Crystal Ice Co. of Columbia, Inc. v. First Colonial Corp., No. 20944

• Court: South Carolina Supreme Court
• Writing for the Court: NESS; LEWIS
• Citation: 257 S.E.2d 496,273 S.C. 306
• Parties: CRYSTAL ICE COMPANY OF COLUMBIA, INC., Respondent, v. The FIRST COLONIAL CORP. and George Bruce Shealy, Charles Marshall Duke, Fred C. Meetze, Carolina Rock Wool Co., Inc., and First Citizens Bank and Trust Company of South Carolina, Baker-Brown Builders, Inc., and U. S. Fidelity and Guaranty Company, of whom George Bruce Shealy is Appellant.
• Decision Date: 19 July 1979
• Docket Number: No. 20944

Page 496

257 S.E.2d 496 273 S.C. 306 CRYSTAL ICE COMPANY OF COLUMBIA, INC., Respondent,
v.
The FIRST COLONIAL CORP. and George Bruce Shealy, Charles
Marshall Duke, Fred C. Meetze, Carolina Rock Wool Co., Inc.,
and First Citizens Bank and Trust Company of South Carolina,
Baker-Brown Builders, Inc., and U. S. Fidelity and Guaranty
Company, of whom George Bruce Shealy is Appellant. No. 20944. Supreme Court of South Carolina. July 19, 1979.

[273 S.C. 307] Walter F. Going of Going & Going, Nina G. Reid and Gene V. Pruet of Nexsen, Pruet, Jacobs & Pollard, Columbia, for appellant.

Robert W. Dibble, Jr., of McNair, Konduros, Corley, Singletary & Dibble and Michael W. Tighe of Callison, Tighe, Nauful & Rush, Columbia, for respondent.

Page 497

NESS, Justice:

Heretofore, on the 23rd day of April, 1979, this Court filed its opinion in this case. It is now before us as a result of a petition for a rehearing. Upon a consideration of the petition, it is ordered that our former opinion be withdrawn and the following substituted therefor.

The case concerns the priority of two mortgages, a purchase money interest acquired by appellant Shealy and a mortgage executed by the purchaser, First Colonial Corporation, which was assigned to the respondent, Crystal Ice Company. The master concluded the purchase money interest had priority; the trial court disagreed and held that Crystal Ice possessed the first lien. We agree with the master and reverse the order of the trial court.

By contract of sale dated November 9, 1973, appellant Shealy agreed to sell four acres of land near Columbia, to [273 S.C. 308] C. M. Rose, Jr., agent for First Colonial, for a purchase price of $70,000. Pursuant to the contract, $18,000 was to be paid in cash and the balance by way of a purchase money mortgage.

On November 26, 1973, First Colonial gave to C. M. Rose and Company, Inc. a mortgage and promissory note in the amount of $45,000. This mortgage was assigned to respondent Crystal Ice for $40,000. On this date the deed and purchase money mortgage were executed.

Also on this date the closing was held in the office of Ken Lester, attorney for Rose and First Colonial. Following the closing, Lester offered to record Shealy's deed and mortgage, and on November 30, 1973, Lester completed the recording as follows:

(1) At 12:20 p. m.

(a) The deed to First Colonial from Shealy;

(b) The mortgage of First Colonial to C. M. Rose and Company;

(c) The assignment of the C. M. Rose and Company mortgage to Crystal Ice.

(2) At 12:21 p. m.

(a) The purchase money mortgage of First Colonial to Shealy.

The trial court concluded Crystal Ice had priority under the South Carolina recording statute. We disagree.

Crystal Ice is not entitled to the protection of our recording statute because it was not a bona fide purchaser. The knowledge of the existence of the prior purchase money mortgage was imputed to Crystal Ice through its agent, attorney Ken Lester. As Crystal Ice was not a "subsequent purchaser without notice," it cannot prevail under Code § 30-7-10 simply because its mortgage was clocked...