Sumter Trust Co. v. Moses , 116 S.C. 446 ( 1921 )

June 30, 1921. The opinion of the Court was delivered by Foreclosure proceedings, involving principally the rights and obligations of a purchaser at private sale of the mortgaged premises after three mortgages had been placed upon it. The property consists of a house and lot in the city of Columbia. In the complicated transactions preceding this litigation it first appears as the property of the defendants Perry Moses, Jr., and W.G. Moses, and of two other persons not parties to this action, W.T. Rowland and H. V. Wells.

Prior to June 16, 1913, the date not being stated in the appeal record, Perry Moses, Jr., W.G. Moses, W.T. Rowland, and H.V. Wells executed a bond and mortgage upon the house and lot in favor of A.M. Gibbes, for $4,500. The details of this transaction are not disclosed in the record, as the mortgagee A.M. Gibbes is not a party to this action, and all proceedings have been had subject to this mortgage.

On June 16, 1913, the same parties, Perry Moses, Jr., W.G. Moses, W.T. Rowland, and H.V. Wells executed a note and mortgage upon said premises in favor of O.E. Thomas and H.B. Thomas, for $800, payable two years thereafter, with interest from date at 6 per cent., payable semi-annually.

On July 18, 1913, Perry Moses, Jr., and the other parties named above conveyed said premises to the defendant L. S. Covin, subject to the two mortgages above mentioned, the Gibbes mortgage of $4,500 and the Thomas mortgage of $800, and received from L.S. Covin his note and mortgage upon said premises for $1,387.50, due three years after date, with interest from date at 6 per cent., payable semi-annually.

On October 20, 1913, L.S. Covin conveyed said premises to the defendant Lillie V. Padgett, the consideration being a cash payment of $2,000, her note and mortgage upon said premises for $748.44, and the assumption by her of the three mortgages above mentioned, the Gibbes mortgage of $4,500, the Thomas mortgage of $800, and the Covin mortgage of $1,387.50, which, together with the mortgage executed by her, $748.44, and the $2,000 cash payment, aggregated $9,435.94; the $748.44 mortgage was subsequently assigned by Covin to the defendant, W.W. Arthur.

On December 15, 1913, O.E. Thomas and H.B. Thomas assigned to one Clarence Richards the note and mortgage for $800 above referred to, which had been executed to him by Perry Moses, Jr., and the parties named. After the date of the mortgage from L.S. Covin to Perry Moses, Jr., and others for $1,387.50, and before the commencement of this action, two of the mortgagees, W.T. Rowland and H.V. Wells, assigned their interests in said mortgage, the same being one-fourth each, to the defendant, H.J. Harby, and thereupon the interest of the several parties therein were: H.J. Harby, one-half, Perry Moses, Jr., one-fourth, and W.G. Moses, one-fourth.

On April 12, 1915, this action was instituted by Clarence Richards, the assignee of the Thomas mortgage of $800, for the foreclosure of the same. The parties defendant were Perry Moses, Jr., W.G. Moses, H.J. Harby, L.S. Covin, and Lillie V. Padgett. During the pendency of the action the plaintiff Clarence Richards assigned the note and mortgage upon which suit was brought to Sumter Trust Company, which was substituted as plaintiff for Clarence Richards. In said action A.M. Gibbes, the holder of the first mortgage for $4,500, was not made a party defendant, and it was not sought to secure a foreclosure of his mortgage in this proceeding. The several interests of the parties may be summarized thus:

(1) The plaintiff Sumter Trust Company: The assignee of the $800 mortgage given by Perry Moses, Jr., W. G. Moses, W.T. Rowland, and H.V. Wells to O.E. Thomas and H.B. Thomas, assigned to Clarence Richards, and by him to Sumter Trust Company; the second mortgage in point of priority.

(2) The defendants Perry Moses, Jr., W.G. Moses, and H.J. Harby: Perry Moses, Jr., and W.G. Moses, two of the mortgagees in the mortgage for $1,387.50 given by L.S. Covin to Perry Moses, Jr., W.G. Moses, W.T. Rowland, and H.V. Wells, each owning one-fourth interest; H. J. Harby, the assignee of the interest of W.T. Rowland and H.V. Wells, one-fourth interest each, giving him one-half interest in said mortgage; the third mortgage in point of priority.

(3) The defendant W.W. Arthur: The assignee of the $748.44 executed by Lillie V. Padgett to L.S. Covin; the fourth mortgage in point of priority.

(4) Lillie V. Padgett: The owner to the fee-simple title to the lot, incumbered by the Gibbes mortgage of $4,500, the Thomas mortgage of $800, the Covin mortgage of $1,387.50, and her own mortgage of $748.44, all of which she is alleged to have assumed.

The complaint alleged the execution and maturity of the $800 Thomas mortgage, and prayed for judgment against all of the defendants except Covin for the amount of the note and for foreclosure of the mortgage.

The defendants Perry Moses, Jr., W.G. Moses, and H. J. Harby in their answer alleged the execution and maturity of the $1,387.50 Covin mortgage and the assignment to Harby of the interests of Rowland and Wells; they prayed for judgment against Covin and Lillie V. Padgett (the liability of the latter being based upon her alleged assumption of all mortgages upon the lot) for the amount of the note and for foreclosure of their mortgage.

The defendant Lillie V. Padgett in her answer alleged that, some time in 1913, Walter A. Keenan and Edward T. Cato, doing business as the Keenan Real Estate Agency, approached her, and induced her to sell a tract of farm in Richland County at $40 per acre, in order to allow them to reinvest the proceeds of sale for her in city property; that she, relying on them as her agents, was induced to sell said farm lands, and to give said Keenan and Cato, as her agents, $2,000, the cash proceeds of said sale, to reinvest for her, and they reinvested it in purchasing the city lot mentioned in the complaint from Covin; that she did not know at the time of such investment that Keenan and Cato represented Covin as agent in selling to her said city lot, but afterwards ascertained such fact; that she was inexperienced in business matters, and did not know that she assumed or became bound to pay said mortgage indebtedness or anything more than the cash payment of $2,000, and was misled into making the purchase by the fraudulent misrepresentations of said agents in regard to said lot, and tendered a reconveyance of the lot to Covin; and denied other material allegations of the complaint.

The defendant L.S. Covin in his answer alleged that on the 20th day of August, 1913, he, through W.A. Keenan and E.T. Cato, who did business under the firm name of Keenan Real Estate Agency, as his agents to sell, sold the lot in question to the defendant Lillie V. Padgett, who paid him $2,000 cash, and gave him a fourth mortgage thereon for $748.44, and assumed the obligation to pay all the other and prior mortgage indebtedness on said lot, and that he transferred said fourth mortgage to W.W. Arthur, and has no further interest in the matter; he denies that any misrepresentations were made to Lillie V. Padgett by Keenan and Cato which induced the sale, or that he was responsible for the same.

The defendant W.W. Arthur in his answer alleged the execution and maturity of the Covin mortgage of $784.44, its assignment to him, and prayed for judgment upon the note against both Covin and Mrs. Padgett, and for foreclosure of his mortgage.

The issues arising upon the answers of Lillie V. Padgett and L.S. Covin represent the main contest in this case. The Court is entirely satisfied with the correctness of the Circuit Judge's finding of fact and his conclusions of law. His decree will be reported.

The judgment of this Court is that the judgment of the Circuit Court be affirmed, and that this case be remanded to said Court for the purpose of such administrative changes in the decree as have been made necessary by the delay in this appeal.