Metz v. Commercial Bank

45 S.C. 216 | S.C. | 1895

Lead Opinion

The opinion of the Court was delivered by

Mr. Justice Pope.

The contention in above causes involves one of the most curious set of facts among business men that we remember ever to have encountered. Briefly stated, these facts are: that in 1883, Levi Metz, while a citizen of Lexington County, in this State, being a man of sound discretion, though advanced in years, became so enamoured with the profits flowing from banking operations, that he actually embarks in a partnership, as private bankers, with a man, Mr. C. J. Iredell, without capital, and while Metz holds a large mortgage over the very roof that shelters Iredell and his family, simply upon his faith in Iredell’s capacity and character as a business man. This new relation is embodied in articles of copartnership, signed by the two men. As indicating the terms of this business venture, we repeat, with the articles of partnership before us, some of the main features thereof. Its purpose is to conduct a general private banking business in the city of Columbia, S. C. Levi Metz agrees to furnish $25,000 as its business capital. C. J. Iredell agrees to devote his time and attention to the business, to furnish all necessary clerks and messengers, to keep a complete set of books, showing plainly, at all times, the condition of said business, arid have the same constantly open for the inspection of said Levi Metz, or his legal representatives; to furnish said Levi Metz all desired information as to the condition of said business, and to be responsible for the proper conduct of said business, and to that end is to have the full management thereof. All rents and expenses of said business, except the hire of clerks and messengers, are to be paid out of the gross earnings thereof, the capital remaining intact; but all such expenses and losses in excess of the gross earnings of said business, and the reserve fund hereinafter provided for, shall be borne in equal parts by the parties hereto; the liability of Levi Metz is not to extend beyond the sum of $25,000, as capital by him contributed, and Iredell agrees to indemnify him against any loss in excess of that amount. Ten per cent, of the net earnings is to be placed monthly to the credit of the reserve fund. Said reserve fund is not to be divided during the continuance of said partnership, except both parties consent thereto; and the balance of the net earnings shall be divided monthty, or at such other time as partners may agree. Upon termination of said business, Levi Metz is to draw out the capital, and the accumulated net earning and reserve fund is to be equally divided. The business of said partnership shall be conducted under the firm name, “The Commercial Bank of Columbia, S. C.,” and shall continue five years from September 1, 1883. Provided, that if at end of first year it is found unprofitable, either party ma}'- terminate same upon ten days written notice to the other. With a proviso that in case of the death of one partner, the survivor shall have the privilege of purchasing the other interest. Now, this contract was signed in duplicate, each party taking a copy. No public notice was made thereof, nor was the same recorded as required by law. The terms of the contract were locked, so to speak, against the public. Mr. W. H. Eyles, of the Columbia bar, prepared the papers that were signed, to wit: contract in duplicate. The bank, so called, opened on 4th September, 1883. Its beginning was modest, being-operated by C. J. Iredell, without assistance, in one room of a storehouse. Metz still lived in the country, but came in every week. A complete set of bank books were kept from the beginning. Gradually, as the business of the bank increased, additional clerical force was retained. A more pretentious building was after awhile leased. A vault, with safety boxes therein, was constructed. Metz had a box assigned to him for his own use, just as Iredell did. From 4th September, 1883, to 1st September, 1888, so far as the proof extends, Metz never looked into a bank book, nor did he see a single security taken; he seems to have been content with the report of Iredell: “All’s well.” He did influence depositors to place their money with the partnership as deposits, and on one occasion he did recognize the fact that Mr. W. T. Martin, who was a large depositor from the beginning to the end, was showing the banking-firm a favor by his said deposits. Exactly when he got the information that Mr. Martin was a depositor does not appear. Mr. Metz regularly received his dividends, semiannually. In 1884 or 1885, he made a deposit of $20,000 in said partnership bank, stipulating for ten- per cent, thereon, which he received very punctually. He also made a deposit of an additional $9,000, upon which he received a great rate of interest. His sister also made a deposit with said banking firm, at ten per cent. Other depositors were made content with an allowance of six peícent. interest. Some time in the year 1885, Mr. Metz removed to the city of Columbia; he was often in the bank, but never, as before remarked, examined a book or an investment. On one occasion he discussed the propriety of allowing interest on deposits, stating to Iredell what a leading banker in the State said to him against the plan of allowing interest on deposits. He was soon quieted byIredell. When the first day of September, 1888, came, he had before him a statement in writing of the profits for the five years of the firm:

Dividends to July 1..................................$24,161 18

Dividends for two months, to September 1...... 900 00

Total.............................................$25,061 18

Net profits reserved.................................... 1,000 00

$26,061 18

Total to Devi Metz.....................$13,030 59

Interest on special fund............... 6,000 00

$19,030 59

Due Devi Metz on Sept. 1st, 1888, the capital.. $25,000 00 Special fund, $20,000; dep’t on book, $13,317.81 33,317 81

One-half net profits for two months............... 450 00

One-half reserve fund................................. 500 00

$59,267 81

Thus it will be seen that Mr. Metz, for the five years of the existence of the firm, received $13,980.59 as profits on his $25,000 capital, something more than eleven per cent, interest per annum thereon. Discussion then arose as to continuing the business. Metz expressed his readiness to do so, if Iredell would contribute one-half of the capital stock, $12,500. This Iredell explained he was unable to do. It was then agreed to proceed to wind up the business. On the 8th day of March, 1889, the liabilities and resources of the firm bank was stated by Iredell as follows:

ASSETS.

