JUSTICE BLACKMUN delivered the opinion of the Court.
This case presents the issue whether it is constitutional for a county to take as its own, under the authority of a state statute, the interest accruing on an interpleader fund deposited in the registry of the county court, when a fee, prescribed by another statute, is also charged for the clerk's
On February 12, 1976, appellant Eckerd's of College Park, Inc., entered into an agreement to purchase for $1,812,145.77 substantially all the assets of Webb's Fabulous Pharmacies, Inc. Both Eckerd's and Webb's are Florida corporations. At the closing, Webb's debts appeared to be greater than the purchase price. Accordingly, in order to protect itself and as permitted by the Florida Bulk Transfers Act, Fla. Stat. § 676.106 (4) (1977),
Pursuant to § 676.106 (4), the Circuit Court thereupon ordered that the amount tendered be paid to the court's clerk and that the clerk deposit it "in an assignable interest-bearing account at the highest interest." App. 4a. The court specifically reserved decision on the issue of entitlement, as between the clerk and Webb's creditors, to the interest earned on the fund while so deposited, stating that the transfer to the clerk was without prejudice to the creditors' claims to that interest. Id., at 4a-5a. Eckerd's tendered the sum to the clerk on July 13, 1976, id., at 6a, and that official proceeded to make the required investment.
The clerk deducted from the interpleader fund so deposited the sum of $9,228.74 as his fee, prescribed by Fla. Stat. § 28.24 (14) (1977),
On July 5, 1977, almost a year after the tender and payment, the Circuit Court upon its own motion
The receiver then moved that the court direct the clerk to pay the accumulated interest to the receiver. App. 22a, 26a, 33a. The Circuit Court ruled favorably to the receiver, holding that the clerk "is not entitled to any interest earned, accrued or received on monies deposited in the registry of this Court pursuant to the Court's order . . . ; the creditors herein are the rightful parties entitled to all such interest earned on the interpleader fund while it is held by the Clerk of this Court." Id., at 35a.
Seminole County and the clerk appealed to the Florida District Court of Appeal. That court transferred the cause to the Supreme Court of Florida. The Supreme Court, in a per curiam opinion with one justice dissenting in part, ruled that § 28.33 was "constitutional" and reversed the judgment of the Circuit Court. 374 So.2d 951 (1979). The stated rationale was that a fund so deposited is "considered `public money'" from the date of deposit until it leaves the account: that "the statute takes only what it creates"; and that "[t]here is no unconstitutional taking because interest earned on the clerk
Because it had been held elsewhere that a county's appropriation of the interest earned on private funds deposited in court in an interpleader action is an unconstitutional taking, Sellers v. Harris County, 483 S.W.2d 242 (Tex. 1972); see McMillan v. Robeson County, 262 N.C. 413, 137 S.E.2d 105 (1964), we noted probable jurisdiction. 445 U.S. 925 (1980).
It is at once apparent that Florida's statutes would allow respondent Seminole County to exact two tolls while the interpleader fund was held by the clerk of the court. The first
The second would be the retention of the amount, in excess of $100,000, consisting of "[a]ll interest accruing from moneys deposited." This toll would be exacted because of § 28.33's provision that the interest "shall be deemed income of the office of the clerk of the circuit court."
An initial reading of § 28.33 might prompt one to conclude that, so far as it concerns entitlement to interest, the statute applies only to interest on funds clearly owned by the county (such as charges for certifications) and that it does not apply to interest on private funds deposited under the direction of another statute. The Florida Supreme Court, however, has read § 28.33 otherwise and has ruled that it applies to interest earned on deposited private funds. That reading of the State's statute is within the Florida court's competency, and we must take the statute as so read and interpreted.
The pertinent words of the Fifth Amendment of the Constitution of the United States are the familiar ones: "nor shall private property be taken for public use, without just compensation." That prohibition, of course, applies against the States through the Fourteenth Amendment. Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 239 (1897); Penn Central Transportation Co. v. New York City, 438 U.S. 104, 122 (1978). Our task is to determine whether the second exaction by Seminole County amounted to a "taking"— it was obviously uncompensated—within the Amendment's proscription.
The principal sum deposited in the registry of the court plainly was private property, and was not the property of Seminole County. This is the rule in Florida, Phipps v. Watson, 108 Fla. 547, 551, 147 So. 234, 235 (1933), as well as
Appellees submit, Tr. of Oral Arg. 26, 29—and we accept the proposition—that, apart from statute, Florida law does not require that interest be earned on a registry deposit. See 374 So. 2d, at 953. We, of course, also accept the further proposition, pressed upon us by the appellees, that "[p]roperty interests . . . are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law . . . " Board of Regents v. Roth, 408 U.S. 564, 577 (1972). But a mere unilateral expectation or an abstract need is not a property interest entitled to protection. See, for example, Fox River Paper Co. v. Railroad Comm'n, 274 U.S. 651 (1927); United States v. Willow River Power Co., 324 U.S. 499 (1945). See also Penn Central Transportation Co. v. New York City, supra; Andrus v. Allard, 444 U.S. 51 (1979).
Webb's creditors, however, had more than a unilateral expectation. The deposited fund was the amount received as the purchase price for Webb's assets. It was property held only for the ultimate benefit of Webb's creditors, not for the benefit of the court and not for the benefit of the county. And it was held only for the purpose of making a fair distribution among those creditors. Eventually, and inevitably, that fund, less proper charges authorized by the court, would be distributed among the creditors as their claims were recognized by the court. The creditors thus had a state-created property right to their respective portions of the fund.
