Case ID: scl_43/html/0031-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neal, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Commercial Bank vs. Simpson Bobo.
    B. was tbe indorser of L. on a note in Bank, and had a judgment against L. as indemnity, for a sum much larger than the amount of the note. The Bank recovered a junior judgment on the note against L. The Sheriff sold property and had in his hands sufficient of the proceeds to satisfy B's judgment, and thereupon B. gave the Bank an order, directing the Sheriff to pass over B's judgment, and apply the proceeds in his hands to the judgment of.the Bank. The Sheriff having been warned to pay no judgment against B. declined to comply with B's order: — Held, that the mere acceptance of the order by the Bank was no payment of the note so as to discharge B.
    A bill or note given for a previous debt is no payment, unless it be expressly accepted as such or unless it produce payment.
    BEFORE WARDLAW, J., AT SPARTANBURG, SEPTEMBER, EXTRA TERM, 1855.
    The report of liis Honor, the presiding Judge, is as follows:
    “ Assumpsit against defendant as indorsor of a promissory note for seven thousand dollars, dated December 21st, 1853, made by E. C. Leitner, payable to the order of defendant at the Commercial Bank, and indorsed by defendant.
    
      “ The defendant admitting the making and indorsement of the note, undertook to show payment since the commencement of this suit. Below is a summary of the testimony which was adduced, embracing various papers, of all which copies or sufficient abstracts must be in the Court of Appeals.
    
      “ 1. Record, iS. Bobo and B. B. Foster vs. the Bivingsville Manufacturing Company and F. C. Leitner. Confession, June 20th, 1853, upon a note for fourteen thousand dollars, with interest from the date. Judgment, October 7th, 1853. Fi.fa. March 31st, 1855. On the note is written in the handwriting of the defendant: “ This note is not to interfere with any other transactions, but to settle debts that they (Bobo & Foster) have agreed to indorse in Bank.” And on the declaration is written in the same hand-writting, “ This^ confession is to indemnify the plaintiffs in being security for certain amounts in Bank. See note.” ,
    
      “ Bobo and Poster are brothers-in-law of Leitner.
    “ 2. Record: S. Bobo vs. the Bivingsville Manufacturing Company and E. C. Leitner. Confession November 17th, 1853, for six thousand dollars besides interest and costs. Judgment andjft. fa., January 26th, 1854.
    “ 3. Record : The Commercial Bank of Columbia vs. E. C. Leitner. Confession, judgment, and fi. fa., March 31st, 1855, for five thousand four hundred dollars, with interest. The balance of the note now in suit after a credit of one thousand six-hundred dollars paid January 7th, 1854.
    “ E. C. Leitner disappeared, from Spartanburg, about March Court, 1855.
    “4. On the first Monday of July, 1855, Sheriff H. S. Poole, under the preceding writs of fi. fa., and others, against E. CLeitner only, sold lands, negroes, live stock, &e., to the amount of about twenty-four thousand dollars. At this sale the defendant, as purchaser, became liable to the Sheriff for enough to satisfy his separate judgment, (No. 2,) and was ready to give a receipt for the amount of that judgment. The proceeds of sale were amply sufficient (after the satisfaction of about three thousand three hundred dollars, which was due on a fi. fa., of one Kirby, the oldest, against E. C. Leitner), to pay the separate judgment of S. Bobo (No. 2), and the judgment of the Commercial Bank, (No. 3), the next oldest after the fourteen thousand dollar judgment (No. 1), but not sufficient to reach No. 3 if No. 1 was to be paid, nor sufficient to reach No. 3 if Dorn’s claims, mentioned below, were recognized. /
    “ 5. A warning or direction not to pay any judgment hut No. 2, was served on the Sheriff by Mr. Farrow, Attorney at Law, claiming to act as solicitor and agent of W. B. Dorn. and as agent of George Leitner. This was immediately after the sale. W. B. Dorn claimed as mortgagee and as a creditor who had applied to Equity, as below mentioned ; and George Leitner claimed as creditor of his brother, E. O. Leitner, and as shareholder in the Bivingsville Manufacturing Company.
    
      “ 6. A written order which defendant gave to the Sheriff, same in substance as No. 7.
    ££ 7. A paper without date, written by Mr. DeSaussure Solicitor of the Commercial Bank, and signed by defendant, which is. annexed to the fi. fa., of the Bank vs. F. Q. Leitner, No. 3 — in substance as follows: “Bobo Foster vs. E. G. Leitner, The Sheriff will pass over the above execution (No. 1) in favor of the execution of the Commercial Bank against defendant, and give precedence to this latter execution, by applying to it any money raised by- sale of defendant’s property, to which the above would be otherwise entitled. This is the second order to the same effect. Simpson Bobo.”
    
