Davis v. Childers

| S.C. | Sep 17, 1895

The opinion of the Court was delivered by

Mr. Justice Gary.

This action was commenced in January, 1894, by the plaintiff against the defendants, to recover possession of a buggy, set of harness, and one horse, of the alleged values, respectively, of $60, $6, and $150; also to recover $5,000 damages for the alleged wrongful and malicious seizure of said property.

It is alleged in the complaint, that the defendant, S. D. Childers, procured and directed the defendant, J. B. Gaboon, to seize and take from the possession of the plaintiff said property, during the absence of the plaintiff from home, and in defiance of the direction and command of the plaintiff’s wife, who forbade such taking; it was further alleged, that the defendant, J. B. Gaboon, seized and carried away said property without any authority of law or right whatever, and delivered it to the defendant, S. D. Childers, or kept or disposed of said property under the direction of said Childers, and that the defendants • refused to deliver possession of said property to the plaintiff.

The defendants answered said complaint by separate answers, alleging that about the 6th day of January, 1890, the plaintiff, wishing to borrow the sum of $292 from John Tompkins, requested the defendant, S. D. Childers, to sign a note with him to said Tompkins for said amount, as surety for the plaintiff, and that said Childers agreed to sign said note as surety, if the plaintiff would execute and deliver to him a mortgage on said property, and other property not in dispute here, to indemnify and save him harmless on account of such suretyship; that the plaintiff agreed to execute to said Childers said mortgage, and that Childers, relying upon the said agreement of the plaintiff, signed said note as surety for him, that after Childers signed said note as surety for the plaintiff, he refused to execute and deliver to him the said mortgage, as he had agreed to do; that said plaintiff having failed to pay said note at maturity, the said Childers was compelled and did pay the same; that having requested the plaintiff to execute and deliver the said mortgage according to his agreement, and he having refused to do so, the said Childers, being advised that said agreement to mortgage constituted an equitable mortgage, with the right in said defendant to seize said property and sell the same for the purpose of indemnifying himself, caused said property to be seized and sold, and the proceeds applied to reimburse him and save him harmless, and that the same was done in a peaceable manner. And they allege, further, that the said agreement constituted an equitable mortgage, giving said Childers the right to seize said property and sell the 'same for the purpose of saving himself harmless, he having paid the note which he signed as surety, and that he caused said seizure to be made by his codefendant, J. B. Baboon, whom he appointed as agent for that purpose.

The cause came on for trial at the October (1894) term of the Court for Anderson Count}' before his Honor, Judge Watts, and a jury.

The note and mortgage which, it is alleged, the plaintiff agreed to sign, is set out in the case, upon which is this endorsement: “South Carolina, county of Anderson. I hereby appoint J. B. Baboon my agent to execute the within mortgage. November 13th, A. D. 1893. S. D. Childers.” In the “Case” the following statement appears: “On line 8, page 44, and on line 20, page 45, appears the name of A. A. Davis, as signed to the note and mortgage therein set forth; whereas it was never signed by Davis, he being unable to write, nor did he ever authorize any other person to sign his name or affix his mark to the said note and mortgage; but, on the contrary, when the same had been prepared and presented to him, he refused to sign the same. His name was written by the person who prepared the papers in the anticipation of his affixing his mark to it, but this he refused to do.”

The jury rendered the following verdict: “We find that the plaintiff is entitled to recover the possession of the property sued for, and in case delivery cannot be had, for the value thereof, $175, and for $235 damages.” The charge of the presiding Judge to the jury and the appellants’ exceptions will be set forth in the report of the case.

In considering the questions raised by the exceptions, we will follow the arrangement adopted by the appellants’ attorneys in their argument before this Court, to wit: “1st. Whether or not an agreement founded on valuable consideration to give a mortgage on a chattel constitutes an equitable mortgage? 2d. If such agreement does constitute an equitable mortgage, whether or not it must be reduced to writing in order to have that effect; or, in other words, whether or not verbal agreement founded on valuable consideration to give a mortgage on a chattel, constitutes an equitable mortgage? 3d. Assuming that such agreement does constitute an equitable mortgage, whether or not the equitable mortgagee, having taken possession of the property covered thereby after default in the payment of the obligation which the same was intended to secure, and having sold the same for the purpose of paying such obligation, can successfully plead such agreement in defense to an action brought against him for the possession of said property?”

1 2 The cases of Read v. Adm'r of Simons, 2 DeS. Eq., 552; Dow v. Ker et al,., Speers Eq., 413; Parker & Co. v. Jacobs, 14 S. C., 112, show that the first of said questions must be answered in the affirmative. The Am. & Eng. Enc. of Daw, vol. 3, page 179, under the head of “Chattel Mortgages,” and Cobbey on Chattel Mortgages, vol. 1, secs. 14 and 15, show that such mortgage may be created by parol, and that it is not necessary that the agreement to give such mortgage should be in writing.

3 4 We come next to a consideration of the exceptions raising the third question. Chattel mortgages are divided: 1st, into legal and eqtdtable mortgages; 2d, the equitable mortgages are divided into those containing words of alienation sufficient in form to pass the legal title to property; but where the property at the time of the execution of the mortgage is not in esse, and those where there are no words of alienation sufficient in form to pass the legal title to the property mortgaged. When the mortgage contains words of alienation as aforesaid, and the property mentioned therein is not in esse at the time the mortgage is executed, the mortgagee has the right to take the property into his possession when it comes into existence, but his right to seize the property is based upon the words of alienation contained in the mortgage.

5 When there are no such words of alienation, the mortgagee must seek the enforcement of his rights in a court of eq^dty. By observing this distinction is the only way in which the cases of Perkins v. Bank, 43 S. C., 39; Whilden & Co. v. Pearce, 27 S. C., 44, and Moore v. Bynum, 10 S. C., 452, can be harmonized with the case of Green v. Jacobs, 5 S. C., 280.

6 There was, in the case before us, only an equitable mortgage, without words of alienation; and his Honor, Judge Watts, was right in charging the jury that such a mortgage did not confer upon the mortgagee the right to seize and sell the property in dispute.

Although it was error on the part of the presiding Judge in charging the jury that it was necessary that the agreement should be in writing in order to create an equitable mortgage, such error was harmless, as, under the view which we take of the case, the defendants had no right to seize the property, even admitting that Childers had an equitable mortgage. The allegations of the answer do not constitute a defense to the plaintiff’s cause of action, not because there may not be merit in them, but because the defendants, by their wrongful act, have estopped themselves from interposing such defense in this proceeding.

It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.