Williams v. . Hooks

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 *492 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.