36 S.C. 331 | S.C. | 1892
The opinion of the court was delivered by
The issues in the action originally begun on the 17 January, 1820, in the Court of Common Pleas for Marlboro County, have been reduced to a contention between the two defendants, George A. Norwood & Co. on the one side, and E. H. Frost & Co. on the other side, as to the priority of mortgages held by them respectively. Judge Hudson, who heard the cause on the Circuit, decided that E. H. Frost & Co. had prior lien and decreed accordingly. From that decree the defendants, George A. Norwood & Co. appeal to this court on fourteen grounds of appeal, as follows :
1. Because his honor, the presiding judge, erred in holding that the mortgage of defendants, E. II. Frost & Co., is entitled out of the proceeds of sale of the mortgaged premises to priority in payment to the mortgage of G. A. Norwood & Co.
2. Because his honor erred in. holding that the mortgage of G. A. Norwood & Co. was in fact paid on the 13th day of January, 1885, the date of the first renewal of the same by C. N. Rogers and N. S. Rogers.
3. Because his honor erred in holding that the renewal of the bond and mortgage by C. N. Rogers and N. S. Rogers to G. A. Norwood & Co. was a secret agreement, and could not affect the rights of the defendants, E. H. Frost & Co., who were junior mortgagees.
4. Because his honor erred in not holding that the mortgage of the defendants, G. A. Norwood & Co., being prior in date and unpaid, should be preferred in its payment to the bond and mortgage of E. H. Frost & Co.
5. Because his honor erred in not holding that the renewal of the bond and mortgage to G. A. Norwood & Co. was valid and binding upon the junior mortgagees, E. H. Frost & Co., as the. said renewed mortgage was of record and uncancelled.
6. Because his honor erred in not holding that it was incum
7. Because his honor erred in not holding that the senior mortgage of G. A. Norwood & Co. was not such a mortgage as could be affected by actual notice of a subsequent mortgage, as G. A. Norwood & Co. were compelled to make the advances specified in the said renewed bond.
8. Because his honor erred in not holding that the renewal of said bond and mortgage of G. A. Norwood & Co. was a revivor of the same, and was valid as against the subsequent mortgage of defendants, E. H. Frost & Co. ■
9. Because his honor erred in not holding that the account of G. A. Norwood & Co. against C. N. Rogers, was a running account and had not been closed, and that the bond and mortgage given to secure the same was to secure an eventual balance which had not been paid at-the date of the mortgage to E. EL Frost & Co., nor at any time afterwards.
10. That his honor should have held that the question involved was one of the application of payments by G. A. Norwood & Co. to their account against C. N. Rogers; that there had been no direction of such application by C. N. Rogers, and that the same had been applied to the open account, which was in excess of the security given, thus leaving the balance on account secured by the bond given by 0. N. Rogers and the mortgage given to secure the same.
11. Because his honor erred in not bolding that G. A. Nor-wood & Co. were at least entitled to priority under their mortgage over E. H. Frost & Co. to the extent of ail amounts due them on account of C. N. Rogers on the 23rd day of February,-1885, the day the mortgage of E. II. Frost & Co. was executed.
12. That his honor erred in not decreeing the sum of $669.96, with interest from the date of the advancement of the items composing that amount, on the account of C. N. Rogers, due tó G. A. Norwood & Co., at ten per cent, per annum, till the date of the decree herein.
13.. Because his honor erred in holding that a recital by C. N.
14. Because his honor erred in holding that there was a settlement between C. N. Rogers and G. A. Norwood & Co., on the 13th January, 1885, on which day there was a balance due said C. N. Rogers of three or four hundred dollars.
The facts in this case are undisputed, and are about as follows: C. N. Rogers, in February, 1884, agreed with G. A. Norwood & Co. to borrow $1,000, to be paid on or before 1 January, 1885, and that he would ship said firm seventy-five bales of cotton, to be sold by them as factors during the year 1884; and in order to secure such factors he, with his father, N. S. Rogers, executed their bond to them in the penalty of $2,000, conditioned for the payment of $1,000 and interest, &c.; and that on the 1 January, 1885, G. A. Norwood & Co. held claims against C. N.Rogers for $2,360.34, and held to O. N. Rogers’s credit, $2,442.-58, in money, and six bales of cotton worth $277.69. On 13 January, 1885, Norwood & Co. owed C. N. Rogers $2,720.27, and he owed them $2,376.59, a difference in Rogers’s favor of $359.-. 93. These two results, to wit: the state of their accounts on 1 January, 1885, and also on 13 January, 1885, included the bond secured by mortgage. On the 'l3th January, 1885, C. N. Rogers made an agreement with G. A. Norwood & Co., -which was entered on the bond executed 23rd February, 1884, by which it was agreed between them that the arrangement for 1884 should be continued for the year 1885. This agreement was not entered on the record of the mortgage or made known. In other words,1 while entirely fair and business like between the parties to the same, it was not made public.
