Carolina Housing & Mortg. Corp. v. Orange Hill A. M. E. Church

• Decision Date: 04 February 1957
• Docket Number: No. 17256,17256
• Citation: Carolina Housing & Mortg. Corp. v. Orange Hill A. M. E. Church, 97 S.E.2d 28, 230 S.C. 498 (S.C. 1957)
• Parties: CAROLINA HOUSING AND MORTGAGE CORPORATION, Respondent, v. ORANGE HILL A. M. E. CHURCH, Sidney Butler, Samuel Gooden and James Glasser, d/b/a Aluminum Products Company, of which James W. Glasser, d/b/a Aluminum Products Company is, Appellant.
• Court: South Carolina Supreme Court

Page 28

97 S.E.2d 28

230 S.C. 498

CAROLINA HOUSING AND MORTGAGE CORPORATION, Respondent, v. ORANGE HILL A. M. E. CHURCH, Sidney Butler, Samuel Gooden and James Glasser, d/b/a Aluminum Products Company, of which James W. Glasser d/b/a Aluminum Products Company is, Appellant.

No. 17256.

Supreme Court of South Carolina.

Feb. 4, 1957.

Clinch Heyward Belser, Belser & Belser, Columbia, for appellant.

G. Werber Bryan, Robert O. Purdy, Schwartz & Schwartz, E. A. Parker, Sumter, for respondent.

MOSS, Justice.

The original complaint of the respondent alleges that on April 8, 1953, Orange Hill A. M. E. Church, by Sidney Butler and Samuel Gooden, Trustees, and as individuals, executed and delivered to J. W. Glasser, doing business as Aluminum Products Company, a promissory note in the sum of $2,338.92, payable in stated monthly installments. It is further alleged that in order to secure the payment of said note so executed and delivered, that Orange Hill A. M. E. Church executed and delivered a real estate mortgage creating a lien upon the church property. It is further alleged that the said note and mortgage were executed pursuant to a congregational resolution, dated March 19, 1953, as certified by Clara Bracey, Secretary of the congregation. It is then alleged that on April 8, 1953, that the said note and mortgage were for value duly assigned to Carolina Housing and Mortgage Corporation, the respondent herein.

The respondent commenced this action in the lower court, as plaintiff, for the purpose of foreclosing the mortgage against the church. The church answered the complaint, denying that the mortgage was made, executed or delivered by the church and that such note and mortgage are invalid for the reason that the said Sidney Butler and Samuel Gooden were not trustees of the said church at the time alleged in the complaint and were without authority to execute a note or to encumber the real property of the church. It was also alleged that if Clara Bracey, as secretary of the congregation, certified a congregational resolution of authority to execute the note and mortgage, such certificate was done without the authority of the church, and that she has never been secretary of the said church. The prayer of the answer of the church was that the complaint be dismissed and the court issue its decree directing the Clerk of Court of Sumter County to cancel of record the aforesaid mortgage alleged to have been unlawfully executed and entered upon real estate records of said County.

Upon the service of the aforesaid answer by the church, the respondent after notice to the church, moved in the court below for leave to amend its complaint so as to join James W. Glasser, doing business as Aluminum Products Company, as a party defendant. The motion was based upon the pleadings, including a petition which recited the assignment of the note and mortgage by James W. Glasser, doing business as Aluminum Products Company, to the respondent herein, for full and valuable consideration, and that it is proper, in view of the allegations of the church's answer, that James W. Glasser, doing business as aforesaid, be joined as a party defendant, and that an amended complaint be served so that a complete determination may be had in this one action of the issues made by the pleadings. A proposed amended complaint was attached to the motion, and for the purpose of this appeal, we consider allegation 12 thereof, which alleges that the church denies the validity of the note and mortgage and 'avers that the same was procured by fraud and/or forgery and, therefore, in order to have a complete determination of the matter, the defendant, James W. Glasser, is joined as a defendant because, as plaintiff is informed and believes, it is from James W. Glasser the plaintiff secured the mortgage as hereinabove alleged, and it is plaintiff's belief that should a fraud or forgery be proven against the defendant James W. Glasser in connection with the execution and/or delivery of the said mortgage, then James W. Glasser would be responsible to the plaintiff for the amount of funds advanced to him upon the purchase of the mortgage by the plaintiff, with interest at the legal rate.' The prayer of the amended complaint is for foreclosure, and in the alternative, if appropriate, that the respondent have judgment as the equities may indicate against the defendant James W. Glasser for the funds expended by it for the purchase of the note and mortgage, together with the costs and expenses of this action and interest.

