Homestead Building & Loan Ass'n v. Parker

56 S.C. 12 | S.C. | 1899

Lead Opinion

The opinion of the Court was delivered by

Mr. Justice Gary.

1 The facts of this case are set forth in the order of his Honor, the Circuit Judge, dismissing the petition, which will be reported. The questions presented by the exceptions will be hereinafter stated. Section 3, article V., Constitution of 1868, which was not repealed by the Constitution of 1895, is as follows: “* * * That justice may be administered in a uniform .mode of pleading, without distinction between law and equity, they (the General Assembly) shall provide for abolishing the distinct forms of action, and for that purpose shall appoint some suitable person or persons whose duty it shall be to revise, simplify and abridge the rules, practice, pleadings and forms of the Courts, now in use in this State.” Section 161 of the Code is as follows: “There shall be mo other forms of pleading in civil actions in Courts of record in this State, and no other rules by which the sufficiency of the pleading’s is to- be determined, than those prescribed in this Code of Procedure.” Section 195 of the Code provides that “the Court * * * may in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, order or other proceeding taken against him, through his mistake, inadvertence, surprise or excusable neglect, and may supply an omission in any proceeding * * *.” In the case of Durant v. Philpot, 16 S. C., 125, which was a motion for a new trial on the ground of after-discovered evidence, Mr. Chief Justice Mclver used this language: “Under the practice of the former Court of Equity, it might, perhaps, have been difficult to sustain the mode of proceeding adopted in this case. Under that practice, a petition for rehearing and a bill of review were sustainable on similar grounds, one of which was newly-discovered evidence (Hewit v. Smith, 3 Rich. Eq., 541) ; but a petition for rehearing was the proper mode of proceeding, where the decree had not been signed and enrolled or filed; whereas, after the filing of the decree, the proper mode of proceeding would be by application for leave to file a bill of review (Simpson v. Downs, 5 Rich. Eq., 425; Hinson v. Pickett, 2 Hill Ch., 353) ; and such bill could not be filed without leave of the Court. Simpson v. Smith or Watts, 6 Rich. Eq., 364. If, therefore, this should be regarded as a petition for rehearing, it is liable to two objections: First, because the decree has been filed; and second, the petition is not verified by two counsel. Ex parte Terry, Rice Ch., 1; 3 Dan. Ch. Pr., 1623. On the other hand, if it be regarded as in the nature of a bill of review, no' leave of the Court to file it seems to have been obtained. It seems to us, however, that since the abolition of the Court of Equity, and the requirement of the Constitution in section 3, article V., that justice shall be administered in a uniform mode of pleading, without distinction between law and equity, these modes of proceeding by a petition for rehearing and bill of review have become inapplicable, and that now the same results can be obtained by motion under the provisions of section 2, chap. CV., Gen. Stat., 497; Hill v. Watson, 10 S. C., 277. See, also, remarks of Simpson, C. J., in State v. David, 14 S. C., 428.” In the case of Covington v. Covington, 47 S. C., 273, Mr. Justice Pope, in behalf of the Court, says : “It does not affect the soundness of these views so expressed, that the legislature has repealed section 2, chap. CV., Gen. Stat., 497, for it will be observed, that there was no provision in the repealed law relative to the form under which the desired relief was to be obtained, which was made the basis of this utterance of this Court; but, on the contrary, it was bottomed on the change wrought in the mode of pleading in our Courts by section 3, article V., of the Constitution of 1868.” From the foregoing it is manifest that it was intended to abolish the proceedings by petition for rehearing and by bill of review, and to substitute therefor the remedy provided by section 195 of the Code, which was intended to be exclusive.

