Sellers v. Harris County
| Decision Date | 31 May 1972 |
| Docket Number | No. B--2892,B--2892 |
| Citation | 483 S.W.2d 242 |
| Parties | Harold SELLERS et al., Petitioners, v. HARRIS COUNTY, Texas, Respondent. |
| Court | Texas Supreme Court |
Reynolds, White, Allen & Cook, Grant Cook, John L. Buvens, Houston, for petitioners.
Joe Resweber, County Atty., Billy E. Lee, Asst. County Atty., Houston, for respondent.
ON MOTION FOR REHEARING
The motion for rehearing is overruled since the judgment originally entered is not changed. The opinion delivered April 5, 1972 is withdrawn, and the following is delivered in its stead.
When trust funds are paid into court during litigation and invested at interest by the clerk or auditor, may the judge of that court direct the ultimate payment of the interest to the owner of the principal or, under existing statutes, must all interest be paid to the county? The trial court by its judgment in this case answered this question in favor of the owner of the principal. The court of civil appeals reversed and ordered payment of the interest to the county. 468 S.W.2d 950. We agree with the trial court.
North American Insurance Company filed suit in the district court of Harris County impleading Harold Sellers and Joyce Karback Watson who were adverse claimants to the proceeds of an insurance policy on the life of Thomas Douglas Watson, Jr., deceased. The net proceeds of the $1,000,000 policy were tendered and received in the registry of the court, and the insurance company was discharged from liability. A series of orders were entered by the trial judge to direct the handling of this money in a manner to assure that the ultimate victor in the litigation would also receive the interest earned during the time the money was in the court's charge. Since the size of the principal brought a return of approximately $6,000 each month, the matter attracted special attention.
Harris County, the District Clerk and County Auditor intervened in the cause to assert that the statutes require that this money be deposited in the Harris County depository bank and that all interest accruing therefrom be paid into the general fund of the County. The claims of ownership of interest and of principal were severed by the trial court in order that the court could enter a final judgment in the cause involving the interest and in which Harris County, the District Clerk, and the County Auditor were parties. By this judgment the court declared that the proceeds of the policy were to be deposited in the Harris County depository bank and maintained in a separate account for the benefit of the ultimate victor in the contest between Sellers and Watson. The interest to be earned as provided in the contract between the county and the depository was to be retained for the benefit of the same party. At the conclusion of the litigation the trial court was to determine a reasonable fee to compensate Harris County for its accounting and administrative expenses incurred in handling the fund.
The contention by Harris County that it is entitled to all of the interest is based on the terms of Articles 1656a and 2558a, Vernon's Ann.Civ.Stats. Article 1656a is a general direction to the county auditor as to the accounting system and the handling of money collected by officers of the county. Such money is to be deposited in the county depository to 'draw interest for the benefit of the county.' Article 2558a is a comprehensive statute setting procedure and liability in the handling of trust funds in the possession of county and district clerks. It makes the county liable if funds on deposit with its designated depository are lost. The clerk is relieved of responsibility for the safekeeping of the funds so long as they are deposited in the legally selected depository. Sections 4a and 4b of Article 2558a...
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