Opinion
12610
March 12, 1929.
Before JOHNSON, J., Clarendon, November, 1927. Affirmed.
Proceeding by A.S. Fant, as State Bank Examiner, against J.G. Dinkins and J.H. Boswell, as Receivers of the Bank of Manning, in which H.V. Boyce and the National Bank of Sumter asserted a preferential claim against the assets in the Receiver's hands. The conclusion of the special referee denying claimants' preference was approved by the Circuit Court, and claimants appeal.
The report of the special referee follows:
"Acting under an order of this Court appointing me as special referee to take proofs of claims in all contested matters arising out of the liquidation of the Bank of Manning, and to report to the Court my findings of fact and conclusions of law thereon, I proceeded after due legal notice to such claimants as had filed notice of claim to hold a reference in the Bank of Manning Building at 10 o'clock a. m. on May 27, 1927.
"A.S. Harby, Esq., appeared for the claimant H.V. Boyce.
"M.H. Levi, Esq., appeared for the Receivers.
"The claimant herein, H.V. Boyce, claims a preferential lien against the assets in hands of the Receivers.
"The Receivers disallow the contention of Boyce.
"The attorneys agree that all claims of like nature in the hands of the National Bank of Sumter abide the finding and adjudication of the Boyce claim.
"The parties here agree to submit the matter to me upon the agreed statement of facts as set out in Exhibit 7X hereto attached.
"It is admitted by the Receivers that there was more than three hundred ($300) dollars in cash in the hands of the Bank of Manning when it closed.
"Mr. Levi, to sustain the position taken by the Receivers, cites the following: Citizens Bank of Pinewood v. Bradley, 136 S.C. 511, 134 S.E., 510; and United States Nat. Bank of Omaha, Neb. v. Glanton, 146 Ga. 786, 92 S.E., 625, L.R.A., 1917-F, 600, a Georgia case.
"Mr. Harby urges that the distinction between the case at bar and the Pinewood Bank case is that in this case the Bank of Manning is not debtor, but agent or trustee for collection and remittance, and actually collected the fund, thereby increasing by three hundred ($300) dollars the assets in hands of the Receivers.
"The attorneys requested that I hold open the record in this claim for a reasonable time, in order that they might file written briefs. Mr. Harby did file with me a written argument, which is hereto attached, within a few days. Mr. Levi, although repeatedly urged by me to give me his additional authorities, has never done so. As I have, in my capacity as Referee, to report to this Court on numerous other claims, so must dispose of this Boyce claim without further postponement. I therefore respectfully report to this Court:
"Julian Weinberg, a depositor of the First National Bank of Manning, gave to H.V. Boyce, of Sumter, S.C. his check on First National Bank of Manning for three hundred ($300) dollars. On November 26, 1926, Boyce deposited said check in the National Bank of Sumter. In accordance with established custom, the Sumter Bank, on same date, forwarded this check, with other items, to the Bank of Manning for collection, the same being received by the Bank of Manning on November 27, 1926. On November 27, the Bank of Manning presented the Boyce check to the First National Bank of Sumter, and was paid the three hundred ($300) dollars. On the same date the Bank of Manning collected certain other items for the National Bank of Sumter, and undertook to remit therefor by its check drawn on the Murchison National Bank, of Wilmington, N.C., in favor of the National Bank of Sumter, for three hundred sixty-two and 4/100 ($362.04) dollars, which check included the three hundred ($300) dollars collected on the Boyce check. At the time this check in the Wilmington Bank was issued the Bank of Manning had on deposit with the Wilmington Bank more than sufficient funds to pay the same. The Wilmington check was received by the National Bank of Sumter on or about November 29th, and was immediately forwarded, in due course, to Wilmington. Before being presented at Wilmington, however, the Bank of Manning closed its doors, and payment was refused by the Murchison National Bank for that reason.
"The written argument and memorandum of authorities filed with me by Mr. Harby, counsel for Boyce, is attached hereto as a part of this report. Mr. Harby very learnedly discusses the points involved in his contention.
"A careful study of the Citizens Bank of Pinewood case, and the recent case of Manuel v. Bradley (the Fairfax case), 140 S.C. 321, 138 S.E., 815, handed down in Westbrook advance sheet for the week ending July 9, 1927, convince me that a case exactly on all fours in facts with the case at bar has not yet been passed upon by the Supreme Court of South Carolina.
"There is a feature arising in this case that has not been specifically brought to the front by the attorneys, but which I deem a vital issue, as my conclusion is influenced thereby.
"While it does not so appear in the agreed statement of facts, Mr. Harby, for the claimant, contends that the National Bank of Sumter did not authorize the Bank of Manning to remit the collection of the Boyce check by means of the Bank of Manning's check, but was, as a matter of right, entitled to be paid in cash. The statement of facts, however, shows that the check, with other items, was forwarded by the National Bank of Sumter to the Bank of Manning for collection, "in accordance with its established custom.' And it further shows, that the National Bank of Sumter did accept the Bank of Manning's check drawn on the Murchison National Bank, of Wilmington, N.C., and presented said check to the Murchison National Bank for payment.
"From my study of the decisions based upon states of fact such as this, in federal and other state jurisdictions, I am forced to conclude that the acceptance of the Bank of Manning's check on the Murchison National Bank by the National Bank of Sumter established the relationship of creditor and debtor; that the National Bank of Sumter, accepting this check in settlement, did so at its own peril.
"I therefore find, as a conclusion of law, that the relationship of trustee and cestui que trust does not arise out of the statement of facts, but that of creditor and debtor. The claimant, Mr. Boyce, is therefore not entitled to a preference, as against the Bank of Manning, over other creditors of the bank."
Messrs. Harby, Nash Hodges, for appellants, cite: As to when bank trustee of the proceeds of collections: 134 S.E., 510; 60 S.C. 122; 227 Fed., 346; L.R.A., 1916-C, 12; 139 S.E., 783.
Mr. M.H. Levi, for respondents, cites: After collection relation between depositor and bank that of creditor and debtor: 134 S.E., 510; 19 S.E., 280; 60 S.C. 122; 139 S.E., 783; 15 F.2d 585.
March 12, 1929. The opinion of the Court was delivered by
The conclusions reached by the Special Referee, J. Ingram Wilson, Esq., in this cause, which were approved in the decree of the Circuit Judge Hon. J. Henry Johnson, are satisfactory to this Court. Let the report be reported.
It is the judgment of this Court that the decree of the Circuit Judge be, and the same is hereby, affirmed.
MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES COTHRAN, STABLER and CARTER concur.