Bank of Charleston National Banking Ass'n v. Zorn

The opinion of the court was delivered by Simpson, C. J. Did the Circuit judge err in not ruling out the first defence stated in the answer, is the first question for our consideration. In Cohrs v. Fraser, 5 S. C. 351, where a similar question arose, the court said: “A motion to strike out a part of defendant’s answer as inconsistent, contradictory, or for any other cause, should be made after notice in a reasonable time from the filing of the answer.” This was regarded necessary to prevent surprise, and perhaps a continuance of the cause. This course was not pursued here, and the judge, therefore, might have declined to hear the motion, but it was heard, and it seems without objection by the defendant, respondent. The question involved is, consequently, properly before us. The complainant claimed that plaintiff, appellant, was the legal owner and holder of a note on defendant, respondent, made payable to the order of Wrofcon & Dowling, no part of which had been paid. The first defence set up in the answer was, in substance, payment. It is true that the circumstances and transactions out of which it is claimed by defendant, respondent, that payment had been made, are stated with unnecessary circumlocution and detail, but, when analyzed, the point of this defence seems to be payment without notice of any transfer to the plaintiff. This was no new contract, changing and altering the original by verbal testimony, but it was a substantial and material defence which the defendant, respondent, had the right to set up, and which the Circuit judge properly refused to strike out. It is objected, second, that an account current between the respondent and Wroton & Dowling was allowed to be made use of by the defendant, respondent, as a witness, to refresh his memory as to the amount of money in the hands of Wroton & Dowling, at a certain date, sufficient to have discharged the note in question and this is made the second ground of appeal. The rule upon this subject, in its broadest outline, embraces two classes of cases': first, where the witness, after referring to the paper, speaks from his own memory, and depends upon his [451] own recollection as to the facts testified to; second, where he relies upon the paper and testifies only because he finds the facts contained therein. In the first class the paper is always permitted to be used by the witness without regard to when or by whom made. In the second class this rule of admission is much more stringent. In fact, it cannot be used unless it be an original paper made by the witness himself, and contemporaneously with the transaction referred to. Admitted under any other circumstances, it would be obnoxious to the doctrine of hearsay and other important principles regulating the admission of evidence, and would render the administration of justice uncertain and doubtful. The principles above laid down will be found sustained in 1 Greenl., § 436; State v. Rawls, 2 N. & McC. 331; Cleverly v. McCullough, 2 Hill 446 ; and O’Neale v. Walton, 1 Rich. 234. In this case the account current was offered as evidence, but, upon objection, was ruled out. The wfitness was afterwards permitted to examine it, and upon this examination he was prepared to speak from recollections, and did so speak, as it appears from the record — at least so we understand from the brief agreed upon by the counsel. Whether he was entitled to credit, testifying under such circumstances, or could speak from memory after examining the paper, was for the jury, and is not a matter before us. The question here is, was it legally competent for him thus to testify? We think this case falls within the first class above referred to, and that there was no error on the part of the Circuit judge in ruling the testimony competent. We see nothing objectionable in the charge of the judge on the third exception. It is true he did not define to the jury in general terms what, as a matter of law, was the meaning of the term laches. He, however, states “ that if the jury believed the plaintiff did not demand payment of the note at the office of Wroton & Dowling [the place of payment] before their failure, and that plaintiff would have received the money if the note had been presented, and by their failure to do so the defendant lost his money, they should find for defendant,” on account of laches. In this he kept the question of law and the facts separate and [452] distinct, and the facts only seem to have been submitted to the jury. The fourth exception raises the question that the respondent was bound to take up his note when he settled with Wroton & Dowling, and that it was error on the part of the judge not to so charge when requested. ■ The note was due on the 1st of October, 1876, and payable at the office of Wroton & Dowling, in Charleston. The respondents lived in Barnwell county, and the final settlement was made between the parties on the 18th of January, 1877, whether in Charleston or Barnwell does not appear. The theory of the defence is that funds had been left in the hands of Wroton & Dowling to pay this note as far back as October of the preceding year. It seems that it was known by respondent that his note might be deposited with some bank and that the bank was entitled to these funds in the hands of Wroton & Dowling. All, therefore, that the respondent was concerned about in the settlement was that he should get credit for this amount which he had left at the place of payment. This he received in the settlement, and we do not see that his failure to demand and take up the note was in violation of his legal duty; nor was it error in the presiding judge to decline to so charge; parties are presumed to 'know the law. This note on its face was payable at the office of Wroton & Dowling on October 1st, 1876, and when the respondent left there on that day the amount required to pay it, it was in effect discharged in the hands either of the payee or any other holder. If he had withdrawn the funds from Wroton & Dowling and paid the note on the day of settlement without taking it up, then he might have been responsible to any third party who may have held it, but this was not done. The settlement embraced the transactions of the year between the parties, and in the settlement, as we understand it, the respondent was allowed a credit for this note on October 1st preceding, when it fell due. The last exception alleges error in that the judge charged that the bank was bound to demand payment at the office of Wroton & Dowling, &e. The English commercial law, when [453] strictly applied and enforced, seems to require that demand shall be made at the place of payment, when specified in the note, either on the day of payment or at some future time, and without this, no default arises on the part of the maker for nonpayment. The American doctrine, however, is not so rigid; demand is not a precedent condition here, and suit may be brought against the maker under that doctrine without presentment or demand at the place mentioned, subject, however, to the right of the maker to prove by way of defence that on the day and at the place specified he had the necessary funds to make payment, and that if any loss has occurred it should be the loss of the holder of the note and not his; in other words, the burden of proof is shifted; instead of requiring the plaintiff to prove that he made demand, the maker, defendant, is required to prove that he deposited the money according to the terms of the note, and that it was lost to the plaintiff on account of his failure to demand it at the proper place. Wallace v. McConnell, 13 Peters 136; Story on Promissory Notes, §§. 227, 228, and note to page 287; Walcott v. Van Santvoord, 17 Johns. 248; Clarke v. Gordon, 3 Rich. 313. Now, if the matter complained' of in the last exception had stood alone in the judge’s charge, the exception would be well founded, as the charge in this respect is not in accordance with the above principles, but when the whole charge on this branch of the case is taken together, as appears in the brief, it is apparent that the judge properly qualified the doctrine as a whole when he instructed the jury “that if they believed the plaintiff was guilty of laches in not demanding payment of the note at the office of Wroton & Dowling before their failure, and that plaintiff would have received the money if the note had been presented, and by their failure to do so the defendant lost the money, they should find for the defendant.” This is, we think, in accordance with the American doctrine, and was a part of the judge’s charge, and properly qualified that which, when taken in detached portions, might be regarded as error. The judgment below is affirmed and the appeal dismissed. IVIcIvbr and McGowan, A. J.’s, concurred.