Loan & Savings Bank v. Farmers' & Merchants' Bank

• Decision Date: 17 April 1906
• Citation: 54 S.E. 364,74 S.C. 210
• Parties: LOAN & SAVINGS BANK v. FARMERS' & MERCHANTS' BANK.
• Court: South Carolina Supreme Court

54 S.E. 364

74 S.C. 210

LOAN & SAVINGS BANK v. FARMERS' & MERCHANTS' BANK.

Supreme Court of South Carolina

April 17, 1906

Appeal from Common Pleas Circuit Court of Greenwood County; Watts Judge.

Action by the Loan & Savings Bank against the Farmers' & Merchants' Bank.Judgment for plaintiff, and defendant appeals.Affirmed.

Sheppards Grier & Park, for appellant.Witherspoon & Spencers, for respondent.

POPE C.J.

The plaintiff, in its action in the court of common pleas of Greenwood, sought to recover of the defendant bank the sum of $84.45, with interest from the 30th of December, 1903, and also the sum of $25, the expense of the action.By the agreement of the partiesthe case was heard before Judge Watts, who rendered his judgment on April 7 1905, for the sum of $84.45, with interest thereon from December 30, 1903, and the cost of this action.In order to understand these issues, we will reproduce the complaint, the affidavit submitted by the defendant bank, the notice of the defendant bank, the order of Judge Watts, and the defendant's grounds of appeal therefrom.

Complaint.

"The plaintiff above named, complaining of the defendant herein, shows to this court: (1) That at the times hereinafter named the plaintiff was, and still is, a banking corporation, duly organized under the laws of said state to do, and actually doing business as such, at Yorkville, in the county of York, and state aforesaid.(2) That at the said times the defendant was, and it still is a banking corporation, duty organized under the laws of said state to do, and actually doing business as such, at Greenwood, in the county and state first above named, the residence of defendant.(3) That on the 12th day of December, 1903, one Y. B. Trammell, a depositor of defendant, for value received, duly issued and delivered to one W. G. Stephenson said depositor's check in writing, drawn by the said Y. B. Trammell on the defendant, and made payable to the order of the said W. G. Stephenson, in the sum of $84.45; the said check being in form as follows: 'Greenwood, S. C., Dec. 12, 1903.No. _______.The Farmer's and Merchants' Bank: Pay to the order of W. G. Stephenson($84.45) eighty-four and forty-five cents.Y. B. Trammel.'(4) That thereupon the said W. G. Stephenson, for value received, indorsed, transferred, and delivered the said check to one R. T. Stephenson, secretary and treasurer, who in turn thereupon, and for full value received of the plaintiff , indorsed, transferred, and delivered the said check to plaintiff, who accordingly became, and it still continues to be, the bona fide owner and holder thereof, and of the said Y. B. Trammell's deposit in said bank to the extent of $84.45.That thereafter between the date of said check and the 30th day of December, 1903, the plaintiff duly presented the check to the defendant, and demanded payment thereof, and of the sum of $84.45, but the defendant refused payment; the said refusal being coupled with only one reason assigned, and with an admission made, as defendant's memorandum indorsed on the said check shows, to wit: "Funds on hand to meet check, but party drawing check had ordered same held up;' and in this connection plaintiff charges the truth of said admission, the insufficiency of the reason assigned, and that there was and is no sufficient reason for said refusal; and accordingly plaintiff has been forced to bring this action for the defendant's said refusal.Plaintiff was and is damaged by the defendant in the sum of $84.45, with interest thereon from the 30th day of December, 1903, and also the sum of $25, the expenses of this action.Wherefore, plaintiff prays judgment against the defendant for said sums and interest, and for the costs of this action."

The Affidavit and the Notice.

