Hayne Federal Credit Union v. Bailey, No. 24678

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtTOAL; WALLER and BURNETT, JJ., and GEORGE T. GREGORY, Jr. and THOMAS J. ERVIN
Docket NumberNo. 24678
PartiesHAYNE FEDERAL CREDIT UNION, Appellant, v. Lynda Hutchins BAILEY, a/k/a Lynda Hutchins Smith, Harold E. Bailey, Karen Kristen Bailey, National Welders Supply Company, Inc., United States Fidelity and Guaranty Company, and Pennsylvania National Mutual Insurance Company, Respondents. . Heard
Decision Date04 June 1997

Page 472

489 S.E.2d 472
327 S.C. 242
HAYNE FEDERAL CREDIT UNION, Appellant,
v.
Lynda Hutchins BAILEY, a/k/a Lynda Hutchins Smith, Harold E.
Bailey, Karen Kristen Bailey, National Welders Supply
Company, Inc., United States Fidelity and Guaranty Company,
and Pennsylvania National Mutual Insurance Company, Respondents.
No. 24678.
Supreme Court of South Carolina.
Heard June 4, 1997.
Decided Aug. 11, 1997.

Page 474

[327 S.C. 246] Charles E. Carpenter, Jr. and Deborah H. Sheffield, both of Richardson, Plowden, Carpenter & Robinson, P.A., Columbia; Jack W. Erter, Jr., of Lee, Wilson, and Erter, Sumter, for Appellant.

Linwood S. Evans, Jr., Sumter, for Respondents.

TOAL, Acting Chief Justice:

In this foreclosure action, Hayne Federal Credit Union ("Credit Union") appeals from the order of the special referee who held that Harold Bailey ("Father") owned the property in dispute by virtue of a resulting trust. We reverse and remand.

FACTUAL/PROCEDURAL BACKGROUND

Father contracted to purchase a house located on Pumpkin Lane in Sumter County. He had put down $25,000 in earnest money to make the purchase. The real estate agent involved [327 S.C. 247] in the transaction indicated that Father had told her to prepare the contract identifying Father's son, William E. Bailey ("Son"), as the purchaser. The closing attorney testified that his primary contact was with Father. At the closing, which Son attended, Father produced a briefcase containing $73,000 in cash to pay off the balance on the house.

Although Father paid for the house, the deed was put in Son's name. The closing attorney testified that Father was buying the property and putting it in Son's name because of business problems. In his pleadings in the present case, Father declared that he instructed the closing attorney to place the title in Son's name "as an accommodation and for protection against the claims of potential lien and judgment creditors." At trial, he testified that "The real reason I put the house in my son's name was to keep my wife from getting it...." He further indicated that he had been advised not to have any houses in his own name in the event he remarried.

Page 475

Father occupied the house. He paid the insurance and taxes on the property. Father testified that Son never helped him financially or physically with the house, nor did Son ever occupy the residence.

Son died in June 1987. Son's will devised all of his property to his wife Lynda Hutchins Bailey ("Lynda"). Father did not make a claim against Son's estate as to the Pumpkin Lane property.

In 1990, Lynda applied for a loan in the amount of $17,000 from Credit Union, where she was employed at the time. The loan was to be secured by the Pumpkin Lane property. Credit Union required an attorney to certify the title. Lynda's attorney did a title search and certified that the mortgage was a first lien on the property and that Lynda was the fee simple title owner. Credit Union approved the loan, and the mortgage was recorded in the Sumter County RMC office.

Sometime thereafter, Lynda filed for bankruptcy. Father filed a claim with Lynda's bankruptcy trustee, asserting ownership of the Pumpkin Hill property. In April 1994, this claim in bankruptcy court was settled for approximately $12,000. The settlement statement declared that "the Trustee will transfer the estate's interest in the real property by Trustee's deed, without warranties, to [Father] subject to a first mortgage[327 S.C. 248] to Hayne Federal Credit Union of Spartanburg, South Carolina and Bailey will pay to the Trustee $11,000 [sic] lump sum." This settlement was approved by the bankruptcy court.

In August 1994, Credit Union commenced this foreclosure action. Father answered and counterclaimed, contending that he owned the Pumpkin Hill property by virtue of a resulting trust. The matter was referred to a special referee. The referee found that Father owned the property and canceled Credit Union's lien on the property. Credit Union has appealed and presents, among others, the following issues:

It argues that Father is not entitled to avoid Credit Union's lien on the property because:

1. A resulting trust was not created inasmuch as Father did not rebut the presumption that he made a gift by titling the property in Son's name.

2. A resulting trust was not created because Father placed title in Son's name to avoid creditors and/or to defraud his wife.

3. Father is by virtue of judicial estoppel precluded from claiming ownership of the property.

LAW/ANALYSIS

A mortgage foreclosure is an action in equity. Collier v. Green, 244 S.C. 367, 137 S.E.2d 277 (1964). Our scope of review of a case heard by a master who enters a final judgment is to determine facts in accordance with our own view of the preponderance of the evidence. See Tiger, Inc. v. Fisher Agro, Inc., 301 S.C. 229, 391 S.E.2d 538 (1989).