The lower court, over the objection of the church, granted the motion joining James W. Glasser, as aforesaid, as a party defendant to the action.

After the order of the lower court was granted, directing that the appellant herein be made a party defendant, and that the complaint of the respondent be amended, James W. Glasser, doing business as aforesaid, demurred to the amended complaint and also moved to amend said complaint by striking out his name as a party defendant, and the allegations of said complaint purporting to assert any liability against him. The demurrer and motions were heard by the lower court and by order such were refused. The appeal to this court is from the rulings of the court below. The question for determination in this court is whether or not there was error in joining the appellant James W. Glasser, doing business as Aluminum Products Company, as a party defendant.

The record in this case does not disclose whether the assignment of the note and mortgage by the appellant to the respondent was a general or a qualified one.

It should be borne in mind that an action for the foreclosure of a real estate mortgage is an equitable one. Ex Parte Floyd, 145 S.C. 364, 142 S.E. 805; People's Bank of Hartsville v. Bryant, 148 S.C. 133, 145 S.E. 692; Ayers v. Guess, 217 S.C. 233, 60 S.E.2d 315.

Section 10-203, Code of Laws of South Carolina 1952, provides:

'Any person may be made a defendant who has or claims an interest in the controversy adverse to the plaintiff or who is a necessary party to a complete determination or settlement of the questions involved therein. * * *'

Section 10-204, Code of Laws of South Carolina 1952, provides:

'Of the parties to the action those who are united in interest must be joined as plaintiffs or defendants. But if the consent of any one who should have been joined as plaintiff cannot be obtained he may be made a defendant, the reason thereof being stated in the complaint.'

Section 10-219, Code of Laws of South Carolina 1952, provides:

'The court may determine any controversy between the parties before it, when it can be done without prejudice to the rights of others, or by saving their rights. But when a complete determination of the controversy cannot be had without the presence of other parties, the court must cause them to be brought in. * * *'

This court has held under Section 10-203 and Section 10-219, the power to bring in new or additional parties is within the discretion of the trial Judge. Murray Drug Co. v. Harris, 77 S.C. 410, 57 S.E. 1109; Ellen v. King, 227 S.C. 481, 88 S.E.2d 598; Long Mfg. Co. v. Manning Tractor Co., 229 S.C. 301, 92 S.E.2d 700. This is also true of actions in equity. People's Bank of Hartsville v. Bryant, supra. The discretion referred to in these decisions means a legal discretion and, of course, if there is an abuse of same, this court has the power to review and reserve such decision. Fidelity Fire Ins. Co. v. Windham, 134 S.C. 373, 133 S.E. 35.

The respondent, in its brief, states that it has never contended that it could, as a matter of right, require the court to join the appellant, James W. Glasser, as a party to the action. It asserts that it was for the court below, in the exercise of its legal discretion, to determine whether the appellant should be joined as a party defendant. A review of the holding of Judge Eatmon shows he joined James W. Glasser as a party to the action in the exercise of his discretion, and he also states that in joining the appellant as a party 'it is quite possible that considerable litigation may be saved by joining all of the parties who may possibly have an interest in the subject matter of the suit.'

In the case of People's Bank of Hartsville v. Bryant, supra, it was said [148 S.C. 133, 145 S.E. 694]:

'Section 361, vol. 1 [now Section 10-203, of the 1952 Code], of the Code of Civil Procedure, has been liberally construed for the purpose of bringing before the Court all parties who may be necessary to a complete determination or settlement of all questions involved in the action. This is particularly true when the action relates to the foreclosure of a real estate mortgage.'

In the case of First Carolinas Joint Stock Land Bank of Columbia v. McNiel, 177 S.C. 332, 181 S.E. 21, 25, this Court held:

'The proper practice in this state in actions for the foreclosure of a real...