[104] The decree and exceptions directed to be reported are as follows:
Decree
This matter comes before me on the petition of District Grand Dodge No. 13 of the Grand- United Order of Odd Fellows of South Carolina, praying that this Court order the receiver of the defunct the People’s Federation Bank of Charleston to pay over to the said lodge the amount of the deposit in the said bank to the credit of the lodge.
The petition is resisted by the Receiver.
The facts of the case are admitted by counsel for the parties, the question before this Court being the proper construction of a contract.
It seems that the People’s Federation Bank was a banking corporation created under the laws of the State of South Carolina, and as such engaged in a general banking business until the 7th day of September, 1926, on which date it closed its doors. On September 25, 1926, this Court appointed Charles W. Waring, Esq., Receiver of the defunct institution with the usual powers of liquidation.
On June 2, 1926, the Grand Dodge above-named had on deposit in the savings department of the said bank the sum of $19,873, drawing 4 per cent, interest under its_ contract with the bank; the deposit on July 1, 1926, the quarterly interest date, amounting to $20,071.73.
On June 2,-1926, the Grand Dodge and the bank entered into the following contract, being in writing but not under seal:
(Copy of Contract.)†
The $30,000 bond was thereupon duly delivered to the Grand Dodge and was in its possession on September 7, 1926, when the bank closed its doors.
[105] The Grand Dodge made no further deposits in the bank from June 2 to September 7, 1926, and when the bank closed its doors had on deposit therein the same sum of money which it had therein on June 2, together with the quarterly interest due on July 1st.
The record does not show that there was ever made 'by the bank any demand upon the Grand Lodge to make any additional deposit after June 2.
On November 24, 1926, this Court ordered and directed the Grand Lodge to deliver the said bond to the Receiver of the bank. The said Receiver has collected the amount of the debt evidenced by the said bond from the obligors thereon and is holding the fund subject to the order of this Court.
The Grand Lodge now petitions this Court for an order directing the Receiver of the bank to pay over to it the entire amount of its deposit, alleging that it was secured by the collateral bond which has now been collected.
The Receiver, representing the creditors of the defunct bank, resists the petition of the Grand Lodge on the following two grounds:
(1) That a proper construction of the contract is that the collateral bond was to have been given by the bank only to secure an additional deposit of $5,000 to be made by the Grand Lodge, and was not to have been given to secure the deposit actually in the bank on the date of the contract.
(2) That even though it be held that the collateral bond was given as security for the amount on deposit to the credit of the Grand Lodge on the date of the contract, that as to the Receiver representing innocent third parties the contract should be declared void for lack of consideration, since the consideration named in the contract, viz., the' deposit by the Grand Lodge of an additional sum of $5,000, was never executed.
At first impression the contract appears to be ambiguous. But a consideration of the entire contract in all of its terms in my opinion discloses the meeting of the minds. A bond [106] of $30,000 would hardly be given to secure a deposit of only $5,000. And if the collateral bond was to secure simply the $5,000 which the Grand Dodge was “willing to deposit,” it would certainly not have been delivered until such additional deposit was actually made.
I am therefore of the opinion that the collateral bond was given under contract to secure the entire deposit of the Grand Dodge in the bank.
And in my opinion the leaving on deposit in the bank by the Grand Dodge of a sum of over $20,000 was sufficient consideration to support the'contract for the delivery by the bank of the collateral security for same. No demands appear to- have been made upon the Grand Dodge for any additional deposit, and certainly no additional deposit could have been made after September 7, 1926, on which day the bank closed its doors.
It is therefore ordered, adjudged, and decreed that the Receiver do pay over to the proper officers of the said Grand Dodge the sum of $20,071.73, together with interest thereon at the rate of 4 per cent, per annum from July 1, 1926, to September 7, 1926.
Exceptions
The appellant respectfully submits that the Circuit Judge erred in the following particulars:
1. In holding that the bond given by the bank was given to secure the deposit of $19,873.
2. In holding that the bond given by the bank was given to secure the deposit of $20,071.73.
3. In holding that the bond given by the bank was not contingent upon the deposit of an additional amount so as to bring total deposit up to' $25,000.
