Bank of Johnston v. Jones

• Decision Date: 30 August 1927
• Docket Number: 12265.
• Citation: 139 S.E. 190,141 S.C. 98
• Parties: BANK OF JOHNSTON v. JONES et al.
• Court: South Carolina Supreme Court

139 S.E. 190

141 S.C. 98

BANK OF JOHNSTON v. JONES et al.

No. 12265.

Supreme Court of South Carolina

August 30, 1927

Appeal from Common Pleas Circuit Court of Greenwood County; Wm. H Grimball, Judge.

Action by the Bank of Johnston against C. E. Jones and another. From an order overruling a demurrer to the complaint, defendants appeal. Affirmed.

The following are the complaint, the contract, and defendants' exceptions:

Complaint.

"The plaintiff complaining of the defendants herein respectfully shows unto the court:

I. That the plaintiff, the Bank of Johnston, is, and at the time mentioned in this complaint was, a banking corporation organized and existing under the laws of the state of South Carolina, with legal capacity to sue and be sued, with its principal place of business at Johnston, in the county of Edgefield, state of South Carolina.

II. That the false pretenses and representations made to the plaintiff as hereinafter stated were made to W. B. Ouzts vice president, and J. M. Edwards, cashier of the plaintiff and as its agents and acting in the scope of their duties for it in the transactions hereinafter enumerated, and the false impressions hereinafter mentioned were made upon the two said agents of the plaintiff acting in the scope of their duties for it.

III. That the defendant C. E. Jones is a resident and citizen of Lexington county, in the state of South Carolina, and the defendant S. F. Perry is a resident and citizen of the county of Greenwood, in the state of South Carolina.

IV. That at the times mentioned in this complaint, the defendants C. E. Jones and S. F. Perry pretended and represented to the plaintiff that South Atlantic Realty & Auction Company was a corporation with its principal place of business at Greenwood, S. C., and engaged in the real estate business, buying and selling lands, but in truth and in fact the said pretenses and representations were false and known to the defendants C. E. Jones and S. F. Perry at the time they were made to be false for in truth and in fact there was no such corporation doing business at Greenwood, or elsewhere in the state of South Carolina, and the two said defendants by said false pretenses and representations fraudulently and willfully deceived this plaintiff and induced it to influence J. W. Marsh and J. F. Marsh to execute the contract marked Exhibit A and made a part of this complaint, and to give the plaintiff's consent thereto and to become a party to said contract; and the said contract and all transactions relative thereto and all transactions made pursuant thereto were for the benefit of the two said defendants and to accomplish their selfish design.

V. That on the 23d day of March, 1921, J. W. Marsh and J. F Marsh were seized and possessed in fee of a certain lot of land situate, lying, and being in the city of Columbia county of Richland, in the state of South Carolina, and containing about 4 acres, and bounded by Wheat, Lincoln, Rice, and Gadsden streets; and on the 24th day of February, 1921, J. W. Marsh and J. F. Marsh made, executed, and delivered to the plaintiff their four promissory notes for $5,000 each; two payable on November 15, 1921, and two payable on December 13, 1921, and on the 23d day of March, 1921, the two said Marshes in order to secure the payment of said notes made, executed, and delivered to this plaintiff a mortgage on the premises aforesaid, and subsequently with the consent of plaintiff sold to Southern Railway Company a small strip of land from said lot; and thereafter the said two Marshes and this plaintiff agreed and decided to sell the balance of said lot of land, and the plaintiff agreed to accept the proceeds of the sale of the same in payment of the said four notes and other indebtedness due it by the two said Marshes to the extent of $30,000; that is, the plaintiff was to allow the two said Marshes a credit of $30,000, including said four notes, on their indebtedness to it; and the two said Marshes authorized and empowered the plaintiff to make any arrangement satisfactory to it for the sale of said lot of land and agreed to execute and deliver deeds in fee of the said balance of said lot of land to any person or persons named by the plaintiff and to carry out any agreement or contract made by the plaintiff for the sale of said lot or parcel of land, all of which the defendants had full notice when the plaintiff had the transaction herein mentioned with them. VI. That pursuant to the agreement referred to in the preceding paragraph hereof between J. W. Marsh and J. F. Marsh and this plaintiff, the plaintiff on March 11, 1924, entered into an agreement with the supposed corporation, South Atlantic Realty & Auction Company, by its supposed and pretended agent, C. E. Jones and S. F. Perry, whereby the said pretended corporation was to sell the said lot of land, less the strip sold to the Southern Railway Company, for the consideration of any sum of money the said pretended and supposed corporation received in excess of $30,000; and the plaintiff agreed to accept as part payment on said amount purchase-money notes and mortgages executed therefor on portions of said premises according to the terms of said contract, and the plaintiff in carrying out its part of said agreement had the said J. W. Marsh and J. F. Marsh to sign and execute the contract aforesaid marked Exhibit A, as parties of the first part, and the supposed and pretended corporation, South Atlantic Realty & Auction Company, by C. E. Jones, its manager, sign the said contract as party of the second part, and the plaintiff consented to said contract and signed a separate instrument of writing attached to said contract consenting thereto, and the two said instruments of writing signed by the two Marshes and the pretended and supposed corporation, South Atlantic Realty & Auction Company, and the plaintiff constituted one transaction and one contract; and then the two defendants, pretending to act for the supposed corporation aforesaid, cut the said lot of land into two subdivisions in the ratio of about four-ninths and five-ninths, and the smaller subdivision had a brick warehouse on it, and each of the said subdivisions was and is of the value of $15,000; and the two Marshes aforesaid had no further interest in the said lot except to carry out any contract made by the plaintiff relative to the sale of the same, and the defendants well knew this and knew that any sales of the said lot of land were for the benefit of the plaintiff and that the plaintiff was to have all the proceeds from the sale thereof up to the amount of $30,000, and the excess of $30,000 belonged to the supposed corporation.

