Enterprise Bank v. Rice

128 S.E. 872, 132 S.C. 158, 1925 S.C. LEXIS 215

• Court: Supreme Court of South Carolina
• Decided: July 30, 1925
• Docket: 11815
• Status: Published

Opinions

July 30, 1925. The opinion of the Court was delivered by This action was commenced by the service of summons and complaint in the Court of Common Pleas, Colleton County, in April of 1923. The plaintiff sought to foreclose two mortgages given by the defendant, Jennie M. Rice, for $5,000 and $2,500, respectively, which were owned at the time of the commencement of this action and held by the plaintiff Enterprise Bank. The defendant, Brick House Plantation, Inc., purchased a part of the property covered by the lien of the said mortgages from the defendant, Jennie M. Rice, and is, therefore, made party to this action. The case was referred by consent to F.K. Myers, one of the Masters of Charleston County, who found for the plaintiff. The matter came on to be heard before his Honor, J. Henry Johnson, presiding Judge, at Walterboro, S.C. on the ____ day of ____, 1924, upon exceptions filed by the defendant's to the Master's report. From the order of his Honor, Judge Johnson, confirming the Master's report, the defendants appeal to the Supreme Court.

The exceptions, four in number, raise the sole question, one of law, involving the legal effect of the tender by Mrs. Rice, under the circumstances. Under the opinion of this Court (Guerin v. Hunt, 118 S.C. 32; 110 S.E., 71), Miss Hunt was entitled to the estate when she became of age. She became of age in August, 1921. The executor signed the pledge agreement in November, 1921, for one year.

We think that the rights of the parties in this case are unaffected by the executor's pledge; that the transaction sought to be enforced here did not in terms violate the depositors' "pledge", even if we should hold it to be binding upon the beneficiary of the pledged funds; there is no doubt that the pledge expired November 10, 1922, at which time the appellants' tender was still open.

We think that the Master's finding, sustained by the Circuit Judge, "that the right of Florence G. Hunt, as beneficiary of the estate of A.M. Hunt, to question the validity of the pledge of the funds of the estate of A.M. Hunt in the Enterprise Bank, was waived under the circumstances of this case," was erroneous. To affirm the judgment would be contrary to the principles of equity and would work a great hardship on the appellants.

All exceptions are sustained, and judgment reversed.

MR. CHIEF JUSTICE GARY and MR. ACTING ASSOCIATE JUSTICE R.O. PURDY concur.

MR. ACTING ASSOCIATE JUSTICE R.O. PURDY: I concur in the opinion of Mr. Justice Watts. In differing from the Justices who have dissented, I do not question the principles of law announced in the dissenting opinion, but only the application of those principles to this case.

This was not a case in which an executor was suddenly confronted with a situation in which he had to assume the responsibility of acting, without an opportunity to consult the beneficiary. The beneficiary had become of legal age to represent herself several months prior to the time of the pledge to continue the money on deposit.

The capacity in which the executor was acting was known to the bank, and the consent or refusal of the beneficiary could easily have been obtained. The beneficiary does not appear to have been consulted.

The Master found, however, that, in accepting the check from the executor and giving a receipt in settlement, Miss Hunt waived her right to the possession and control of the money, except under the pledge, and that she tacitly, by such receipt, acknowledged the status of the fund.

We think the effect of receiving this check and giving an acknowledgment to the executor was to release the executor from any personal liability, and did not create any new relationship to the bank nor ratify the act of the executor, and, as has been suggested by the argument of the appellants, her manifest intention was "to insist upon such measure of control of her property as she may find physically possible under the circumstances."

The money in the bank belonged to Miss Hunt. It was simply in the name of the executor on the books of the bank, and from the time that she received the check from the executor she was entitled to direct control of the money, and the check was in the nature of a declaration on the part of the executor that he had no further interest in the fund.

When the bank received notice of this transfer of the fund in name, it was its duty to honor the check of Miss Hunt, and the failure and refusal to transfer the fund on its books to her credit could not defeat her rights. A bank has a right to refuse a deposit, but this was not the refusal to receive a deposit. The money was already in the bank, and it was simply a matter of bookkeeping to make the change from the name of the executor to the name of the real owner.

The statement, therefore, that there was no fund against which she could draw the check for $6,226, loses its persuasive force in the light of these facts. It was the fault of the bank, and not the fault of Miss Hunt, that the change was not made on the books. Therefore, upon the presentation of the check for $6,226, indorsed to its order, the bank should have canceled the evidences of debt held against Mrs. Rice and surrendered them, and should have charged the item to the account of Miss Hunt.