4. In holding that the bond given by the bank was not contingent upon the deposit of an additional amount of $5,000.
Messrs. Waring & Brockinton, for appellant,
Messrs. Walter Hazard, and J. I. Washington, for respondent,
5. In holding that the contract was binding upon the bank, the acts to be performed by the depositor not having been performed.
6. In holding- that there was any consideration moving from the depositor to the bank to' sustain said contract.
7. In failing to hold that the said contract had become null and void by the failure of the depositor to carry out and perform the conditions and obligations thereof.
8. In ordering the Receiver to pay over to the depositor the full amount of the deposit.
9. In giving a preference to the indebtedness due this depositor over other depositors.
[108] October 3, 1928.
The opinion of the Court was delivered by
Mr. Justice Carter.
The main cause herein involves the liquidation of the People’-s Federation Bank of Charleston, S. C., wherein Charles W. Waring was appointed Receiver. By petition filed in the cause, dated February 5, 1927, the District Grand Lodge No. 13, of South Carolina, Grand United Order of Odd Fellows (referred to herein as the “lodge”), asked the Court to construe a contract between the Lodge and the bank, and to direct the Receiver of said bank to pay over to the Lodge the full amount of the deposit in the bank, referred to in the petition, contending that the Lodge was entitled to a preference as to said deposit. The Receiver in his answer denied that the Lodge was entitled to preferential payment.
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[104] The decree and exceptions directed to be reported are as follows:
Decree
This matter comes before me on the petition of District Grand Dodge No. 13 of the Grand- United Order of Odd Fellows of South Carolina, praying that this Court order the receiver of the defunct the People’s Federation Bank of Charleston to pay over to the said lodge the amount of the deposit in the said bank to the credit of the lodge.
The petition is resisted by the Receiver.
The facts of the case are admitted by counsel for the parties, the question before this Court being the proper construction of a contract.
It seems that the People’s Federation Bank was a banking corporation created under the laws of the State of South Carolina, and as such engaged in a general banking business until the 7th day of September, 1926, on which date it closed its doors. On September 25, 1926, this Court appointed Charles W. Waring, Esq., Receiver of the defunct institution with the usual powers of liquidation.
On June 2, 1926, the Grand Dodge above-named had on deposit in the savings department of the said bank the sum of $19,873, drawing 4 per cent, interest under its_ contract with the bank; the deposit on July 1, 1926, the quarterly interest date, amounting to $20,071.73.
On June 2,-1926, the Grand Dodge and the bank entered into the following contract, being in writing but not under seal:
(Copy of Contract.)†
The $30,000 bond was thereupon duly delivered to the Grand Dodge and was in its possession on September 7, 1926, when the bank closed its doors.
[105] The Grand Dodge made no further deposits in the bank from June 2 to September 7, 1926, and when the bank closed its doors had on deposit therein the same sum of money which it had therein on June 2, together with the quarterly interest due on July 1st.
The record does not show that there was ever made 'by the bank any demand upon the Grand Lodge to make any additional deposit after June 2.
On November 24, 1926, this Court ordered and directed the Grand Lodge to deliver the said bond to the Receiver of the bank. The said Receiver has collected the amount of the debt evidenced by the said bond from the obligors thereon and is holding the fund subject to the order of this Court.
The Grand Lodge now petitions this Court for an order directing the Receiver of the bank to pay over to it the entire amount of its deposit, alleging that it was secured by the collateral bond which has now been collected.
The Receiver, representing the creditors of the defunct bank, resists the petition of the Grand Lodge on the following two grounds:
(1) That a proper construction of the contract is that the collateral bond was to have been given by the bank only to secure an additional deposit of $5,000 to be made by the Grand Lodge, and was not to have been given to secure the deposit actually in the bank on the date of the contract.
(2) That even though it be held that the collateral bond was given as security for the amount on deposit to the credit of the Grand Lodge on the date of the contract, that as to the Receiver representing innocent third parties the contract should be declared void for lack of consideration, since the consideration named in the contract, viz., the' deposit by the Grand Lodge of an additional sum of $5,000, was never executed.
At first impression the contract appears to be ambiguous. But a consideration of the entire contract in all of its terms in my opinion discloses the meeting of the minds. A bond [106] of $30,000 would hardly be given to secure a deposit of only $5,000. And if the collateral bond was to secure simply the $5,000 which the Grand Dodge was “willing to deposit,” it would certainly not have been delivered until such additional deposit was actually made.