2 Waiving, however, this objection'to the pleadings, we will consider the question raised by the exceptions as if the petitioner had proceeded by motion, under section 195 of the Code. In the case of McDaniel v. Addison, 53 S. C., 222, Mr. Chief Justice Mclver uses this language, in delivering the opinion of the Court: “The motion is based upon section 195 of the Code of Procedure, which provides, amongst other thing's, that the Court may 'in its discretion, and upon such terms as may be just, allow an answer or reply to be made, or other act to be done, after the time limited by this Code of Procedure, or, by an order, enlarge such time.’ It is manifest, therefore, from the express terms of the statute, that a motion of this character is addressed to the discretion of the Circuit Court, and not, therefore, ordinarily appealable. For, as it was said by the late Chief Justice Simpson, in Truett v. Rains, 17 S. C., 451, and quoted with approval in the very recent case of Michalson v. Roundtree, 51 S. C., 405, ‘As a general rule, where a Court or Judge is invested with power to be exercised at discretion, such power is absolute, and when exercised it is final. From the very meaning of the term and the nature of the power, discretion is unlimited. It is bounded by no rule except the good sense and integrity of the party empowered to exercise it, and in the absence of an express right to appeal, it necessarily follows that its exercise is unappealable.’ While this is undoubtedly the general rule, our cases, some of which have been cited in the argument of counsel, recognize at least one exception, and that is where there has been an abuse of discretion. Of course, this Court would not assume that any Circuit Judge had been guilty of abusé of discretion confided to’ him by law, and hence, whenever an appeal has been taken upon this ground, the burden rests upon the appellant to show that there has been abuse of discretion.” The practical question, therefore, raised by the exceptions in this case is whether the Circuit Judge abused his discretion in dismissing the petition. Such an order is not, ordinarily, appealable, and although this Court might in the first instance have reached a conclusion different from that stated by the Circuit Judge, his action will be affirmed unless there was an abuse of discretion. The parties between whom the'misunderstanding in this case arose, are gentlemen of the highest character, and there is not even an intimation of any unfair dealing on the part of any of them. It would be of no practical use to state at length the reasons for the conclusion at which this Court has arrived. The facts stated by the Circuit Judge in his order dismissing the petition, are sufficient to show that he did not abuse his discretion.

