THE STATE OF SOUTH CAROLINA
In The Supreme Court
Renaissance Enterprises, Inc., a South Carolina Corporation, Petitioner,
Ocean Resorts, Inc., a South Carolina Corporation, Respondent.
ON WRIT OF CERTIORARI TO THE COURT OF
Appeal From Horry County
John L. Breeden, Jr., Master in Equity
Opinion No. 24904
Heard December 2, 1998 - Filed February 22, 1999
Dirk J. Derrick, of Conway, for petitioner.
Craig A. Snook, of Leiter & Snook, of Myrtle Beach, for respondent.
MOORE, A.J.: This case is before us to review the Court of
Appeals' decision1 holding that the deposit of money into court as provided
in Rule 67, SCRCP, stops the accrual of interest pursuant to the contract
between the parties. We reverse.
Petitioner (Broker) and respondent (Management Company) entered
a contract whereby Broker would procure guests for Management
Company's facilities in exchange for a 10% commission. The contract
further provided that any commission not paid when due would accrue
interest at the rate of 1.5% per month compounded monthly. When
Management Company failed to pay commissions due, Broker submitted
its claim to arbitration as required under the contract. On December 6,
1989, the arbitrators awarded Broker a total of $69,566 including interest
under the contract. This award was affirmed.2
Broker subsequently commenced supplementary proceedings to collect
on its judgment. In the course of these proceedings, the master held the
contractual rate of interest of 1.5% per month compounded monthly
applied to the judgment and that Management Company's payment of
money into court3 did not stop the accrual of interest.
Management Company appealed. The Court of Appeals reversed in
part holding the payment of money into court stopped the accrual of
interest pursuant to the contract. This is the only issue before us.
Does the payment of money into court stop the accrual of
interest where the contract provides for interest to be paid on
amounts past due?
Management Company deposited money into court pursuant to Rule
2 310 S.C. 395, 426 S.E.2d 821 (Ct. App. 1992).
3 Management Company deposited funds by permission of the court on
September 29, 1994.
67, SCRCP, which provides in pertinent part:
In an action in which any part of the relief sought is a
judgment for a sum of money . . . a party, upon notice to every
other party, and by leave of court, may deposit with the court
all or part of the sum . . . .
In Russo v. Sutton, 317 S.C. 441, 454 S.E.2d 895 (1995), we held a
judgment debtor's deposit of funds into court pursuant to Rule 67 pending
his own appeal stops the accrual of interest on the judgment. See also
Small v. Pioneer Machinery, Inc., 330 S.C. 62, 496 S.E.2d 884 (Ct. App.
1998). The rationale was that "such a rule encourages the debtor to pay
the judgment and assures the judgment creditor the funds will be
available." 317 S.C. at 442, 454 S.E.2d at 896.
The Court of Appeals found it was a "logical extension" of Russo to
hold the deposit of money into court pursuant to Rule 67 during the
pendency of supplemental proceedings stops the accrual of interest.
Further, it rejected Broker's contention that the contractual provision for
interest on past due monies abrogated the effect of a deposit into court
pursuant to Rule 67. Broker argues this was error. We agree.
In Turner Coleman, Inc. v. Ohio Constr. & Eng. Co., 272 S.C. 289,
251 S.E.2d 738 (1979), we held contractual interest rates prevailed over
statutory post-judgment interest rates because there was nothing in the
statute providing for post-judgment interest rates4 to override the intent of
the parties expressed in their contract regarding the appropriate interest
rate. Accordingly, we concluded the post-judgment statutory rate applied
only where there was no contractual interest rate; where the contract
provided a rate of interest, that rate would apply to a judgment entered
on the contract.
Similarly, there is nothing in Rule 67 indicating a deposit into court
will affect the parties' contract regarding interest. Although Turner
Coleman involved interest rates, the principal is analogous in this case
where the contract provides for the accrual of interest without providing
accrual will stop before actual payment.
Further, Rule 67 is substantially the same as the federal rule
allowing a deposit into court. See Rule 67, Fed.R.Civ.P. Federal courts
have uniformly held that Rule 67 "cannot be used as a means of altering
the contractual relationships and legal duties of the parties." LTV Corp.
v. Gulf States Steel, Inc., 969 F.2d 1050, 1063 (D.C. Cir. 1992); In re:
Dept. of Energy_ Stripper Well Exemption Litigation, 124 F.R.D. 217, 218-
19 (D. Kan. 1989); Prudential Ins. Co. v. BMC Indus., 630 F. Supp. 1298,
1300 (S.D.N.Y. 1986). Stopping the contractual accrual of interest would
in effect substitute the interest rate of the court's deposit account for that
provided by contract which the court has no authority to do. LTV Corp. v.
Gulf States Steel, Inc., supra.
In conclusion, a deposit into court pursuant to Rule 67 does not stop
the accrual of interest provided by contract. This holding of the Court of
FINNEY, C.J., TOAL, WALLER, and BURNETT, JJ., concur.