Carolina Nat. Bank v. State

• Decision Date: 18 April 1901
• Citation: Carolina Nat. Bank v. State, 60 S.C. 465, 38 S.E. 629 (S.C. 1901)
• Parties: CAROLINA NAT. BANK OF COLUMBIA v. STATE.
• Court: South Carolina Supreme Court

38 S.E. 629

60 S.C. 465

CAROLINA NAT. BANK OF COLUMBIA v. STATE.

Supreme Court of South Carolina

April 18, 1901

Appeal from common pleas circuit court of Richland county; J. C Klugh, Judge.

Action by the Carolina National Bank against the state of South Carolina. From an order overruling a demurrer to the complaint, defendant appeals. Reversed.

Since the state's acquiescence in or approval of the indorsement of notes by the superintendent of the penitentiary taken for convict hire could only be manifested by an act of the general assembly because such officer was not authorized to make such indorsement, and no such act was alleged, a complaint alleging the government's acquiescence in and approval of such indorsements stated a mere conclusion of law, which was not admitted by a demurrer.

The complaint is as follows, omitting caption: "The plaintiff above named, complaining of the defendant herein and bringing this action under and by virtue of a joint resolution of the general assembly of the state of South Carolina entitled 'A joint resolution to authorize the Carolina National Bank of Columbia to sue the state of South Carolina for the recovery of money claimed by the said bank to be due it from the state,' approved February 17, 1900 alleges: (1) That the plaintiff is, and at the times hereinafter mentioned was, a corporation duly created and existing by and under the laws of the United States of America. (2) That during the year 1898, and for many years prior thereto, the account of the state penitentiary was kept in the name of its superintendent at the bank of the plaintiff, all moneys received by the said penitentiary being deposited to the credit of said account in said bank, and all payments made by the said penitentiary being made by check on said bank and against said account. (3) That during the year 1898, and for many years prior thereto, it was the usage and practice of the superintendent of the said state penitentiary to raise money for the purpose of carrying on its operations by discounting at said bank or other banks notes taken in the name of the superintendent from persons for convict hire, or for the price of articles sold, payable at some future date. That such usage and practice was well known to and approved by the board of directors of the said state penitentiary, and was well known to the defendant, and acquiesced in and approved of by the defendant. (4) That all such notes were made payable to the said superintendent as such, for and on behalf of the defendant, and, when discounted as aforesaid were indorsed by the superintendent as such for and on behalf of the defendant, and when not paid at maturity by the makers thereof were taken up and paid by the superintendent of said state penitentiary for and on behalf of the defendant, all of which was with the knowledge, acquiescence, and approval of the said board of directors and of the defendant; and that all such notes were of the same tenor, except as to amount dates, and names of makers, as the two notes hereinafter set forth, and the indorsements thereof being the same as the indorsements of the two notes hereinafter set forth. (5) That on July 8, 1898, W. A. Neal, then being the superintendent of the said state penitentiary, brought to the plaintiff bank a note, of which the following is a copy: '$600. Columbia, S. C., July 8th, 1898. Six months after date I promise to pay to the order of W. A. Neal, superintendent, six hundred dollars; value received. Payable at the Carolina National Bank of Columbia, S.C. With interest after maturity at the rate of eight per centum per annum. W. W. Russell.' That said note was indorsed 'W. A. Neal, Superintendent S.C. P.' And that he, the said W. A. Neal, superintendent, requested the plaintiff bank to discount the said note for the accommodation of the said state penitentiary; and that it was well understood between the plaintiff and the said W. A. Neal, superintendent, that the said note had been executed to him as superintendent for and on behalf of the defendant, and that he had indorsed the same for and on behalf of the defendant; and that the discount of the said note was asked upon the faith of the indorsement thereon as being the indorsement of the defendant, by its officer and agent, the said W. A. Neal, superintendent. That pursuant to said request, and upon the faith and security of the said indorsement as being the indorsement of the defendant, the said note was discounted by the plaintiff bank, and the face value of same was placed to the credit of the said penitentiary account; the said W. A. Neal, superintendent, paying the discount of same. (6) That again, on the 21st day of July, 1898, the said W. A. Neal, still being the superintendent of the state penitentiary, brought