Court Opinion

ID: 3513571
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:24:34.151873+00
Date Added: 2024-06-11T14:25:17.384880
License: Public Domain

The writer is so thoroughly convinced that the majority opinion clearly overlooks and fails to meet and recognize the rule in Mississippi on the question of interest, that I feel it my duty briefly to call attention to the position which I assume, as to the decision of this case. *Page 670 
On the facts, the chancellor found that there was no unlawful conversion on the part of Henry, the insurance commissioner, but that the insurance commissioner failed to turn over, at the time required by law, moneys which came into his hands as commissioner; and the lower court held, no doubt upon the apparent authority of the decisions of our own court, that Henry was not liable for interest. Under this state of facts and believing that the Brethren joining in the majority opinion have wholly ignored the decisions of our own court and the position of Mississippi on the question of interest, I shall call attention to these decisions, and not undertake to enter into an argument thereon. In our state, interest is the creature of statute, and the statute imposing interest is in derogation of the common law and must be strictly construed, and in the absence of a specific statute, the common law controls our decisions. The majority opinion is based upon section 2678 of the Code of 1906, which is as follows:
"Legal rate. The regal rate of interest on all notes, accounts and contracts shall be six per cent. per annum; but contracts may be made, in writing, for a payment of a rate of interest as great as eight per centum per annum. And if a greater rate of interest than eight per centum shall be stipulated for or received in any case, all interest shall be forfeited, and may be recovered back, whether the contract be executed or executory. If a rate of interest is contracted for or received, directly or indirectly, greater than twenty per cent. per annum, the principal and all interest shall be forfeited, and any amount paid on such contract may be recovered by suit." Laws 1912, chapter 229. In effect January 1, 1913.
It will be noted that interest is imposed on notes, accounts, and contracts. In my opinion, we do not have to appeal to the lexicon to ascertain the meaning of the word "account," and the meaning which has been placed upon it by our court, and by the legislature almost since Mississippi became a state. We think it is clear that *Page 671 
"accounts" here means those items of debit and credit which arise from a contractual relation; and that the word "accounts" here means that character of dealing between parties which would constitute a contract, and not necessarily statutory obligations. I have no quarrel with the dictionary definition of the word "accounts," but I believe it has been clearly settled that there must be a relation of contract between debtor and creditor in order to be able to invoke this statute for the imposition of interest. Interest is not imposed in Mississippi by way of damages, but is imposed under the statutes, and in no other way. In Eastin v. Vandorn, Walk. (Miss.) 214, it is said: "The subject of interest is one of statutory creation. Interest was not allowed by the common law. As judgments, in March, 1806, did not by any statutory provisions bear interest, the clerk erred in issuing his execution for interest on the judgment."
In Hamer v. Kirkwood, 25 Miss. 95, Chief Justice SMITH said, in passing upon the question of interest upon a judgment: "The propriety of this determination of the court on the first question, depends entirely upon the statutes in regard to interest upon judgment debts; as neither debts due by contract, nor by judgment, would bear interest, unless made to do so by positive legislation."
In Board of Supervisors v. Klein, 51 Miss. 807, our court said: "Interest is the creature of statute, and our statute does not embrace county warrants. The common understanding of the community is, that they do not bear interest. . . . It is not in the contemplation of persons to whom warrants are issued that they are to carry interest. Our statute (section 2279, Code), has reference to the contracts of individuals, and not of the state or counties, which are not supposed to be included in any statute imposing burdens, unless specially named or fairly embraced in the language used. Section 2281, as to judgments, embraces only those between individuals, enforceable by execution, and does not include allowances *Page 672 
by boards of supervisors, which, though called judgments, are not strictly such in the legal acceptation. The demand of payment of county warrants does not create any right to interest from that date. Not bearing interest, they cannot be made to bear it by a demand of payment."
If Henry shall be said to owe an account to the state, it would be a poor rule that would not work both ways, especially where the legislature has had opportunity to impose interest on this particular official and has not done so, unless it be in the use of the word "account" in the statute here under review. In the case of Clay County v. Chickasaw County, 64 Miss. 534, 1 So. 753, our court said, in passing upon a claim for interest in favor of Chickasaw county as against Clay county: "The claim of Chickasaw county does not arise ex contractu, but it is purely statutory. The statute of May 4, 1872, by which the liability was created, makes no provision in regard to interest."
