Case Name: C. L. WILLIAMS, Solicitor of Fourth North Carolina Judicial District, on Relation of THE STATE OF NORTH CAROLINA, v. JOHN B. HOOKS et al.
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1930-10-01
Citations: 199 N.C. 489
Docket Number: 
Parties: C. L. WILLIAMS, Solicitor of Fourth North Carolina Judicial District, on Relation of THE STATE OF NORTH CAROLINA, v. JOHN B. HOOKS et al.
Judges: 
Reporter: North Carolina Reports
Volume: 199
Pages: 489–492

Head Matter:
C. L. WILLIAMS, Solicitor of Fourth North Carolina Judicial District, on Relation of THE STATE OF NORTH CAROLINA, v. JOHN B. HOOKS et al.
(Filed 1 October, 1930.)
1. Clerks of Com’t B a — Statute does not require clerk to invest funds paid into his hands for minor under C. S., 148.
Where funds belonging to a minor are paid into the hands of the clerk of the Superior Court by an administrator under the provisions of C. S., 148, discharging the administrator and his sureties from liability in regard thereto, it is not required by statute, O. S., 153, 956, that the clerk invest the funds, upon interest, unless so directed, the clerk being liable for such funds as an insurer, and the clerk and his sureties are not liable for the amount of interest the funds would have drawn if they had been so invested, but if the funds are actually invested by the clerk he is liable for the interest actually received therefrom, since a fiduciary will not be allowed to make a personal profit out of funds committed to his custody.
2. Appeal and Error K a — Where findings of fact are not sufficient for determination of cause the case will be remanded.
Where on appeal there is no agreed statement of fact or finding as to whether a deceased clerk of court invested and received Interest, for which his estate must account, on a sum paid into his hands under the provisions of G. S.. 148, the case will be remanded for a specific finding in regard thereto.
Civil ACTION, before Sinclair, J., at April Term, 1930, of WayNE.
Prior to 1920, John B. Hooks was clerk of the Superior Court of Wayne County and died in office on 28 November, 1929. Tbe defendant, Goldsboro Savings and Trust Company, was appointed receiver of tbe estate of said clerk in December, 1929. On 16 February, 1920, Clara G. Hill, administratrix of tbe estate of William L. Hill, paid to John B. Hooks, clerk of tbe Superior Court of Wayne County, tbe sum of $2,130.85 for tbe use of tbe minor children of tbe said William L. Hill, deceased. Tbe agreed facts- show that “sáid funds were commingled by tbe said John B. Hooks, clerk of tbe Superior Court, witb other funds in bis office in such manner that it was impossible to identify such funds or any notes or securities in which tbe same were invested; that the property of tbe estate of John B. Hooks, clerk of tbe Superior Court of Wayne County, consisted, principally of certificates of deposit, which bore interest at tbe rate of four per cent per annum and mortgage notes which bore interest at tbe rate of six per cent per annum; that a considerable portion of tbe notes held by John B. Hook’s, clerk of tbe Superior Court of Wayne County, are worthless and uncol-lectible, and that it is impossible at this time to determine tbe exact amount of tbe same; that there is no- circumstance or evidence to- show that any of tbe worthless no-tes represented investments of tbe fund above referred to and no circumstance or evidence to show that John B. Hooks was negligent in investing any of tbe funds of bis estate in said notes which are now worthless.”
Tbe record further tends to show that from time to time tbe said clerk duly paid to said minors tbe sum of $2,154.10, leaving a balance due of $576.75. Tbe claimants contend that this balance of $576.75 should bear interest from the- date it was paid into tbe clerk’s bands, and '‘this interest added to tbe principal sum due would make a total of $1,695.68. Tbe trial judge allowed tbe claim to tbe amount o-f tbe principal, to wit, $576.75, but declined to allow interest, “the court finding as a fact and concluding as a matter of law that the receiver is not obligated to pay the said Otis Hill and others any interest on the funds held by I. B. Hooks, O. S. 0., for said Otis Hill and others.”
