Crown Central Petroleum Corp. v. Elmwood Properties

• Decision Date: 02 September 1964
• Docket Number: No. 18257,18257
• Citation: 138 S.E.2d 38,244 S.C. 588
• Court: South Carolina Supreme Court
• Parties: CROWN CENTRAL PETROLEUM CORPORATION, Respondent, v. ELMWOOD PROPERTIES, Mutual Properties, Inc., United Bond and Mortgage Corporation, Perpetual Building and Loan Association of Columbia, Interstate Truck Stops, Charles F. Cooper, Claudia P. Broome and Wallace A. Perry, Individually or as an Officer or Director of Any of the Foregoing Corporate Defendants; and Milledge T. Pitts, of whom Elmwood Properties and Charles F. Cooper are, Appellants.

Page 38

138 S.E.2d 38

244 S.C. 588

CROWN CENTRAL PETROLEUM CORPORATION, Respondent, v. ELMWOOD PROPERTIES, Mutual Properties, Inc., United Bond and Mortgage Corporation, Perpetual Building and Loan Association of Columbia, Interstate Truck Stops, Charles F Cooper, Claudia P. Broome and Wallace A. Perry, Individually or as an Officer or Director of Any of the Foregoing Corporate Defendants; and Milledge T. Pitts, of whom Elmwood Properties and Charles F. Cooper are, Appellants.

No. 18257.

Supreme Court of South Carolina.

Sept. 2, 1964.

Milledge T. Pitts, Charles F. Cooper, Columbia, for appellant.

Irvine F. Belser, Clinch Heyward Belser, Belser, Belser & Baker, Columbia, for respondent.

BUSSEY, Justice.

For the sake of brevity, the various corporate entities which are parties to the action will be referred to simply by the first words appearing in their respective corporate names.

The respondent Crown, on January 18, 1962, instituted the present action in the Court of Common Pleas for Richland County to set aside, as allegedly fraudulent, collusive and preferential, under the Statute of Elizabeth, Code Section 57-301, and the statute against unlawful preference, Code Section 57-351, two certain judgments of appellant Elmwood, Roll No. 52850 and Roll No. 52984; to restrain defendants from instituting any further action with respect to the properties herein involved except by proceeding in an action then pending in the same court; to enjoin defendants from proceeding further in certain actions then pending between some or all of them; to have judgment against appellants and other defendants for counsel fees; and for other relief.

From an order of the circuit court confirming the master's report and adjudging the aforementioned judgments of Elmwood fraudulent, collusive, preferential, null and void as to Crown; holding that all claims of Crown against Mutual were entitled to priority over certain claims of Elmwood; holding that Crown was entitled to an allowance of costs and attorneys fees to be paid out of the proceeds of sale of the property involved; and referring the cause back to the master to determine the amount and manner of payment of such attorneys fees, Elmwood and the individual defendant Cooper appealed.

The disposition of this appeal should culminate a long series of maneuvers by the individual defendant Cooper, including multifarious litigation, either caused to be instituted or made necessary by the defendant Cooper, all in an effort to prevent Crown from collecting monies lawfully owed it by Mutual. We shall not here undertake to recite all of the facts reflected by the record or set forth in chronological order everything which happened. We confine our statement of the facts to the bare essentials necessary to an understanding of the decision.

The corporate defendants involved, other than Interstate, that is to say, Elmwood, Mutual, United and Perpetual, are all corporations owned and/or controlled by Cooper and members of his immediate family, Cooper being the dominant officer thereof. Mutual was the owner of various parcels of real estate, including a filling station site, which is involved in this action and with respect to which there was a lease agreement between Crown and Mutual. On August 24, 1954 a note and mortgage executed by Mutual to Perpetual covering the real estate involved in this action and various other parcels, was duly recorded. On August 14, 1958, at which time Mutual was substantially indebted to Crown, Mutual conveyed substantially all of its properties, including the subject property, to United, at which time Perpetual executed a release of the property from the lien of its mortgage, which release was duly recorded. Thereafter, on February 5, 1960, Crown obtained a judgment against Mutual for $10,632.32, execution upon which judgment was returned nulla bona. Crown then instituted a creditors suit on behalf of itself and others against Mutual and United seeking, among other things, to set aside the conveyance of August 14, 1958, and, at least as to the property here involved, the conveyance was set aside as fraudulent by a decree of the court dated August 24, 1961. There was no appeal from this decree, which provided for entry of an implementing order to effect the sale of the subject property, the disbursement of the proceeds and the satisfaction of Crown's judgment.

Crown then, on September 12, 1961, served notice of intention to move before the court for such implementing decree and attached to said motion a copy of a proposed decree which was thereafter signed on September 27, 1961, said decree providing, among other things, for judgment against Mutual and United in the amount of $18,517.39, which amount included the earlier judgment as well as the accrual of additional items; for the sale of the property, and for the distribution of the proceeds of sale. While the last mentioned motion was pending, Cooper, on September 16, 1961, caused to be instituted an action in the County Court of Richland County by Perpetual against Crown, Mutual and United in which it was sought to restore retroactively the lien of the 1954 mortgage which had been released of record in 1958. The complaint alleged that Perpetual owned said note and mortgage. This action was transferred to the court of common pleas as being beyond the jurisdiction of the county court and was not further pursued.

On September 22, 1961, Elmwood brought action, and promptly obtained a consent order for judgment, against Mutual and United in the total sum of $92,444.58, said judgment being based upon the aforesaid note and mortgage of 1954 and being judgment No. 52850 here involved. Crown had no notice of this action, although it had filed a lis pendens against the subject property in connection with the creditors suit. On September 26, 1961, Cooper then caused an action to be brought by Elmwood against Mutual and United, promptly obtaining a consent order for judgment resurrecting the lien of the 1954 mortgage, again without notice to Crown, this judgment being No. 52984 here in issue. In all of the last three mentioned actions Cooper verified the answers of the corporate defendants which in each instance admitted the allegations of the respective complaints as being true; one of the complaints alleging that the 1954 note and mortgage were owned by Perpetual and the other two alleging that such were owned by Elmwood, both corporations under his control.

All three of these actions were hastily brought, the last two secretly and collusively, in an effort to get...