Atlantic Sav. Bank of Charleston v. Rowland

• Decision Date: 07 August 1925
• Docket Number: 11817.
• Citation: Atlantic Sav. Bank of Charleston v. Rowland, 130 S.E. 57, 133 S.C. 1 (S.C. 1925)
• Parties: ATLANTIC SAV. BANK OF CHARLESTON v. ROWLAND ET AL.
• Court: South Carolina Supreme Court

130 S.E. 57

133 S.C. 1

ATLANTIC SAV. BANK OF CHARLESTON v. ROWLAND ET AL.

No. 11817.

Supreme Court of South Carolina

August 7, 1925

Appeal from Common Pleas Circuit Court of Charleston County; R. W Memminger, Judge.

Action by the Atlantic Savings Bank of Charleston, as administrator of the estate of Henry Archibald Duc, deceased, against Thomas R. Rowland, Jr., and others, whereby plaintiff sought instructions as to payment of a claim made by certain defendants against the estate.From a judgment sustaining validity of the claim, plaintiff and certain defendants appeal.Affirmed.

The following is the decree of the circuit court:

"This cause comes before me upon exceptions to the master's report, filed herein, April 19, 1924.

The controversy arises out of effort on the part of the plaintiff, Atlantic Savings Bank, and the defendantsThomas F. Rowland, Jr., Charles B. Rowland, George Tibbals, and Samuel Tibbals, the latter wealthy iron manufacturers of Brooklyn, N. Y., and devisees under the will of Duc, to avoid the payment from the estate of Duc, a lifelong citizen of Charleston, S. C., of a claim of $15,000, upon a contract between Duc and the Orphan Aid Society of the Jenkins Colored Orphanage, for the construction of a certain bakery, known as the Poor Child Bread Company.The master decided adversely to the claimant, and accepted the reasoning of the joint argument submitted by Mr. Henry Buist, attorney for plaintiff, Atlantic Savings Bank of Charleston, and Mr George L. Buist, attorney for the devisees.

The exceptions, four in number, raise substantially but two points: (1) The competency of the witness Jenkins under section 708 of the Code of 1922; and (2) error on the part of the master in holding the estate of Duc not liable to the claimant, the Orphan Aid Society of the Jenkins Colored Orphanage for the amount claimed in this action.For a proper understanding of the question, a brief review of the facts is essential:

The proceeding was brought on the face of the papers by plaintiff, Atlantic Savings Bank of Charleston, S C., administrator c. t. a. of the estate of Henry Archibald Duc, deceased, for instructions from the court in reference to a claim of defendant the Orphan Aid Society of the Jenkins Colored Orphanage, duly filed with it, dated April 21, 1922 and reading as follows:

'To money advanced and expended for the erection and equipment of a building, at 27Franklin Street, Charleston S. C., known as "the Poor Child Bread Company," at the special instance and request, and under the authority and direction, of Mr. Henry A. Duc--$15,000.00.'For convenience the Orphan Aid Society of the Jenkins Colored Orphanage will be referred to hereinafter as the Orphanage.

Both the Orphanage and D. J. Jenkins were made defendants.They filed a joint answer, alleging that on or about April 1 1920, Duc (who died on September 29, 1920), visited the Orphanage, in the city of Charleston, conducted by them, and proposed to Jenkins, its president (the Orphanage being an incorporated institution), the erection of, at his (Duc's) expense, what is known as two 'Poor Child Bread Companies' in the city of Charleston for the purpose of manufacturing, baking, and distributing bread among the poor colored children and people of the colored race in the city of Charleston; that the Orphanage has been in existence for many years, in the city of Charleston, working entirely among the negro race of that city, for the purpose of educating, supporting, and training destitute and orphan children of that race; and that Duc, who throughout his life took an active interest in the development, education, and uplift of the colored race, authorized and requested the erection, at his expense, on Franklin street in the city of Charleston, of a building for the purposes referred to; that such building was erected at a cost of $15,000, which sum was advanced by the Orphanage in reliance upon the promise, request, and agreement of the said Duc, to pay for the same.Judgment for this amount and interest is asked on behalf of the Orphanage.