A. RESULTING TRUST: PRESUMPTION OF GIFT

Credit Union argues that a resulting trust was not created because Father did not rebut the presumption that he made a gift by titling the property in Son's name. We disagree.

Equity devised the theory of resulting trust to effectuate the intent of the parties in certain situations where one party pays for property, in whole or in part, that for a different reason is titled in the name of another. McDowell v. [327 S.C. 249] South Carolina Dep't of Social Servs., 296 S.C. 89, 370 S.E.2d 878 (Ct.App.1987). The general rule is that when real estate is conveyed to one person and the consideration paid by another, it is presumed that the party who pays the purchase money intended a benefit to himself, and accordingly a resulting trust is raised in his behalf. Caulk v. Caulk, 211 S.C. 57, 43 S.E.2d 600 (1947). The presumption, however, may not be in accord with the truth. It may be rebutted and the actual intention shown by parol evidence. Larisey...

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113 practice notes
  • In re Boyd, C/A No. 13-02924-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • July 17, 2020
    ...of South Carolina adopted the doctrine of judicial estoppel as it relates to matters of fact in Hayne Federal Credit Union v. Bailey , 327 S.C. 242, 489 S.E.2d 472, 477 (1997). In Cothran v. Brown , the Supreme Court of South Carolina provided the elements for judicial estoppel:(1) two inco......
  • Holtzclaw v. Morgan (In re Holtzclaw), C/A No. 20-03558-HB
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • August 27, 2021
    ...nom. Furlow v. Macdonald , C/A No. 2:20-CV-3820-DCN, 2021 WL 2982864 (D.S.C. Jul. 15, 2021) (quoting Hayne Fed. Credit Union v. Bailey , 327 S.C. 242, 249, 489 S.E.2d 472 (1997) ). However, when the conveyance is to a spouse, child, or any other person for whom the purchaser is under a lega......
  • Wright v. Craft, No. 4181.
    • United States
    • Court of Appeals of South Carolina
    • November 27, 2006
    ...not explain how the loan application qualifies as a proceeding related to the current action. He cites Hayne Fed. Credit Union v. Bailey, 327 S.C. 242, 489 S.E.2d 472 (1997), and Quinn, 343 S.C. at 414-15, 540 S.E.2d at 476, in support of this broad view. However, neither of these cases sup......
  • Whitacre Partnership v. Biosignia, Inc., No. 617PA02.
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • February 6, 2004
    ...See New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 1814, 149 L.Ed.2d 968, 977 (2001); Hayne Fed. Credit Union v. Bailey, 327 S.C. 242, 251-52, 489 S.E.2d 472, 477 (1997); Fay v. Fed. Nat'l Mortgage Ass'n, 419 Mass. 782, 787-88, 647 N.E.2d 422, 426 (1995); Douglas W. Henkin, Comm......
  • Request a trial to view additional results
113 cases
  • In re Boyd, C/A No. 13-02924-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • July 17, 2020
    ...of South Carolina adopted the doctrine of judicial estoppel as it relates to matters of fact in Hayne Federal Credit Union v. Bailey , 327 S.C. 242, 489 S.E.2d 472, 477 (1997). In Cothran v. Brown , the Supreme Court of South Carolina provided the elements for judicial estoppel:(1) two inco......
  • Holtzclaw v. Morgan (In re Holtzclaw), C/A No. 20-03558-HB
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • August 27, 2021
    ...nom. Furlow v. Macdonald , C/A No. 2:20-CV-3820-DCN, 2021 WL 2982864 (D.S.C. Jul. 15, 2021) (quoting Hayne Fed. Credit Union v. Bailey , 327 S.C. 242, 249, 489 S.E.2d 472 (1997) ). However, when the conveyance is to a spouse, child, or any other person for whom the purchaser is under a lega......
  • Wright v. Craft, No. 4181.
    • United States
    • Court of Appeals of South Carolina
    • November 27, 2006
    ...not explain how the loan application qualifies as a proceeding related to the current action. He cites Hayne Fed. Credit Union v. Bailey, 327 S.C. 242, 489 S.E.2d 472 (1997), and Quinn, 343 S.C. at 414-15, 540 S.E.2d at 476, in support of this broad view. However, neither of these cases sup......
  • Whitacre Partnership v. Biosignia, Inc., No. 617PA02.
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • February 6, 2004
    ...See New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 1814, 149 L.Ed.2d 968, 977 (2001); Hayne Fed. Credit Union v. Bailey, 327 S.C. 242, 251-52, 489 S.E.2d 472, 477 (1997); Fay v. Fed. Nat'l Mortgage Ass'n, 419 Mass. 782, 787-88, 647 N.E.2d 422, 426 (1995); Douglas W. Henkin, Comm......
  • Request a trial to view additional results

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