VII. That on the 31st day of March, 1924, the two defendants pretending to act for the said supposed corporation, but really acting for themselves, and in order to accomplish their own selfish ends, fraudulently pretended and represented to the plaintiff that they had made a sale of the larger subdivision of the said lot of land, to wit: 'All that lot, parcel or piece of land lying, being situate within the city of Columbia, Richard county, S. C., having a frontage on Wheat street of 242.42 feet, and extending for an equal width along Gadsden street for a distance of 417.42 feet to right of way of Southern Railway Company, and being a portion of the property more fully described on a map made by Tomilson Engineering Company, Columbia, S. C., April 22, 1922. It is understood from the southwest corner a parcel of the land has been sold to the Southern Railway Company, and measuring 30 feet on Gadsden street and 90 feet along Southern Railway right of way and as set out on map aforesaid'-for the sum of $30,000, to C. A. Perry $6,064.45 cash, and the balance of the purchase money, $23,935.55, evidenced by three notes, secured by a mortgage of the said portion sold, and said notes were dated March 31, 1924, and made payable as follows: One on March 31, 1925, for $7,978.52; one on March 31, 1926, for $7,978.52; one on March 31, 1927, for $7,978.51.

VIII. That the two defendants pretending to represent a corporation named South Atlantic Realty & Auction Company for the consideration aforesaid; that is, all money collected by them for the said lot of land in excess of $30,000, proceeded to offer said lot of land for sale as subdivided, and as the two defendants pretending to represent the said corporation were acting as agents for the plaintiff and therefore in a fiduciary capacity for the plaintiff, were intrusted and given the special confidence of the plaintiff to sell both of said subdivisions of said lot of land; and the said C. E. Jones and S. F. Perry wrongfully, unlawfully, willfully, and fraudulently agreed, colluded, and conspired together to cheat and defraud the plaintiff of $9,000 of the security held by it as aforesaid, and to induce the plaintiff to part therewith, and to obtain the smaller subdivision of the said lot covered by the said mortgage for themselves without any consideration whatsoever to the plaintiff or the said Marshes; and in furtherance of said unlawful, fraudulent, and deceitful scheme pretended and represented to the plaintiff as aforesaid that the defendants had made a sale of said larger subdivision of said lot to C. A. Perry for the consideration of $30,000 and on the terms aforesaid; and the defendants, by pretending and representing that a sale of the larger subdivision of the said lot had been made to C. A. Perry for $30,000 on the terms aforesaid, induced and persuaded the plaintiff, who believed said pretenses and representations to be true, to have the said J. W. Marsh and J. F. Marsh execute and deliver to the said C. A. Perry a good marketable title in fee of the said larger subdivision of said lot, and to cancel and have marked

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