On March, 1st day, 1884, Elizabeth Munnerlyn obtained a mortgage upon the lands in controversy here, for $2,000 and interest. This is admitted on all hands as the first and preferred lien, On 23rd February, 1885, Charles N. Rogers executed a mortgage on these lands to secure an antecedent indebtedness of $3,000 to E. H. Frost & Co., representing in the body there
At the hearing Charles N. Rogers, who was the witness of George A. Norwood & Co., testified that all indebtedness between him and said firm of George A. Norwood & Co. -was paid on the 13th January, 1885, and no testimony or admissions of parties appears to negative such testimony.
Judge Hudson decreed that the lands should be sold and the proceeds applied, 1st, to the payment of the mortgage of Elizabeth Munnerlyn ; 2nd, to the payment of the mortgage of E. H. Frost & Co.; 3rd, to the payment of the mortgage of George A. Norwood & Co.
From the view we take of this ease, it will only be necessary for us to consider the first exception; it includes all the rest.
After a careful consideration of the appeal, the writer of this opinion has reached the conclusion that the decree below must be modified, for he was satisfied that Norwood & Co. were entitled to a priority in so far as the amount advanced to C. N. Rogers, beginning on the 13th day of January and ending on the 23d February, 1885, being the sum of six hundred and eighty-six 21-100 dollars, is concerned. This result arises from these considerations : The Circuit Judge found as a fact, and as a conclusion of law, that the written agreement endorsed on the bond and mortgage between Norwood & Co. and C. N. Rogers “was equivalent to the execution of a new bond and mortgage by him to them, and he is bound thereby,” on the 13th January, 1885. This finding of the judge has not been appealed from, and is, therefore, the law of this case. He also finds that C. N. Rogers executed his mortgage to Frost & Co. on the 23d February, 1885, and the same was recorded on that day. This is admitted to be true. It also appears that Norwood & Co. advanced to Rogers $<386.21 between the 13th January, 1885, and the 23d February, 1885.
It is not material, in the writer’s view of the rights of these parties, that the consideration of the mortgage of Frost & Co. was an antecedent indebtedness. It was lawful to make such
It must be apparent, therefore, that on the 23d day of February, 1885, these co-defendants — Frost & Co. and Norwood & Co. — stood in this attitude to each other, growing out of their transactions with C. N. Rogers : Norwood & Co. had a mortgage entitling them to advance from time to time to Rogers not more than $1,000, and of this sum they had advanced $686 21. On this day Frost & Co., upon an antecedent debt of C. N. Rogers of $3,000, obtained bona fide a mortgage froip Rogers upon the same land covered by the lien of Norwood & Co. What is the rule equity adopts in such a case ? It treats the parties in this way: It asks, has Frost & Co. 'parted with any consideration to Rogers previously or on the 23d February, 1885, either by the surrender to him of any security or the payment of any money, or divesting themselves of any right by which such firm have been placed in any worse situation than they would have been in if they had received notice of Norwood & Co.’s mortgage? Their answer, under the proofs here, would be No. Then equity supplies relief to Norwood & Co. in this way. It says: You have not complied with the law by recording your mortgage, but by an honest dealing with Rogers you have obtained a-right that he created by contract to hold his land as a pledge to secure so much money or property, to wit, $686.21, as you advanced to him prior to the day the law made you take notice of the rights of Frost & Co., and this we give you, because, to that extent, you area purchaser for valuable consideration without notice. Zorn v. C. & S. R. R. Co., 5 S. C., 97, and other cases there cited.
It is the judgment of this court, that the judgment of the Circuit Court be affirmed.
See McFall v. McFall, 35 S. C., 559.