Opinion
14113
July 22, 1935.
Before DENNIS, J., Chesterfield, July, 1934. Affirmed and modified.
Bill by B.T. Rayfield against the Bank of Chesterfield and others. Decree for named defendant, and plaintiff appeals.
Order of Judge Dennis directed to be reported follows:
This action comes before me upon the exceptions of the plaintiff to the report of the master dated . . . . day of . . . . . . . . . . . ., 1934. The facts are fully stated in the said report of the said master.
In November, 1929, the plaintiff and the Bank of Chesterfield entered into a written contract wherein and whereby the said bank agreed to advance to the plaintiff by way of overdraft moneys not to exceed at any one time the sum of $2,000.00 to purchase cotton on the open market at Chesterfield, S.C. The terms of the contract are set forth in the instrument referred to as the "First Cotton Contract" dated the 14th day of November, 1929. The plaintiff, as collateral security for the payment of the advances to be made to him by way of overdrafts, in accordance with the terms of the said contract, deposited and pledged with the Bank of Chesterfield certain security, and also as additional and further security for the repayment to the bank of the moneys advanced to him by way of overdrafts for the purchase of cotton, procured his sister, Miss Myrtle Rayfield, to make and deliver unto the Bank of Chesterfield her certain promissory note, secured by mortgage upon real property conditioned to secure the repayment of the advances to be made by the bank to plaintiff to the extent of $1,000.00.
Plaintiff and the defendant bank continued this arrangement until September 1, 1931. The State Bank Examiner having criticized the officers of the bank on account of the plaintiff's overdrafts, the plaintiff and the bank agreed that the bank would lend the plaintiff $2,000.00 to provide capital for the operation of plaintiff's business of purchasing cotton.
In pursuance of this agreement, on September 1, 1931, the plaintiff and the defendant bank entered into a second written contract, dated September 1, 1931, by the terms of which the plaintiff, in consideration of the moneys to be advanced to him by the Bank of Chesterfield for the purchasing of cotton, among other things, agreed and covenanted to convey unto the bank all the cotton purchased by him through it, and agreed that the title to the said cotton should be and remain in the Bank of Chesterfield until his obligations to it by overdrafts, or otherwise, should be satisfied in full.
In pursuance of the last-mentioned agreement, the bank, on September 1, 1931, advanced unto the plaintiff the sum of $2,000.00 which was credited to his bank account. As collateral security for the payment of the debt thereby created, the bank, with the consent of the plaintiff and his sister, Miss Myrtle Rayfield, retained the note and mortgage of Miss Myrtle Rayfield which she had given the bank in 1929, but also took from her a new note in the sum of $1,000.00 dated September 1, 1931. The new note and the old note and mortgage were delivered to the bank by Miss Rayfield as collateral security for the repayment to it of such sums of money as it might advance to the plaintiff for the purpose of buying cotton, but her liability was not to exceed the sum of $1,000.00. At the same time the plaintiff gave the bank his certain promissory note in the sum of $1,000.00 and pledged certain further securities therewith as collateral security for the payment to the bank of such sums of moneys as it might advance to him under the contract of September 1, 1931.
The plaintiff contended that these transactions were direct loans to the plaintiff and his sister, Miss Rayfield, and that the balance of $1,069.79 claimed by the bank is the amount due on the note of Miss Myrtle Rayfield dated September 1, 1931. The master rejected this proposition and I agree with his conclusion. The sum of $2,000.00 was advanced to the plaintiff by the bank under the contract of September 1, 1931. The note and collateral securities of the plaintiff and the notes and mortgage of Miss Myrtle Rayfield were taken by the bank as collateral security for the repayment to it of such sums of money as it should advance to the plaintiff under the said contract. There were further overdrafts after September 1, 1931, and further loans made by the bank to the plaintiff in pursuance of the said contract.
The bank satisfied and surrendered the $1,000.00 note of the plaintiff dated September 1, 1931, on August 15, 1932. The indebtedness of the plaintiff to the bank had been at that time reduced to approximately $1,000.00. When the bank closed on February 10, 1933, the account of the plaintiff with the bank was as follows:
Overdraft on Cotton Account ........... $1,903.61 Overdraft on Personal Account ......... 166.17 Interest due on Overdraft Account ..... 88.86 _________ $2,158.64 Deposit in Farm Account Applied on Debt ............................... 1,088.85 _________ Balance due as of 2-10-33 ............. $1,069.79 The bank subsequently advanced to the plaintiff under the contract of September 1, 1931, the following sums of money: 12-13-32 ............................................... $1,000.00 12-22-32 ............................................... 750.00 1-4-33 ................................................. 875.00 1-12-33 ................................................ 500.00 In accordance with the order of this Court dated . . . . day of March, 1933, the plaintiff paid the Bank of Chesterfield the principal and interest on these notes, which are designated the "American Trust Company Notes" and said notes were surrendered unto the plaintiff. These notes were in form as follows: "MORTGAGE NOTE (MYRTLE RAYFIELD)"$1,000.00 Chesterfield, S.C. Nov. 9, 1929.
