John Steen as Treasurer of the State of North Dakota and the State of North Dakota, Appellants.
(175 N. W. 195.)
Insurance — interest on moneys deposited with state treasurer hy insurance companies —■ interest becomes a part of the fund.
As a general rule interest earned on a fund belongs to the owner of the fund. It is held that moneys deposited by a foreign mutual hail insurance company under §§ 4896 et seq., Comp. Laws 1913, belongs to the Insurance company making the deposit, and that all interest earned on the fund while on deposit with the state treasurer becomes a part of the fund and belongs to the owner thereof.
Opinion filed September 18, 1919.
Appeal from the District Court of Burleigh County, Honorable W. L. Nuessle, Judge.
From a judgment in favor of plaintiff, both Steen and the state of North Dakota appeal.
Affirmed.
William Lunger, Attorney General, George K, Foster, Assistant Attorney General, and H. A. Bronson, for appellants.
Section 3 of chapter 112 of the Laws of North Dakota for 1915 requires the clerk of the district court to pay such fees into the general fund.' Mulcrevy v. San Francisco (1914) 231 U. S. 669, 58 L. ed. 425, 34 Sup. Ct. Kep. 260; Berkshire County v. Cande (Mass.) 109 N. E. 838; Barron County v. Beckwith, 142 Wis. 519, 124 N. W. 1030.
The state treasurer shall not receive any fees nor rewards aside from his annual salary. Comp. Laws 1913, § 149.
There is absolutely no duty on the part of the state treasurer, the state, or anyone else to return the whole or any part of the $25,000 or its interest to'the company, unless such duty is created by the provisions of §§ 4899 and 4900 of the Compiled Laws of 1913. Jones v. Moore, 198 Fed. 304.
The state treasurer is at liberty or has the option under certain circumstances to pay interest on securities at his election. Sutherland, Stat. Const. 1st ed. § 460.
It is only where an answer admits of leaves undenied the material facts stated in the complaint that a judgment can be rendered on the pleadings. Botto v. Vandament, 67 Cal. 333.
A public officer is not liable for interest or profits made by him from the public funds, in the absence of the statute charging him therewith, although the law makes him criminally liable for putting the money out at interest or making a profit from it. People v. Walsen, 15 L.K.A. 456; Maloy v. Bernalillo County Comrs. 52 L.K.A. 126; State ex rel. Nary v. Dunbar, 20 L.K.A.(N.S.) 1015.
A mere 'stakeholder is not liable for interest upon money in his hands although he makes profit by use of such money. Jones v. Mallory, 22 Conn. 386; Buckman v. Pitcher, 13 Barb. 556; Havens v. Church, 62 N. W. 149.
Where one receives the proceeds of certain notes, and is not liable for an accounting until the happenings of such contingency, he is not liable for interest until after such contingency. Bellevue Mills Co. v. Baltimore Trust Co. 214 Fed. 817.
On a bill of interpleader by a pafty claiming the title to certain funds, interest is not allowed during the litigation, where the money is deposited in a bank and the bank paid on said deposit 3 per cent. Delta & P. L. Co. v. Sherwood, 187 111. App. 167.
Money received for the use of another. 37 Century Dig. 1915, 2046; 29 Century Dig. 23, 274.
Where money is paid by mistake and there is no fraud or surprise, interest is not allowed. Claim v. Adams, 1 Dali. 52, 1 L. ed. 33; Ashurst v. Potter, 29 N. J. Eq. 625.
Where money is held as bail or on deposit, interest is not chargeable on such fund. ITaswell v. Fanners Bank, 26 Yt. 100; Duncan v. Morgette, 25 Tex. 245.
Theodore K off el, for John Steen and John Steen as State Treasurer.
The debt created by such deposit, being wholly paid and extinguished, the interest being a mere incident to the debt, cannot exist without it, and the debt being extinguished, the interest must necessarily be extinguished too. 15 R. C. L. 14, notes 9 & 10; Bennett v. Federal Goal & Coke Co. 40 L.R.A.(N.S.) 588; Mason v. Callender, 72 Am. Dec. 102.