The answer of defendantsThomas F. Rowland, Jr., Charles B. Rowland, George Tibbals, and Samuel Tibbals denies knowledge of any action taken on behalf of the plaintiff in respect to the administration of the estate; and denounces the claim as 'a fictitious claim, and unsupported by any facts whatsoever,' etc.This answer is signed by George L. Buist, Esq., attorney for the said last named defendants, as well as the defendants'the Orphan Aid Society of the Jenkins' Colored Orphanage, and D. J. Jenkins.'This is obviously a mistake, however, because, as appears throughout, and from the above summarized answer of the last two named defendants, Mr. Buist is not their attorney, and their interests are entirely and sharply antagonistic.

The chief witness offered by the Orphanage in support of its claim was its codefendant and president, Rev. D. J. Jenkins.Objection to this testimony (under section 708 of the Code) as to transactions had between him and the said Duc, deceased, was made by counsel opposed to the claim.The master, at the hearing, sustained this objection upon the ground as reported: 'That the witness, having testified that he is president of the defendant the Orphan Aid Society of the Jenkins Colored Orphanage, and not as an individual, any transactions between him in his official capacity as an officer of the society and the deceased abide by the statute.'Record, page 8.The testimony, however, of course, was taken, subject to this objection and ruling.

In his report, however, the master seems to have reversed this ruling.In his report he seems to expressly decide that the witness was not disqualified by reason of being 'a party to the action or proceeding nor as a person having an interest that may be affected by the event of the trial, these disqualifications being the recognized subdivisions (a) and (b) of section 708.And further, the master seems to have decided that 'Jenkins as a paid official of the corporation would hardly be held to have a disqualifying interest.'

Subdivisions (c) and (d) of the Statute as set out in the report are: (c)'A person who has such an interest, but which has been in any manner transferred to, or has in any manner come to, the party to the action or proceeding.'(d)'As assignor of a thing in controversy in the action.'Under these two subdivisions, the master held the witness disqualified, reporting: 'It is clear that the only parties to such an arrangement or contract were Henry Archibald Duc and D. J. Jenkins; that the interest therein of D. J. Jenkins was thereafter transferred by him to the Orphan Aid Society of the Jenkins Colored Orphanage, and that Jenkins is disqualified under sections 3and4 above set out, the defendant Orphan Aid Society having no claim against the estate of Duc other than such contract or agreement as may have been assigned to it by D. J. Jenkins.'Report, page 3.

The finding of competency under subdivision (b) and disqualification under subdivision (c) appear clearly inconsistent and irreconcilable.If Jenkins was not 'a person having an interest that may be affected by the event of the trial,' under subdivision (b), by what reasoning can he subsequently be declared incompetent as 'a person who has had such an interest, but which has been in any manner transferred to, or has in any manner come to, a party to the action or proceeding,' under subdivision (c).

The master seems to have clearly recognized this dilemma, and disqualified this witness 'as assignor of a thing in controversy in the action,' under subdivision (d), reporting:

'The defendant, Orphan Aid Society, having no claim against the estate of Duc other than such contract or agreement as may have been assigned to it by D. J. Jenkins.'Report, page 3.

The Orphanage now contends before me that there is absolutely no testimony to support this holding, and I have found none.On the contrary, I find ample evidence showing that the transaction or agreement was had between the said Duc and the Orphan Aid Society through its president, Rev. D. J. Jenkins.

The witness Jenkins testified that the Orphan Aid Society of the Jenkins Orphanage is a corporation (incorporated in 1892), and that he is the president; that in the summer of 1920, the Orphanage erected the building on Franklin street (record, page 6); that the Orphanage actually paid for erecting the building at a cost of over $15,000, and borrowed money to pay for it (record, page 71); that Duc came to his 'place'(the Orphanage, presumably), several times and ordered him to erect the building (page 8); that he had no personal interest in the money to be used for erecting the building (page 24); that the Orphanage owned the lot on

which the building was erected and had owned it for 20 or 30 years (page 30); and that Duc selected the site (page 31).

The witness Jeannette Moore testified that the proposition of Duc to erect this building was submitted to the board of managers of the Orphanage at one of their regular meetings, and the erecting of the building was then authorized (page 34).

The evidence further reveals through the witness Edna May Clement, the bookkeeper of the Orphanage, that the itemized statement of the claim in evidence was made up from the books of the Orphanage (page 36); that the items were carried as repairs and improvements in the ledger of the Orphanage as applicable to this building, though no special account was opened in Duc's name (pages 37, 38).

Besides, not only the foregoing, but the whole testimony negatives completely the suggestion that Duc's arrangement was with Jenkins individually, or that Jenkins had any personal interest in the funds to be used for the erection of this building.No

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