Cash..................................... ; 2,495 33

Doans................................... 105,834 68

Overdrafts............................. 41,872 42

Bills of exchange.................... 1,918 36

Property account..................... 4,359 99

Rent account......................................... 989 83

Bond account.......................................... 15,150.75

Account of expenditures........................... 1,594 22

Bank of Hanover.................................... 453 09

Peoples’ Bank of Greenville....................... 1,435 23

Peoples’ Roan and Exchange Bank............... 651 52

First National Bank of Charleston............... 533 06

Commercial Bank, Cincinnati..................... 68 97

1177,356 95

EIABIEITIES.

Capital.................................................. $25,000 00

Special deposit....................................... 20,000 00

Deposits................................................ 96,497 35

Profits’ account....................................... 3,142 71

National Bank of the Republic................... 3,922 51

Carolina Savings Bank.............................. 14,907 72

Commercial Bank, Augusta, Ga.................. 567 91

Georgia Railroad and Banking Company...... 2,633 47

State Bank of Virginia.............................. 660 53

National Bank of Newberry....................... <8 99

Latham, Alexander & Co.......................... 3,397 56

Greenville Savings Bank........................... 418 20

Bills payable.......................................... 4,750 00

$177,356 95

Now think of this statement, and what it involves. Here is a private banking firm with nearly $100,000 due depositors, and the sum of $2,495.35 in cash to pay such depositors. It is true, that the loans are reported at over $105,000, and there are overdrafts for over $41,000. See the balances due other banks, for probably $25,000. Mark the significant item, “Bills payable, $4,750.” And yet this firm of general private bankers are talking a few months before- — ■ placidly, we may imagine — of stopping business and winding up their affairs. Metz afterwards said, “We ought to have shut down and made the fur fly.” It is not difficult to imagine that he himself would have been compelled to lose more than many a night’s sleep if he had pursued such a course. This statement, especially that last item, ought to have burnt itself in his memory, and caused him, instead of drawing dividends, interest by the thousands of dollars, and complacently lending money by the thousands of dollars, to have devoted his every energy and every dollar to paying off these depositors, but he did not; it happened that the money of other people was employed to do this beneficent work for the banking firm. But Metz was not the only member of this banking firm. C. J. Iredell was there. He knew, well knew, the financial precipice that yawned in front of him, and that much of this trouble came from his weakness and inability to say “No” to those people, whp were pressing him for loans of money, that the commonest prudence ought to have told him he must refuse or be lost. His reputation as a financier was at stake. Far more than that. He had induced this trusting old man to furnish him with means with which to try his skill as banker. He knew this old man trusted him as he had never trusted mortal man before. All these considerations should have forced him to pursue a safer course than he did, and to seek to repair his errors of judgment, when once made, at an earlier day. As soon as he found Mr. Metz would not go any farther, he devised the scheme of a' new bank, whose head he would be. Such was his reputation as a banker, that he soon enlisted the co-operation of others than Mr. Metz, and formed the “Commercial Bank of Columbia, S. C.” He had himself elected president and a director, his son, James, a director and cashier, carrying with him into this new bank his other subordinate officials of the partnership. On the 8th day of March, 1889, he marked the partnership books “closed,” and ón the day of the 9th of March, 1889, he opened the chartered bank in the same building — same sign, same officials, same books and stationery, same vault. His old partner and friend, Levi Metz, was not a stockholder. His reply always, settle up the old firm before I can talk of subscribing to the new bank. It is true, that this was a master stroke by Mr. Ire-dell. Here he was at the head of a new bank, whose capital stock was $100,000, which stock was taken so rapidly, that when Mr. Metz concluded he would take $10,000 in' its stock, he was mortified to hear, ‘‘It is too late; all the stock is taken.” Mr. Iredell, as manager of the old partnership. bank, opened an account with the new bank in this wise: C. J. Iredell, manager. Having sold furniture, books, stationery, and vault to the new bank for $7,000, that sum was placed to his credit as manager; so was the cash on hand, so were some $19,000 of notes, some bonds, and a bond and mortgage for $3,000 — so that his account, as said manager, was credited with $43,000. The depositors of the old bank, and its other creditors, together with Mr. Metz, made such rapid demands for their money due by the old banking firm, that it was with difficulty he met their demands; and, in fact, in order to do so, he was compelled to overdraw his account as manager and as an individual. He had helped a Mr. Pickard by way of loans; to enable him keep his feet as a merchant, he had to advance more money. To make a long story short, he had finally to take Pickard’s stock. Hence he had an account in the new bank as agent. Then, too, he was a member of the Congaree Construction Company. His overdrafts, as manager, he covered by notes, reporting them to the finance committee of the board of directors. He represented to the board of directors that he had authority of the firm bank to make these notes, and that Mr. Metz knew of it, and that, the assets of the firm were abundant to secure these papers. At first these notes and overdrafts were not objected to by the board of directors, being assured by Mr. Iredell that they would soon be covered. However, in 1890, the board of directors began to manifest some concern. The overdrafts were so frequent of occurrence and so tardily reduced, and then, too, they went up into the thousands of dollars. Being the paper of a firm of which Mr. Metz was a partner, and on account of his reputed wealth, at first no concern was felt; but when all these matters reached over $40,000, the directors felt a stop must be put to it. Hence Mr. Ire-dell was notified to settle, and a time was fixed for such settlement. When that time was reached, there was no settlement. Accordingly, on the 12th day of February, 1891, Mr. Iredell was asked to resign. This he did. Mr. W. H. Lyles was elected president. Soon after this, a conference was held in the bank, at which were present Mr. Lyles, Mr. W. T. Martin, and Mr. Willis, of the board of directors of the new bank, Mr. Iredell and Mr. Metz. There it was Mr. Metz was told by the bank officials of the debts of the private firm of bankers, contracted with the new bank by Mr. Iredell as manager of the partnership bank. We need not repeat just here what transpired. Of course, there was crimination and recrimination between Metz and Ire-dell. This interview led to an investigation of the old firm transactions and assets. Thus was precipitated these two suits, whose history and whose issues are so clearly told in the decree of the Circuit Judge, and inasmuch as we feel that that decree should be reported, we will content ourselves with the statement, that the plaintiff was denied any judgment against Commercial Bank of Columbia, S. C., but, on the contrary, was decreed to pay that defendant a large sum, while the plaintiff in the second action obtained judgment against defendant. From this decree, the said Levi Metz has appealed upon thirty exceptions, which will be reported.

