Akers v. Rowan

• Decision Date: 22 October 1890
• Citation: 12 S.E. 165,33 S.C. 451
• Parties: AKERS et al. v. ROWAN, Sheriff, et al. SHAND v. CENTRAL NAT. BANK OF COLUMBIA. SAME v. ROWAN, Sheriff, et al.
• Court: South Carolina Supreme Court

12 S.E. 165

33 S.C. 451

AKERS et al. v. ROWAN, Sheriff, et al.

SHAND v. CENTRAL NAT. BANK OF COLUMBIA.

SAME v. ROWAN, Sheriff, et al.

Supreme Court of South Carolina

October 22, 1890

Appeal from common pleas circuit court of Richland county; NORTON Judge.

The facts are stated in the opinion, which refers for a fuller statement to the master's report and the decree, which are as follows:

"To the honorable the circuit court of common pleas for the county and state above named, the undersigned, master for Richland county, respectfully reports: The three actions above entitled were separately brought, but by a single order of reference were referred to me 'to take the evidence, and hear and determine all the issues, both of law and of fact,' therein, and were, by consent of counsel, tried together, the same evidence being considered as offered in all the cases. A pressure of other matters prevents my discussing the evidence, or stating my reasons for my findings and conclusions. I find the following to be the facts of the case: (1) That for a year or more prior to the month of March, 1886, J. S. Robbins, who is named as a party defendant in the action first above entitled, was engaged in the mercantile business in the city of Columbia as a wholesale and retail dealer in provisions, groceries hay, etc., doing all of his banking business with the defendant, the Central National Bank of Columbia. (2) That he was permitted to overdraw his account in said bank from time to time, upon the security of bills of lading for merchandise at the various railroad depots in the city of Columbia, which were taken up by said bank, until, on the 16th day of March, 1886, such overdrafts amounted to nine thousand one hundred and eighty-five dollars, ($9,185,) when said bank advanced to him the further sum of eighteen hundred dollars ($1,800) to pay certain acceptances of his then maturing, taking therefor his note for the said eighteen hundred dollars, ($1,800,) and a chattel mortgage to secure the said note, and the overdraft above mentioned, the bank surrendering its bills of lading, and he promising to deposit all his funds in the said bank, and to transfer to it as security certain bills and accounts; but he was to be allowed to check against his deposits for such sums as would be necessary to run his business, the net balance only of the deposits to go to the reduction of his overdraft, which it was expected would be paid up within forty days. (3) That on the 30th day of April, 1886, having reduced his overdraft to five thousand nine hundred and fourteen and 58-100 dollars, ($5,914.58,) but not having paid anything on the note, he gave a renewal note for the same amount, payable at thirty days, and executed a new mortgage as a renewal of the first one, which was surrendered to him, but was probably not marked 'satisfied' or 'canceled.' (4) That both of these mortgages were executed in good faith by Robbins, and the officers of the bank had no reason to believe him to be insolvent, as he really was, but neither of the said mortgages was ever recorded, because it was so requested by him. (5) That during the month of May, 1886, Robbins became more and more embarrassed, many drafts upon him being returned dishonored, some of them through the Central National Bank, and many suits were commenced against him, which was known to some of the officers of the bank. (6) That from the execution of the first mortgage he was required, in pursuance of his promise, to deposit all his funds in said bank, whether in the shape of cash, or bills and notes, the net amounts going as payments on account of his said overdraft. (7) That from about the 15th day of June, 1886, the officers of the bank had reasonable cause to believe that Robbins was insolvent, in the legal sense of the term, but the payments and deposits made by him were made in pursuance of his previous promise, and in the regular course of his business with said bank, and they considered that they were requiring of him only what he was legally and morally bound by his promise to do. (8) That, for the purpose of gaining time, Robbins employed counsel to stave off judgments in all of the suits against him, except in the case of N. K. Fairbanks & Co., which he seems to have inadvertently overlooked, having put the papers in his desk to hand to his counsel, which he forgot to do. (9) That on the 20th day of July, 1886, having reduced his overdraft to two thousand seven hundred and thirty-one and 39-100 dollars, ($2,731.39,) Robbins executed a new mortgage to secure the same, and a renewal of the eighteen hundred dollar note, such mortgage being intended as a renewal of the previous mortgages, and not as a change thereof; said mortgage, as the previous ones had done, covering all goods then in his store, and at the several railroad depots, or elsewhere in the city of Columbia, and all goods to be thereafter acquired and added to said stock. (10) That, in the interim between the date and maturity of the mortgage of the 30th of April, the stock of goods had been materially changed by sales and purchases, and Robbins had contracted some debts, which have not been paid. This is also true of the interim between the maturity of said mortgage and the execution of the mortgage of July 20, 1886. (11) That, in pursuance of the promise made when the Central National Bank surrendered the bills of lading held by it in March, Robbins, on the ___ day of August, 1886, transferred to said bank certain of his book-accounts, upon which considerable sums have since been collected by said bank. (12) That said accounts had not been transferred prior to the said ___ day of August, 1886. (13) That, in making such transfer of these accounts, Robbins must be held to have intended the necessary consequences of his act, a preference to the bank over his other creditors, in fraud of chapter 72 of the General Statutes of 1882, and the bank had reasonable cause to believe that he so intended. The same would be true of the mortgage of the 20th July, if it stood as an isolated transaction, but I have already found that it was a renewal of the mortgage executed previous to the ninety days preceding the 2d day of September, 1886, and conferred no new rights. (14) That N. K. Fairbanks obtained an order for judgment in the case above referred to on the ___ day of July, 1886, but did not enter up judgment or issue execution until the 30th day of August, having postponed doing so at the earnest solicitation of Robbins, although there was no collusion between them, and Robbins did not contribute in any way to the obtaining of said judgment, or connive at their getting any advantage over their other creditors. (15) That, Robbins' condition steadily growing worse, said bank, on the 30th day of August, 1886, by S.W. Rowan, as its agent, seized, under the mortgage of July 20th, all the goods covered thereby that could be found; and at the same time said S.W. Rowan, as sheriff of Richland county, levied upon the same goods under the execution issued upon the judgment of N. K. Fairbanks & Co., and also levied under said execution upon a horse, wagon, and harness, and some money not covered by said mortgage. (16) That on the 2d day of September, 1886, Robbins executed and delivered to Robert W. Shand, Esq., as assignee, a deed of assignment of all his property for the benefit of his creditors, without preferences, drawn strictly in accordance with the provisions of chapter 72 of the General Statutes of 1882. (17) That Robbins did not intend, by any of his transactions with the bank, to make a general assignment of his property for the benefit of creditors, but intended only to secure said bank, and the officers of said bank were guilty of no act inconsistent with honesty and fair dealing, and supposed that they were requiring only what the bank had a legal and moral right to demand and receive. (18) That the plaintiffs, in the action first above entitled, are bona fide creditors of Robbins to the amounts alleged in the complaint therein.