It is true, of course, that none of the creditor claimants had any right to the deposited fund until their claims were recognized and distribution was ordered. See Aron v. Snyder, 90
We therefore turn to the interest issue. What would justify the county's retention of that interest? It is obvious that the interest was not a fee for services, for any services obligation to the county was paid for and satisfied by the substantial fee charged pursuant to § 28.24 and described specifically in that statute as a fee "for services" by the clerk's office. Section 28.33, in contrast, in no way relates the interest of which it speaks to "services rendered." Indeed, if the county were entitled to the interest, its officials would feel an inherent pressure and possess a natural inclination to defer distribution, for that interest return would be greater the longer the fund is held; there would be, therefore, a built-in disincentive against distributing the principal to those entitled to it.
The usual and general rule is that any interest on an interpleaded and deposited fund follows the principal and is to be allocated to those who are ultimately to be the owners of that principal. See, e. g., James Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 463 (CA5), cert. denied sub nom. City Trade & Industries, Ltd. v. Allahabad Bank, Ltd., 404 U.S. 940 (1971); Murphy v. Travelers Ins. Co., 534 F.2d 1155, 1165 (CA5 1976); In re Brooks & Woodington, Inc., 505 F.2d 794, 799 (CA7 1974); McMillan v. Robeson County, 262 N. C., at 417, 137 S. E. 2d, at 108; Sellers v. Harris County, 483 S. W. 2d, at 243; Southern Oregon Co. v. Gage, 100 Or. 424, 433, 197 P. 276, 279 (1921); Board of Law Library
The Florida Supreme Court, in ruling contrary to this long established general rule, relied on the words of § 28.33 and then proceeded on the theory that without the statute the clerk would have no authority to invest money held in the registry, that in some way the fund assumes temporarily the status of "public money" from the time it is deposited until it leaves the account, and that the statute "takes only what it creates." Then follows the conclusion that the interest "is not private property." 374 So. 2d, at 952-953.
This Court has been permissive in upholding governmental action that may deny the property owner of some beneficial use of his property or that may restrict the owner's full exploitation of the property, if such public action is justified as promoting the general welfare. See, e. g., Andrus v. Allard, 444 U. S., at 64-68; Penn Central Transportation Co. v. New York City, 438 U. S., at 125-129.
Here, however, Seminole County has not merely "adjust[ed] the benefits and burdens of economic life to promote the common good." Id., at 124. Rather, the exaction is a forced contribution to general governmental revenues, and it is not reasonably related to the costs of using the courts. Indeed, "[t]he Fifth Amendment's guarantee . . . was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40, 49 (1960).
No police power justification is offered for the deprivation. Neither the statute nor appellees suggest any reasonable basis to sustain the taking of the interest earned by the interpleader fund. The county's appropriation of the beneficial use of the
Neither the Florida Legislature by statute, nor the Florida courts by judicial decree, may accomplish the result the county seeks simply by recharacterizing the principal as "public money" because it is held temporarily by the court. The earnings of a fund are incidents of ownership of the fund itself and are property just as the fund itself is property. The state statute has the practical effect of appropriating for the county the value of the use of the fund for the period in which it is held in the registry.
To put it another way: a State, by ipse dixit, may not transform private property into public property without compensation, even for the limited duration of the deposit in court. This is the very kind of thing that the Taking Clause of the Fifth Amendment was meant to prevent. That Clause stands as a shield against the arbitrary use of governmental power.
We hold that under the narrow circumstances of this case— where there is a separate and distinct state statute authorizing a clerk's fee "for services rendered" based upon the amount of principal deposited; where the deposited fund itself concededly is private; and where the deposit in the court's registry is required by state statute in order for the depositor to avail itself of statutory protection from claims of creditors and others—Seminole County's taking unto itself, under § 28.33 and 1973 Fla. Laws, ch. 73-282, the interest earned
The judgment of the Supreme Court of Florida is reversed.
It is so ordered.
"The clerk of the circuit court in each county shall make an estimate of his projected financial needs for the county and shall invest any funds in designated depository banks in interest-bearing certificates or in any direct obligations of the United States in compliance with federal laws relating to receipt of and withdrawal of deposits. . . . Moneys deposited in the registry of the court shall be deposited in interest-bearing certificates at the discretion of the clerk, subject to the above guidelines. . . . All interest accruing from moneys deposited shall be deemed income of the office of the clerk of the circuit court investing such moneys and shall be deposited in the same accounts as are other fees and commissions of the clerk's office. Each clear shall, as soon as is practicable after the end of the fiscal year, report to the county governing authority the total interest earned on all investments during the preceding year." (Emphasis supplied.)
"A transferee may within ten days after taking possession of the goods, discharge his obligations under this section by an action in the circuit court for the county where the transferor had his principal place of business in this state interpleading all creditors in the list of creditors required by [§] 676.104. In such event the court shall require the consideration to be deposited into the registry of the court and thereupon shall decree the goods to be free and clear of the claims of such creditors and that such creditors should file their claims with the court."
"The clerk of the circuit court shall make the following charges for services rendered by his office in recording documents and instruments and in performing the duties enumerated:
"(14) For receiving money into the registry of court:
"(a) First $500.00, percent................................... 1 "(b) Each subsequent $100.00, percent......................... 1/2"
The statute has since been amended in ways not relevant to the present litigation.
In any event, the federal constitutional issue appears to have been raised in the Supreme Court of Florida. See Tr. of Oral Arg. 4. While there is no specific reference to the Federal Constitution in the court's per curiam opinion, the court spoke specifically of the receiver's argument that the statute "constitutes either a taking without due process of law or an unlawful tax," 374 So. 2d, at 952, and ruled that there was "no unconstitutional taking." Id., at 953. We are satisfied that the Supreme Court of Florida upheld the statute against both federal and state constitutional challenges. This is a sufficient base for this Court's consideration of the federal issue.