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

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Dissenting Opinion

Mr. Justice Pope

dissenting. I regret my inability to reach the conclusion of the majority of this Court, and inasmuch as I fear the positions they have taken are unsound in fact and in law, I have deemed it a duty I owe to them as well as to myself to lay bare, briefly, the difficulties in the way of their conclusion, as they appear to my mind. I quite agree with them that the position taken by the respondent, in its-effort to add other reasons than those contained in the order of Judge Ernest Gary to- support his views, is not sound. Equity pleadings, as distinguished from common law pleadings, have been wiped out of existence by the Constitution of this State, so that now the pleadings in Courts of justice in this State are set forth in the Code of Procedure; and it is now useless to speak of “bills of review,” etc., except as by illustration. I also agree with them that section 195 of the Code of Procedure is that under which the Court must administer relief, if any such can be given, to the petitioner here. Section 195, as far as it is concerned with the case as here made, is as follows; “* * * and may also in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, order or other proceedings taken against him through his mistake, inadvertence, surprise or excusable neglect, and may supply an omission in any proceedings: * * *” In Garvin v. Garvin, 13 S. C., 162, Mr. Justice Mclver, in discussing the provisions of this section (at that time numbered 197),says : “The provisions of section 197 of the Code are intended to provide relief only in cases where a judgment has been taken against a party through his own mistake, inadvertence, surprise or excusable neglect, and must be confined to such cases * * *” ,Now to the case at bar. The Carolina National Bank-wishes to correct its own mistake, and one of seriousness to it.- It seems that in the year 1893, one George W. Parker wished to have his note for $1,250 discounted for his own use at and by the Carolina National Bank, with Edward R. Arthur as his indorser. This was done, but at the time, in order to secure the payment of the said note so- to- be discounted so as to- save harmless the said E. R. Arthur and the said bank, he (Parker) executed his mortgage of three or more separate parcels of land, which was promptly recorded. In the year 1896, the said Parker wished to borrow some $1,600 from the Homestead Building- and Loan Association of the city of Columbia, S. C. This loan was agreed to, but, as a condition precedent, the association required the said E. R. Arthur to release the lien of the mortgage executed by Parker to- him as aforesaid, so far as the tract of land which Parker was to mortgage to the Homestead Building and Loan Association was concerned. The said E. R. Arthur executed such release of said mortgage upon the mortgage executed by Parker to Homestead Building and Loan Association, and this mortgage was also recorded in the year 1896. During the year 1897, the said E. R. Arthur and the Carolina National Bank released the lien of the mortgage of George W. Parker on all the several separate parcels of land included in said mortgage, except that one which the Homestead Building and Loan Association had a mortgage upon. In the year 1898, the said George W. Parker having made default for some months in the payment to' the Homestead Building and Loan Association, its attorney, H. Co-wper Patton, Esq., when about to begin proceedings in foreclosure, spoke to W. G. Childs, who was the administrator, &c., of E. R. Arthur, deceased, as to the mortgage executed by Parker to Arthur, and was referred to his attorney, J. S. Muller, Esq. When he consulted Mr. Muller, as such attorney, he was told that such mortgage was unsatisfied, and had been assigned to' the Carolina National Bank. Accordingly, when the complaint in foreclosure was prepared, Mr. Patton made the said W. G. Childs, as administrator, &c., of E. R. Arthur, and the Carolina National Bank, along with G. W. Parker, defendants. In the eighth paragraph of the complaint he alleged that the liens held by the defendants, W. G. Childs, as administrator, &c., and the Carolina National Bank, were junior to that of the plaintiff. The defendants in question answered through their attorney, J. S. Muller, Esq., admitting the eighth paragraph of the complaint. The reference to the master was had, testimony taken, report made, judgment had thereon on 15th July, 1898, directing sale of the lot of land on first Monday in September, 1898, and also directing that plaintiff be paid before defendant, the Carolina-National Bank. After the lands were advertised, Mr. Muller inquired of W. A. Clark, Esq., as president of the Carolina National Bank, if any attempt should be made by said bank to' bid at said sale, it being a junior encumbrancer, when, to his surprise, the president informed him that-he was mistaken in supposing the lien of the bank was junior to that of the plaintiff, Homestead Building and Loan Association. At once, therefore, papers were prepared to- submit to- the Court to correct the mistake of the Carolina National Bank made by its attorney, J. S. Muller, Esq. On 2d day of September, Judge Ernest Gary made an order requiring the plaintiff, the Homestead Building and Loan Association, to show cause before him why the decree in this cause should not be vacated, or so amended as to adjudge a priority of lien to the petitioner’s (the Cárolina National Bank) mortgage over the mortgage of plaintiff, and in the proceeds of the mortgaged premises, and why petitioners should not be allowed to amend its answer, so as to assert the right. In the meantime, sales were restrained. The Homestead Building and Loan Association made return, and submitted affidavits. On 17th September, 1898, the hearing was continued. In January, 1899, the hearing was had before Judge Ernest Gary, who filed his order during that month, denying the petitioner any relief whatsoever. From this order the petitioner has appealed. The majority of this Court has reached the conclusion that the Circuit Judge’s'order should be affirmed; but to this, as before remarked, I am unable to agree. The opinion of the majority is based upon two< propositions— first, that when a power is confided to a Circuit Judge in his discretion, it is only appealable in case it is shown by the appellant that such discretion of the Circuit Judge has been abused; and, second, that the facts as recited in the order of the Circuit Judge show affirmatively that he has not abused his discretion.

