Huggins v. Commercial & Savings Bank

• Decision Date: 19 October 1927
• Docket Number: 12290.
• Citation: Huggins v. Commercial & Savings Bank, 141 S. C. 480, 140 S. E. 177 (S.C. 1927)
• Parties: HUGGINS v. COMMERCIAL & SAVINGS BANK.
• Court: South Carolina Supreme Court

140 S.E. 177

141 S.C. 480

HUGGINS v. COMMERCIAL & SAVINGS BANK.

No. 12290.

Supreme Court of South Carolina

October 19, 1927

Appeal from Common Pleas Circuit Court of Florence County; H. F Rice, Judge.

Action by M. B. Huggins against the Commercial & Savings Bank of Timmonsville. From a judgment for plaintiff defendant appeals. Affirmed.

Cothran J., dissenting.

The complaint, answer, contract of October 5, 1922, judge's ruling on motion for directed verdict, and the exceptions are as follows:

Complaint.

The plaintiff above named, complaining of the defendant herein, alleges I. That heretofore before and on the 16th day of August 1919, the Citizens' Bank of Timmonsville, S. C., was a corporation created under the laws of the state of South Carolina, owning, maintaining, and operating a general banking business in the town of Timmonsville, in the county of Florence, and said state.

II. That on the said 16th day of August, 1919, the plaintiff herein in the usual and ordinary course of the conduct of his business with the said Citizens' Bank, as one of its depositors, placed on deposit with and in the said bank the full and just sum of $3,000.

III. That plaintiff has never at any time received the said $3,000, nor has any check of the plaintiff therefor ever been presented to the said bank or paid by it to any person whomsoever.

IV. That heretofore on or about the 20th day of January, 1923, the said Citizens' Bank of Timmonsville, being embarrassed and in imminent danger of insolvency transferred, turned over and delivered unto the defendant herein, the Commercial & Savings Bank, a corporation created and existing under the laws of the state of South Carolina, all of its assets, including the $3,000 of the plaintiff on deposit, so as aforesaid.

V. That plaintiff has repeatedly demanded from the said defendant the refund or payment of the said deposit of $3,000, which has been refused, and no part of which has been paid by discount or otherwise.

VI. That because of the foregoing facts, the defendant herein is justly and truly indebted to the plaintiff in the sum of $3,000, together with interest thereon at 7 per cent. per annum.

Wherefore, plaintiff demands judgment against the defendant:

First. For the aforesaid sum of $3,000, with interest thereon at the rate of 7 per cent. per annum, and for the costs and expense of this action, and for such further relief as may be just.

Answer.

The defendant, answering the complaint herein: (1) Denies each and every allegation therein contained.

Ruling on Motion for Directed Verdict.

It seems to me, and I have read this case pretty closely, that it would be inequitable and unjust that the defendant in this case should be allowed to get possession of all assets of the Citizens' Bank and not be liable, at least to the extent of the assets that came in their hands for the debts of the bank; or as in this case to a depositor, if he was a depositor. I do not think there is any court that is going to hold-our Supreme Court or any other court-is going to hold that under these circumstances the defendant in this case could take over all the assets of the Citizens' Bank and not be liable to the depositors. If this man was a depositor, then he had the same rights that any other depositor had, and if they could do that and not account to him, that is, take the assets out of his reach, then they could take the entire assets away from all the depositors. It is true, there is an agreement here in which, as between the parties themselves, the Citizens' Bank and the Commercial & Savings Bank, wherein they have undertaken to limit their liabilities to the amounts of the deposits that are set out here in this agreement. There is no doubt in my mind that that agreement was entered into in entire good faith between the Citizens' Bank and the defendant in this case. There is no doubt that they thought that that was all of the deposits, but I don't think that alters the case so far as this plaintiff is concerned, because, as I said a moment ago, if the bank would enter into an agreement with another corporation and place all of its assets in such a position that none of their creditors could get their hands on it, it couldn't do it any more in the case of this man than it could in the case of all of them; and whether that was done intentionally or unintentionally I do not think it makes any difference. The defendant in this case knew what it was going into when they went into it; they knew the condition of the bank, because they had expert accountants looking into it; they knew there might be claimants that would arise that they could not foresee; that some of these assets might slip through; and in order to protect themselves they required an amount of $75,000 to be put up to protect them. Now, it is true, they didn't take over the franchise of this other bank, but under the evidence I got that bank is just as dead as it ever will be. As I got the evidence, no depositor or any other creditor can get anything out of it. Here is an agreement to take over everything of value that that bank owned.

