First Carolinas Joint Stock Land Bank of Columbia v. Knotts

• Decision Date: 14 February 1939
• Docket Number: 14823.
• Citation: 1 S.E.2d 797,191 S.C. 384
• Parties: FIRST CAROLINAS JOINT STOCK LAND BANK OF COLUMBIA v. KNOTTS et al.
• Court: South Carolina Supreme Court

1 S.E.2d 797

191 S.C. 384

FIRST CAROLINAS JOINT STOCK LAND BANK OF COLUMBIA v. KNOTTS et al.

No. 14823.

Supreme Court of South Carolina

February 14, 1939

[Copyrighted Material Omitted]

The complaint directed to be reported follows:

The plaintiff above named complaining of the defendants above named, alleges 1. That this action is brought on behalf of the plaintiff and all other creditors of Shingler B. Knotts.

2. That the plaintiff is a corporation duly organized and existing under the laws of the United States Congress with its principal place of business in the City of Columbia S. C.

3. That the defendants Shingler B. Knotts and Annie M. Knotts are residents and citizens of Orangeburg County, the defendant Annie M. Knotts being a sister of Shingler B. Knotts, and being the holder of various mortgages and other claims against said Shingler B. Knotts.

4. Upon information and belief that the defendant J. N. Culler is a resident of Orangeburg County, and is the holder of a chattel mortgage given by the defendant Shingler B. Knotts, and that the defendant Henry R. Sims, as Receiver of the Southern Bank and Trust Company of Orangeburg, S. C., is the holder of a judgment or judgments against the defendant Shingler B. Knotts.

5. That the plaintiff is the holder of a Twenty Thousand ($20,000) Dollar amortization note made by the defendant Shingler B. Knotts, dated on February 17, 1925, payable in Sixty-six (66) semi-annual installments of Seven Hundred ($700) Dollars each (except that the last installment is for Five Hundred and Eighty-four [$584] Dollars) with interest at six per cent. secured by a mortgage of even date, recorded in the office of the Clerk of Court for Orangeburg County on February 19, 1925, in book of mortgages 96 at page 67, and covering premises described as follows:

All that certain piece, parcel, or tract of land, situate, lying and being in Elizabeth Township, in the County of Orangeburg, in the State of South Carolina, containing nine hundred and twelve (912) acres, more or less, with the dwelling and improvements thereon, and bounded on the north by lands of Mrs. F. E. Hoffman; on the east by lands of A. H. Inabinet and Annie M. Knotts; on the south by other lands of Shingler B. Knotts, and the west by lands of Staley and Bull Swamp Creek, dividing said lands from those of J. W. Ulmer, all of which are more fully represented on a plat thereof made by C. G. Sohoenberg, Surveyor, dated February 6, 1925. Being a portion of a tract of land conveyed to Shingler B. Knotts by Annie M. Knotts in the division of the estate lands of Joseph E. Knotts, deceased, recorded in Deed Book 40, page 543, in the office of the Clerk of Court for Orangeburg County, S. C.

6. That the said mortgage contains covenants providing for the right to foreclose the same in case of default in the payment of principal or interest or of taxes, and also contains a covenant assigning and setting over and transferring to the plaintiff "all of the rents and income of said mortgaged premises for each and every year that any installment or installments of the said note may be unpaid", and providing that, upon filing suit of foreclosure, plaintiff should "be entitled to have a receiver appointed to take charge of the said mortgaged premises, together with all the rents, profits, crops and proceeds arising therefrom during such litigation, ***."

7. That none of the installments due during the years 1932, 1933, 1934, 1935, 1936, and 1937 to date have been paid and there is a small balance due on the installment due on December 1, 1931, and upon information and belief that no taxes have been paid upon the said property for the years 1928 down to date, and that the taxes thereon due to be paid through 1936 amount to approximately Thirty-two Hundred and Fifty ($3250) Dollars.

8. That during the fall of the year 1934, while the plaintiff was pressing for payment of arrearages under the said mortgage, the defendant Shingler B. Knotts filed his petition in bankruptcy on or about the 17th day of November, 1934, in the United States District Court for the Eastern District of South Carolina under Section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203, and therein alleged his insolvency; that in the said bankruptcy matter various proceedings were had and undertaken by the said defendant, and numerous appeals taken and sought to be taken by the defendant to the Circuit Court of Appeals of the Fourth Circuit and to the United States Supreme Court, and that the said bankruptcy matter was finally dismissed in the spring of 1936 by the Federal Court for lack of good faith on the part of the said defendant in the composition or extension proposals, all of which will fully appear by reference to the record of said cause, reference to which is craved as often as may be necessary.