. It seems to me that too much potency is ascribed to the discretion vested in a Circuit Judge. I can and do’ appreciate the discretion ascribed to such officer in the management of the details of trials of causes pending in such Court; but when solemn rights of property of-parties litigant are concerned, which solemn rights are confided to his discretion in the care thereof, I do not believe the Constitution of the State intended that the decision of the Circuit Judge should be final, and that there should be no> supervisory control over such Circuit Judge by this Court. When the Constitution of this State prescribes the powers of this Supreme Court, it makes no exception in its jurisdiction. Section 4, article V.: “* * * And said Court (Supreme Court) shall have appellate jurisdiction only in cases of chancery, and in such appeals they shall review the findings of fact as well as the law * * and shall constitute ¿ Court for the correction of errors at law under such regulations as the General Assembly may by law prescribe.” This is a cause in equity, and in such causes the Constitution has laid no restrictions upon the power of this Court to hear appeals both as to the law and the fact.- Even if the General Assembly, in section 195 of the Code, should confide the hearing of questions thereunder to the discretion of the Circuit Judge, it could not avail against the right to review on appeal any question of law and fact, because the Constitution has conferred the general jurisdiction, in equity, of all appeals to- this Supreme Court. I admit that in law cases, as distinguished from equity cases, this Court would of necessity be confined to questions of errors of law, because the Constitution has so prescribed. It is for these reasons I cannot ascribe to the decision of Circuit Judges in questions on the equity side of the Court, under section 195 of the Code, the right to- 'be free from a supervisory control of such decisions by this Court, except in those instances where an abuse of discretion by the Circuit, Judge has been made to appear. Nor do- I, in the- second place, agree that there has been no abuse of discretion here. Clearly the petitioning bank has a prior lien upon a lot of land which its attorney, under a mistake, has allowed to be called and acted upon as a junior lien to that set up by the plaintiff, the Homestead Building and- Loan Association. The Carolina National Bank obtained its lien in the year 1893, at which time the mortgage was placed upon the records. It is true, the mortgage was executed to Edward R. Arthur, but in the mortgage it was stipulated that it, the mortgage, was to protect said Arthur and said bank. It is no new equity that ascribes full protection to the bank under a mortgage executed to protect an indorser, even without the formal assignment to said bank of said mortgage by said in-dorser of the maker, Parker. But said indorser did formally assign such mortgage to' the bank. What power did Edward R. Arthur, by his release, possess, in the year 1896, to destroy the lien of that mortgage, so far as the bank was concerned? Now, the only power to cancel or postpone from the lien of that mortgage resided in the Carolina National Bank. The said bank was not required to search the records to see what subsequent releases were made of its mortgage by an unauthorized person. As before remarked, Edward R. Arthur had no power to renounce or waive the lien of this mortgage. Therefore, when the Circuit Judge speaks of the duty of this bank to' consult the records to see the release of Arthur, in my opinion, he is in error as to the requirements of the law, in such cases made and provided. In the interview of Mr. Patton and Mr. Muller, there was no reference made to any release of mortgage executed by Edward R. Arthur in favor of the Homestead Building and Loan Association; what passed between them, at such interviews, had reference to an alleged postponement of its lien by the bank. Mr. Muller is positive that from something said by Mr. Patton, he made the mistake in concluding that the bank’s lien was postponed to that of the Homestead Building and Loan Association. Mr. Muller does not say how this postponement of lien by the bank occurred, or was alleged to have occurred. He sought out Col. Jones, as cashier of the Carolina National Bank, and understood Col. Jones to say that the lien of the bank, under its mortgage, had been, postponed to that of the Building and Loan Association. Mr. Muller honestly acted under this mistake, for he put into his answer an admission that the lien of the bank was junior to that of the Homestead Building and Loan Association. Mr. Patton very frankly states in his affidavit that he knew nothing of the Carolina National Bank having any mortgage on this lot of land when he first spoke to1 Mr. Muller. But he was then certainly informed that such bank did have a, lien on such land. How is it that in his complaint he alleges that the lien of this bank was junior to that of the plaintiff? It certainly was a fact in his mind at the time he wrote the complaint that the bank’s lien was junior. Then how is it otherwise explained that Mr. Muller concluded that the lien of the bank, dated in 1893, was junior to that of the Plomestead Building and Loan Association, dated in 1896, than that he got that impression from something Mr. Patton said about that matter, while the pleadings show he (Mr. Patton) thought the bank’s mortgage was junior to that of his client? Mr. Muller never spoke to Col. Jones, the cashier of the bank, until after he received his impressions from his interview with Mr. Patton: Is it not, then, evident that the bank is about to lose its security from an honest mistake it made through its attorney ?

These matters so appearing to my mind, I must dissent.