Opinion ID: 1126780
Heading Depth: 1
Heading Rank: 3

Heading: Interest on the $2,995.00.

Text: The superior court ordered Lora Gregory to pay compound interest on the $2,995.00 for a period of six years, the interest to be compounded annually. She assigns as error, first, the imposition of any interest and, second, the imposition of compound interest. An administratrix may be charged with interest on estate funds which she has converted to her own use. Sullivan v. Sullivan, 335 Mass. 268, 139 N.E.2d 510 (1957); In re Thompson Estate, 98 N.J. Super. 36, 235 A.2d 920 (1967), aff'd, 104 N.J. Super. 324, 250 A.2d 35 (1969); In re Meyer, 173 Pa. Super. 592, 98 A.2d 444 (1953); see also Annot. 18 A.L.R.2d 1384 (1951). The superior court correctly found that Lora M. Gregory had converted the sum of $2,995.00 to her own use, and that interest should be charged. We believe, however, that a charge of compound interest was erroneous. AS 45.45.010(a) (1) provides:  Legal rate of interest. (a) The rate of interest in the state is six per cent a year and no more on (1) money after it is due   . This section cannot be construed as authorizing compound interest. Appellee argues that since the administratrix had a duty to place the estate funds in an interest-bearing account, compound interest must be charged to put the estate in as good a position as it would have been had the money been so invested. We cannot accept this argument. We have no assurance that this money would not at some point have been authorized by the court to have been paid out in the form of claims or other expenses. While Lora Gregory's performance as administratrix was questionable, we cannot say with any certainty that the estate would have had the benefit of six years' compound interest had she not used the money to buy herself a car.