Now, under these conditions, it seems to me it would be inequitable and unjust to hold that the defendant in this case should have no remedy against the Commercial & Savings Bank to the extent of the assets which came into the hands of the defendant, and no further; and for this reason I canot bring my conscience to the point where I think that the plaintiff should go out of court with nothing, unless the jury says so.

It is true, he testified that as far as the books of the bank are concerned the sum of $6,000 must have been paid in the new Commercial Bank, and it is a little strange to me that this thing ran on so long without his making any complaint about it, but that is a matter the jury will have to determine; and I am going to submit to this jury that at the time the Commercial & Savings Bank took over these assets whether this plaintiff had a deposit of $3,000. If he did, he had title to

$3,000; if he did not, he is not entitled to anything.

If a bank can do that with respect to one depositor, it can do it to all. All the assets of this bank, so far as this plaintiff is concerned, were placed beyond this man's reach, and I am not going to hold that that is just or right. The motion is refused.

The Contract,

Defendant's Exhibit No. 1.

State of South Carolina, County of Florence.

This agreement, made and entered into, in duplicate, this 5th day of October, 1922, by and between the Citizens' Bank a corporation under the laws of the state of South Carolina, with its principal office at Timmonsville, in said state, first party, and Commercial & Savings Bank, a corporation under the laws of the state of South Carolina, with its principal office at Florence, in said state, second party, witnesseth:

Whereas, the directors and stockholders of first party on the 3d day of October, 1922, entered into an agreement with second party wherein they covenanted and agreed to have first party execute and deliver all instruments of writing of every nature and kind that might be necessary to transfer and convey to second party title to all of the assets of first party, in consideration of the assumption by second party of the liability of first party to its depositors and the holders of its bills payable; and

Whereas, resolutions to this effect have been adopted by both the directors and the stockholders of first party, and first party by its proper officers in and by such resolutions has been authorized and directed to execute the necessary transfers to carry out in detail the terms of said contract, all of which will appear more fully and at large from certified copies of said resolutions hereto attached and made a part of this agreement:

Now, therefore, in pursuance of the said agreement and in consideration of the covenants hereinafter contained to be performed by second party, and in further consideration of the sum of $5 to it in hand paid by second party, the receipt whereof is hereby acknowledged, first party has bargained and sold, granted and conveyed, transferred and delivered, and by these presents does bargain and sell, grant and convey, transfer and deliver unto second party, its successors and assigns, all and singular, the assets of first party, consisting of cash, notes, bonds, mortgages, stocks, choses in action, and collateral securities of every kind, and any and all personal property of any nature or kind owned by first party, or in which it may be interested, and wheresoever the same may be found, except its banking house, furniture and fixtures, stationery and office appliances in its banking house in Timmonsville, S. C., which are to be transferred by a separate deed, to have and to hold all of the said assets unto the second party, its successors and assigns, forever.

And the first party, for itself and its successors and assigns, does covenant and agree with second party to warrant and defend the said described assets hereby transferred unto the second party, its successors and assigns, forever, against it and all persons whomsoever.

And in consideration of the transfer to it of all of the assets of first party hereinabove mentioned, the second party for itself, its successors, and assigns, does covenant and agree with the first party that it will and does hereby assume the obligation of paying the bills payable and the depositors of first party in full, but no other obligations of said first party, the extent of this obligation being that set forth in the schedule shown in the statement of the Citizens' Bank, Timmonsville, S. C., at the close of business, October 3, 1922, signed by D. J. Winn, which statement is attached hereto and made a part of this contract.

In witness whereof,

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