"On demand after date, without grace, I promise to pay Bank of Chesterfield or order
One Thousand . . . . . . . . . . . . . . . . . . . . Dollars Negotiable and Payable at Bank of Chesterfield with Interest from maturity at the rate of 8 per cent. per annum, payable annually, for value received, being for money loaned.
"I, or we, agree to pay 10 per cent. as attorney's fees on the amount involved in case this note is placed in the hands of an attorney for collection after maturity.
"And the subscribers and endorsers hereby agree to continue and remain bound for the payment of this note and all interest thereon, notwithstanding any extension of time granted to the principal, and notwithstanding any failure or omission to protest this note for non-payment or to give notice of non-payment or dishonor or protest or to make presentment or demand for payment, hereby expressly waiving any protest and any and all notice of any extension of time or of non-payment of dishonor or protest in any form, or any presentment or demand for payment or any notice whatsoever.
"[Sd.] MYRTLE RAYFIELD."
(The above note is the evidence of indebtedness secured by the Myrtle Rayfield mortgage described in the testimony. In this mortgage, the following statement appears: "This mortgage is given to Bank of Chesterfield to secure the payment to the said Bank of the sum of $1,000.00 advanced by the said Bank to B.T. Rayfield.")
"MYRTLE RAYFIELD NOTE"Dated Sept. 1, 1931.
"$1,000.00 Chesterfield, S.C. Sept. 1st, 1931.
"Jany. 1st after date, without grace, I promise to pay to the Bank of Chesterfield, or order
One Thousand No/100 . . . . . . . . . . . . . . . . . . . Dollars, negotiable and payable at Bank of Chesterfield with discount before and interest after maturity at the rate of 8 per cent. per annum, payable annually, for value received, being for. * * *
"I or we, agree to pay 10 per cent. as attorney's fees on the amount involved in case this note is placed in the hands of an attorney for collection after maturity. And the subscribers and endorsers hereby agree to continue and remain bound for the payment of this note and all interest thereon, notwithstanding any extension of time granted to the principal, and notwithstanding any failure or omission to protest this note for non-payment, or to give notice of non-payment or dishonor or protest or to make presentment or demand for payment, hereby expressly waiving any protest and any and all notice of any extension of time or of non-payment or dishonor or protest in any form, or any presentment or demand for payment or any notice whatsoever.
"MYRTLE RAYFIELD."
The defendant Bank of Chesterfield contended, and the master sustained its contention, that the American Trust Company notes were conditioned to secure the payment of the balance due it for the overdraft of the plaintiff at the time of the closing of the bank on the 10th day of February, 1933. I concur in this view and hold that the defendant was entitled to resort to the warehouse receipts pledged as security for the payment of the indebtedness evidenced by the American Trust Company notes for the payment of the balance due it of $1,069.79 and a reasonable attorney's fee for its attorneys. The master held 15 per centum of the amount due as a reasonable fee for the attorneys for the defendant, and I concur in his findings and conclusions with respect to his allowance of attorney's fees. In addition to the provision for the payment of attorney's fees contained in the American Trust Company notes, the notes of Miss Myrtle Rayfield pledged to the defendant as collateral security for the payment of the indebtedness of the plaintiff to it by way of overdrafts, or otherwise, contains a clause providing for the payment of attorney's fee, and in my judgment, and I so hold, that the defendant Bank of Chesterfield is entitled to the allowance of attorney's fees under the terms and conditions of the said note of Miss Myrtle Rayfield so pledged with it.
After hearing Samuel Want, of counsel for the plaintiff, and James E. Leppard, of counsel for the defendants, and upon due deliberation in the premises, it is decided, adjudged, and ordered that the findings of fact and conclusions of law of the master and his report thereon be, and they are hereby, approved, ratified, confirmed, and made the decision and judgment of the Court, except as herein otherwise modified.
And it is further determined, decided, adjudged, and ordered that the defendant Bank of Chesterfield have judgment against the plaintiff for the sum of $1,069.79 with interest at the legal rate from the 10th day of February, 1933, and 15 per centum of the amount due as attorney's fees, together with its costs and disbursements, to be taxed by the Clerk of this Court.
And it is so ordered.
Messrs. Samuel Want and Melvin Hyman, for appellant, cite: Reversal of conclusions of lower Court: 170 S.C. 61; 169 S.E., 659; 45 S.C. 503; 24 S.E., 288; 50 S.C. 385; 27 S.E., 868; 64 S.C. 27; 41 S.E., 835; 78 S.C. 366; 59 S.E., 983; 112 S.C. 519; 100 S.E., 161; 171 S.C. 301; 172 S.E., 135; 143 S.C. 325; 141 S.E., 564; 169 S.C. 173; 168 S.E., 541; 169 S.C. 263; 168 S.E., 705.
