Bassett v. Kinney

Waite, C. J.

The money, when deposited by the railroad company in the hands of Kinney, became the property of the plaintiff. It was substituted by the company for the land, which they had taken for their use. The interest, paid by the bank, was paid for the use of the plaintiff’s money, and became as much his property, as the principal itself.

It was upon this principle that the case of Willis v. The Commissioners of Appeals in Prize Causes, proceeded. 5 East, 22. There, a portion of the cargo of a captured ship had been condemned and sold by agents appointed for that purpose. Upon an appeal to the commissioners, the decree of condemnation was reversed, and the agents were ordered to pay over to the owners, the net proceeds of the sale, together with the interest from the time of the sale. Upon an application to the court of king’s bench, for a prohibition against further proceedings, relating to the payment of interest, that court refused to interfere, upon the ground that it was to be presumed, that the commissioners had found that the agents had made interest from the funds in their hands, and if so, they were accountable for it. Lord Ellenborough, C. L “ The case is not brought forward, on the ground of contract, but simply on the ground that the proceeds had got into the hands of the agents, and have there grown and accumulated, producing the interest sought to be recovered.” And Le Blanc, J. remarked, that taking interest to have been made, he considered it as composing part of the proceeds.

And in the case of Rogers v. Boehm and others, where the plaintiff sought to recover interest upon money remitted to *270 the defendants, Lord Kenyon observed, that there were cases in which the rules of equity and law were the same; that it had been decided, in a court of equity, “ that if money had been remitted to an agent, and he suffered it to remain dead in his hands, he should not be liable to interest, but, that if he mixed it with his own, or made use of it, he should be subject to the charge of interest.” 2 Esp. Cas., 703.

It is true that Kinney was under no obligation to place the funds deposited with him as treasurer of the county, upon interest. Had he locked them up in his chest, or merely deposited them in the bank for safe keeping, and received no compensation for the use of them, he would not have been accountable for interest. But having placed them where they drew interest, that interest must be considered qs having the same ownership, as the principal, which produced the interest.

A similar rule applies to funds in the hands of executors and trustees. It was formerly held that, as they were not bound to lend, and if they did so, it was at their peril, and as they were liable to bear the loss, they were entitled to the gain. But that doctrine was overruled by Lord Thui-low, and an executor or trustee may now be considered as chargeable with interest, whenever he appears to have made interest. 2 Fonb., Eq., 183, note p. Newton v. Bennett, 1 Bro. Chan, it., 359.

In this respect an agent, with whom money is deposited for a definite owner, stands in a different situation from that of an auctioneer or stakeholder, with whom funds are deposited for the benefit of one of two claimants, and who is bound to keep them and have them ready to pay over to the party entitled to them, as soon as the question of title is determined. In such case he is not generally chargeable with interest, although he may have used them as his own. Jones v. Mallory, 22 Conn. R., 386. Harrington v. Hoggart, 1 B & A., 577. 20 E. C. L. R., 443. Lee v. Munn, 8 Taun., 45 4 E. C. L. R., 14.

*271 But in neither of these capacities did Kinney receive the money. The very instant it came into his hands, it became the property of the plaintiff, and entitled him to all the interest accruing upon it.

In our opinion, therefore, the charge of the court below was right, and we do' not advise a new trial.

In this opinion, the other judges, Stohrs and Hinman, concurred.

A new trial not granted.