Case Name: ELEAZER ET AL. v. SHEALY, CLERK OF COURT
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1914-04-21
Citations: 97 S.C. 335
Docket Number: 8808
Parties: ELEAZER ET AL. v. SHEALY, CLERK OF COURT.
Judges: Watts, J., concurs in the opinion of the Chief Justice.
Reporter: South Carolina Reports
Volume: 97
Pages: 335–349

Head Matter:
8808
ELEAZER ET AL. v. SHEALY, CLERK OF COURT.
(81 S. E. 648.)
Judicial Sales. Check as Payment. Negligence in Collecting Check. Sufficiency of Evidence. Harbiless. Error.
1. In an action by the purchaser of land at a judicial sale, claimed to have been paid for by giving a check to defendant clerk of Court, which he failed to diligently present for payment before the bank had become insolvent, to compel defendant to make title to the land to plaintiff, evidence held to sustain a finding that the clerk received the check to collect it for plaintiff, and not as payment, and that he made reasonable efforts to collect the check.
2. The judgment will not be reversed because of any errors which are not shown to have been prejudicial to appellant’s rights.
Before Shipp, J.,
Lexington,
June, 1913.
Affirmed.
Action by Sarah C. Eleazer and husband against Frank W. Shealy, clerk of Court of Common Pleas and General Sessions for Lexington county and special referee. From a judgment for defendant, plaintiffs appeal.
Affirmed.
The Circuit decree, appealed from, was as follows :
Sarah Eleazer and her husband, H. H. Eleazer, complaining of F. W. Shealy, clerk of Court of Lexington county, allege that certain lands belonging to J. T. Bouknight, deceased, were sold by said clerk of the Court under an order of Court, signed by Pión. J. W. DeVore, Circuit Judge, and that said sale took place on sales day in February, 1912, said lands being described in the petition; that said lands were bid off by Walter Looney, for the price of four hundred and forty dollars and thereafter said Looney for value, to- wit, in consideration of an agreement to pay him the sum of five hundred dollars, duly assigned said bid to petitioner, Sarah C. Eleazer, and authorized the clerk of the Court to make title therefor to- said petitioner; that on the 22d of February, H. H. Eleazer, the husband of Sarah C. Eleazer, acting for her, paid to the clerk and special referee the sum of five hundred dollars in accordance with the agreement with Looney and in full- payment of the purchase price of the tract o-f land; that payment was made to the clerk by giving him a cashier’s check on the Lexington Savings Bank, which it is alleged the clerk received and accepted as payment, and for which the clerk; executed a receipt as follows: “Lexington, S. C., 2-21-1912. Received from H. H. Eleazer five hundred and no-100 dollars, payment on tract No. 4 in Bouknight estate, deed to be executed to S. C. Eleazer. $500.00., (Sd.) Frank W. Shealy, C. C. C. P. & G. S.”
That the petitioner heard no- more from the clerk until about the 27th day of March, 1912, when he received notice from the clerk that he was unable to collect check; that in the meantime, to wit, on the 23d of March, Lexington Savings- Bank, which is situated at -Lexington Courthouse, failed in business and a receiver was appointed, the bank having been declared inslolvent, and that this happened after the clerk had a reasonable time in which to have collected the check; it further alleges- that failure o-f the clerk to collect the check was due- to his negligence, and petitioners pray that the Court require the clerk to execute to Sarah C. Eleazer title to said tract of land.
The answer o-f the defendant, Shealy, clerk, admits that the land was sold under order of Court on sales day in February, 1912, and that the same was bid by Walter Looney and his bid transferred to Sarah C. Eleazer, and that the clerk was authorized to- make title therefor to Sarah C. Eleazer. The answer sets up by way of defense that soon after the sale and assignment of the bid, H. H. Eleazer offered him a check drawn by one Riddle, in favor of either H. H. Eleazer or Sarah C. Eleazer, for the sum of five hundred dollars in payment of the assigned bid, but that he refused to receive it for the reason that he had been having trouble with checks from said bank and he would not take *' said, check; that later on in the same day H. H. Eleazer returned with a cashier’s check on the Lexington Bank, and .offered it to the defendant in payment of said bid, but defendant refused to accept is as such payment, but agreed to take it and try to- collect it, and if he could do- so, he would “credit the amount on the bid. That defendant presented the check or draft to the bank for payment on the same day it was received and on the subsequent day, and made several other attempts to collect it and failed to collect it; that at no time after he received the check for collection was the bank in a condition to- pay it. That the defendant gave Eleazer a receipt for the check in order that the said Eleazer have something to show for the check to- the defendant; that as soon as defendant found that he could not collect the check he wrote several letters to Eleazer, informing him of his inability to-collect the same. Defendant admits that hé has refused to make title under the circumstances.
