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THE STATE OF SOUTH CAROLINA

In The Supreme Court

Renaissance Enterprises, Inc., a South Carolina Corporation, Petitioner,

v.

Ocean Resorts, Inc., a South Carolina Corporation, Respondent.

ON WRIT OF CERTIORARI TO THE COURT OF

APPEALS

Appeal From Horry County

John L. Breeden, Jr., Master in Equity

Opinion No. 24904

Heard December 2, 1998 - Filed February 22, 1999

REVERSED

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

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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.

FACTS

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.

ISSUE

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?

DISCUSSION

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.

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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

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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

Appeals is

REVERSED.

FINNEY, C.J., TOAL, WALLER, and BURNETT, JJ., concur.

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