Eckerd's filed an interpleader action in Florida and deposited the purchase price for Webb's assets into the circuit court registry as required by Florida's Bulk Transfers Act. The clerk invested the fund in an interest-bearing account, deducted a separate statutory fee of $9,228.74 for receiving money into the registry, and later retained more than $100,000 in accrued interest under a different statute declaring such interest to be income of the clerk's office. The principal, less the fee and a court-ordered payment, was transferred to Webb's receiver, who then sought the accrued interest for Webb's creditors. The deposited fund itself was private property held for the ultimate benefit of Webb's creditors and for fair distribution among them.
Issue
Whether a county may, consistent with the Fifth and Fourteenth Amendments, retain for itself the interest earned on a private interpleader fund deposited in the court registry under state law when a separate statute already charges a clerk's fee for services in receiving the fund.
Rule
Under the narrow circumstances of this case, when the deposited fund is concededly private property, a separate state statute already imposes a clerk's fee for services rendered based on the principal deposited, and deposit into the court registry is required by state law to obtain statutory protection, the county's retention of interest earned on that fund is a taking of private property without just compensation. Interest earned on a fund is an incident of ownership of the principal and ordinarily follows the principal.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
In Ohio, Lakeside Medical Supply sold its assets to North Harbor Health Stores. To obtain statutory protection from competing creditor claims under a state bulk-transfer procedure, North Harbor was required to deposit the purchase price into the Cuyahoga County court registry. The clerk charged a separate statutory filing-and-receipt fee based on the amount deposited, invested the money, and then kept all accrued interest under another statute declaring registry-account interest to be county revenue.
If the creditors later establish entitlement to the deposited proceeds, which argument best supports their claim to the accrued interest?
Explanation. Under the majority's narrow rule, when a concededly private fund must be deposited in court to obtain statutory protection, and the clerk already receives a separate statutory fee for services, the government's retention of interest earned on that fund is a taking without just compensation. The Court rejected the ideas that temporary deposit makes the money public or that the state's requiring interest to be earned gives the state ownership of that interest. Interest is an incident of ownership and ordinarily follows the principal. (Derived from Webb's Fabulous Pharmacies, Inc. v. Beckwith (n.d.).)