Court Opinion

ID: 7365740
Source: CourtListenerOpinion
Date Created: 2022-07-27 23:51:27.240328+00
Date Added: 2024-06-11T16:20:45.367484
License: Public Domain

MAYFIELD, J.
(dissenting). — The questions for ■decision in this case are: (1) Is a trustee liable for interest upon failure to pay money to beneficiary in accordance with the terms of the trust? (2) Is a trustee liable for interest upon failure and refusal to deliver property to the beneficiary in accordance with the terms of the trust? (3) Is a trustee liable for interest for failure to pay money in accordance with the decree of a court of equity administering the trust? (4) Is a trustee liable to his beneficiary for interest upon failure to pay money, or to deliver a promissory note in accordance with the terms of the trust, and with the decree of a court of equity administering the trust?
Until the decision in this case, I thought the decisions were uniform to the effect that a trustee was liable to- his beneficiary for interest, upon and after a failure and refusal to deliver trust property or to pay money in accordance with the terms of the trust, or in accorrdance with the decree of the court of equity administering the trust. The effect of the judgment of this court in this case is to deny the beneficiary interest when both of the above mentioned conditions exist.
The facts are undisputed in this case that Ball received the trust fund, which consisted of notes and money collected thereon, as trustee under an express trust, and that he both failed and refused to pay over the money or to deliver the notes in accordance with the terms of the trust, and with the decree of the court of equity which was administering the trust; and yet *311the lower court aud this court decline to make him pay interest on the amount due upon the note, or for the money collected thereon, held and retained by him in violation of the express terms of the trust, and in utter disregard of the decree of the lower court and of this court.
The. lower court and this court seem to have acted upon the theory that, because there was no mala tides on the part of the trustee in failing and refusing to pay the money or to deliver the note, and because his failure and refusal was in the hope and anticipation of reversing the decree of the lower and.of this court as to the distribution he should make of the trust fund, he should not be required to pay interest, either for failure to deliver the note as agreed or decreed, or failure to pay the money as agreed and'decreed.
The error which the lower court and this court have fallen into is in forgetting the principle of law that neither the trial court nor this court has any discretion in the matter as to whether the trustee under the disputed facts in this case, should be required to pay interest. The facts undisputed, the law fixes the liability both in character and extent, and the court has neither the right nor discretion to relieve the trustee from this liability to the beneficiary as to any amount, nor to any extent.
This court said, in the case of Broughton v. Mitchell, 64 Ala. 211, that interest attaches as a matter of right to all contracts for the payment of money, from the day on which it becomes due, and that no court of law or equity has discretion as to its amounts. Interest is given by statute as a compensation for the detention of the money, and no court has any discretion in its allowance.
*312Our statute is plain and mandatory, that no court, whether of equity or of law, has the right to avoid the statute nor enforce it. Our statute upon the subject reads as follows: “All contracts, express or implied, for the payment of money, or other thing, or for the performance of any act or duty, bear interest from the day such money, or thing, estimating it at its money value, should have been paid, or such act, estimating the compensation therefor in money, performed.” — Code 1907, § 4620.
The facts in this case are undisputed that the trustee did malte a contract, both for the payment of money and for the performance of acts and duties, and the statute expressly declares that he shall be liable for interest from the day the money should have been paid or the act performed. Why the lower court or this court should decline to follow or to enforce this express statute, I am unable to conceive.
According to the trustee’s own answer and evidence, he is clearly liable for interest, both for a failure to pay over the money, and failure to deliver the note. Moreover, it is undoubtedly the law that if .the beneficiary had sued the trustee in a court of law, instead of moving for the decree in the chancery court, he would have been liable for interest, both, for the amount of money he failed to pay, and for the amount of the notes he failed to deliver, and for the amount of money he collected on the note which he declined to deliver in accordance with his agreement, and with the decree of the court. This being true, he was clearly and certainly liable, and should have been made to pay the same by the chancery court.
That there is no distinction between the right to recover interest in courts of equity and that to recover in courts of law is well established. This court, in the *313case of Crocker v. Clements, 23 Ala. 296, 312, said: “Courts of chancery upon this, as upon the subject of the application of the statute of limitations, follow the law, and allow interest in all cases where it would have been recoverable had the suit been instituted in the common-law court.” It was likewise held in that case that where a sum of money to be refunded was certain, then the law implied a contract and raised a promise to pay it and the interest, and that in such case interest was properly allowed.
