13 S.E. 357 (S.C. 1891), Hibernia Sav. Inst. v. Luhn

Citation:13 S.E. 357, 34 S.C. 175
Opinion Judge:McIver, J.
Party Name:Hibernia Sav. Inst. v. Luhn.
Case Date:June 17, 1891
Court:Supreme Court of South Carolina

Page 357

13 S.E. 357 (S.C. 1891)

34 S.C. 175

Hibernia Sav. Inst.



Supreme Court of South Carolina

June 17, 1891

Appeal from common pleas circuit court of Charleston county; T. B. Fraser, Judge.

This was an action brought to foreclose a mortgage given by defendant, Josephine S. Luhn, to the Hibernia Savings Institution of Charleston, plaintiff. The cause was referred, and the master's report is as follows: "To the Honorable the Presiding Judge: This case was referred to me by an order of the court filed July 5, 1889, to inquire into and report upon the issues of law and fact therein involved, with leave to report any special matter. I have held references, have been attended by the solicitors of the parties, have taken testimony, which is hereto attached, and have heard arguments upon the issues involved. I submit the following report: The complaint in this action is brought for the foreclosure of a mortgage executed by the defendant to the plaintiff, under date of 23d January, 1885, to secure her bond of even date, conditioned for the payment of $1,800 on the 18th January, 1886, with interest after maturity at the rate of 7 per cent. per annum payable semi-yearly in advance. The complaint alleges simply: (1) That the plaintiff is a corporation, chartered under the laws of this state. (2) That the bond and mortgage were duly made, executed, and delivered by the defendant to the plaintiff, as above stated; describing the property mortgaged. (3) That the mortgage was duly recorded. (4) That the condition of the bond has been broken, and that there is due thereon the sum of $1,989. And then follows the prayer of judgment of foreclosure and sale. The answer of defendant admits all the allegations of the complaint, but alleges 'that at the time of the execution and delivery of the bond and mortgage mentioned this defendant was a married woman; that the money received from plaintiff corporation was not used for the benefit of this defendant, or for the benefit of her separate estate. Wherefore defendant prays that the said bond and mortgage be declared null and void, and that the complaint be dismissed.' After the testimony had been closed, and the plaintiff had made his argument in chief, the attorney for the defendant moved for leave to amend the answer by striking out the words, 'that the money received from plaintiff corporation was not used for the benefit of this defendant, or for the benefit of her separate estate,' and substituting the words, 'that said bond and mortgage were not made for the benefit of her separate estate.' The motion was opposed by plaintiff, but I granted the amendment, as it does not seem to me change materially the defense, and it was represented to me by defendant's counsel that, owing to his sickness at the time, the answer had not been drawn according to his instruction. Plaintiff excepted to this order. The case therefore came up upon the complaint and the amended answer. A great deal of testimony offered was excepted to on both sides on the grounds of irrelevancy and incompetency, and by consent of counsel for both parties it was all taken subject to any legal exception that may be urged against it, whether stated specifically in the minutes of reference or not. After a careful examination and weighing of evidence, I find the following facts: On January 16, 1885, the late Dr. G. J. Luhn, the husband of defendant, applied to the Hibernia Savings Institution, the plaintiff herein, for a loan on behalf of his wife, representing himself as her agent. The application was made to F. J. McGarey, the cashier of the bank, at the banking-house. The application was made in writing upon a printed slip of the bank, and the original application is in existence, (Ex. A.) It reads as follows: 'To the President and Board of Directors of the Hibernia Savings Institution. Charleston, S. C., January 16, 1885. Gentlemen: I asked for a loan of $1,800, @ 7% per annum, for which offer as security one new two-story frame house, Smith street, just below Vanderhorst street, lot 40x133. Respectfully, Josephine S. Luhn, per G. J. Luhn.' On Mr. McGarey's examination, he was asked by plaintiff's attorney, 'At the time Dr. Luhn was negotiating for the loan, and at the delivery of the bond and mortgage, as the agent for his wife, what purpose did he state the money would be used for by her?' I ruled this question out as incompetent. The answer of the witness thereto was however taken, subject to exception, and will be found in the appendix to the testimony. The application was referred to the board of directors. They employed Capt. James F. Redding to examine the property. Redding made the examination, found that the buildings on the premises 'were nearing completion,' and made the following indorsement in writing upon the original application: 'Approved. J. F. Redding, Committee, January 19th, 1885.' On January 24, 1885, Dr. Luhn presented himself at the bank with the bond and mortgage, (Exhibits B and C,) which are dated 23d January, 1885, the mortgage being probated January 24, 1885, and received the money. Eight hundred dollars was paid him in cash, and one thousand in check No. 160 on the Bank of Charleston, N. B. A., to the order of 160, which check is in evidence. (Ex. D.) It is indorsed, 'G. J. Luhn.' No further inquiry was made by the bank. The title seems to have been examined by their solicitor, but no written opinion was furnished, and no abstract of title has been offered in evidence. There are no payments indorsed upon the bond. Mr. McGarey testifies that the loan was charged on the books of the bank against Mrs. Josephine S. Luhn. Dr. Luhn is dead. The defendant being a married woman, the burden of proof is upon the plaintiff to show that the contract was made with reference to the separate estate of Mrs. Luhn. The mortgage is of property which is conceded to be Mrs. Luhn's separate estate. As I understand the law, however, the mortgage is only the security for the debt; the debt or contract being...

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