Appeal
from common pleas circuit court of Barnwell county; O. W
Buchanan, Judge.
Separate
actions by R. M. Hughes and others and Winfield Scott and
others against the Edisto Cypress Shingle Company and others.
The first action was to set aside certain mortgages and
subject property, and the second was for the winding up of
the Edisto Cypress Shingle Company. The causes were heard
together, and from a decree invalidating one of the
mortgages, and directing a sale of property to satisfy it
certain defendants appeal. Modified.
The
decree of the lower court and the grounds of appeal are as
follows:
"This
action came on for a hearing at the November term of the
Barnwell county court upon the report of the master, A
Howard Patterson, to whom it had been referred to take the
testimony, and report the same to this court. The
plaintiffs, on behalf of themselves and all other creditors
of the defendant Edisto Cypress Shingle Company, brought
this action to subject the property of the defendant Edisto
Cypress Shingle Company to the payment of the debts of
those plaintiffs who are judgment creditors, and for the
purpose of vacating the mortgage of the Bailey-Lebby
Company and Perkins Company, and to enjoin and restrain the
Bailey-Lebby Company from enforcing its mortgages against
the Edisto Cypress Shingle Company. The Edisto Cypress
Shingle Company and the Bailey-Lebby Company are
corporations duly chartered by the secretary of state under
the existing laws of this state, and are business
corporations. Perkins & Co. is a business concern
consisting of Willis J. Perkins, doing business at Grand
Rapids, Mich., and who was named in plaintiffs'
complaint as a corporation, and served as such, but
subsequently petitioned the court to be made a party to
this suit as Willis J. Perkins, doing business as Perkins & Co. The other defendants named in plaintiffs' complaint
are judgment creditors of the Edisto Cypress Shingle
Company. It appears from the testimony that the Edisto
Cypress Shingle Company executed, or attempted to execute,
on the ___ day of December, 1892, a chattel mortgage to the
Bailey-Lebby Company for ___ dollars, which debt was
afterwards merged into one debt, and became incorporated
with that secured by a chattel
mortgage executed by said Edisto Cypress Shingle Company to
the Bailey-Lebby Company, on December 22, 1893, for the sum
of $1,765.92. The Perkins paper, it is claimed by Willis J.
Perkins, is a chattel mortgage, as was held in Perkins
v. Bank (S. C.) 20 S.E. 759. The propositions in this
case are clearly defined. The plaintiffs, together with all
the creditors of the Edisto Cypress Shingle Company,
attacked the alleged mortgages of the Bailey-Lebby Company
and that of the Perkins Company upon the grounds that
neither of the said mortgages were authorized to have been
executed by the Edisto Cypress Shingle Company, that no
advertisement appeared in any paper authorizing the
execution of said mortgages, and that neither the
stockholders nor the directors (save and except A. N. Webb
and the secretary of said company) knew that said mortgages
were executed, and never authorized the execution thereof.
The various creditors obtained their judgments against the
Edisto Cypress Shingle Company, and they are in every
respect regular. The plaintiffs applied to Judge
Witherspoon for an order enjoining and restraining the
Bailey-Lebby Company from executing its mortgages over the
property of the Edisto Cypress Shingle Company, from
selling the same, and for the appointment of a temporary
receiver; and C. B. Free was, under the order of Judge
Witherspoon, appointed as temporary receiver, and upon the
hearing of the return to said order the Bailey-Lebby
Company obtained an order by which all of the chattel
property, including shingles, mules, horses, etc.,
described in its said mortgage, was turned over to it, with
the right on the part of said C. B. Free, who was appointed
permanent receiver, to bring any suit or suits for its
recovery. The plaintiffs, however, after the appointment of
C. B. Free as permanent receiver, entered into a consent
order on the part of themselves with the Bailey-Lebby
Company, by which it was agreed that the plaintiffs R. M.