Another error which the trial court and this court fell into was in treating the trustee as if he were acting-in pursuance of the trust, and not in disregard and violation of it as the undisputed evidence in this record shows he was doing. It is an undoubted principle of law that a trustee who is a bare stakeholder (as was the trustee in this case) is not liable for interest so long as he acts in accordance with the terms of the trust, or unless he uses or realizes profit from the trust fund; and then, if he use it and act in good faith, and without negligence, he is liable only for the profit which he actually realizes; but when he acts in violation and disregard of the express terms of the trust, and in rebellion against the decree of the court which is administering the trust, this rule no longer applies. He is then not only liable for legal interest but may under certain conditions be made liable for compound interest and for other damages in addition thereto. For example: If the trustee in this case had paid over the money to the parties, in accordance with the terms of the trust, and with the decree of the court, or if he had paid it into court on taking the appeal, to await final adjudication, he would not then have been liable for legal interest, but merely for the amount he actually received and was decreed by the lower court to be liable for; *314but, haring declined to pay in accordance with, the agreement, and with the decree of the court, he was no longer protected from liability to interest by such rule, and was at least liable as for the minimum amount of damages, which the law says is legal interest for the time the money and notes of the beneficiary were withheld.
It was well said by this court, in the case of State v. Lott, 69 Ala. 154 (speaking of interest), as follows:
“Interest, in this state, has been long regarded not as the mere incident of. a debt, attaching only to contracts, express or implied for the payment of money, but as compensation for the use, or for the detention of moñey. Wherever it is ascertained that at a particular time money ought to have been paid, whether in satisfaction of a debt, or for the failure to keep a contract, interest attaches as an incident. — Whitworth v. Hart, 22 Ala. 343; Boyd v. Gilchrist, 15 Ala. 849; James v. Governor, 1 Ala. 605. The true and just doctrine is expressed in Dodge v. Perkins, 9 Pick. (Mass.) 368, approved in Boyd v. Gilchrist, supra, that ‘the inquiry is, whether the party has done all that the law has required of him in the particular case, whether acting on his own account, or as agent, executor, administrator, or trustee for others. If he has, he is not accountable for interest; if he has not, he is accountable for it, as a -compensation for the nonperformance of his contract.’ ”
In the case of Godwin v. McGehee, 19 Ala. 474, a case similar to ■ the one under consideration, the court, in ■speaking of the liability of a trustee for interest upon failure to pay over the money or funds in accordance yfith the decree of the court, said: “The fund being called for in the court of chancery, it was the obvious duty of the defendants who desired to rid themselves of the payment of interest upon their unpaid bonds, to *315have tendered the money in court, and, if instead of doing so, they engaged in a protracted, expensive, but fruitless litigation concerning it, and hold onto it until obtained at the extremity of the law, it is but equitable and. right that they should be required to pay interest.”
In the case of Kirkman v. Vanlier, 7 Ala. 218, in speaking of the liability of the trustee for interest, the court said:
“Any trustee will be chargeable for interest if he has made interest, used the money, or is guilty of laches or neglect. * * * And * * * if an agent does not in a reasonable time apply money to the purposes for which it was received, he will be liable to pay interest. * * * So if one man retains the money of another, the presumption is that he kept it for the purpose of profit, and that he should therefore pay interest on it.” It was further held in that case “that a trustee was liable to pay interest on the trust money in his hands, unless he can show that it was necessarily kept in hand for the purpose of the trust; this he may do upon oath, subject to be controlled by other testimony and the circumstances of the case; and in such case interest is calculated from the time the money was received. But the case more strikingly analogous to the one before us is Shackelford v. Helm, 1 Dana (Ky.) 338, in which it was determined that a debtor is not excused from the payment of interest, because the debt is attached in his hands by bill in chancery; unless he bring the money into court, or is enjoined from using it. So it has been decided that an officer of court who has money in his hands, raised by sale of attached effects, which the court forbade him to pay over, shall pay interest, unless it appear that he kept the principal by him.”
Simpson, J., concurs.