1 It now remains for us to dispose of these exceptions. So far as the 17th exception is concerned, it refers to certain exceptions taken by Levi Metz to the report of the master, without stating what matters were embodied in the same. It is very certain, under the rules adopted by this Court, as well as the decisions of said Court construing such rules, that we will not be expected to pass upon this exception in this form. It is, therefore, overruled.

2 The 1st, 3d, 4th, and 5th exceptions will be considered together. It will be remembered that on the 1st of September, 1888, the partnership owed over $100,000 to its various depositors, large sums to special depositors, large sums to other banks, and had but a little more than $2,000 in cash to pay these depositors. Although a new partnership was not entered into, yet both partners well knew their banking business could not then end. It was the understanding, then, between the partners that their joint business should be so shaped as to close as soon as could be. That both partners so understood, is abundantly established by the testimony submitted at the hearing. At that time no notice of any change in the business was given to the public or to any one of their customers. On the contrary, the doors of the banking firm were kept open for all business; their sign was still allowed to be exhibited; the cashier, teller, and book-keeper, as well as manager, were kept at their posts for months afterwards. It must not be overlooked, in this connection, that unless this was true, how could Mr. Metz expect Mr. Iredell to pay all the expenses of the officers, salaries, rents, &c. If this partnership closed on the 1st of September, 1888, as required by its articles, there was no more duty imposed upon Mr. Iredell in these matters than upon Mr. Metz. It is an implied recognition by each of the partners, that this partnership was continued, that each one of them acted towards each other, in their settlements and other dealings with each other, upon the basis of the articles of partnership between them, requiring Mr. Iredell to pay all these expenses. As we before remarked, the testimony abundantly establishes this conclusion. Hence these exceptions must be overruled.

We will consider the 2d, 6th, and 8th exceptions together. It is true, the manager, Mr. Iredell, did write on the books of the partnership its closing of business at the end of the 8th day of March, 1889, and on the next day opened said books on behalf of the new bank. Still the assets of the old partnership bank were retained at the old stand, and the books that were not transferred to the new bank were still kept there by the old partnership bank. It was to this building, as the centre of the operations of the partnership bank, that all of its customers, debtors and creditors, came. It was, in fact, simply the adoption of a new machinery, so to speak, in the conduct of the old business. The entities were kept separate and distinct one from the other. Yet the existence of the old bank was not destroyed. It required two minds to dissolve the old bank— not only that of Mr. C. J. Iredell, but that of Mr. Revi Metz — and we fail to find anywhere in the testimony that they ever thus concurred. The testimony shows that Mr. Metz still claimed that the vault and other property in the bank belonged to the old bank; it was difficult for him ever to see that when two men enter into a partnership, that the assets of said partnership are not the property of the partner who furnishes the capital. We apprehend that such is his difficulty to-day. The testimony of Mr. Iredell shows that he tried to point out this distinction to Mr. Metz, but he never accepted this view. To part with a part of the property owned by a partnership does not destroy it (the partnership). Indeed, to sell all the property will not do so, for more may be bought, or a change of some kind may be made. We have endeavored to give the testimony a patient and thorough consideration, and we must frankly say, as to these exceptions, we do not find the conclusions of the Circuit Judge here complained of either opposed to the manifest weight of the testimony or without any testimony to support it. These exceptions must be overruled.