to the plaintiff bank another note, of which the following is a copy: '$2,000. Columbia, S. C., July 21st, 1898. Five months after date I promise to pay to the order of W. A. Neal, superintendent, two thousand dollars; value received. Payable at the Carolina National Bank of Columbia, S.C. With interest after maturity at the rate of eight per centum per annum. C. W. Ragsdale.' That said note was indorsed 'W. A. Neal, Superintendent S.C. Penitentiary.' And that he the said W. A. Neal, superintendent, requested the plaintiff bank to discount the said note for the accommodation of the said state penitentiary; and it was well understood between the plaintiff and the said W. A. Neal, superintendent, that the said note had been executed to him as superintendent for and on behalf of the defendant, and that he had indorsed the same for and on behalf of the defendant; and that the discount of said note was asked upon the faith of the indorsement thereon as being the indorsement of the defendant, by its officer and agent, the said W. A. Neal, superintendent. That pursuant to said request, and upon the faith and security of the said indorsement as being the indorsement of the defendant, the said note was discounted by the plaintiff bank, and the face value of same was placed to the credit of the said penitentiary account; the said W. A. Neal, superintendent, paying the discount of same. (6) That again, on the 21st day of July, 1898, the said W. A. Neal, still being the superintendent of the state penitentiary, brought to the plaintiff bank another note, of which the following is a copy: '$2,000. Columbia, S. C., July 21st, 1898. Five months after date I promise to pay to the order of W. A. Neal, superintendent, two thousand dollars; value received. Payable at the Carolina National Bank of Columbia, S.C. With interest after maturity at the rate of eight per centum per annum. C. W. Ragsdale.' That said note was indorsed 'W. A. Neal, superintendent S.C. Penitentiary.' And that he, the said W. A. Neal, superintendent, requested the plaintiff bank to discount the said note for the accommodation of the said state penitentiary; and it was well understood between the plaintiff and the said W. A. Neal, superintendent, that the said note had been executed to him as superintendent for and on behalf of the defendant, and that he had indorsed the same for and on behalf of the defendant; and that the discount of said note was asked upon the faith of the indorsement thereon as being the indorsement of the defendant, by its officer and agent, the said W. A. Neal, superintendent. That pursuant to said request, and upon the faith and security of the said indorsement as being the indorsement of the defendant, the said note was discounted by the plaintiff bank, and the net proceeds thereof, $1,931.60, placed, to the credit of the said penitentiary account; the sum of $68.40 being the discount on said note. (7) That at maturity each of said notes was duly presented for payment, but was not paid, of all which due notice was given to W. A. Neal, superintendent, for and on behalf of the defendant. (8) That each of the said notes discounted by the plaintiff bank as aforesaid, as the plaintiff is informed and believes, and was then informed and believed, was taken by the said W. A. Neal, superintendent, in payment for convict hire. (9) That during the year 1898, the proceeds of the said two notes placed to the credit of the said penitentiary account in the plaintiff bank were, in the due and regular course of business, checked out of the plaintiff bank for the use of the said state penitentiary, by checks signed by the said W. A. Neal, superintendent, and countersigned and certified as correct by R. E. Burriss, clerk of the said state penitentiary, in accordance with the usage and practice of the said state penitentiary then and theretofore prevailing, and in payment of legal and proper claims against the penitentiary and the defendant, according to law; and that the defendant, the state of South Carolina, got, received, and still retains the full benefit thereof. (10) That the plaintiff has demanded the payment of said notes, and of the indebtedness represented thereby, and the repayment of the said proceeds of said notes placed to the credit of said penitentiary account with the plaintiff bank, together with interest thereon; but no part thereof has been paid. Wherefore the plaintiff demands judgment against the defendant for twenty-six hundred dollars, with interest on two thousand dollars thereof from December 24, 1898, and on six hundred dollars thereof from January 11, 1899, together with one and 10/100 dollars, costs of protest, and the costs and disbursements of this action."

To this complaint the defendant filed a demurrer, of which the following is a copy, caption being omitted: "The defendant demurs to the complaint herein on the ground that it appears upon the face thereof that it does not state facts sufficient to constitute a cause of action, in...