The opinion of the court was delivered by: BY THE COURT; STEWART DALZELL
This class action raises the question of whether the Prothonotary of the Court of Common Pleas of Montgomery County, Pennsylvania, may, consistent with the United States Constitution and state law, retain interest earned on interpleaded funds in private disputes.
The parties have filed cross-motions for summary judgment, together with a joint stipulation of facts. After consideration of the parties' submissions, and after extended oral argument, we conclude that the Prothonotary's practice of taking the interest earned on interpleaded private funds is unlawful, and thus he improperly withheld $ 23,291.81 in interest earned on the class representative's funds in addition to the $ 869.20 "poundage" imposed pursuant to state law on the same principal.
As noted, the facts necessary to our decision are undisputed, and are set forth in a joint stipulation, as supplemented by undisputed matters disclosed at the oral argument held on November 18, 1993.
In 1986, a dispute arose over competing claims to brokers' commissions in connection with the sale of Accountline Financial Services, Inc. ("Accountline"), a company of which plaintiff Rivkin was president and one of five shareholders. In granting Accountline's motion regarding the disposition of an unpaid remainder of commission, then-Montgomery County Common Pleas Judge Anita B. Brody entered an Order, dated November 5, 1986, directing Accountline "to pay the sum of $ 87,169.70 to the Prothonotary in an account which the Prothonotary is hereby directed to identify with the caption of this case." On December 10, 1986, Accountline duly interpleaded the $ 87,169.70 in compliance with Judge Brody's Order. The Prothonotary deposited these funds into the Prothonotary's interest-bearing account at a local bank, but did not open a separate account.
Litigation ensued among the parties in interest to the brokers' commissions, and after Judge Ott had entered his specific findings and verdict in the underlying matter,
a telephone conference took place which led to an Order, dated March 20, 1991, wherein Judge Ott required the Prothonotary "to place the sum of $ 87,169.70 held by him . . . forthwith into an interest-bearing account, with interest to be reported in the name of Harry Rivkin, social security # 165-30-3457." On April 17, 1991, the Prothonotary complied with Judge Ott's Order and placed the principal balance in a separate interest-bearing account. By this time the principal had been reduced by $ 2,250 for court reporter costs. The Prothonotary calculated a poundage fee on the $ 84,919.80 principal, in compliance with 42 Pa.Cons.Stat.Ann. § 21161, of $ 869.20.
In the time from December 10, 1986 through April 17, 1991, the Accountline interpleaded funds actually earned interest of $ 23,291.81. All such interest was remitted to the Montgomery County Treasurer.
Finally, pursuant to Judge Ott's Order of January 17, 1992, the Prothonotary that day remitted $ 86,728.92 to Rivkin, representing the remaining principal balance of $ 83,429.50
plus interest of $ 3,299.42 from April 18, 1991 to January 17, 1992.
The parties agree that, at least from 1984, when funds are interpleaded and the referencing court order is silent concerning the payment of interest, the Prothonotary has deposited the principal into his account, and the interest earned on that account has been remitted every month to the Treasurer of Montgomery County. The Treasurer, in turn, disburses funds from that account at the direction of the Commissioners of Montgomery County solely for public purposes.
Plaintiff Rivkin demanded that defendants
pay him the interest earned on the interpleaded Accountline funds from December 10, 1986 to April 17, 1991, but his request was rebuffed based upon the Prothonotary's practice of retaining interest on such funds. Rivkin filed this action on December 3, 1992, pursuant to 42 U.S.C. § 1983 and state law.
The defendants did not oppose plaintiff's motion for class action certification, and so on May 20, 1993 we certified a class, pursuant to Fed.R.Civ.P. 23(b)(2), consisting of "all persons and entities who received all or a portion of interpleaded funds held by the Montgomery County Prothonotary where the court order establishing the account was silent with respect to the payment of interest". The class period covered the "six years preceding the date of filing of this complaint", i.e., from December 3, 1986 to December 3, 1992. In accordance with our Orders of June 7 and 29, 1993, notice of pendency of the class action has been mailed to all individuals and entities identified as putative class members, and newspaper publication of the notice of pendency occurred on or before August 6, 1993.