February 2, 1982
Subject:
Judgments; Interest on Costs.
Requested By:
Honorable Charles M. Johnson Clerk of Superior Court Montgomery County
Question:
May interest be assessed on costs in light of the 1981 amendments to G.S. 24-5?
Conclusion:
No.
Prior to its amendment in 1981, G.S. § 24-5 read:
"All sums of money due by contract of any kind, excepting money due on penal bonds, shall bear interest, and when a jury shall render a verdict therefor they shall distinguish the principal from the sum allowed as interest; and the principal sum due on all such contracts shall bear interest from the time of rendering judgment thereon until it is paid and satisfied. In like manner, the amount of any judgment or decree, except the costs, rendered or adjudged in any kind of action, though not on contract, shall bear interest till paid, and the judgment and decree of the court shall be rendered according to this section." (Emphasis added)
In 1981 the General Assembly substituted the following language in place of the second sentence of G.S. § 24-5 quoted above:
"The portion of all money judgments designated by the fact-finder as compensatory damages in actions other than contract shall bear interest from the time the action is instituted until the judgment is paid and satisfied, and the judgment and decree of the court shall be rendered accordingly. The preceding sentence shall apply only to claims covered by liability insurance. The portion of all money judgments designated by the fact-finder as compensatory damages in actions other than contract which are not covered by liability insurance shall bear interest from the time of the verdict until the judgment is paid and satisfied, and the judgment and decree of the court shall be rendered accordingly." N.C. Sess. Laws 1981, c. 327 s. 1.
The phrase "except the costs" found in the original statute does not appear in the amended section. The issue thus raised is whether the legislature intended to allow interest to be computed on costs henceforth.
Of course, the intent and spirit of an act are controlling in its construction. In ascertaining this intent one must consider the language of the statute, the spirit of the Act and what it sought to accomplish, and the changes to be made and how these should be effected. 12 Strong’s N.C.
Index 3d, Statutes, § 5.1 (1978).
The intent of the legislature, clearly expressed in the amendment, was to change the method of computing interest in the case of claims covered by liability insurance so as to allow interest to accrue from the time action is instituted rather than from the time of verdict. The purpose of the amendment in this regard is also expressed by the simultaneous amendment of G.S. § 24-7 adding the phrase,
"Except with respect to compensatory damages in actions other than contract as provided in G.S. 24-5, when . . ." N.C. Sess. Laws 1981, c. 327 s. 3.
at the beginning of the statute which originally read,
"When the judgment is for the recovery of money, interest from the time of the verdict or report until judgment is finally entered shall be computed by the clerk and added to the costs of the party entitled thereto."
The title of the Bill itself gives evidence to the General Assembly’s intent for it reads,
"An act to mandate the accrual of interest on money judgments awarded in actions other than contract from the filing of the claim." N.C. Sess. Laws 1981, c. 327.
There is nothing in any of the above to indicate that the legislature intended to allow interest on costs by virtue of the amendment. To the contrary, the plain language of the statute provides for interest only on that portion of a judgment designated by the fact finder as principal, in the case of contracts, or as compensatory damages, in actions other than contract. The amendment acted only to change the period of accrual used to calculate that interest. Further, since the amendment now specifies which portion of the judgment interest is to be computed on it would have been redundant to carry over the phrase "except the costs," from the original language.
It is the general rule that interest on costs may not be allowed without statutory authority. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E. 2d 179 (1972); and, see, Smith v. Old Dominion Building and Loan Association, 119 N.C. 249, 26 S.E. 41 (1896); 50 N.C. Atty. Gen. Rep. 18 (1980). Since there is nothing in G.S. § 24-5 expressly providing for interest on costs, nor, as we have discussed, is there anything in the amendment from which such an allowance can be implied, we are of the opinion that interest may not be assessed on costs.
Rufus L. Edmisten Attorney General
Lucien Capone, III Assistant Attorney General