3 The 9th and 11th exceptions will now be considered. Appellant admits that within the scope of a general private banking business up to 1st September, 1888, Mr. C. J. Iredell, as manager, had the power to bind such partnership. But he contends that the partnership having ceased on the 8th of March, 1889, that power to bind did nof exist in Mr. Iredell, as manager, unless expressly conferred upon him by Mr. Metz. Respondents contend that not only did the partnership continue after 1st September, 1888, and after 8th March, 1889, but also that Mr. Metz himself conferred the power after these dates. We have already called attention to the presence of “bills payable, $4,750,” among the liabilities of the partnership bank set out in plaintiff’s complaint in paragraph 7, as having been rendered by Mr. Iredell, as manager, to Mr. Metz, on the 8th day of March, 1889. It cannot be learned through the testimony taken at the hearing that there was the least intimation of a disapproval of such conduct of Mr. Iredell, as manager, by Mr. Metz at that time. These notes of Mr. Iredell, as manager, to the new bank pledging collateral thereto, and also the guarantee of Mr. Iredell, as manager, of the securities of the partnership bank, transferred for value to the new bank, was, in legal effect, nothing more as a legal liability than a bill payable; it required the payment of a definite sum at a definite time, or it guaranteed its payment according to its terms. But we have already held that the partnership- was not dissolved on the 8th March, 1889. If this exercise of power was bona fide, without fraud or collusion, on the part of Mr. Iredell, as manager, it would be a valid obligation of this partnership. We are not averse to the utmost candor in this connection. When we examined this testimony, it was with a fixed purpose that if the investigation of that testimony led us to the conclusion that the use of this power by Mr. Iredell, as manager, was other than for the purpose of raising money' to pay off the partnership liabilities, we would reverse the Circuit decree. We felt for Mr. Metz; his age, his faith, his absolute surrender of himself to his partner, the concealment of material facts from him by this partner, the cruel deception practiced upon him, touched us; but when we arose from the study of the magnificent cross-examination of the witness, C. J. Iredell, conducted by Mr. Abney, covering 200 printed pages, coupled with other testimony in this case, our doubts were removed. Let these exceptions be overruled.

Next we will consider the ,12th and 13th exceptions. So far as this money, about $5,700, is concerned, we are at a loss to see any ground for a contention over it. Mr. Metz himself received every dollar of this money from the defendant bank; he applied every dollar to his own use, to wit: made loans secured by mortgage of real estate; he still retains this money. These exceptions are overruled.

As to the 14th exception, relating as it does to the claim presented under a call for creditors against the partnership bank, we fail to find anything in the testimony that mitigates against the conclusion reached by the Circuit Judge. This exception is overruled.

4 The 15th exception is closely allied to the 14th, just disposed of. The testimony abundantly establishes the fact that when any choses in action belonging to the partnership bank were assigned to the new bank, it was for full value. When the manager of the partnership assigned certain choses in action to secure the new bank against his overdrafts as manager, why, of course, the latter being collateral, are only the property of the new bank to the extent they may be required to pay the debts for which they are assigned. It seems to us that Mr. Metz has been really beneficially served by this new bank. All their troubles came through him, or rather through his insolvent partnership. This new bank has served this partnership in season and out of season. This new bank was not in existence when his losses were actually made. The fact that their president, who was first given power through Mr. Metz, came near being their ruin, is no small matter to them. It has virtually closed the business of the new bank, and but for the prudence of their presidents — Mr. Tyles and Mr. Childs — and the manly conduct of the directors, the depositors of the new bank might have closed its doors. This exception is overruled.

As to the 16th exception, we fail to see that Mr. Iredell is indebted to Mr. Metz in the sum here claimed. We think full justice has been done Mr. Metz in the judgment accorded him against C. J. Iredell.

We will consider the 18th and 19th exceptions. When the decree of the Circuit Judge here assailed is considered carefully, it will be readily seen that the Circuit Judge is endeavoring to point out that, as to creditors, the partnership could not be dissolved by its members so as to destroy their right to pursue such partnership, and cause the assets to be available to the payment of their respective demands. It could not be claimed that such partnership had wound up its affairs so long as the claims of its creditors were unsettled. But, in addition to these matters, the Circuit Judge largely relied upon the testimony in the case clearly pointing to a different determination by the partners to this private banking copartnership. We are not disposed, under these views, to disturb these conclusions of the Circuit Judge.

As to the 20th exception, we think the appellant fails to grasp what the Circuit Judge did hold as to the liability of the new bank to answer fully in this action for all collaterals held by it derived from the partnership bank. Certainly they were required to account for these collaterals. The respondent claims that it has fully accounted therefor, and it seems the Circuit Judge concurred in such view. The testimony is wanting to deny validit}'' to such finding of fact. The proofs might have been more complete on this point. This exception is overruled.

