South Dakota v. Collins

Background

The State of South Dakota sued J. Collins, who served as state treasurer from January 1903 to January 1907, seeking an accounting and repayment of interest he received on state money deposited in banks. The State pointed out that the constitution forbids officers from taking any "fees or perquisites whatever," and a statute (§333) required deposits to be made in the treasurer’s name as state treasurer, not to his personal credit. The bill alleged Collins had received more than $10,000; a referee examining the evidence found he received and retained $32,094.27 in interest.

Reasoning

The central question was whether interest earned on the deposited funds belonged to the State or to the treasurer personally. Collins denied misappropriation, asserted he relied on a Colorado decision, and in some testimony declined to answer questions to avoid possible criminal prosecution. The referee concluded the interest was earned by public funds, was paid to Collins as treasurer, and was appropriated to his own use without accounting. The South Dakota Supreme Court had held under §333 that interest on state deposits is state money (State v. Schamber). Relying on those findings and that construction, the Court approved the referee’s report and directed judgment against Collins.

Real world impact

The Court ordered Collins to repay $32,094.27 with interest at 7% per year from January 1, 1907, plus costs. The ruling makes clear that earnings on state deposits are state property and that officers who receive such interest must account for and turn it into the treasury.