9. That thereafter on or about the 25th day of June, 1936, the plaintiff duly commenced its suit, in this Court, for the foreclosure of the said mortgage; that the defendant Annie M. Knotts was also made a party defendant therein but defaulted; that Lis Pendens was duly filed in the office of the Clerk of Court for Orangeburg County on or about the said 25th day of June, 1936, and that various proceedings in the said suit have been had, and that the said suit has progressed to the point where the Court has granted a judgment of foreclosure and sale therein dated August 20, 1937, giving judgment against the defendant Shingler B. Knotts for the sum of $25,576.85 and ordering the sale of the said premises for salesday in November, 1937, all of which is more fully shown by the record in said cause, reference to which is craved as often as may be necessary.

10. That in the said foreclosure proceeding orders were duly passed on July 31 and October 16, 1936, providing that the plaintiff should "have a lien upon all of the crops now standing or to be gathered for the year 1936 on, of and from the said mortgaged premises, and the said crops are hereby impressed with such lien", and that the lien should be discharged upon the defendant Knotts paying over to the Hon. B. H. Moss, as Referee, the sum of $1350 on or before October 1, 1936; that on appeal from the said order by the said Shingler B. Knotts to the South Carolina Supreme Court the said order was affirmed in February or March, 1937, except that the amount of the said lien was reduced from $1350 to the sum of $900; that the said rental for the year 1936 has not been paid, and that the said defendant Knotts has admitted that he had disposed of the 1936 crops, and that as plaintiff is informed and believes the defendant grew a considerable quantity of cotton, corn and other crops on said premises during the year 1936 amounting in value to several thousand dollars, and that in so disposing of said crops without satisfying said lien, the said defendant has thereby rendered himself liable, as plaintiff is advised, to arrest and bail for unlawfully disposing of such crops.

11. That in the said foreclosure proceeding, moreover, an order was duly passed by Judge Mann, Judge of the First Judicial Circuit, dated on March 13, 1937, appointing P. F. Haigler Receiver of the rents, profits, crops and proceeds arising from the said mortgaged premises during the pendency of the said foreclosure proceeding; that a considerable quantity of crops of cotton, corn and other crops has been raised upon the said premises during the year 1937 amounting in value to several thousand dollars, and that the said Receiver has made demand upon the said defendant Shingler B. Knotts, to deliver over the said rents, crops and proceeds, but that the said defendant Knotts has unlawfully refused and continues to refuse to comply with said demand or to deliver said rents and crops.

12. Upon information and belief, the defendant Annie M. Knotts claims to be the holder of a note and real estate mortgage purporting to cover 523 acres of land, more or less, dated April 4, 1932, given by the defendant Shingler B. Knotts in the original amount of $17,000, on which there is claimed to be a principal balance due of $13,500, it being also claimed by the said Annie M. Knotts that the said mortgage also covers the dwelling house (valued by said Shingler B. Knotts in his application for loan from plaintiff at $7,000) and a portion of the lands which were represented by said Shingler B. Knotts to be and are covered by the mortgage held by this plaintiff; that the said Annie M. Knotts commenced an action of foreclosure on the said mortgage in this Court on or about July 6, 1937, but did not make this plaintiff a party defendant thereto, though she knew the dwelling house was covered by plaintiff's mortgage; that no answer or appearance was filed therein on behalf of the said Shingler B. Knotts and that the said action has already proceeded to final judgment, an order therein having been taken on August 17, 1937, giving judgment therein against the defendant Shingler B. Knotts for the sum of $19,339, and ordering that the property be sold on salesday in September, and that the sale not be held open for thirty days, all of which is shown by the record in said cause, reference to which is craved as often as may be necessary.

13. That the claim that the said Annie M. Knotts' mortgage covers the dwelling and a portion of the land mortgaged to this plaintiff first came to plaintiff's attention on or about April 16, 1937, in the examination of the defendant Shingler B. Knotts; that in fact, as plaintiff is informed and believes, there is no merit in such contention; that the plaintiff's mortgage itself as well as the application for the loan specifically shows that the dwelling was covered by the mortgage given to this plaintiff; that the said Annie M. Knotts made no such...