Collier v. Green

• Citation: 137 S.E.2d 277,244 S.C. 367
• Decision Date: 25 June 1964
• Docket Number: No. 18231,18231
• Court: United States State Supreme Court of South Carolina
• Parties: G. Delores COLLIER, Respondent, v. Ralph T. GREEN, Appellant.

Page 277

137 S.E.2d 277

244 S.C. 367

G. Delores COLLIER, Respondent, v. Ralph T. GREEN, Appellant.

No. 18231.

Supreme Court of South Carolina.

June 25, 1964.

Smith & Drawdy, Columbia, for appellant.

James D. Walters, Columbia, for respondent.

MOSS, Justice.

Ralph T. Green, the appellant herein, admits that on August 30, 1958, he made, executed and delivered to C. W. Cheeks his promissory note, whereby he promised to pay the principal sum of $3,200.00 in stated monthly installments. He further admits that in order to secure the payment of the aforesaid note, that he made, executed and delivered to C. W. Cheeks a real estate mortgage securing the payment of the aforesaid note and creating a lien upon a parcel or lot of land located near the City of Columbia, in the County or richland, South Carolina.

G. Delores Collier, the respondent herein, commenced this action on August 24, 1962, for the purpose of foreclosing the aforesaid mortgage, alleging that he was the owner and holder of said note and real estate mortgage and that the same had been duly assigned to him by C. W. Cheeks on November 10, 1960. It is then alleged that the terms and conditions of the said note and mortgage had been breached and that the respondent, the owner and holder of said note and mortgage, had declared the entire mortgage debt due and payable. It is further alleged that the mortgage herein was being foreclosed subject to a first mortgage lien.

The appellant answered the complaint, within twenty days after the service thereof, admitting the execution and delivery of the aforesaid note and mortgage and set up by way of an affirmative defense (1) that the respondent in this action was not the real party in interest; (2) that the respondent has no actual interest or ownership in said note and mortgage; and (3) that the said assignment of the note and mortgage to the respondent was made solely for the purpose of cutting off any defenses which the appellant had against C. W. Cheeks, the real owner of said note and mortgage. It is further alleged in the answer that there are certain moneys due on the said promissory note to the said C. W. Cheeks and that the appellant has a defense in whole and in part to any action brought upon the said note and mortgage against him by the said Cheeks.

Subsequent to the filing of the aforesaid answer by the appellant he made a motion for an order allowing him to amend his answer so as to file a cross complaint against Cheeks. This motion was denied by the trial Judge upon the ground that the appellant had no right to file a cross complaint against Cheeks, in the present action, for the reason that Cheeks was not a party to said action. There was no appeal from this order.

The respondent, by motion dated January 13, 1964, moved for an order referring all issues of law and fact in this case to the Master in Equity for Richland County. The appellant resisted the motion on the ground that his defenses to the foreclosure of the mortgage should be tried by a jury. By order, dated February 5, 1964, the motion of the respondent was granted upon the ground that an action for the foreclosure of a real estate mortgage is an equitable one and the defenses of the appellant to such cause of action could properly be tried and determined by the Master. Timely notice of intention to appeal from such order was given by the appellant.

The appellant asserts that the trial Judge erred in granting a general order of reference in violation of his right to a trial by jury upon the issue as to whether the respondent was the real party in interest. He asserts that this question of fact should have been submitted to a jury for determination and the motion for an order of reference should have been refused.

Section 10-207 of the Code provides that every action must be prosecuted in the name of the real party in interest, with the exceptions therein stated which are not here applicable. This rule has been applied to actions for the foreclosure of a real estate mortgage. Cleveland v. Bomar, 178 S.C. 455, 183 S.E. 34.

An action for the foreclosure of a real estate mortgage is one in equity. Carsten v. Wilson, 241 S.C. 516, 129 S.E.2d 431.

Section 10-1402 of the 1962 Code provides when a reference may be compulsorily ordered. This section provides:

'When the parties do not consent the court may, upon application of either or its own motion, direct a reference in the following cases:

'(1) In all equitable actions and of equitable issues in actions at law.'

Once it has been determined that the complaint states a cause of action which is equitable as distinguished from one cognizable only at law, it necessarily follows that a compulsory order of reference was not improper. Judson Mills v. Norris, 166 S.C. 422, 164 S.E. 919. We quote from the cited case the following:

'If the case is one in equity, the facts set forth in the complaint, to which objection is made, are pertinent as showing the propriety and necessity for resorting to a court of equity and in showing the inadequacy of the legal remedy.

'It is well established by the authorities that suit may be instituted in equity for the foreclosure of mortgages on personal property and of liens by way of pledge upon stock and bonds, and that this is especially true where the debt, and/or the lien, is in dispute. In such a suit all questions arising under the plaintiff's claim can be determined, making an end to litigation. See Bryan v. Robert, 1 Strob.Eq. 334; Stokes v. Liverpool 3 L. & G. Ins. Co., 130 S.C. 521, 126 S.E. 649; Broom v. Armstrong, 137 U.S. 266, 11 S.Ct. 73, 34 L.Ed. 648; 49 C.J. 1013, 1014; 21 R.C.L. § 54; Jones on Pledges, §§ 644, 645, 646 and 648; Pomeroy on Eq.Jur. (4th Ed.) § 1230; 6 Fletcher on Corp. § 3931; 6 Thompson on Corp. (3d Ed.) § 4293.

'Nor is the nature of the action changed by reason of the fact that the defendants have, in their answers, set up defenses and counterclaims based upon alleged misrepresentations in the transaction upon which the plaintiff's note and pledge are predicated. The questions raised by these defenses and counterclaims directly affect the validity of the plaintiff's lien and the question as to the amount due upon the debt secured by the lien. Where, in actions of foreclosure, defendant sets up a defense and/or a counterclaim affecting the consideration, and arising out of the transaction in which the mortgage or lien was created, the authorities hold that the issues thus raised are equitable and are to be tried by the court upon its equity side. Hunt v. Nolen, 46 S.C. 551, 553, 24 S.E. 543; McLaurin v. Hodges, 43 S.C. 187, 20 S.E. 991; Armour Fert. Works v. Burckhalter, 141 S.C. 232, 237, 139 S.E. 465; Mobley Co. v. McLucas, 99 S.C. 99, 82 S.E. 986.'

The...