5 Now as to the 21st, 25th, and 26th exceptions. We confess, at the outset, that we fail to see the pertinency of the assault made by the appellant, in these actions, upon the new bank, as to its corporate existence, arising, as he contends, from the failure to have on hand twenty per cent, of the capital stock when the charter was issued to it by the Secretary of State. It is a fact that the new bank has the State’s warrant — a charter — to do business as a bank. It is a fact that the representation was made by Mr. James Iredell, who had been appointed the agent of the corporators of the new bank to receive the twenty per cent, of the stock subscribed for' by the corporators. This Mr. Iredell held in the Carolina National Bank and the Central National Bank $5,000 for that purpose, and he: held as deposited in the partnership the $10,000 subscribed by George W. Williams and the $6,000 subscribed by Mr. J. K. Davis. These sums were in excess of the twenty per cent. But appellant contends that it was not there to the credit of Mr. James Iredell, as agent for the corporators. It was put there for that purpose by both Mr. Williams and Mr. Davis, and, as a fact, it was so used by the new bank as part of its capital stock. Under all these circumstances, the Circuit Judge took an opposite view to that urged by the appellant. We agree with the Circuit Judge. Uet the exceptions be overruled.

As to the 22d and 23d exceptions, we may remark, that we have already agreed to the finding of fact, that Mr. Ire-dell, as manager, had authority from Mr. Metz, his partner, to create the obligation he did with the new bank, in furtherance of their joint duty to pay the money they owed other people who were creditors of the partnership bank. Uet these exceptions be overruled.

So far as the 24th exception is concerned, it may be said that Mr. Metz, in view of heavy liabilities that he was under to other people, and which liabilities were fully disclosed to him, seemed remarkably inactive. Even after the 1st of September, 1888, he did not seek to acquaint himself with the character of the assets of the partnership bank to pay such large debts. He certainly knew in March, 1889, of $4,500 of bills payable being issued by his partner. If cash was not on hand when demand was made by depositors, it had to be raised. There is a conflict in the testimony as to his knowledge of these overdrafts. Such a conflict of testimony has been solved against him, and as there is testimony to support such finding, under our well established rule, we will not interfere. This exception is overruled.

The next exception is the 27th. We find no evidence to sustain the view that the new bank was careless or grossly negligent except in Mr. Metz’s favor. The finance committee should have been more persistent against the use by Mr. Iredell, as manager, of so much of. their money to pay Mr. Metz’s debts. It is a great pity that they did not put the duty upon Mr. Metz to pay his own debts due to his own depositors, instead of allowing so much of their money to be so applied. This exception is overruled.

The 28th exception is virtually disposed of by the views we have already announced, but we will say that the testimony does- not impress us, that Mr. Iredell, as manager, used the funds he derived from the new bank in any other way, to much extent, than in relieving the pressing demands made upon the partnership. How could this large deposit account of the partnership have been reduced to a few thousand dollars, except by the use of' the new bank’s money? It is admitted that Mr. Metz never added a dollar to the assets of the old firm after 8th Morch, 1889. On the contrary, he drew thousands of dollars therefrom for his own private use. Mr. Iredell was admittedly unable to help in this way to much of an extent. So practical common sense answers us, under the testimony, that these depositors and other creditors of the old bank were paid by the money of the new bank. Bet this exception be overruled.

The 29th exception refers to the absence, of any necessity, in view of the assets of the old bank and the private means of Mr. Metz, to borrow any money to pay the debts of the old banking partnership. There is no testimony as to the extent of Mr. Metz’s means. There is abundant testimony as to the insolvency of the partnership bank in September, 1888. Bet this exception be overruled.

The 30th exception. We do not doubt that Mr. Iredell, as manager, kept Mr. Metz as his partner profoundly ignorant of his wretched management of the partnership bank. All this occurred before the new bank was organized. The testimony is in the record as to the necessity of borrowing money being known by Mr. Metz. We are impressed, however, with the idea that this necessity of borrowing money was understood by Mr. Metz to be only a temporary expedient, to be used until the funds of the partnership bank could be collected, and replace such loans. It was a sad day to both partners, when it was realized at last that the assets of the old bank were well nigh worthless for this purpose. To think that the want of firmness and candor on the part of Mr. Iredell as manager should have culminated in such disasters. There is testimony submitted which sustains the finding here complained of, and, therefore, it is overruled.

It remains now for us to dispose of the 7th and 10th exceptions. The 7th exception seems to complain that his Honor, the Circuit Judge, used incorrectly the words of “partnership at will of the old banking firm after 1st September, 1888.” Our view is, that if the partnership continued after that date, it matters little what name you apply to such a condition, and hence we decline to pursue that' inquiry as an abstraction.

As to the 10th exception, we may say, that while there does seem to have been some notice to depositors of the formation of the new bank, and that the old bank was attempting to close its business, yet we fail to see how this circumstance would operate to produce any effect of payment of depositors and other creditors of the old partnership bank. Until these debts were paid, this firm was an entity, and the entity that had to provide for their payment. We conceive that our previous remarks will cover this ground of appeal also.

We greatly regret that our time is too limited to enter as fully as we would like to do into the discussion of all these exceptions. We have thought much over this case, and our conclusions are the result of that reflection.

It is the judgment of this Court, that the judgment of the Circuit Court be affirmed in each of the two cases, which were heard together.