I am therefore of the opinion that the collateral bond was given under contract to secure the entire deposit of the Grand Dodge in the bank.
And in my opinion the leaving on deposit in the bank by the Grand Dodge of a sum of over $20,000 was sufficient consideration to support the'contract for the delivery by the bank of the collateral security for same. No demands appear to- have been made upon the Grand Dodge for any additional deposit, and certainly no additional deposit could have been made after September 7, 1926, on which day the bank closed its doors.
It is therefore ordered, adjudged, and decreed that the Receiver do pay over to the proper officers of the said Grand Dodge the sum of $20,071.73, together with interest thereon at the rate of 4 per cent, per annum from July 1, 1926, to September 7, 1926.
Exceptions
The appellant respectfully submits that the Circuit Judge erred in the following particulars:
1. In holding that the bond given by the bank was given to secure the deposit of $19,873.
2. In holding that the bond given by the bank was given to secure the deposit of $20,071.73.
3. In holding that the bond given by the bank was not contingent upon the deposit of an additional amount so as to bring total deposit up to' $25,000.
4. In holding that the bond given by the bank was not contingent upon the deposit of an additional amount of $5,000.
Messrs. Waring & Brockinton, for appellant,
Messrs. Walter Hazard, and J. I. Washington, for respondent,
5. In holding that the contract was binding upon the bank, the acts to be performed by the depositor not having been performed.
6. In holding- that there was any consideration moving from the depositor to the bank to' sustain said contract.
7. In failing to hold that the said contract had become null and void by the failure of the depositor to carry out and perform the conditions and obligations thereof.
8. In ordering the Receiver to pay over to the depositor the full amount of the deposit.
9. In giving a preference to the indebtedness due this depositor over other depositors.
[108] October 3, 1928.
The opinion of the Court was delivered by
Mr. Justice Carter.
The main cause herein involves the liquidation of the People’-s Federation Bank of Charleston, S. C., wherein Charles W. Waring was appointed Receiver. By petition filed in the cause, dated February 5, 1927, the District Grand Lodge No. 13, of South Carolina, Grand United Order of Odd Fellows (referred to herein as the “lodge”), asked the Court to construe a contract between the Lodge and the bank, and to direct the Receiver of said bank to pay over to the Lodge the full amount of the deposit in the bank, referred to in the petition, contending that the Lodge was entitled to a preference as to said deposit. The Receiver in his answer denied that the Lodge was entitled to preferential payment.
The parties having entered into a stipulation as to the facts involved, the matter was submitted to Judge William H. Grimball, at his • chambers, at Charleston, for a hearing. After a full hearing and due consideration, his Honor, Judge Grimball, issued a decree directing the Receiver to pay over to the Lodge the sum in question, $20,071.73, with interest. From this decree and judgment, the Receiver has appealed to this Court, and asks a reversal upon the grounds set forth in the exceptions.
[109] For a full understanding of the questions involved in the appeal, we quote herewith the contract between the parties and the stipulation as to the facts in the case. We call attention to the fact that no question of unlawful preference is raised in the return to- the petition and there is no testimony on the question.
Contract
“The State of South Carolina.
“Memorandum of agreement made this 2d day of June, nineteen hundred and twenty-six, by and between the People’s Federation Bank of Charleston, S. C., hereinafter styled the party of the first part, and District Grand Dodge No. 13, Grand United Order of Odd Fellows in South Carolina, hereinafter styled the party of the second part, witnesseth:
“Whereas, the party of the second part has on deposit in the People’s Federation Bank of Charleston, S. C., the sum of twenty thousand seventy-one and 73/100 ($20,071.73) dollars, subject to the rules and regulations of said bank; and
“Whereas, the party of the second part is willing to deposit five thousand dollars more in said account to its credit in said bank, provided the party of the first part is willing to secure said deposit; and
“Whereas, the party of the first part is willing to secure said deposit, and has agreed to do so.
“Now'this agreement further witnesseth:
“That the party of the first part hereby pledges and delivers to the party of the second part as collateral security for said deposit the bond of N. H. Collins, et al., trustees of Bethel A. M. E. Church, to the People’s Federation Bank, dated the tenth day of June, 1921, to secure the payment of thirty thousaand dollars as therein set forth, together with the mortgage securing same, which said mortgage is dated the tenth day of June, 1921, and is duly recorded in the office [110] of the register of mesne conveyance for Richland County, S. C., in Volume C. J., page 69.
