Nauful v. National Loan & Exchange Bank

January 11, 1919. The opinion of the Court was delivered by This is an action for damages, alleged to have been sustained by the plaintiff on account of the refusal of the defendant to pay a check, which she had drawn in favor of Palmer-Sowers Company, of Chattanooga, Tenn., on the 1st of December, 1916, for $224.43.

The plaintiff had two accounts with the defendant — one an open account and the other in the savings department. The check in question was drawn by her, against her open account.

The following statement appears in the argument of the appellant's attorneys:

"The plaintiff claimed that, at the time the check in question was presented for payment, she had ample funds in the bank to pay the check. The defendant claimed that the account lacked a small amount of having enough money to pay the check when presented. The check was drawn for the sum of $224.43, dated December 1, 1916.

"One of the most hotly disputed questions was what day the check was presented for payment. The plaintiff claimed that it was presented for payment on December 6, 1916; and the defendant claimed that it was presented on December 8, 1916. If the check was presented on December 6, 1916, there were ample funds to pay it, in the regular deposit mercantile account. If it was presented on December 8, between 12 and 4 o'clock, then the account lacked either $13.13 of having enough money on hand to pay check, or it lacked $53.13 of having enough on hand, depending on the time when a check for $40 was cashed on that day."

The jury rendered a verdict in favor of the defendant, and the plaintiff appealed upon exceptions, which will be reported.

The exceptions assigning error on the part of his Honor, the presiding Judge, in allowing the introduction of testimony therein mentioned, cannot be sustained, for the following reasons: "In general, any fact or circumstance, which leads the mind to the affirmative or negative of any proposition, constitutes proof." Hunterv. Glenn, 1 Bail. 542; Hobbs v. Beard, 43 S.C. 370,21 S.E. 305.

In the next place, the issue which the testimony was introduced to establish did not constitute the right for which the plaintiff sued, but was merely collateral in its nature.

"The general rule that parol evidence of the contents of a paper writing, which the party has in his possession, or which he may procure to be produced, by the process of the Court, cannot be given in evidence, holds universally, wherever it constitutes the evidence of his right to the thing for which he sues; and that because it is the most certain, and, therefore, the best. But where the writing relates to a collateral circumstance, and an inference favorable to the party arises out of the fact of its execution and existence, and not out of its particular contents, parol evidence is admissible."Lowry v. Pinson, 2 Bail. 324, 23 Am. Dec. 140; Sims v.Jones, 43 S.C. 91, 20 S.E. 905; Hampton v. Ray, 52 S.C. 74,29 S.E. 537; Elrod v. Cochran, 59 S.C. 467,38 S.E. 122; State v. Waldrop, 73 S.C. 60, 52 S.E. 793.

The next question to be determined is whether there was error on the part of his Honor, the Circuit Judge, in ruling that it was not the duty of the defendant to pay the check by supplementing the deficiency from her savings account. Rule 3 printed in the book containing the conditions upon which the deposits were made in the savings department of the bank is as follows: "Drafts may be made personally or by the order in writing of the depositor (if the book has the signature of the party on its signature book); or by letters of attorney, duly authenticated; but no person shall have the right to demand any part of his or her principal or interest, without producing his or her bank book, that the payment may be entered therein; nor shall any person have such right, without previous notice in writing to the bank, of his or her intention to make such demand of thirty days, for any amount not exceeding three hundred dollars, and sixty days for any amount exceeding that sum; but money may be voluntarily paid by the bank daily, and without such notice, and without thereby waiving the right of the bank, to such notice and time of payments."

The appellant's attorney relies upon the following authorities:Callaham v. Bank, 69 S.C. 374, 48 S.E. 293, 2 Ann. Cas. 203; Lorick v. Bank, 74 S.C. 185, 54 S.E. 206, 7 Ann. Cas. 818; Hiller v. Bank, 92 S.C. 445, 75 S.E. 789.

In the first mentioned case, the question was whether the plaintiff had a right of action against the defendant for its refusal to pay a check drawn by him, in favor of a third party, in the absence of notice to the plaintiff that the bank had applied his funds on deposit in extinguishment of past-due claims held against him by the bank, when he had deposited with the bank sums of money sufficient to meet payment of the draft. The Court ruled that the plaintiff had a right of action against the defendant for such refusal.

In the case of Lorick v. Bank, supra, the admitted facts are that the plaintiff on the 14th of March, 1903, deposited with the defendant bank the sum of $313.75, to be paid out on the check of the plaintiff. On the 2d of July, 1903, she issued to one J.R. Harris, or bearer, a check on the defendant bank for the sum of $13.75; the defendant informed the holder of the check that the plaintiff had funds in its bank to her credit sufficient to pay said check, but that the same were in the savings department of said bank, the rules of which required that all checks presented for payment should be accompanied by the bank's passbook. It was found that the bank made a mistake; for the funds of the plaintiff were not deposited in the savings department of the bank, but were really subject to the check of the plaintiff. His Honor the presiding Judge, charged the jury:

"That if the jury believed that there was no positive and unqualified refusal to pay, they should find for the defendant."