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Concurrence Opinion

Mr. Chief Justice McIver,

concurring. I concur in the conclusions reached by Mr. Justice Pope in both of these cases. It seems to me, that the points raised by the appeal turn mainly, if not entirely, upon questions of fact, and under the well settled rule, the conclusions of fact reached by the Circuit Judge should not be disturbed by this Court, unless such conclusions are either without any testimony to support them or are manifestly against the weight of the testimony. After a careful examination of the voluminous record, I cannot say that the conclusions reached by the Circuit Judge are open to either of these objections; but, on the contrary, it seems to me that there is much in the testimony to sustain the views adopted by the Circuit Judge. I do not deem it necessary to add anything more to what is said by Mr. Justice Pope.

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Dissenting Opinion

Mr. Justice Gary,

dissenting. ■ On the 16th day of July, 1883, Bevi Metz and C. J. Iredell entered into articles of partnership to do a banking business in Columbia, S. C., under the firm name of “The Commercial Bank,” to continue for five years from the 1st day of September, 1883. Metz was to put in $25,000, and Iredell guaranteed him from any loss in excess of this capital. Iredell was to devote his time to the business, and was to have the full management thereof. This partnership bank was opened for business on the 4th day of September, 1883. Previous to that time Metz had been a farmer and surveyor in Bexington County, S. C., and by his industry and thrift had accumulated a considerable fortune. Iredell for several years prior to said year had been, and at the time of the formation of the partnership was, the cashier of the Carolina National Bank of Columbia, S. C., and enjoyed the reputation of being a man of honesty, integrity, and business capacity. Metz was frequently in the bank, but left the entire business to Iredell, who managed it exclusively — signed the papers of the bank “C. J. Iredell, Manager.” The result of the first five years operation was complete insolvency, although Metz had every reason to believe, and did believe, that the business was prosperous. The partnership did a general banking business, loaned money, discounted notes, received deposits, sold exchange, and dealt in bonds and other securities. During said period the only knowledge Metz had of the conduct and management of said business was that furnished him by the monthly statements made out by said Iredell, commencing on the 4th day of May, 1884. Whenever the plaintiff made inquiry as to the condition of the partnership affairs, he was always assured by Iredell that the loans and discounts were well secured, and that the bank was in a prosperous condition. Dividends were declared at or near the end of the first and second years, and afterwards semiannually, beginning from the 1st of January, 1886, and were paid or credited to the partners. The total amount received by each up to the 1st day of September, 1888, was about $13,000. On the 1st day of September, 1885, the plaintiff deposited in said partnership bank $20,000, and received therefor a certificate bearing interest at the rate of ten per cent, per annum, which interest was paid up to the 1st September, 1888. At the end of five years the defendant, Iredell, upon request of the plaintiff, made a statement in writing of the profits of the whole period, from which it appears that they exceeded $26,000. Iredell well knew this statement to be false. Several bad loans had been made, which aided in causing utter r m condition of insolvency was m. community, and was only km ■ day of September, 1888, the . : ; was limited to terminate unci' a continuance of the partners! tiff was willing to continue the- 1 dell would contribute $12,500 stock. Iredell declined t<> ‘-, the money! The plaintifí ¡' partnership must be wound 1 , ■ Iredell went to work to ¡ he accomplished, and a clu-D •vency at that time. This spected by any one in the by Iredell. On the 1st on which said partnership id articles of partnership, as considered. The plainsiness, provided C. J. Irens one-half of the capital ecause he did not have >ld him the affairs of the peedilyas practicable, a chartered bank. This ■; obtained for “Comrnercial Bank of Columbia, S. C.” The chartered bank went into operation on or about the 9th day of March, 1889, and the books of the partnership bank were marked “closed” on that day. The only difference in the name of the old and new banks was, that the new bank omitted the word “The” before the “Commercial.” The new bank started its business with the same officers, same sign, place of business, pass book, checks, vault, and stationery as the old bank, and with its good will and customers. When the partnership bank closed, Iredell opened an account in the defendant bank under his name, as C. J. Iredell, manager. All money, assets and property of the partnership transferred to the new bank before the 12th day of February, 1891, were credited as cash on said account, subject to his check as manager, and were drawn out on the check of C. J. Iredell, manager. He deposited to the credit of said account all collections of notes, overdrafts, &c., of the partnership bank. Through the operations of this account, after the 8th day of March, 1889, up to the 12th of February, 1891, when he resigned, Iredell created large overdrafts in the defendant bank, which he closed up by notes nuder his name as C. J. Iredell, manager. All the claims of the defendant bank save two (those of Green and Ford, which were assigned to said bank,) against the partnership bank, grew out of the operations of said manager account, and were created by said Iredell after the 8th day of March, 1889. The new bank when it commenced business purchased sundry notes of the partnership, under the guarantee of said C. J. Iredell, manager, and purchased also the vault, furniture, books, &c., at an agreed price, also balances then due by other banks. For the aggregate of these rediscounts and purchases, Iredell took credit on the books of the defendant bank, of date 9th March, 1889, in the name of C. J. Iredell, manager, for $43,294.29, which in a few days thereafter was checked out and applied to the partnership indebtedness. On the 12th of February, 1891, the defendant, Iredell, conveyed and transferred to the new bank certain property which will be hereinafter more fully mentioned. The foregoing statement is intended merely as an outline of the facts connected with this very voluminous case, which contains 908 pages of printed matter, besides the elaborate and able arguments of the respective attorneys.

