Oswald v. Lawton

• Decision Date: 05 April 1938
• Docket Number: 14658.
• Citation: 196 S.E. 535,187 S.C. 42
• Parties: OSWALD v. LAWTON et al.
• Court: South Carolina Supreme Court

196 S.E. 535

187 S.C. 42

OSWALD v. LAWTON et al.

No. 14658.

Supreme Court of South Carolina

April 5, 1938

Appeal from Common Pleas Circuit Court of Allendale County; G Duncan Bellinger, Judge.

Action by J. L. Oswald against T. O. Lawton and others, executors of the will of D. Sams, for amount allegedly paid by the plaintiff for the decedent pursuant to an agreement with the decedent and other bank stockholders with the bank examiner for the continued operation of the bank. From an adverse judgment, the plaintiff appeals.

Reversed and remanded for new trial.

Searson & Searson, of Allendale, for appellant.

C Birnie Johnson and Boulware & Bowden, all of Allendale, for respondents.

BONHAM Justice.

January 20, 1927, the Allendale Bank was placed in the hands of the state bank examiner for a time limited under the statute. While it was thus under the control of the state bank examiner, steps were taken looking toward the reopening of the bank. The depositors instituted a movement by which they agreed to write off, or relieve the bank of liability for, 50 per cent. of each respective deposit. This agreement was approved by the state bank examiner and duly signed by the depositors. A meeting of the stockholders was held, at which the state bank examiner was present. The agreement of the depositors, above referred to, was under discussion. The bank examiner stated that, inasmuch as the depositors had eliminated from the liabilities of the bank 50 per cent. of their respective deposits, he would permit the bank to reopen upon the sole condition that the stockholders raise a fund of $15,000, which was 50 per cent. of the capital stock of the bank, which sum should constitute assets of the bank. At the meeting of stockholders to which this proposition was submitted, a majority of the stockholders was present including this plaintiff and D. Sams, the testate of the defendants.

This action is brought to compel the executors of the will of D. Sams, who died in 1932, to pay to the plaintiff in this action the sum of $2,000, and interest thereon, the legal liability for which payment arises in this wise, according to the allegations of the complaint.

It is alleged that at this meeting where the ultimatum of the bank examiner was announced, to the effect that the stockholders should raise the sum of $15,000 to meet and offset the agreement of the depositors to write off 50 per cent. of their respective deposits. J. L. Oswald stated that he would advance the sum necessary to raise the amount of $15,000, if any of those present were unable to pay the money at that time.

Out of that meeting arises this controversy and lawsuit.

The complaint alleges that D. Sams was present at this meeting, heard the announcement of the state bank examiner of what it was necessary to do to reopen the bank, heard the proposition of J. L. Oswald that he would advance the money for any one not then ready to pay his proportion, the advance to be repaid when all litigations relating to the bank were ended. Plaintiff alleges that D. Sams acquiesced in the plan proposed; that the plaintiff, in pursuance of such plan, paid for D. Sams the sum of $2,000, 50 per cent. of the par value of D. Sams' holding of the capital stock of the bank. The allegation of the complaint is that D. Sams refused to pay said money so advanced for his benefit, and that the defendants, as the executors of his will, likewise refuse to pay it. They deny liability.

The case was heard by Judge Bellinger and a jury, and resulted in a verdict for the defendants.

The plaintiff appeals upon nine exceptions, and the respondents move to sustain the judgment on two grounds.

We shall not consider the exceptions made by the plaintiff seriatim, nor chonologically, but all of them will be included in the final judgment of the court.

Since the case must go back for retrial, we shall briefly state the grounds upon which we hold that the judgment below should be reversed, and leave untouched, as far as possible, other questions concerned in the retrial.

The cardinal issues for our consideration are made by the allegations of the complaint that D. Sams was present at the stockholders' meeting, where was heard the ultimatum of the state bank examiner that the stockholders should raise in cash the sum of $15,000 as a condition precedent to the consent of the state bank examiner that the bank be reopened, and that he acquiesced in the acceptance by the stockholders of this condition of the bank examiner; that he heard the proposal by J. L. Oswald that he would advance the money to meet this liability, for those not ready to pay it then, and acquiesced in it; that Oswald paid the sum of $2,000 for D. Sams and it went to pay the liability of Sams as stockholder, to that amount.

Here is the crux of the case. Did D. Sams acquiesce in the proposition of J. L. Oswald? Sams died in 1932, and the executors of his will were made parties to the suit. They denied liability.

When J. L. Oswald was on the witness stand, he was asked for whose benefit he deposited in the bank the sum of $13,350; whether he had made a statement to the bank examiner in the presence of D. Sams, and what that statement was. It is conceded that these questions related to the meeting of the stockholders at which it was decided to raise from the stockholders $15,000 in order to reopen the bank. His honor said: "He cannot testify to anything along that line." Furthermore, when J. L. Oswald was asked: "Did you make a statement to the Bank Examiner and others who were present at that time?" the following ensued:

"Mr. Boulware: I object.

The Court: Others were present than Mr. Sams.

Mr. Searson: It has been testified that he was present.

The Court: Then I rule that it is not admissible."

W. B Warren and W. I. Johns had testified that they were at the meeting of these stockholders; that when Warren heard J. L. Oswald's offer to put up the money for those who didn't then have it, and stated that it was to be paid when the lawsuits were all ended, he (Warren) testified that he asked D. Sams "What about it?" and Sams answered, "It is agreeable with you all and it is agreeable with me." When it was sought to prove by Mr. Oswald that he heard what Mr. Sams said, which showed his acquiescence in Mr. Oswald's proposal, he was not allowed to testify to the fact that he heard the conversation between Warren and Sams, because, as the court held, it would be obnoxious to Section 692 of the Code. The provisions of that section are to this...