This Court held that the charge was erroneous, and ordered a new trial.

The facts are thus stated in the case of Hiller v. Bank,92 S.C. 445, 75 S.E. 789:

"All the money deposited by the plaintiff belonged to her individually, but she chose, for convenience, to keep two accounts, one in her individual name and the other in the name of ``Nannie E. Hiller, Adm'x,' although she was not administratrix. The latter account was used in the conduct of a mercantile business owned by the plaintiff and conducted by her and her brother-in-law, John Hiller. On this account John Hiller was authorized to check, signing the checks ``Nannie E. Hiller, Adm'x.' Both John Hiller and the plaintiff issued checks, against this account, which were paid and charged against it, until several checks were presented which would have overdrawn the account. Instead of refusing payment, the bank, by the direction of John Hiller, charged this overdraft to the account kept in the name of Nannie E. Hiller. No evidence was offered that John Hiller was authorized to use or control the latter account. In this state of the evidence, the Circuit Judge directed a verdict in favor of the plaintiff for $158.54, the balance of the Nannie E. Hiller account after deducting a check for $55.20, which the plaintiff admitted she had signed without the suffix, ``Adm'x.'

"The Court refused to allow the defendant to prove that the checks, which went to make up the overdraft transferred or charged to the Nannie E. Hiller account, were signed by the plaintiff herself."

Upon this state of facts, this Court ruled as follows:

"There is no escape from the conclusion that this was error. When Mrs. Hiller made two accounts with the bank. under an agreement that John Hiller should have the right to draw, as her agent, on one of them, the bank had no right to charge checks drawn by John Hiller to the other account. Mrs. Hiller had the right to hold the funds deposited on the other account subject to her own control, and that right could not be defeated by the unauthorized action of John Hiller and the bank. This right of a depositor to separate and control his accounts is established in this State."

None of these cases sustain the proposition for which the appellant's attorney contends, but, on the contrary, indirectly show that the exceptions raising this question cannot be sustained.

The case of Simmons v. Bank, 41 S.C. 177, 19 S.E. 502, 44 Am. St. Rep. 700, is directly in point. The facts in that case relating to the question under consideration were as follows: Jervey Co. were merchants in the town of Greenwood. They were also engaged in the business of buying and selling cotton. They had been doing business with the defendant bank for several years; the bank advancing the money to buy the cotton, and taking from Jervey Co. drafts drawn by them against the cotton so bought. Jervey Co. kept two deposit accounts with the bank, one of which was designated as the merchandise account, upon which was credited money arising from the sales of merchandise, and upon which checks were drawn to pay for the merchandise; the other was designated as the cotton account, upon which the money advanced to buy cotton was charged, and the drafts against the cotton were credited. The merchandise deposit account was headed, "Jervey Co.," while the cotton deposit account was designated, "Jervey Co. C.A." The checks drawn on these two deposit accounts were of a different style; one being signed "Jervey Co.," and the other "Jervey Co. C.A." When the check then in question was presented for payment, there appeared on the books of the bank a balance on the merchandise account, in favor of Jervey Co., more than sufficient to pay said check, and the only reason given for refusing payment thereof was that Jervey Co. then owed the bank a large balance on the cotton account, besides notes past due to a large amount.

In commenting on the case of Fogarties Stillman v.State Bank, 12 Rich. 518, 78 Am. Dec. 468, Mr. Chief Justice McIver, who delivered the opinion of the Court in Simmonsv. Bank, supra, used this language:

"That case shows, just what the Circuit Judge held in this case, that the true theory is that, when a bank receives the money of a depositor and places the amount to the credit of such depositor on his deposit account, the implied contract on the part of the bank is that it will pay all checks drawn by the depositor, in such amounts and to such persons as may be mentioned in such checks, as long as there remains to the credit of the depositor * * * an amount sufficient to pay such checks."

He also said:

"The fifth question involves the inquiry whether the bank had a right to set up the past-due notes of Jervey Co. and the balance against them on the cotton account. If, as we have seen, the bank received the deposits on the merchandise account under an implied promise to pay the checks of Jervey Co. on that account as they were presented, then therewas an application of that fund to that purpose, and the bankcould not afterwards apply the same to any other purpose;certainly not without the consent of, or previous notice to,Jervey Co." (Italics added.)

In the case now under consideration, we have shown that there was a contract between the plaintiff and the defendant, stipulating the conditions upon which the funds deposited in the savings department were to be withdrawn. There is no provision therein authorizing or making it the duty of the bank to pay out such funds in order to supplement an overdrawn check on the open account.

Affirmed.