Messrs. Leppard Leppard, for respondent, cite: As to confirmation of master's decree: 156 S.C. 480; 153 S.E., 462; 67 S.C. 35; 45 S.E., 122; 16 S.E., 632; 133 S.C. 23; 130 S.E., 552; 112 S.C. 329; 98 S.E., 193; 133 S.C. 395; 131 S.E., 18; 142 S.C. 477; 141 S.E., 15; 146 S.C. 385; 144 S.E., 82; 169 S.C. 373; 168 S.E., 852.
July 22, 1935.
ORDER ON PETITION FOR REHEARING
On considering the petition of the appellant asking for a rehearing in this cause, it is ordered that a rehearing be refused, but for the purpose of correcting an error regarding the question of counsel fees, it is ordered that the opinion hereinbefore filed in the case be and is hereby withdrawn and the opinion attached hereto substituted in lieu thereof. It is further ordered that the remittitur in the case be held for the usual ten days after the filing of this opinion.
JOHN G. STABLER, C.J., JESSE F. CARTER, A.J., M.L. BONHAM, A.J., T.S. SEASE, A.A.J., A.L. GASTON, A.A.J.
The opinion of the Court was delivered by
As a statement of this case, the Court adopts, in the main, the agreed statement of counsel, as set forth in the transcript of record.
The action, commenced in the Court of Common Pleas for Chesterfield County, March 3, 1933, by B.T. Rayfield, plaintiff in the Court below, appellant before this Court, against the defendants Bank of Chesterfield, John A. Welsh, individually and as president of the said bank, D.L. Smith, individually and as cashier and agent for the said bank, Albert S. Fant, as State Bank Examiner, and American Trust Company, of whom Bank of Chesterfield is respondent, is an action instituted as a suit in equity, for the purpose of procuring an injunction to prevent the sale of certain cotton which had been pledged by the plaintiff as collateral security for the payment of certain notes given by him.
In addition to the injunctive relief, the prayer of the complaint is that the indebtedness of the appellant to the respondent (the amount of which is in dispute), be adjudicated; that the appellant be permitted to pay the debt as so adjudicated; and that upon such payment being made, the cotton in question delivered free of any lien or claim on the part of the respondent.
Upon the complaint, a temporary restraining order was granted. The respondent answered, denied the material allegations of the complaint, and alleged an indebtedness upon the three notes last mentioned in the second paragraph of the complaint, the said notes being due and payable on the 20th day of February, 1933, the 6th day of March, 1933, and the 13th day of March, 1933, and aggregating the sum of $2,125.00 (and which notes had been pledged with American Trust Company), and the further and additional sum of $2,158.64 for cash advances alleged to have been made by the respondent to the appellant under the contract between them dated September 1, 1931, making a total indebtedness claimed by the respondent against the appellant of the sum of $4,283.64, and that the appellant was entitled to an offset on account of his deposits in the Bank of Chesterfield in the sum of $1,088.85, leaving a balance due by appellant to respondent of $3,194.79.
Upon terms provided in an interlocutory order subsequently granted by the Judge of the fourth judicial circuit, the cotton in question was released unto the appellant and the warehouse cotton receipts were surrendered to the appellant. The three notes heretofore mentioned, aggregating the sum of $2,125.00, were paid by the appellant. This transaction, made in accordance with the terms of the said interlocutory decree, reduced the amount in dispute to the sum of $1,069.79, which was claimed by the Bank of Chesterfield as cash advances under the contract of September 1, 1931. The appellant claims that the said sum of $1,069.79 represents the balance due on an alleged loan of $1,000.00, which he contends the Bank of Chesterfield made to Miss Myrtle Rayfield. The order of Judge Dennis provides that such sum as should be found to be due by the appellant to the bank of Chesterfield should be secured by the bond given by the appellant pursuant to the said interlocutory order.
The case was referred to the master for Chesterfield County to hear and determine all issues of law and fact; and the said master thereafter filed his report, finding for the respondent, Bank of Chesterfield, both as to the facts and the law. The Judge of the fourth judicial circuit, by his decree dated the 31st day of July, 1934, overruled all the appellant's objections to the said report of the said master and confirmed his report both as to his findings of fact and conclusions of law except as modified therein and directed judgment in favor of the respondent, Bank of Chesterfield, and against the appellant, B.T. Rayfield, for the sum of $1,069.79, with interest and 15 per cent. of the amount due as attorneys' fees, together with the costs of the action. From the judgment entered upon the said decree, the appellant appealed to the Supreme Court.
This Court is satisfied with the conclusion reached by the Circuit Judge and approves the same, except as to the question of counsel fees. It is our opinion that the record in the case does not warrant the award of counsel fees allowed the respondent by the lower Court. It is, therefore, the judgment of this Court that the judgment of the lower Court be and the same is hereby affirmed, except as to the award of counsel fees to the respondent, and to this extent it is the judgment of this Court that the judgment of the lower Court be modified.
NOTE: Let the decree of the Circuit Judge be incorporated in the report of the case.
MR. CHIEF JUSTICE STABLER, MR. JUSTICE BONHAM and MESSRS. ACTING ASSOCIATE JUSTICES SEASE and GASTON concur.