American Freehold Land Mortg. Co. v. Felder

• Decision Date: 03 September 1895
• Citation: 22 S.E. 598,44 S.C. 478
• Parties: AMERICAN FREEHOLD LAND MORTGAGE CO. OF LONDON, Limited, v. FELDER et al.
• Court: South Carolina Supreme Court

22 S.E. 598

44 S.C. 478

AMERICAN FREEHOLD LAND MORTGAGE CO. OF LONDON, Limited, v. FELDER et al.

Supreme Court of South Carolina

September 3, 1895

Appeal from common pleas circuit court of Barnwell county; I. D Witherspoon, Judge.

Action by the American Freehold Land Mortgage Company of London Limited, against Bessie C. Felder, N. Z. Felder (her husband), and Jane S. Counts, to foreclose a mortgage executed to plaintiff by Bessie C. Felder and husband. From a decree declaring the mortgage void, and ordering it canceled and a judgment in favor of plaintiff against defendant N. Z Felder for the amount due on the notes secured by such mortgage, plaintiff appeals. Affirmed.

The decree of Judge Witherspoon is as follows:

"This is an action by plaintiff to foreclose a mortgage of real estate executed September 10, 1884, to plaintiff by the defendant Bessie C. Felder, a married woman. The defendant Bessie C. Felder and her husband, the defendant N Z. Felder, allege in their answer that the money secured by the mortgage was borrowed from plaintiff for the use of N. Z. Felder, the husband, that it had no reference to the separate estate of Bessie C. Felder, and that plaintiff, at the time of the loan, had notice that N. Z. Felder, the husband, was borrowing the money for his own use. The defendant Jane S. Counts has gone into possession of a portion of the premises embraced in plaintiff's mortgage since the execution of said mortgage. The case was heard upon the pleadings, the testimony taken and reported by the master, and upon the argument of counsel. It appears that John B. Palmer & Son, of Columbia, represented the plaintiff in loaning money in this state, secured by mortgage of real estate. Robert Aldrich, Esq., represented Palmer & Son, as their local agent, at Barnwell, S.C. On the 20th of June, 1884, Hutson & Co., of Aiken, S. C., forwarded to Palmer & Son, at Columbia, the written application of the defendants Bessie C. Felder and N. Z. Felder, signed in the order named, for a loan of $500, to be secured by a mortgage of the real estate of Bessie C. Felder. Bessie C. Felder is represented in said application as the borrower. In a letter accompanying said application to Palmer & Son for their consideration, Hutson & Co., represented Bessie C. Felder as the applicant for the loan, and they recommended the loan as a first-class risk. On the 10th September, 1884, Bessie C. Felder and N. Z. Felder, in the order named, signed four notes, of $125 each, payable to plaintiff in one, two, three, and four years, with interest at the rate of ten per cent., payable semiannually. On the same day, Bessie C. Felder executed and delivered to the plaintiff the mortgage of her real estate, as stated in the complaint. Two of the notes secured by the mortgage, with interest to November 1, 1890, have been paid; and the allegation of the complaint that the other two notes are due and owing to plaintiff, with interest from November 1, 1890, is not denied.

"It is admitted that the notes signed by Bessie C. Felder and N. Z. Felder, and the mortgage executed by Bessie C. Felder, are in the handwriting of Robert Aldrich, Esq. The amount loaned by plaintiff was transmitted by Palmer & Son by drafts payable to the order of Robert Aldrich, attorney, and by him made payable to the order of Bessie C. Felder. The name of Mrs. Bessie C. Felder is indorsed on each of said drafts. Bessie C. Felder testifies that her husband, N. Z. Felder, negotiated for the loan; that she had no communication, directly or indirectly, with plaintiff, or with any of plaintiff's agents, with reference to the loan; that her husband used the money received from plaintiff for his own use; and that she did not receive any portion of the money. She admits that she knew that her land was being mortgaged for her husband's use. There is no controversy as to the fact that the defendant Bessie C. Felder was at the date of the execution of the mortgage, and that she is now, the wife of the defendant N. Z. Felder, or as to the execution of the notes and mortgage as alleged in the complaint. There is no doubt about the loan being negotiated by N. Z. Felder with the knowledge and approbation of his wife, Bessie C. Felder. The main point of controversy is whether N. Z. Felder, the husband, did notify Robert Aldrich, Esq., as plaintiff's agent, pending the negotiations for the loan, that the money was being borrowed for his use upon the security of his wife's real estate, and, if so, whether such notice invalidates the mortgage and notes referred to in the complaint, so far as they affect the liability of Bessie C. Felder. N. Z. Felder testifies that he made a verbal application to Col. Aldrich, at Barnwell, for the loan; that he told Col. Aldrich at the time that he wanted to borrow $500, and that he would give him a mortgage on his wife's estate. Col. Aldrich will not deny the statement of N. Z. Felder that he applied to him for the loan, but does not think that he did. According to his distinct recollection, the first time he saw Mr. Felder about the loan was when the papers were executed. The testimony of N. Z. Felder as to the notice given Col. Aldrich is positive. Col. Aldrich, in his testimony, does not deny that Mr. Felder told him that he was borrowing the money for his own use, and would give a mortgage on his wife's estate. He evidently does not think so, but his want of recollection is not sufficient to overcome the otherwise uncontradicted statement of N. Z. Felder on this point. According to the testimony as found by the master, I must find, as matter of fact, that N. Z. Felder did notify Col. Aldrich, before the papers were executed, that he was borrowing the money for his own use, and would secure the loan by a mortgage of his wife's real estate. According to the uncontradicted testimony of Bessie C. Felder and N. Z. Felder, I must also find, as matter of fact, that the money borrowed from the plaintiff by N. Z. Felder was used for his own benefit. Was the notice to Robert Aldrich as to the purpose of the loan notice to the plaintiff? Col. Aldrich was the local agent of John B. Palmer & Son at Barnwell, who represented plaintiff in making loans in this state, secured by mortgage. Col. Aldrich drew the notes and mortgage referred to in the complaint. He superintended the execution of the papers signed by Bessie C. Felder and N. Z. Felder. The draft by John B. Palmer & Son, representing the amount loaned, was made payable to his order, and by him indorsed payable to the order of Bessie C. Felder; and under the authority of the cases of Salinas v. Turner, 33 S.C. 231, 11 S.E. 702, and Bates v. Mortgage Co., 37 S.C. 88, 16 S.E. 883, I must conclude that notice to Col. Aldrich of the purpose of the loan was notice to the plaintiff. The plaintiff having had notice that the money about to be borrowed on the security of the wife's separate estate was to be used by the husband for his own purposes, and it appearing that the money borrowed was so used, I conclude that the mortgage executed by the defendant Bessie C. Felder is null and void, and that she is not liable on

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