United States v. Minnesota Mutual Investment Co.

Background

A South Dakota corporation doing business in Colorado deposited $15,143.92 into a federal court registry during litigation, and the clerk placed the money in the First National Bank of Denver, a bank designated as a federal depositary. The bank paid 2% annual interest on the deposit into the United States Treasury from June 7, 1918, to May 6, 1920. The company sued the United States for $571.26, claiming the interest belonged to it because historically interest on such court funds had been credited to the party who owned the fund.

Reasoning

The central question was whether the Government had a contract—express or implied in fact—that would let the company recover the interest from the United States. The lower court found the Treasury Secretary lacked power to require national banks to pay interest on court funds to the Government and awarded the company the interest. The Solicitor General argued, and this Court agreed, that recovery against the Government requires an actual implied-in-fact contract, not merely an equitable claim. The Court held the pleadings did not show government officers collected the interest or received it for the company’s benefit, so no contract was proven and no judgment against the United States could stand.

Real world impact

The decision prevents recovery from the federal Government for interest collected by the Treasury absent an express or proven implied contract. Litigants with funds in court and banks acting as federal depositaries must rely on clear agreements or court directions about who gets interest on deposited money.