    £l 8. A letter from the President of the Bank to Poole, Sheriff, dated July 10th, 1855, telling of Mr. Bobo’s willingness to give precedence to the Bank, and asking payment of the Bank’s judgment, (No. 3).
    ££ 9. A formal demand of the money from the Sheriff and Coroner, dated August 11th 1855, stating the consent of S. Bobo, oldest creditor, to its being paid to the Bank, signed by the President and Cashier of the Bank.
    ££ H. S. Poole, late Sheriff, now resigned, testified: Soon after the sale I showed to the defendant the letter from the Commercial Bank, (No. 8,) and told him of the warning I had received, (No. 5). He said he would give me orders to pay' the Commercial Bank in preference out of the fourteen thousand dollars, and added, £ my money.I must have any how.’ In this I understood him to refer to the balance of the fourteen thousand dollars, and I - said, “ I consider that as collateral security.” He said, “ I must have it.” He then gave me an order in writing to pay the Commercial Bank out of the fourteen thousand dollars, which order is not now here.
    “ I cannot say which portion of the property I sold belonged to E. C. Leitner separately, and what portion to the Bivingsville Manufacturing Company. E. C. Leitner was the principal shareholder in the Binvingsville Manufacturing Company and was0manager of its affairs,
    
      “Reply. — The plaintiff adduced proceedings in Equity now pending, Wm. B. Born vs. B. O. Leitner, Simpson Bobo et. al. The bill was filed after March, 1855; one purpose of' it is to set aside the fourteen thousand dollar judgment, (No. 1), another to foreclose a mortgage which É. C.' Leitner made to W. B. Dorn of land, negroes, &c., (part of the property sold by the Sheriff in July, 1855,) which mortgage is older than the judgment of the Bank, (No. 3,) and subsequent in dates to the judgments No. 1 and No. 2. An interlocutory order was made in June, 1855, directing a reference, and calling in the creditors of E. C. Leitner.
    “ The defendant contended in argument that the waiver, in favor of the Bank, of the precedence which prior date gave to the judgment of fourteen thousand dollars in effect subjected the proceeds of sale to the fi. fa. of the Bank vs. E. 0, Leitner, and that payment from these proceeds to the Sheriff was payment by the maker to the Bank, and of course a discharge of the endorser. I held that of the judgment taken to indemnify himself, Bobo could not properly receive more than enough to cover his liability; that the waiver, or order given by him to the Sheriff in favor of the Bank, to which he had become liable, was no more than would have been a draft on one of his debtors —that is, it was payment if payment thence resulted, or if it was accepted as payment, but otherwise it was only collateral security for his liability. In support of this opinion I adverted first to the uncertainty as to the ownership of the property sold. Defendant Bobo had a lien which covered both the property of E. C. Leitner and that of the Bivingsville Manufacturing Company; the Bank’s lien extended only to the property of E. C. Leitner. - And second, I thought of Dorn’s mortgage intervening between the judgment of Bobo, and that of the Bank. If the fourteen thousand dollar judgment should be entirely disregarded, it might not follow that the judgment of the Bank would be reached.
    
      “ The defendant further contended that the Bank, by accepting the order of defendant on the fund in the Sheriff’s hands, had taken from the defendant the control over the fund thus virtually assigned, and had agreed to look only to that for payment. I held that the exercise of exclusive power over a fund assigned as additional security did not imply the abandonment of the original security; and I submitted to the jury the question whether the Bank accepted the order in payment, or took it only as additional security.
    
      “ The jury found for the plaintiff the balance due upon the note in suit.”
    The defendant appealed and now moved this Court for a new trial on the grounds,
    1. Because the money being in the hands of the Sheriff, belonging to the defendant, his transfer of the.money to the debt of the Commercial Bank was a payment of the judgment against Leitner, the principal, and discharged the endorser, the Bank having accepted the transfer and claimed the money.
    2. Because plaintiff having accepted the order of the defendant and a transfer of his right to receive the money from the Sheriff, who held it to be applied and paid over to the judgment against Leitner, was a discharge of the endorser and the jury should have been so instructed.
    
      Young, Thompson, for appellant,
    Q-adberry, contra.
   Curia, per

O’Neal, J.

This Court is satisfied that nothing like payment is established by the facts relied upon by the defendant,

To constitute anything else than money a payment, it must be accepted as such, or payment in fact must result from it.

This is so well understood that it is scarcely necessary to cite authority in support of it.

The case of Peters vs. Barnhill, 1 Hill, 236, a, was a case where a note was set up as payment, and the Court held, if it was accepted as such it might be so regarded.

In Costello vs. Cave, 2 Hill, 528, 531, Judge Harper said, “ the rule of law is perfectly well settled, that if a note or bill be given on account of a previous debt though by open account or other simple contract, this is no payment, unless it be expressly accepted as payment, or produce payment.”

The case before us is concluded by these authorities; for there is nothing in it which will rank higher than a note or bill. The orders drawn by the defendant directing the Sheriff to pass over the execution No. 1, in favor of the execution of the Commercial Bank vs. Leitner, and give precedence to it, by applying to it any money raised by the sale of, Leitner’s property to which No. 1 would be otherwise entitled, is no more than a draft on the Sheriff in favor of the Commercial Bank. Until paid it was and is no satisfaction of the defendant’s liability, unless the Bank had accepted it as payment.

Beyond all doubt there is no proof of that: — all that the Bank has done has been a prompt endeavor to get the money from the Sheriff.

Failing in that they had the right to look to the defendant, the indorser of Leitner.

The motion is dismissed.

Wardlaw, Withers, Whitner, Glover, and Munro, JJ., concurred.

Motion dismissed.