Cook v. C. I. T. Corp.

• Decision Date: 04 October 1939
• Docket Number: 14941.
• Parties: COOK v. C. I. T. CORPORATION.
• Court: South Carolina Supreme Court

4 S.E.2d 801

191 S.C. 440

COOK v. C. I. T. CORPORATION.

No. 14941.

Supreme Court of South Carolina

October 4, 1939

Odom Bostick & Taylor, of Spartanburg, and Hemphill &amp Hemphill, of Chester, for appellant.

McDonald Macaulay & McDonald, of Chester, for respondent.

G. B GREENE, Acting Associate Justice.

On October 16, 1937, George J. Mobley of Chester, S. C., purchased from J. W. Anderson Company, Inc., of Rock Hill, S. C., a Terraplane automobile at the time price of $1,050.24. For a "trade in" purchaser was allowed a credit of $300, leaving a balance of $750.24. For this balance Mobley, on the same day, executed to the seller his promissory note payable in twenty-four equal consecutive monthly installments of $31.26, on the like date of each month, the first payable one month after date of note. In order to secure said note Mobley and J. W. Anderson Company executed what is called a conditional sale contract, which in effect constituted a chattel mortgage over said automobile. The J. W. Anderson Company forthwith assigned and transferred said note and mortgage to appellant.

About a month after his purchase, Mobley and J. T. Cook, respondent herein, entered into an agreement for the purchase and sale of said automobile whereby respondent was to pay Mobley a fixed sum for his equity in the automobile and assume the payment of the balance due on the mortgage indebtedness. Pursuant to this agreement respondent and Mobley, on November 30, 1937, went to the office of J. W. Anderson Company and notified it of their trade and respondent paid to said company on said indebtedness the sum of $25.66. Thereafter, respondent made to J. W. Anderson Company the following payments: On January 1, 1938, $28.16; on February 1, 1938, $28.16; on March 1, 1938, $28.16; and on April 4, 1938, $28.16. All of these payments were in due course remitted by J. W. Anderson Company to appellant.

About thirty days after purchasing the car from Mobley, respondent allowed his son, Barney Cook, to take the automobile to the State of West Virginia and use it in connection with his business.

On January 20, 1938, after making the second payment, respondent had his attorney, Mr. David Hamilton, to write appellant a letter from which we quote:

"J. W. Anderson Company, Rock Hill, S. C., has acted as your agent in collecting two payments on the above account. The payments were collected of Mr. J. T. Cook, of this city, to whom Mr. Mobley sold the car with the consent of J. W. Anderson Company. The fact that you permitted J. W. Anderson Company to collect the money from Mr. Cook shows that J. W. Anderson Company was your agent in the transaction and said Company knew of, and by its act consented to, the transfer of the car from Mr. Mobley to Mr. Cook. You received the payments made by Mr. Cook to J. W. Anderson Company and, therefore, you approved J. W. Anderson Company as your agent.

"Mr. Cook has received a threat from one of your representatives that you intend to take the car in spite of the fact that no payments are in arrears. This is to advise you that Mr. Cook expects to make payments promptly when due and that you will be violating the law and your contract if you interfere with the enjoyment of the possession of said car by Mr. J. T. Cook, or by any member of his family, while there are no payments in arrears. I further wish to advise that if you commit any unlawful act in regard to this matter, I shall probably sue for punitive damages. You could make lots of money if just as soon as a borrower, or his assignee, made a few payments on the mortgage debt, you were permitted to take the car and appropriate it to your own use. Please, therefore, bear in mind that Mr. Cook expects to make payments promptly as they become due and that he and anyone of his family who has possession of the car will be badly damaged should you breach the contract by unlawfully taking possession of the car, or attempting to embarrass Mr. Cook or any member of his family.

"If you do not want Mr. Cook to make payments to J. W. Anderson Company as your agent, let him know and he will forward payments direct to you."

No reply was made to this letter, either to respondent or to Mr. Hamilton. In fact no communication was ever had by appellant with respondent before the automobile was seized on the streets of Princeton, West Virginia, on April 5, 1938. We now quote from the Statement contained in the Transcript of Record in this case:

"This action seeks damages for the alleged conversion by the defendant of the equity of plaintiff in an automobile described in the Complaint. The Complaint alleges in substance that the plaintiff purchased the car from one Mobley, who had theretofore given the defendant a chattel mortgage on same, and assumed and agreed to pay the installments called for thereunder. The Complaint further alleges that plaintiff did pay thereafter all of the payments, but that nevertheless the defendant unlawfully seized and converted to its own use the car in question while it was in the possession and custody of plaintiff's son in the State of West Virginia, and that plaintiff was thereby damaged in the sum of $3,000.00.

"The Answer of defendant is a denial of the material allegations of the Complaint, except that the defendant admits seizing the car and retaining possession thereof.

"The cause was tried before the Hon. T. S. Sease, Circuit Judge, and a jury at the January term of the Court of Common Pleas for Chester County, 6th., Judicial Circuit, and resulted in a verdict for plaintiff of $400.00 actual and $1,600.00 punitive damages. Motion for new trial was made, heard, and refused, and order overruling motion for non-suit, directed verdict and new trial filed January 27, 1939, and due notice of appeal to this Court given by defendant. The plaintiff does not appeal."

Exceptions for appeal are numerous, but according to appellant's brief present seven questions. Before entering upon a discussion of these questions, we call attention to some legal principles applicable in this case and upon which the answers to a number of those questions depend.

After his purchase of the automobile from Mobley, respondent made five payments on the mortgage debt to J. W. Anderson Company, and these payments were in due course remitted to appellant with remittance advices which showed that respondent had purchased the automobile, and that said payments were being made by him. In view of these admitted facts the J. W. Anderson Company was the agent of appellant for the collection of this mortgage indebtedness. Mortgage & Acceptance Corp. v. Stewart, 142 S.C. 375, 140 S.E. 804.

Again, appellant, having been fully advised that respondent had purchased the automobile from Mobley and assumed the payment of the mortgage debt and through its agent having collected and retained five payments on the mortgage indebtedness, cannot now be heard to say that it did not extend credit to respondent. However, this question was submitted to the jury, who by their verdict found that such credit had been extended. Having purchased the automobile from Mobley and credit with respect to the mortgage indebtedness having been extended to him by appellant, respondent had the right to the possession of the mortgaged property until some condition of the mortgage was broken.

We come now to the consideration of the questions presented by the appellant. At the time of the seizure of the automobile was there such default in the payment of the mortgage indebtedness as would entitle appellant to declare a default and take possession of the mortgaged property? As stated above, the note provided for monthly payments of $31.26, beginning on November 16, 1937. By its terms five installments had become due at the time appellant took possession of the automobile. The evidence showed that before the seizure respondent had made five payments as above set forth. These payments and the dates of same were not exactly according to the terms of the note. However, the undisputed evidence shows and the jury by its verdict necessarily found that respondent, not having had the opportunity of seeing the note and mortgage or a copy thereof, paid the entire amount that appellant's agent, J. W. Anderson Company, told him was due thereon, the last payment having been made before the seizure of the automobile. Appellant admits that it never at any time advised respondent of the error made by its agent or...