When we come to a consideration of the exceptions, we will then refer more specifically to the facts of the case, that touch upon the questions raised by the exceptions. A reference to the decree of his Honor, Judge Aldrich, will show the different steps which have been taken during the progress of this case. The appellant’s exceptions are thirty in number, and very lengthy. We will not consider them seriatim, but will endeavor to state our views upon all questions properly arising under them. The first question raised by the exceptions which we will consider is: Was the partnership bank dissolved in March, 1889? The Circuit Judge and master both have found that the partnership was not dissolved at that time. In reaching the conclusion at which we have arrived, we are not to be understood as intending in an}' manner to contravene the well established rule of this Court, that findings of fact by the master, in which the Circuit Judge has concurred, will not be reversed unless they are not supported by any testimony or are against the manifest weight of the evidence. We feel less hesitation in concluding that this finding by the master, in which the Circuit Judge has concurred, should be reversed, because we have reached our conclusions by drawing, in our opinion, the reasonable and correct inference from those facts which in the main are not disputed: 1. After the 1st of September, 1888 (the time when the partnership was to be discontinued, as set forth in the articles of partnership), there was no agreement that the partnership should continue its banking operations for a definite period of time. 2. Metz was not willing to renew the partnership unless Iredell would contribute $12,500 as his one-half of the capital stock, which Iredell could not do for the lack of means. 3. Iredell knew that the affairs of the old bank would have to be settled up shortly after the time fixed for its limitation by the articles of partnership, and, therefore, set about getting a charter for a new bank. 4. The nature of the property sold to the new bank when it commenced business, to wit: vault, &c., was such that without it the old bank could not carry out the purposes of its organization. 5. Neither could the partnership bank accomplish the purposes for which it was organized, when the new bank assumed substantially the name of the old bank, started business with the same officers, same sign, same place of business, same furniture, &c., and with the good will and customers of the old bank. 6. Ire-dell made collections of the partnership assets through the new bank, and kept an account with the new bank touching the partnership affairs under the name of C. J. Iredell, manager; thus showing that the old bank was doing no active banking business whatever at that time. We are satisfied that the manifest weight of the testimony is against the finding of the master, concurred in by the Circuit Judge. The respondent, however, contends that a partnership formed for the purpose of dealing in money — as a banking partnership — the money so dealt in is not an incident to the business, but is the business itself. That notes given or debts due for bank furniture are incidental, deposits are the very business of the company; therefore, the partnership Was not dissolved until the deposits were paid, and- that for the purpose of paying off the deposits, Iredell had the right to act for the partnership as fully as when the partnership was in active business, under the articles of partnership. By reference to the articles of partnership it will be seen that it was organized “for the conduct of a general private banking business.” It loaned money, discounted notes, received deposits, sold exchange, and dealt in bonds and other securities. It was clearly the understanding of all parties concerned that the old bank was not to receive deposits after March, 1889. We can not accept the view of respondent’s attorneys, that deposits were the very business of the company. The receiving of deposits and making, payments thereof, was only an incident of the “general private banking business” for which the partnership was formed, but by no means the sole purpose of its organization. The amount due the depositor was on the same footing with any other .debt against the partnership. There was nothing in the fact that depositors had claims against the old bank, that would cause a continuation of its existence, in the face of such facts as otherwise would have worked a dissolution. The respondent contends that even if the Circuit Judge was wrong on the points so far discussed, still his decree must stand, unless he was also wrong in his finding of fact, that Metz authorized Iredell to borrow for the firm after March, 1889, and thereby made Metz liable for loans so made. It Is not contended that there was any direct authority for .such purpose; and, in our opinion, the manifest weight of the testimony is to the contrary. The circumstances show that Metz had no idea that the partnership was insolvent, and that there was a necessity to borrow money to wind up its affairs.

We will next consider the effect of the purchase by the defendant, in March, 1889, of the vault, furniture, sundry notes, &c., aggregating $43,294.29. It appears that this was a fair price for the property, and that every dollar of said amount was paid towards the extinguishment of the partnership indebtedness. Under these circumstances, even conceding that Iredell had no right to'sell such property, nevertheless the defendant bank became subrogated to the right of the partnership creditors, and have a right to set up this equity against the plaintiff’s claim. Bailey v. Bailey, 41 S. C., 337; Givins v. Carroll, 40 S. C., 413. The plaintiff’s demand growing out of the sale of said property cannot, therefore, be sustained.

