Garvin v. Garvin

• Decision Date: 22 June 1899
• Citation: 33 S.E. 458,55 S.C. 360
• Parties: GARVIN v. GARVIN et al.
• Court: South Carolina Supreme Court

33 S.E. 458

55 S.C. 360

GARVIN v. GARVIN et al.

Supreme Court of South Carolina

June 22, 1899

Appeal from common pleas circuit court of Aiken county; O. W Buchanan, Judge.

Suit by James C. Garvin against Robert Garvin and others. There was a decree for plaintiff, and defendants appeal. Reversed.

Following is the decree of the circuit judge:

"This action was heard by me at the June term of the court, at Aiken, upon the pleadings and proceedings and testimony as reported by the master, both oral and documentary. The cause was referred to the master simply to report the testimony on the equitable issues, but at the hearing before him it was agreed by counsel of all parties, and so entered on the record, that the testimony should be taken on all issues, legal and equitable; and all of the said issues, by consent of counsel, were submitted to the court at the hearing, to be determined by the court. The plaintiff, James C. Garvin, brings the action to foreclose a mortgage given him by the defendant Robert Garvin on September 30, 1892. Said mortgage purports to secure the payment of two notes, both dated on the aforesaid date,--one for $594.44, with interest from date at 8 per cent., and due two years thereafter; the other, due five years thereafter, for the sum of $1,000, in round numbers with interest from date at 8 per cent. The mortgage covers two tracts of land, described as follows: The interest of the defendant Robert Garvin in the tract containing 260 acres, more or less, bounded on the north by lands of the widow Nobles, on the east by the estate of W. Garvin, on the south by lands of Mrs. Polly Williams,--the Ninety-Six road being the dividing line,--and on the west by land of the widow Ables and lands of H. E. Busbee. This tract is known as the 'Betts' or 'Hutto' tract. The interest of the defendant Robert Garvin in that tract containing 400 acres, more or less, about one mile north of the town of Wagener, on the waters of Giddy swamp, bounded on the north by lands of Emanuel Garvin and the Baltzegar homestead, east by lands of Emanuel Garvin, and south by lands of J. E. Busbee, and west by the home tract of Robert Garvin. This tract is sometimes called the 'Mill Tract.' The said mortgage is alleged, and shows upon its face, to have been recorded in the clerk's office on October 3, 1892. Since the commencement of the action and the taking of the testimony before the master, the defendants Robert Garvin and T. A. McCreery have departed this life, and by proceedings presented to me, and orders signed, their representatives have been made parties defendant in this action, and have filed answers. The pleadings on the part of the defendants are as follows and raise the following issues: McCreery alleges and claims that the firm of McCreery & Co. recovered judgments against several parties, among others the defendant Robert Garvin which was entered in the clerk's office in October 1892, after the date of the mortgage aforesaid, and that said judgments were entered in a suit or suits begun before the date of the mortgage from Robert Garvin to the plaintiff; that said mortgage was given and received by the mortgagor to the mortgagee to delay, hinder, and defeat the creditors of the mortgagor, and it is a fraud upon the creditors of said mortgagor. The defendants claiming under the McCreery judgment claim title to the Betts tract of land, alleging that the same was sold under their judgment, and that, as the mortgage aforesaid is fraudulent, they are entitled to any interest in said Betts tract of land which belongs to said Robert Garvin. The defendant Emanuel Garvin alleges and claims that he is the owner in fee simple of the entire Betts tract of land, and that he has acquired the one-half undivided interest of his brother, Robert Garvin, who, it is admitted, was a tenant in common with him to that extent in said land by virtue of adverse possession of said tract of land, and by virtue of the fact that his brother, said Robert Garvin, entered into a contract with him to sell the said one-half interest for $475, and that he has paid for the same. The defendant Melvina Garvin claims that she is the absolute owner of the Mill tract of land aforesaid, having purchased the same from the master of Aiken county at public outcry, and obtained a deed therefor from him, under a sale had in the case of Joseph Garvin and others against Ellen Watts and others, which proceedings were for the partition of said land between the parties interested therein, among whom were the plaintiff and the defendant Robert Garvin, who held an interest each of one-fourth undivided part thereof. The testimony reported by the master is voluminous, and has been carefully considered, as also the argument of counsel, which has been made to the court, and the following conclusions have been reached, after due consideration thereof:

