Case ID: sc-eq_31/html/0441-01.html
Source: Caselaw Access Project
Author: {"author": "Johnston, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles B. Glover vs. C. A. Graeser and others.
    
      Interest — Assignment—Memorandum Chech.
    
    An assignment for the benefit of creditors described a demand belonging to a preferred class as “ about fire thousand dollars.” The demand was for about four thousand three hundred dollars, due on a memorandum check, which bore interest: Held, that the interest as well as the principal was a preferred debt by the terms of the assignment.
    A memorandum check for borrowed money, bears interest.
    BEFORE DARGAN, CH., AT CHARLESTON,
    MARCH, 1858.
    This case was heard upon the Master’s report, which is as follows:
    
      “ I beg leave respectfully to report, that I have been attended by the Solicitors in this case, and have taken the testimony, which I find to be as follows :
    
      “ On the seventeenth day of January, 1852, Glovers & Davis, then doing business as factors, in Charleston, borrowed from the plaintiff four thousand three hundred and twenty-eight dollars, and gave their memorandum check, as it is called, which is copied at the end of this report, and marked A. During their continuance in business, nothing was paid on this loan, nor is it in evidence that it was called for, nor was the check ever presented at the Bank for payment. It followed the course usual in such cases, viz: it was retained as evidence of so much money loaned, to be repaid on call at any sacrifice. The custom is to retain these checks, and not present them at the Bank for payment. 'In November, 1852, Glovers & Davis made an assignment of their estate to the defendant, as assignee, for the benefit of creditors, and B. D. Boyd was subsequently appointed agent of creditors. The plaintiff accepted the assignment. By the terms of this deed, the assigned estate was conveyed in trust to pay, in the first instance, the expenses of drawing the deed, &c., next a balance due W. E. Evans & Co., for cotton and interest; and, in the next place, borrowed money to several persons mentioned, and among them, the complainant, whose debt is set down at “ about $5,000.” In the second case interest is not mentioned.
    “ The assignee has made sundry payments on account of principal of plaintiff’s debt, but he has refused to pay interest, and the bill is filed to compel him to do so. The complainant alleges that the assignee could long since have been in funds sufficient to have met both principal and interest of this debt, if he had not extended a credit upon the Sheriff’s sales, under a large judgment against V. D. V. Jamison, of Orange-burg. The assignee urges as his excuse for doing so, that the credit was extended to get the guaranty of the Bank of the State, holding a junior judgment, and to make the property of Jamison bring a larger amount, which it did by this extension ; and the evidence before me goes to prove that if it had been sold for cash, the judgment in favor of the estate would not have been reached. But this inquiry is, in fact, of comparatively small consequence, as the parties are at issue on the question whether the memorandum check, or loan of which it is the evidence, is or is riot an interest bearing demand — the plaintiff insisting on interest, and the defendant denying his obligation to pay it.
    
      “ I report, further, that the available assets of the assigned estate amount to $15,359, while the debts are about $77,391, so that the estate will pay about twenty-five cents on the dollar. Ttie payments will not reach beyond the third class of preferred debts. I annex hereto a copy of the order of preference, marked exhibit B.
    “If custom among merchants can establish the relative rights of the parties, I think it was clearly proved that although these memorandum checks do not draw interest for short dates, yet if they are suffered to lie over for any great length of time,' (one witness said for a year,) it is expected they should draw interest.
    “The foregoing is a summary of the testimony filed herewith ; it was submitted by me at the trial, and is now presented in this condensed form at the request of the Solicitors in the cause.”
    EXHIBIT A.
    Charleston, January 17, 1852.
    Memorandum. No.
    ■ Cashier of the Union Bank of South Carolina: Pay to C. B. Glover, or bearer, four thousand three hundred and twenty-eight dollars.
    $4,328.23. GLOVERS & DAVIS.
    EXHIBIT B.
    The deed provides for the expense of drawing the papers and paying commissions for collecting the funds, and then proceeds as follows:
    And then in trust, that he, the said Clarence A. Graeser, or his executors, administrators and assigns, do and shall apply the residue of the said trust moneys in and toward the payment and satisfaction of the several debts and sums ofmoney to such of the following persons, for the following causes of indebtedness, in the order following, that is to say :
    First. To William E. Evans & Co., for balance due them on purchase of cotton and interest.
    Second. Borrowed money, to wit: Thomas N. Gadsden» seven hundred dollars ($700.00); Charles B. Glover, executor ofVinyard, aboutfive thousand dollars (5,000.00); William E. Martin, five hundred dollars (500.00); Menlove & Davidson, six hundred dollars ($600.00.)
    