Interest is the compensation allowed by law or fixed by the parties for the use or forbearance of money or as damages for its detention. 15 R. C. L. 3.
Interest is the creature of statute, and cannot be recovered unless authorized by it. Pekin v. Raynolds, 83 Am. Dec. 244.
Interest is not recoverable except upon a contract, express or implied, to pay it, or as damages for the unreasonable detention of money Avhich the party was obliged to pay. Evats v. Nason, 11 Vt. 122; Abbott v. Wilmot, 22 Vt. 437; Wood v. Smith, 23 Yt. 706.
Interest is recoverable only by contract or under express provision of the statute. Forschirm v. Mechanics’ & Traders’ Bank, 122 N. Y. Supp. 168.
Interest is recoverable only Avken expressly reserved by contract or implied by the nature of the promise. United States v. Sanborne, 135 U. S. 281, 34 L. ed. 112; Sneed v. Wister, 5 L. ed. 717; United States v. Knowles, 106 U. S. 537.
Sullivan & Sullivan, for respondent.
The depositary may not use the thing deposited or permit it to be used for any purpose Avithout the consent of the depositor. Comp. Laws 1913, § 6021; Rhea v. Brewster (Iowa) 107 N. W. 940; 5 R. C. L. 630, par. 15.
If a person with whom a deposit is made uses the fund, he must account to the depositor for the income, profits and advantages derived by him from the pledged property. 31 Cyc. 825. ■ ■ ■

Opinion:
Bobinson, J.
This is an appeal by John Steen and by the state of North Dakota from a judgment .against them, in favor of the insurance company, for $1,250, and interest at 6 per cent. The $1,250 is the accrued interest received on $25,000 which the insurance company deposited with John Steen in March, 1913, as security for loss. The deposit was under the statute, Comp. Laws 1913, § 4896. The interest money was claimed by the state and by John Steen, and each appealed from the judgment. On the pleadings and the conceded facts the trial court found that John Steen received interest on the deposit amounting to $1,250, that the same is the property of the plaintiff, and that judgment should be given for same in favor of the plaintiff and against each of the claimants. On April 14, 1916, judgment was entered accordingly. By statute it is provided thus: So long as the deposit required by this article is kept good and the depositing company is solvent, the state treasurer may permit the company to collect interest on the securities so deposited. § 4900.
Counsel for Steen and the state contends that this statute does not apply to the withdrawal of interest money. Hence, he says, there is absolutely no duty on the part of the state treasurer, the state, nor anyone else to return the whole or any part of the $25,000 or the interest to the company, unless such duty is created by the statute. That is an extremely narrow view of the legal and moral duty of a • depositary. The counsel forgets that when one gets hold of money or property of another, unless he has a legal right to it, he is bound to return it regardless of any statute j he is bound to return to the owner, if known, money or property that he finds or picks up in the street, though the statute does not provide that he must do so. And, of course, it is not for the state in such a case to play tweedledum and tweedledee by claiming and insisting on the money and then appealing and objecting to the form of the judgment. The state might well have disclaimed the money, and then there would have been no judgment against it. Now it is manifest that the accruing interest follows the principal, and that when the insurance company concluded to retire from doing business in the state it was entitled to its money, the $25,000, with the accrued interest. There is no principle of law or equity on which either Steen or the state can justly make any claim to the interest. True it is that the ex-treasurer was not legally obliged to put the money at interest, but he was under a moral obligation to do it. In the parable of the talents the person with one talent hid it in the earth and on the return of his Lord he dug it up and said: "Lo! Here thou hast what is thine." For this he was subjected to severe punishment. So, in disregard of the rights of others, the ex-treasurer might have buried or put in a vault the $25,000. The manly, moral, and proper thing for him to do was to put it safely at interest, and then to pay over the accrued interest with the principal. The judgment in favor of the depositor is clearly right.
Judgment affirmed.