We will now consider the effect of the assignment by Iredell of the property mentioned in “A,” on the 12th day of February, 1891, to wit: “Assets of partnership bank traced to defendant bank, held by bank as collateral. 1. Notes, as per Martin list, $7,603.62. 2. Gibson bond and mortgage $5,000. 3. "Twelve notes and liens to Gibson. 4. $10,000 of stock of the Columbia Oil and Fertilizer Co. 5. $900 stock of the Ninety-Six Oil Mill Co. 6. Package of forty-nine notes. 7. Lot of jewelry. 8. $5,000 stock in Congaree Construction Co. 9. Stock in the Piedmont L- I. & I. Co. 10. Real estate: Epstin farm,-Smith house, Peavy place, Harmon land, O’Hanlan. tract. (This excludes- the assets of the old bank transferred to the new bank 9th March, 1889).” The property aforesaid was conveyed and transferred to the defendant bank by Iredell to secure the payment of new obligations entered into by Iredell after the dissolution of the partnership, except the Green and Ford certificates which had been assigned to the defendant bank, and upon which-the Circuit Judge found there was due on the 1st of September, 1894, the respective sums of $1,350 and $124.50.- Iredell had no right to contract new obligations after the dissolution of the partnership, and the transfer, -therefore, of property belonging to the partnership, to secure payment of obligations for which the partnership was not liable, was null and void. The defendant bank, however, is not accountable for said property or its value in case it has been disposed of, for the following reasons: When the defendant bank made the loans to Iredell it supposed, and there were good grounds for it to suppose, that the assets of the partnership were pledged to secure the payment of said loans; the evidence shows that said loans were used by Iredell in satisfying the partnership indebtedness to a greater amount than the value of the property transferred as aforesaid. It would, therefore, be inequitable, under the circumstances, to require the defendant bank to account either for the property or its value, except as hereinafter mentioned as to the Green and Ford certificates.

We will next consider so much of the decree as renders judgment against Metz and Iredell, as partners, in favor of the new bank. The- Circuit Judge finds that Levi Metz and C. J. Iredell, as partners, are indebted to the bank in the sum of $54,920.64, as per statement set out in his decree. All the items therein set forth, except the Green and Ford certificates, are new obligations of Iredell, entered into after the dissolution of the old bank. The old bank is not liable for any of said items, except the Green and Ford certificates, and his finding should be modified so as to include only these two demands, which should be paid out of the property-assigned by Iredell for the purpose of paying them.

The appellant contends that it was error on the part of his Honor, the presiding Judge, to allow the claim of A. C. Alexander. The master, in his report, says: “The facts as to this claim are substantially these: A. C. Alexander had deposited with the defendant, Iredell, and obtained certificates of deposit two or three times in 1887 and 1888; these were subsequently paid. Afterwards, on the 17th of May, 1889, he went again and handed to the defendant, Iredell, a check for $500 and $150 in cash, and received from him a certificate, No. 118, in the usual form, signed ‘C. J. Iredell, manager of the Commercial Bank of Columbia.’ Subsequently on the 22d of July, 1890, he went back-, and to the face of the certificate and interest to that date he added $61.65 in money, and obtained the certificate No. 180 for $750,'■jin evidence as ‘G.’ * * * He did not recollect when the new bank began operation, and supposed that the old bank was in operation on the 17th»of May, 1889, and that he was dealing with it as before. When he obtained the last certificate he asked no questions, and seems to have had no definite idea as to what bank he was dealing with,” &c. The evidence shows that the transaction took place with the president of the new bank after the dissolution of the old bank. Under these circumstances, the defendant bank is liable to Alexander. If for any reason Alexander should not be able to collect his demand from the new bank, then the partnership bank would be compelled to make payment to him, as he did not have notice of the dissolution, although he had been a customer of the old bank.

The appellant complains of error on the part of the Circuit Judge in not holding that the corporators of the bank bad falsely certified to the Secretary of State, in March, 1889, that twenty per cent, of the capital stock had been paid in. While we might decline to consider the exception raising the question, on the ground that it only raised an abstract question, we may say that we agree with the Circuit Judge in the view which he has expressed in his decree.

The Circuit Judge has found that C. J. Iredell is indebted to Levi Metz in the sum of $48,112.75; the views herein-before expressed necessitate a restatement of the account between said partners.

There were two causes of action heard together by the master and Circuit Judge, and we will proceed to a consideration of the question raised by the exceptions under the second cause of action, being that of the Commercial Bank of Columbia, S. C., against Levi Metz. The facts are. as follows: In January, 1891, Metz, having no deposit in the defendant bank, drew three checks on this bank aggregating $5,700, which were paid and charged to him, creating an overdraft of $5,700. The overdraft was wiped out on the books of the bank by Iredell’s check for $2,600, on his overdrawn account, and by a deposit slip for $2,500, plus $600,. making $3,100, which Iredell made out in Metz’s name and put to Metz’s credit, and carried by the teller as “cash in hand,” until the 24th of January, when the whole $5,700— that is, the check of Iredell for $2,600 and the deposit slip for $3,100 — were changed back to Metz, who knew nothing of the credits on his account. Neither the check of Iredell nor the deposit slip ever yielded a cent to the bank. As the check was drawn on the new bank, and Metz received the money, or got the benefit thereof, we are satisfied, in view of all the facts and circumstances in the case, that the Circuit Judge was correct in rendering judgment against Metz for the amount stated in his decree.

For the foregoing reasons, we dissent from the judgment of the majority of the Court..