From the foregoing judgment claimants appealed.
B. H. Taylor for claimants.
Kenneth G. BoyaTl and J. N. Smith for receiver.

Opinion:
BeogdbN, J.
Is a clerk of the Superior Court liable for interest upon funds paid to him in his official capacity for the use of minors ?
The pertinent statutes relating to the subject under discussion are C. S., 148, 153, and 956. C. S., 148, authorizes an administrator or executor to pay into the office of the clerk of the Superior Court any moneys belonging to the legatees or distributees of the estate, and such payment shall operate as a discharge of such administrator or executor and his sureties, to the extent of the amount so paid. It is apparent that this statute was enacted primarily for the relief of executors, administrators and collectors. 0. S., 153, authorizes an executor or administrator to file a petition for settlement with an infant or absent defendant and to pay into court the funds in his hands, such funds "to be invested upon interest or otherwise managed under direction of the judge for the use of such absent person or infant." Hence, funds paid into court in pursuance of this statute must be invested "upon interest" if so directed, and if not invested "upon interest" to be "otherwise managed under the direction of the judge," etc.
C. S., 956, requires the clerk of the Superior Court to submit an official report to the county commissioners on the first Monday in December "of all public funds which may be in his hands." Such report "shall give an itemized statement of said funds so held, the date and source upon which they were received, the person to whom due, how invested and where, in whose name deposited, the date of any certificate of deposit, the rate of interest the same is drawing, and other evidence of investment of said funds." Obviously the quoted portion of the statute contemplates the investment of public funds although such investment does not seem to be mandatory. Said section further provides that the report of the clerk "shall include a statement of all funds in their hands by virtue or color of their office." It is to be observed that the latter clause of the section does not mention interest or investment.
It is manifest that there is no mandatory requirement of law, imposing upon the clerk of the Superior Court, the express duty of investing funds in his hands belonging to minors. Clerks of Superior Courts frequently hold substantial sums of money belonging to minors for long periods of time, and it is a hardship that a person under disability should be compelled to have his money lie idle, when, by tbe exercise of sound business prudence and close scrutiny of security required for tbe protection of tbe in-vestment, tbe fund could be materially augmented. Upon tbe other band, "it is settled in this State that tbe bond of a public officer is liable for money that comes into bis bands as an insurer and not merely for tbe exercise of good faith." S. v. Ehringhaus, 30 N. C., 7; Presson v. Boone, 108 N. C., 79, 12 S. E., 897; Smith v. Patton, 131 N. C., 396, 42 S. E., 849; Gilmore v. Walker, 195 N. C., 460, 142 S. E., 579, 59 A. L. R., 53. Thus, if tbe clerk makes an investment in tbe utmost good faith and in tbe exercise of sound business judgment, and the investment fails, be is still responsible for tbe money and must pay it to tbe person entitled thereto. If be deposits tbe money in a bank of known and approved solvency and tbe bank thereafter fails, be must suffer tbe loss, because if be fails to pay upon demand tbe law presumes that be misappropriated tbe fund at tbe very instant it came into bis bands.
In tbe case at bar, notwithstanding tbe silence of tbe law upon tbe question of interest, it is contended by tbe claimants that as a matter of fact tbe clerk invested tbe funds and collected interest thereon either by means of certificates of deposit or loans upon real estate. If such be tbe fact, tbe clerk would be liable for tbe interest be received, for it is now a truism of tbe law that no fiduciary can make a personal profit out of funds committed to bis custody. There is no agreed statement of fact with reference to this question and no finding by tbe trial judge. Therefore, tbe cause is remanded to tbe Superior Court of Wayne County for a specific finding as to whether tbe clerk actually received interest upon tbe fund in controversy, and, if so, tbe amount thereof. If tbe deceased clerk did not receive interest upon tbe fund in controversy, tbe judgment rendered is correct. If be did receive interest thereon, bis estate must account to tbe claimants for tbe proper amount thereof.
Remanded.