Spartanburg County v. Arthur
| Decision Date | 28 April 1936 |
| Docket Number | 14285. |
| Parties | SPARTANBURG COUNTY v. ARTHUR et al. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Union County; M. M. Mann Judge.
Proceeding by Spartanburg County against J. D. Arthur, and another individually and as receivers of the Bank of Union. From an adverse judgment, the defendants appeal.
Affirmed.
The order of Judge Mann follows:
This proceeding in the nature of an accounting instituted to determine the formula to be employed in calculating the commissions due the receivers of the Bank of Union, was, by an appropriate order, referred to W. S. Hall, esquire, as special referee to take the testimony and to report his conclusions of law and fact to this court. Pursuant to that order, the special referee proceeded to take the testimony proffered and has filed his report, in which he finds that the receivers are entitled to commissions in the amount of $582.02. To that report, the receivers filed exceptions which have been heard by me.
The circumstances out of which this question arises may be briefly summarized. The Bank of Union, a state banking corporation, conducted for many years a general banking business at Union. On September 23, 1931, however, it became hopelessly insolvent and was forced to close. Thereafter under proceedings had in conformity with section 7855 of the Civil Code (1932), J. D. Arthur and Luke J. Wilburn became the receivers of the suspended corporation. Following the bank's suspension and the appointment of receivers therefor, various collections were made in the liquidation of its assets. These collections fall in two well-defined classes: First, collections "received" and "handled" by the receivers themselves; and second, collections "received" and "handled" by secured creditors of the bank. In addition to these collections, another class of transactions must be considered. It consists of offsets made against mutually existing debts between the bank and certain of its debtors-creditors.
The referee concluded that the receivers were duly entitled to commissions upon the first class of collections and were not entitled to commissions upon collections made by secured creditors or to commissions upon offsets. These two latter conclusions of the referee constitute the sole matters in the referee's report to which the receivers have filed exceptions.
At the very beginning of the consideration of the questions thus posed by the exceptions of the receivers, it should be observed that both the receivers and the creditors recognize that section 7855 constitutes the chart, by which the court must determine the right of the receivers to commissions in the case of both disputed items. That portion of section 7855, which deals with the commissions for receivers of closed banks, is in the following language: "All receivers appointed under the provisions of this section shall receive in full for their services in the liquidation of the affairs of this bank the following remuneration: Two (2) per cent. on all moneys received and a like amount on all moneys paid out by them on all sums up to fifty thousand ($50,000.00) dollars; two and one-half (2 1/2) per cent. on all sums received and paid out above fifty thousand ($50,000.00) dollars."
The first question presented by this cause is: Does that statute justify or authorize an allowance of commissions to the receivers upon the second class of collections, as set forth supra, i. e., collections "received" and "handled" by secured creditors of the bank?
The legislative enactment fixes the receivers' commissions by the "moneys received" and by the "moneys paid out" by such receivers. It establishes as the measure of the receivers' compensation, not the trouble or inconvenience incident to the bank's liquidation, but the amount of money "received and paid out." Unless the money has been "received" and "paid out" by the receivers, it specifically inhibits any allowance of commissions to the fiduciaries.
Can it be said, with any show of reason, that moneys which admittedly were received wholly by a secured creditor and applied by such creditor to its indebtedness have ever been "received" or "paid out" by the receivers? For the court to hold that the fiduciaries in this instance "received" the funds collected by the secured creditors is to disregard the indisputable physical fact, necessarily acknowledged by the receivers themselves, that such fiduciaries had never "received" these collections. With even less color of reason can it be urged that the receivers ever "paid out" such collections. As a matter of fact, these collections were never "paid out" by any one, but were merely credited by the secured creditors upon the debt.
This view is strengthened by a consideration of section 9017 of the Civil Code (1932), originally enacted in 1745, That statute, which is similar both in language and in purpose with that under review, fixes the commissions of executors and administrators qualifying in this state by a percentage of the sums "which he, she, or they shall receive." Significantly both enactments employ the same definitive word "receive" to fix the measure of the fiduciary's compensation. It would seem only logical that the Legislature, in using in the statute under review the same verbal formula as that used in the earlier statute, intended to give to that formula an identical meaning to that with which the court had, for two centuries, invested the same formula as used in section 9017. Especially is this true, in view of the fact that the two statutes are, as it were, in pari materia, and it is a familiar rule of law, "supported by justice and wisdom" ( Richards v. McDaniel [1818] 2 Mill, Const. 18) and resorted to irrespective of any ambiguity in the statute under review (Gregg Dyeing Co. v. Query [1931] 166 S.C. 117, 123, 164 S.E. 588), that, to aid in the construction of the language of a statute, the court should look to the construction placed upon similar language in other statutes dealing with the same or a cognate subject-matter (Tallevast v. Kaminski [1928] 146 S.C. 225, 234, 143 S.E. 796; Columbia Gaslight Co. v. Mobley [1927] 139 S.C. 107, 113, 137 S.E. 211; Fergus Motor Co. v. Sorenson [1925] 73 Mont. 122, 235 P. 422).
In construing section 9017, our court has steadfastly adhered to an exact definition of the word "receive" and has denied unto a fiduciary any commissions upon a fund unless it could fairly be said that such fiduciary had himself actually "received" into his possession funds of the estate. This construction first found expression in Rutledge v. Williamson's Ex'r (1789) 1 Desaus. 159, where the chancellor, according to the Reporter's note, held: "In this case, Thompson, the executor (of Williamson), charged the usual commission, on delivering up certain bonds, ordered by this court to be delivered up to Gadsden and Bonsall, as so much money by him paid: But as the law says, an executor shall receive two and a half per cent. for monies received, or paid, the court could not consider the mere delivery of a bond to be a payment-therefore disallowed this charge."
With unbroken continuity, the decisions have followed that construction of the statute. Thus, in Ball v. Brown (1831) Bailey, Eq. 374, it was held that "executors are not entitled to commissions on the proceeds of land sold by the master, under a decree against them, for foreclosure of a mortgage executed by their testator, where the land was bid off by the mortgagee for less than his debt, and the payment was effected by his giving credit for the amount of his bid."
That the executor must actually receive and handle money in order to justify an allowance of the statutory commissions is aptly illustrated by Buerhaus v. De Saussure (1894) 41 S.C. 457, 497, 19 S.E. 926, 946, 20 S.E. 64. In that case, the court, speaking through Mr. Justice (afterwards Chief Justice) McIver, said:
De Loach v. Sarratt (1900) 58 S.C. 117, 124, 36 S.E. 532 533, was a unique case in this connection. There, an intestate died, leaving a valid outstanding policy of insurance payable to his estate in the amount of $10,000. The insurance company issued its check in settlement of said policy, payable to the administrators of the estate. Upon receipt of that check, the administrators indorsed the check over to another, who collected the same. The question presented was the right of the administrators to commissions upon the sum represented by that check. In an unanimous opinion, the court pithily dismissed the administrators' contention for commission with the statement: "We do not think that the administrators are entitled to any commissions on this fund, either for receiving or paying out the same, for the reason that they cannot be said to have either received or paid out the same." Subsequently, in the same opinion, Mr....
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