Hughes, H. P. Jennings, and A. W. Whetstone admitted that
the mortgage of the Bailey-Lebby Company, bearing date
December 22, 1893, was a valid, subsisting, and bona fide
mortgage, and fixed the debt due the mortgage at fifteen
hundred dollars; and this order is binding upon the
plaintiffs and the Bailey-Lebby Company, so that the only
question to be determined is who are bound by said order,
and what is the status of the mortgage of the Bailey-Lebby
Company. I find as a fact that the mortgage of the
Bailey-Lebby Company, dated December 22, 1893, is bona
fide, and was made with the full knowledge of the company,
and duly authorized by the directors of said company, and
that under said order C. B. Free, acting as agent of the
Bailey-Lebby Company, sold the balance, consisting of 2
mules and 3 oxen, for $137.50, and that the Bailey-Lebby
Company sold of shingles embraced in its mortgage--
|
325,600 clippers at $1.00
|
$ 325 60
|
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216,570 Star A " 1.25
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270 71
|
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280,250 Prime " 2.00
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560 50
|
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235,635 Best " 2.75
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647 96
|
|
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---------
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|
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$1,804 77
|
--"And
that the value of the shingles as set forth above was the
real worth of the shingles aboard the cars at Edisto, S. C.,
and that the Bailey-Lebby Company is responsible to C. B.
Free, receiver, for $1,804.77, the value of the said
shingles, and $137.50, the value of the said mules and oxen,
making a total of $1,942.27; and that, as to the plaintiffs,
the Bailey-Lebby Company is entitled to credit for--
|
Amount fixed by consent order
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$1,500 00
|
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Paid May rent of land
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100 00
|
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Load shingles, etc., C. B. Free
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103 35
|
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Taxes
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46 00
|
|
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---------
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Making a total of
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$1,749 35
|
--"Which
debt, from the amount received, $1,942.27, leaves a balance
due the receiver as to these plaintiffs of $192.92; but as to
the other creditors the Bailey-Lebby Company's debt
stands on a different basis. I find that the Bailey-Lebby
Company had received the shingles shipped to it, and from
cash arising from the sale of shingles embraced in its
mortgage after the date of its last mortgage, December 22,
1893, the sum of $789.61, and that this amount is to be
credited upon the notes of the Bailey-Lebby Company, and that
these shipments were made before the maturity of the notes
respectively, and, as they did not bear any interest until
maturity, the first two notes were paid, except a balance of
$76.55, and on this sum the defendant the Bailey-Lebby
Company is entitled to interest from the 22d day of June,
1894, until the maturity of the fourth note; and the interest
amounts to $4.30. So the balance of the mortgage debt would
be $930.61; the cost of loading shingles, etc., by C. B.
Free, $103.35; rent of land, $100; for taxes, $46,--which
leaves the Bailey-Lebby Company indebted to C. B. Free, as
receiver, as to the other creditors, in the sum of $712.21;
and the question which was so earnestly discussed, as to
whether the machinery is fixtures or chattels, does not enter
into the Bailey-Lebby Company's mortgage, as said
mortgage had been paid in full by the sale of the chattel
property, and was duly recorded.
"The
Perkins & Company Paper.
"I
find that this paper, as presented at the trial, consists of
two parts:
"First.
A printed form, with blanks filled out in the handwriting
of S. S. Ingram, and signed by him as salesman, for Perkins & Co. It is as follows:
"'Branchville, S. C., Febry. 23rd, 1893.
"'Messrs
Perkins & Co., Grand Rapids, Mich.: You will please ship the
following goods that have prices carried out, via best route,
South Carolina Railroad, our address at Edisto Sta., South
Carolina, for which we agree to pay you as follows: ___
dollars, 1/3
cash ten days after shipment, or 3/4 the value of order,
balance as follows: Time from date of shipment of 3/4 value
of order, $___, 1/3 6 months; $___ months; interest, 8 per
cent. where three months or more time is given on all or
part, insurance is to be affected in the amount of unpaid
notes and accounts; loss, if any, payable to Perkins & Company, as their interest may appear, and policy delivered
to them within thirty days from shipment; or Perkins & Company are hereby entitled to effect said insurance, adding
premium and expense to the amount of first note becoming due
thereafter. Perkins & Company's security notes to be used
in settlement as per time stated above. This contract order
is taken subject to the approval of Perkins & Company, and
strikes, accident, and delays unavoidable or beyond control
of Perkins & Company. Shipment to be made for goods specified
below about as soon as possible. Acceptance of machinery when
delivered by transportation company is understood to
constitute a waiver of all claims for damage by reason of any
delay. No understanding, whether verbal or otherwise, will be
recognized unless specified in this contract. All property
sold under this contract shall be held and recognized at all
times as personal property. Title and ownership of all
property herein contracted for, and all repairs and additions
thereto, and all contracts for machinery made within one year
from date hereof, shall remain in Perkins & Co. Until the
full purchase price is paid, and in case of any default in
any or either of the payment, all payments shall, at the
option of Perkins & Co., notice of ___ which is hereby
waived, become and be at once due and payable, and said...