I conclude, as matters of law, (1) that the two mortgages executed by Robbins in March and April, 1886, respectively were valid, and having been executed more than ninety days previous to the execution of the deed of assignment are not open to attack, even by the assignee; (2) that the terms 'insolvent' and 'insolvency' are used in chapter 72 of the General Statutes of 1882, as indicating 'a condition of present inability to meet one's just obligations as they become due;' (3) that the judgment in the case of N. K. Fairbanks & Co. v. J. S. Robbins is valid as against all parties, but that the lien of the levy of the execution thereon did not attach to any of the goods covered by the mortgage to the bank, and, even if that mortgage should be set aside as against the assignee, it would not operate to give to that levy a lien which it has never possessed; (4) that the mortgage of July 20, 1886, if standing as an isolated transaction, would have been avoided by the assignment of September 2, 1886, but inasmuch as it was a mere renewal of the previous mortgages, and conferred no right or lien which the bank did not claim by virtue of the previous ones, it cannot be held to have given undue preference to the bank in fraud of chapter 72 of the General Statutes of 1882, and the bank is entitled to the proceeds of the sale of the mortgaged goods; (5) that inasmuch as the payments and deposits of money made by Robbins were made in his regular course of business, and in pursuance of a promise made previous to the ninety days preceding the assignment, they were not avoided by the assignment, and the assignee is not entitled to recover the amount thereof; (6) that the assignment of the accounts in August, and all...