Court Opinion

ID: 3837991
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:58.477041+00
Date Added: 2024-06-11T13:45:35.744624
License: Public Domain

Rehearing denied December 17, 1929                        ON PETITION FOR REHEARING                               (283 P. 17)
Counsel for the defendant has presented a petition for rehearing in which he maintains, with his usual vigor and ability, that our previous decision is erroneous in several particulars. Every question presented in the petition was carefully gone over in the original opinion, and we do not find anything which induces us to alter our position on the main question. There is, however, one matter in which we think that the lower court was mistaken, and in which we erred in not more thoroughly considering, and that is the question of interest on the demand. The court allowed a decree against the defendant for $2,591.68, with interest at the rate of 8 per cent per annum from October 21, 1921. Under the circumstances in this case, we do not consider this allowance equitable. It is seldom, in a suit in equity, that interest is allowed as penalty. In this case the record discloses that, as soon as the claim was demanded from the receiver, he communicated with the *Page 370 
comptroller of the currency, and that several letters passed, with the result that the comptroller directed the receiver not to allow or pay this claim as preference. In a close case of this kind, we think it would not have been advisable for the receiver to have allowed and paid this claim as a preference, taking into consideration the somewhat confused state of the law, without a formal adjudication of the court requiring him to do so, and in fairness to other creditors the funds of the bank should not be depleted by allowing the interest charge imposed my the court below. In this respect the case of Richardson v. LouisvilleBanking Company, 94 Fed. 442, 449, seems in point, and we quote the following:
"The decree of the court below allows interest against the receiver from judicial demand. We are of opinion that this was erroneous. The funds collected, coming into the hands of the receiver, turned over to the comptroller, could not earn interest, and any interest to be paid thereon would be necessarily taken from some other trust fund. The involved circumstances surrounding the case made it improper, if not impossible, for the receiver to pay over the amount for which he is charged as trustee without an investigation and an accounting; and we think he was in no fault, but rather in the fulfillment of his official duties, in refusing to recognize complainant's demands until they were judicially determined. As a general rule in equity, trustees are not required to pay interest unless they are in fault in the management of the trust fund, or have so used the trust fund as to earn interest."
Our former decision and the decree of the lower court will therefore be modified so as not to include the amount allowed as interest. In all other respects the decree of the lower court is affirmed and the petition for a rehearing denied.
REHEARING DENIED. *Page 371