The word "account" was in the statute when the court delivered this opinion, and yet they held that the account must be excontractu, and not an account created by statute unless interest was positively imposed in that statute. In Railroad Co. v.Adams, 78 Miss. 895, 29 So. 996, the court had under review interest on a judgment for a large amount in favor of the state against the railroad company for taxes, and there the court set this question absolutely at rest. Quoting from the opinion,supra:
"Can interest upon delinquent taxes be recovered upon an injunction bond by designating it as `damages'? If it can be thus recovered, it surely would be recoverable in a direct suit therefor. The basis for recovery must be the same in both instances. Calling interest `damages' could not operate to make that liable which was not liable under the name of interest. Interest is entirely statutory. It was not allowable by the common law, and exists only by positive legislation. Easton v.Foster, Walker Rep. 214; Homer v. Kirkland, 25 Miss. 96. *Page 673 
"Our statute provisions authorizing the recovery of interest are found in sections 2348 and 2350, Code 1892, and they provide as follows: `The legal rate of interest on all notes, accounts and contracts shall be,' etc., and `that all judgments and decrees founded on any contract shall bear interest,' etc., and other judgments and decrees at six per centum. Unless the contractual relation exists or judgment has been obtained, our statutes do not authorize the recovery of interest, and it is clear that that relation does not exist as between the government and the citizen regarding the levy of taxes, in the sense in which the interest statute refers to."
The learned counsel who presented the cause, supra, for the appellee, the state, urged that the judgment statute, as to interest, clearly controlled their right to interest, where the suit was based upon the injunction bond. The point I am calling attention to is that the court again and again declared that the interest must be imposed under the statute by virtue of a contractual relation, or else by direct positive legislation. Of course, there is no positive direct legislation in the instant case, unless it is in the section embracing the word "accounts."
We are simply trying to show that our court has always held that accounts have reference to an account created by virtue of a contractual relation. Our court has announced that taxes are a debt, and section 3747 of the Code of 1892 declares taxes a debt. In the case supra, the court, reannouncing this view, held that no contractual relation existed; that neither the tax, nor the judgment for the tax, was subject to interest under either of the statutes quoted.
The insurance commissioner and all the chapter with reference to him is the creature of a statute. It is not a constitutional office. The legislature created it at its will, and may at any moment destroy it. The legislature saw fit not to create any interest charge as against the insurance commissioner, nor any penalties in the way of damages in lieu of interest. I have endeavored to *Page 674 
show, by statement of the decisions of our own court, that we are committed to the doctrine that interest must be imposed by positive legislation, or else be imposed on account of contractual relations. I think the word "account" in our statute has been held to be that kind of an account which arises by reason of the contractual relation between the parties. Where the liability is imposed by statute independent of contract and not by contract then interest must be specifically imposed by that statute.
In early times interest was called usury, looked upon with great disfavor, prohibited by the Mosaic Law, under severe and rigid penalty by the old English laws, the church thundered anathema, and the state declared forfeiture against taking any interest, great or small. John Calvin, the churchman, announced that the true meaning of usury was illegal or oppressive interest, and the allowance was finally sanctioned by statute in 1545 in England. In the United States, from the outset, interest has been viewed with more tolerance and with greater favor than by the English courts. Legislative construction of a statute is persuasive when there is difficulty in its construction, and, if this should be resorted to in the case, it is clear that the legislature has been aware of the clear cut decision in theAdams case, supra, and the other cases cited.
The obligation to pay over and the handling of a sheriff and tax collector is not different from the character of account between the state and the insurance commissioner, yet section 4357, Code 1906, fixes the date, the time of the month when he shall pay over taxes collected by him; imposes thirty per cent. penalty and six per cent. per annum thereon from the time the payment was due to have been made by the tax collector, thus imposing usury in its own favor, if it be called interest, but not so if we term it a penalty. This statute has been in effect since 1904. I think it is a fair inference that the legislature took the view, that money collected by one of its servants was the money of the state, and not subject to interest, but that any reasonable penalty could be imposed. *Page 675 
Another instance where the legislature has construed section 2678 of the Code of 1906 is found in our Depository Laws, where, under section 4247, Hemingway's Code, counsel fees and damages at the rate of one per cent. per month against any county depository failing to pay over any county funds when lawfully demanded, and this statute was approved in the case of Fidelity  Deposit Co.
v. Wilkinson County, 109 Miss. 879, 69 So. 865.
I might cite other instances of legislative construction of our Interest Statute by imposing interest and damages upon certain officials, and not imposing that or similar damages upon others. In the light of the decision in the Adams and other cases, failure of the legislative branch of the government to act is, by tacit consent, an approval of the opinion in that case that only accounts or debts created by contract are subject to interest in Mississippi.
I think the chancellor was correct in holding that Henry was not subject to pay the state interest upon its own funds, because of a failure to pay over on the day named in the statute, freely admitting that the legislature could, and perhaps ought, to have imposed a penalty upon the insurance commissioner. Having failed to do so, I respectfully suggest that it is beyond the power of the court to thus legislate.
HOLDEN, J., concurs in the above dissent.