“It is distinctly understood and agreed by the parties hereto that the party of the first part shall alone have the right to collect the principal and interest due on said bond and mortgage and shall have the right, if necessary or advisable, to foreclose said bond and mortgage in its own name: Provided, however, that the said party of the first part shall promptly notify the said party of the second part of any collections on the principal of the said bond and mortgage, and should at any time the amount due on the principal of said mortgage be less than the amount on deposit, that then the party of the first part agrees to furnish additional collateral of sufficient value to protect said deposit.
“And, it is further agreed, that in case it is necessary to foreclose said mortgage that the party of the first part shall have the right to require possession of the said bond and mortgage upon furnishing to the party of the second part other collateral of similar value in their place and stead.
“It is further understood and agreed that this delivery of said bond and mortgage is simply as a pledge or collateral security for the said deposit, and should the said deposit be withdrawn in accordance with the rules of said bank, that then the party of the second part shall forthwith return the said collateral to the party of the first part, and should the said party of the second part under the rules of said bank withdraw any substantial part of said deposit, that then and in that case the said party of the first part shall then have the right to. withdraw the said security and substitute other collateral of value equal to the amount remaining on deposit in said bank.
“In witness whereof the parties hereto have duly executed this agreement by their proper officers the day and year first above written.
[111] “The People’s Federation Bank,
“By J. E. Beard, President,
“Wm. H. Johnson, Cashier.
“Grand United Order of Odd Fellows,
“By D J, McCottrie, D. G. M.,
“H. H. Butler, D. G. S.
“In the presence of:
“F. R. Blanchard.
“Chris. F. Simmons.
“George Pugh.
“Dizzie Buchanan.”
Stipulation
“The undersigned attorneys, representing the petitioner and respondent in the above-entitled cause, do hereby stipulate and agree that the facts hereinbelow set forth shall constitute an agreed statement of facts in said cause.
“1. That the People’s Federation Bank was a banking corporation created under the laws of the state of South Carolina, and was engaged in general banking business on or about the 2d day of June, 1926, in the City of Charleston, S. C., and that said bank closed its doors on the 7th day of September, 1926, and was thereafter declared insolvent, and Charles W. Waring was duly appointed receiver to liquidate said bank by an order of the Court of Common Pleas for Charleston county, dated September 25, 1926.
“2. That on or about the 2d day of June, 1926, the District Grand Lodge No. 13, Grand United Order of Odd Fellows of South Carolina, had on deposit in the savings department in said People’s Federation Bank of Charleston, S. C., the sum-of nineteen thousand eight hundred seventy-three ($19,-873.00) dollars.
“3. That on or about the 2d day of June, 1926, an agreement was entered into between the petitioner and respondent herein, a true copy thereof having been attached to and made a part and parcel of the answer of respondent.
[112] “4. That the District Grand Lodge No. 13, Grand United Order of Odd Fellows of South Carolina, did not make any deposit of June, 1926, but the interest accruing on said savings deposit as of July 1, 1926, amounting to one hundred ninety-eight and 73/100 ($198.73) dollars, was credited to the deposit and brought the same up to twenty thousand and seventy-one and 73/100 ($20,071.73) dollars as of July 1, 1926, and that its deposit hereinabove referred to was the same on September 7, 1926, the day the bank closed, as it was on July 1, 1926.
“5. That no further agreements of any kind or character have been entered into between the parties herein in respect to the said deposit.
“J. I. Washington,
“Attorney for Petitioner, District Grand Lodge No. 13, Grand United Order of Odd Fellows of S. C.
“Waring '& Brockinton,
“Attorneys for Respondent, Charles W. Waring, Receiver of the People’s Federation Bank of Charleston, S. C.
“Dated June 2, 1927.”
We agree with the conclusion reached by Judge Grimball, and for the reasons stated in the decree issued by his Honor, the exceptions are overruled, and it is the judgment of this Court that the judgment of the Circuit Court be affirmed.
Mr. Chief Justice Watts and Mr. Justice Stabler concur.