The testimony- in this case is very conflicting. If the clerk was negligent in his dealing with the check, and if he failed to collect it on account of his want of diligence in presenting the check for payment, or if in the first instance he received the check in payment, then the loss would fall on the clerk. If, however, the clerk received the check not in payment, or if he used due diligence in collecting the check, or in presenting the check, then the loss must fall on the Eleazers. The testimony is very conflicting. I know personally most of the witnesses on behalf of the defendant, while I am unacquainted with most of the witnesses for the petitioner. After considering all of the testimony, I am satisfied that Mr. Shealy received the check not in payment of the money, but received it for the purpose of collecting the check for the petitioners, and, if collected, to apply it to the purchase price of the land. I am, therefore, satisfied from the testimony, that the bank was in bad condition at the time and that Mr. Shealy made reasonable efforts to collect the check and failed. He wrote several letters to petitioner, H. H. Eleazer, informing him of his inability tO' collect the check, notifying him of his effort to collect the same. It is true that the letters were not sent to the correct postoffice address of Mr. Eleazer, and it may be on that account that Mr. Eleazer had no notice, still, Mr. Shealy acted in good faith and the fact that he wrote the letters and endeavored to- notify Mr. Eleazer, bear forcefully upon the question of his diligence in reference to the check. If the check was refused payment by the bank, in the hands of Mr. Shealy on account of its embarrassed condition, I can not see that-Mr. Eleazer would have met with greater success, had he himself known of the situation and had attempted collect the check himself. I think that the check was not paid because of the condition of the bank and that the loss should not fall upon the clerk of the Court. It is, therefore, ordered that the petition be, and the same is hereby, dismissed.
Mr. D. W. Robinson, for the appellant, cites:
Conditional receipt of check: 83 S. C. 305-7; 90 S. C. 543, Diligence in presenting check: 33 L. R. A. 788, 789; 3 Morse Banking (4th eel.), sec. 431(c) ; 69 S. E. 1014-15; 33 L. R. A. (N. S.) 991;4 Am. St. Rep. 844; 63 Mich. 199 ; 47 Am. St. Rep. 406, 413; 79 Md. 313; 33 Am. Dec. 537; 30 Wend. 193;'49 Am. St. Rep. 47, 53; 103 Ala. 45-8; 53 S. E. 1017; 4 E. R. A. (N. S.) 135; 5 Am. & Eng. Enc. of E. 1040-1043; 3 Daniel Neg. Instruments, secs. 1590-1; 3 Morse Bánking (4th ed.), sec. 433. Diligence in giving notice of nonpayment: 3 Morse on Bank and Banking, sec. 431(b), (c), 433; 77 Am. St. Rep. 630-C33; 53 S. E. 1017; 4 L. R. A. (N. S.) 135. Question of diligence, one of law: 47 Am. St. Rep. 408; 79 Md. 313; 51 Am. St. Rep. 93, 93; 95 Ga. 376. Duty where unsafe condition of bank is known to holder of check: 69 S. E. 1016; 33 E. R. A. (N. S.) 993; 79 N. W. 859; 80 N. C. 31; 3 Morse Banks and Banking, sec. 431 (i). Place to give notice: 3 lb., sec. 438. Discharge of drawer and indorser: 2 lb., sec. 431 (a), (b), (d), (i), 433, 433; 5 Am. & Eng. Enc. of L. 1031, 1045; 3 Daniel on Neg. Insts. (5th ed.), secs. 1496, 1587; 6 Wend. 445; 15 L. R. A. (N. S.) 313, note. Holder failing to notify) drawer must shoulder the loss: 2 M'orse Banks and Banking, sec. 431 (i), (d); 41 Am. St. Rep-. 93, 93; 49 Am-. St. Rep-. 45; 5 Am. & Eng. Enc. of E. (3d ed.) 1013, 1044. Burden of proof: 33 L. R. A. (N. S.) 788, 789; 3 Morse Banks and Banking 431 (b), (c) and (f).
Mr. C. M. Bfird, for the respondent, cites :
Due diligence a question of fact: 13 S. C. 343; 11 S. C. 454; 3 Hill L. 77.
April 21, 1914.

Opinion:
The opinion of the Court was delivered by
Mr. Chief Justice Gary.
The facts herein are stated in the decree of his Honor, the Circuit Judge.
In his findings of fact, he says : "After considering all the testimony, I am satisfied that Mr. Shealy received the check, not in payment of the money, but received it for the purpose of collecting the check for the petitioners, and, if collected, to-, apply it to- the purchase price of the land. I am therefore satisfied from the testimony that the bank was in bad condition at the time, and that Mr. Shealy made reasonable efforts to collect the check and Tailed." The appellants have failed to satisfy this Court, by the preponderance of evidence, that these findings were erroneous.
Having reached this conclusion, the petition- should be dismissed, for the reason that, even if the decree was erroneous in any other respect, it has not been made to appear that the error was prejudicial to the rights of the appellants.
Judgment affirmed.
Watts, J., concurs in the opinion of the Chief Justice.