"1. Is the plaintiff entitled to foreclosure of his mortgage for any amount? This question is contested both by the parties interested in the McCreery judgment and by Emanuel Garvin. It is claimed and insisted that, while the mortgage is good for the amount expressed by the note first above described $594.44, that the other note for $1,000 was placed in the mortgage with a fraudulent intent of delaying, hindering, and defeating the creditors of Robert Garvin; and that, although a part of the mortgage debt is valid, the other part being invalid, the mortgage security is void. It is unquestionably good law, as set forth in such cases as Bowie v. Free, 3 Rich. Eq. 403, that where a judgment confessed for a much larger amount than is actually due the plaintiff, and intended not only to secure the amount actually due, but also to defraud other creditors of the defendant, is set aside for actual fraud, the plaintiff in the judgment will not be allowed to retain his lien as against other creditors for the amount actually due him. And this would be so equally as to a mortgage, if it were the fact that actual fraud existed between the parties, and that both the mortgagor and the mortgagee intended that the mortgage should not only be a security for the debt due, but to delay, hinder, and defeat creditors. But it is equally true as law that if a mortgage or judgment is given to secure an indebtedness valid in fact, and in part for future advances to be made, with no intent on the part of the parties to delay, hinder, or defeat creditors, then such mortgage or judgment would be valid and binding to the extent of the amount found due thereon. This principle is stated and recognized by Chancellor Dunkin in Bowie v. Free, supra (page 410), where he says: 'It has been repeatedly held, too, that a judgment or other security may be taken for future responsibilities or future advances. Chancellor Kent expresses the opinion that this doctrine should be taken with the limitation that, where a subsequent judgment or mortgage intervened, further advances after that period could not be covered.' Again, at page 411, he says: 'In itself, it is no fraud to take a judgment for a larger amount than is actually due. The amount may not be ascertained, or may not at the time be susceptible of accurate statement.' In Bump, Fraud. Conv. (2d Ed.) p. 477, the author, speaking of this principle, says: 'There must, however, be fraud to bring a case within this principle. If there is no fraud or wrong done, or attempted, or intended to be done, the principle does not apply. If an attachment or judgment is taken for too much inadvertently, and the creditor has no purpose in obtaining more than is due him, it will be valid.' In the case of Weaver v. Wright, 13 Rich. Law, 9, it was held that circumstances of suspicion were insufficient to justify a verdict finding a confession of judgment fraudulent which had in it a debt part valid and part invalid; and Judge O'Neal, delivering the opinion of the court, at page 26, says: 'A mere suspicion cannot affect a judgment. It cannot be pronounced fraudulent, or set aside, on any such ground.' Also the similar case of Bulwinkle v. Grube, 5 Rich. Law, 294. So the question of fact is whether or not this mortgage in question, which was given, it seems, from the testimony, to secure one note for a debt then honestly due, and another note for $1,000, upon which nothing was then due, was given with such a fraudulent intention as to delay, hinder, or defeat the creditors of Robert Garvin that it should be set aside. Those who attack a fraud have upon them the burden of proof, and must show, either directly or by circumstances, that the transaction complained of was fraudulent, not only on the part of the mortgagor, but of the mortgagee. It is true that the complaint in this action, which, however, was not verified by the oath of the plaintiff, alleges that the $1,000 note was due, but it appears at the hearing, when the first witness was put upon the stand, Mr. G. A. Lucas, and before the testimony as to what was due upon the note was brought out, plaintiff's counsel announced that they withdrew the note of $1,000, because nothing was due upon same. It was claimed that this was an indiscretion that plaintiff intended to claim more than what was due him. Suppose before the order of reference was taken a motion was made to amend the complaint, striking out the $1,000 note, and it was done, that would have no more effect than the withdrawal of it at the reference, and the withdrawal simply goes to the effect of reducing the debt held by the plaintiff, and in that way to the benefit of defendants' contesting claim. It is further claimed by the defendants that the McCreery suit was pending when this mortgage was given. That is generally considered a circumstance of suspicion; but, in order to ripen into fraud, there must be proof of other...