      Third. Dr. J. P. Zimmerman, amount of his draft, three thousand dollars, (3,000.00), and interest from maturity until paid.
    Fourth. Nicholas A. Peay, balance due him on a draft for five thousand dollars, (5,000.00,) and a note endorsed by him ,for one thousand dollars, ($1,000.00,) with interest on same from maturity until paid, deducting balance secured to him by mortgage of negroes from Sanders L. Glover.
    Fifth. Lewis C. Glover, as drawer and endorser for Glover & Davis, over and above any amount due by him to that firm, the same to be discounted against his liability.
    Sixth. To all persons to whom balance may be due on sales of produce and lumber, made for them on commission.
    Seventh. To all general creditors of the firm of Glovers & Davis, whether by note or open account, or as endorsers, or .otherwise.
    His Honor, the presiding Chancellor, decreed that the complainant was entitled to interest on his claim for money borrowed, and ordered the same to be paid out of the assigned estate. »
    The defendants appealed on the grounds:
    1. Because the deed does not provide for interest, and those who accept it, must look to it as the law of the case.
    
      2. Because the negative evidence of intention not to pay interest which the omission of it in the second ground furnishes, is strengthened by its being provided for in all the other four first classes with this exception.
    3. Because, if we pass by the deed, the original contract does not carry interest. Money had and received, to the use of another, does not necessarily imply that interest is to be paid, and when money is payable on demand, there is no interest until demand. Smith 8f Bythword, Rice, 245.
    
    
      4. Because whatever may have been the character of the original transaction, it would appear from the deed that the preference and the security extended to the class who had loaned money, were intended and received as a full equivalent for interest.
    Martin, for appellants.
    
      Simonton, contra.
   The opinion of the Court was delivered by

Johnston, Ch.

There is little in that clause of the assignment in which the plaintiff’s claim is provided for to countenance the defendants’ position, that the interest on this demand was intended to be excluded.

The memorandum cheque given to the plaintiff on the 17th of January preceding the assignment, for the money borrowed from him, was for the sum of $4,328.23 — made presently due. In the assignment, which was executed, Nov., 1852, it was declared to be in trust for paying and satisfying the demands of claimants “for the following causes of indebtedness” in the order prescribed; and in the second class of claimants, for “borrowed money” is included “Charles B. Glover, executor of Vinyard, about $5,000.” When we recur to. the principal of that debt, and find that it but slightly exceeded $4,000, and compare it with the sum thus roundly provided for, we can hardly suppose that the provision was intended to be restricted to the precise amount of the principal, and that this was not intended, becomes more probable, when we remember that the direction to pay was given, not so much with reference to the amount due to the creditor, or to the form of his security, as to the consideration, or “cause of indebtedness,” on which his claim rested. What was due him for money borrowed was to be paid, much or little.

That sum was ascertained by the memorandum cheque, operating as a statement in writing between the parties of the sum due from the one to the other. If for money advanced, or paid, laid out and expended, the party to be charged admit in writing the amount due, or if an account be stated between the parties and the balance struck, there is no doubt interest accrues from the time. ■

Some reliance is placed on the fact that this was a memo- ( randum cheque, such as it is the custom of tradesmen to take as convenient means for short settlements between themselves, and on which it is not usual to charge interest. No doubt in such daily or weekly settlements, the interest which is trifling is not considered. But if there is unusual or unreasonable delay, there is nothing to prevent them from insisting on the legal incidents of the security given, whether it bear the form of cheque, note or bond. It is neither illegal nor unreasonable that they should do so in such a case.

It is ordered that the decree be affirmed and the appeal dismissed.

Dunkin and Wardlaw, CC., concurred.

Appeal dismissed.