"Personally comes before me R. M. Hays, who, on oath, says: That the Farmers' & Merchants' Bank, the defendant in the above-stated matter, is a banking corporation with its place of business at Greenwood, and that this depondent is its president and an officer thereof and authorized to make this affidavit; that an action is pending in the court of common pleas for Greenwood county against the said the Farmers' & Merchants' Bank, wherein Loan & Savings Bank is the plaintiff, in which said action a judgment is demanded against the said the Farmers' & Merchants' Bank, the defendant herein; the cause of action being that heretofore on December 12, 1903, one Y. B. Trammell, who was a depositor in the defendant bank, issued a certain check to one Stevenson, payable to his order, who thereafter, it is alleged in the complaint, indorsed and transferred it to one R. T. Stevenson, who in turn, it is alleged, indorsed and transferred it to Loan & Savings Bank, who claims to be the owner thereof for value; that the said check was dated December 12, 1903, and it was in the sum of $84.45; that at the time of the making of the said check the said Y. B. Trammell had sufficient funds on deposit to meet the same; that before the check was presented for payment at defendant bank the said Y. B. Trammell notified the defendant in writing that it must not pay the same when presented; that upon the presentation of the said check, after the notice received from the said Y. B. Trammell to refuse to pay the check, defendant accordingly refused payment of the same, but indorsed thereon the statement that the depositor had sufficient funds on hand to meet the check, but had ordered payment held up.These facts are set out in the complaint as going to make up the cause of action against this defendant.Deponent further says that at the time the said Trammell gave notice to the bank to refuse payment of the check, he stated that there was an entire failure of consideration for the said check and that the procurement of the same by the payee amounted to a fraud on his rights.Deponent further says that it still has on hand funds with which to meet the payment of the check; that the said Y. B. Trammell claims to be entitled to the said funds and demands of the defendant bank that it pay the same to him, which defendant has also refused

to do; that the said Y. B. Trammell is not a party to the action above stated against the defendant and without collusion makes against the defendant a demand for the same debt, to wit, the amount of the check by him drawn--$84.45; that deponent is advised and upon such advice says: That the said Y. B. Trammell should be substituted as a partydefendant to the said action and defendant be discharged from liability to either party on its depositing in the court the amount of the debt; that this deponent is simply a stakeholder, and the parties at interest should be required to litigate this matter among themselves.

You will please take notice that the defendant herein will apply to the court of common pleas for Greenwood county on the first day of the next regular term thereof, in open court, at 10 o'clock a. m., or as soon thereafter as counsel can be heard, for an order to substitute, in the above-entitled action, Y. B. Trammell as defendant, and to discharge the defendant herein from further liability to either party on depositing in the court the amount of check, in question, to wit, $84.45, or as the court in its discretion directs."

Judge Watts, after stating the facts set out in the complaint and affidavit, in his order says: "It was agreed by the attorneys for the plaintiff and defendant that in the event I should refuse this motion, that I should dispose of the whole matter without a jury.After consideration, I have reached the conclusion that the motion should be refused, for the reason that in my opinion whenever a party gives a check he is powerless to stop the payment of the same, and the bank has nothing to do but pay the check on its being presented, if it has in hands sufficient funds to meet the payment.I hold that to the extent of the amount of the check it is an appropriation of so much of the funds as the drawer of the check has on deposit, and it makes no difference whether the check is in the hands of the original holder or of a third party; the plain duty of the bank, on its being presented, is to pay the same, and this without regard to any statement or notice which may be filed with it by the drawer of the check; and holding this view I refuse this motion of the interpleader.Under the agreement of the parties the only other question to be disposed of is the amount of the judgment to which plaintiff is entitled.I do not think in this action plaintiff is entitled to anything by way of damages; his relief being limited to the amount of the check and interest thereon at the rate of 7 per cent. per annum from the date it was presented for payment and payment refused.It is therefore ordered: (1) That the motion to require the defendant Trammell to be substituted as a partydefendant for the reason hereinbefore stated be and the same hereby is refused.(2) That the plaintiff have judgment against the defendant for the sum of $84.45 with interest thereon from the 30th day of December, 1903, and the costs of this action."

Exceptions of Defendant.

"(1) It was error in his honor to overrule the defendant's motion herein to substitute the said Y. B Trammell as the defendant, because: (a) The affidavit of the defendant showed that before the check was presented for payment the bank was notified by the said Trammell, who drew the check, that it must not pay the same when presented, stating that there was an entire failure of consideration for the said check and that its procurement amounted to a fraud on his rights; the

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