Johnson v. Keel

• Decision Date: 10 October 1928
• Docket Number: (No. 12508.)
• Citation: 145 S.E. 113
• Parties: Ex parte JOHNSON. SWYGERT. v. KEEL et al.
• Court: South Carolina Supreme Court

145 S.E. 113

Ex parte JOHNSON.

SWYGERT.

v.KEEL et al.

(No. 12508.)

Supreme Court of South Carolina.

Oct. 10, 1928

Cothran, J., dissenting.

Appeal from Common Pleas Circuit Court of Aiken County; J. E. Harley, Special Judge.

Action by Mary A. Swygert against Bradford Keel and others to foreclose a mortgage, in which J. C. Johnson intervened. From the judgment, intervener appeals. Reversed and remanded.

Following is the decree mentioned in opinion:

This matter was heard by me at the spring term of the court of common pleas for Aiken county. The cause was fully argued by counsel orally. Both sides have also filed written arguments of considerable length, and the matter has had my very earnest consideration, and I am herein endeavoring to discuss the exceedingly interesting questions involved in detail, regarding the questions involved as being more important than the comparatively small amount of money in dispute.

The controversy herein is a sequel to the foreclosure of a mortgage executed by W. H., S. A., and Bradford Keel in favor of Bank of Western Carolina, and by it transferred to the plaintiff Mrs. Mary A. Swygert. This mortgage secured the payment of a debt of $15,000, which with unpaid interest amounted at the time. of the foreclosure to more than $20,000. The real estate covered by the mortgage, known as the C. A. Keel home place, brought at the foreclosure sale but $6,200, leaving an unpaid deficit still due the plaintiff of approximately $14,000, even had the plaintiff received the whole of the $6,200 which the property brought at the sale.

The present controversy is between J. C. Johnson (hereinafter designated as "the claimant"), who upon his own petition was made party defendant herein shortly before the sale. Johnson, the claimant, claims to have a mortgage prior in rank to the plaintiff's mortgage, covering a one-sixth interest in the property. His mortgage was originally for $750, and would now amount to approximately $1,000. All parties consented to allow the sale in the foreclosure action to proceed, but the master of Aiken county was directed in the order of sale to withhold $1,000 subject to the determination by this court as to whether the plaintiff or the claimant is entitled to receive said fund. The matter argued before me was the question of the disposal of the $1,000 which is now held by said master.

The questions involved are interesting, and the law complex.

Testimony was taken by the master, both of an oral and a documentary nature. After a full consideration of the same the following are my findings of fact:

C. A. Keel died in 1892, seized of the land in question. His will was admitted to probate, and devised the property to his wife for life. She died in March, 1919. The will further provides: "At the death, of my beloved wife I will that there shall he an equal division of what may be left of my estate * * * among my beloved children, J. H. Keel, Hattie Bates, P. H. Keel, E. F. Keel, W. H. Keel, E. M. Keel and S. A. Keel. * * * If any of the above children die before a division of my estate is made, leaving a bodily heir, then that heir or heirs, as the case may be, will have their parent's share of my estate."

In September, 1919, a partition proceeding, in which the children of C. A. Keel, and his grandchildren who represented predeceased children, were made parties, was commenced in the court of common pleas of Aiken county. This proceeding constituted judgment roll No. 4724 in the clerk's office of said county, which said roll was offered in evidence herein. The proceeding is an ordinary partition proceeding between said parties, in which the sale of the property in accordance with the terms of the will was sought, and a division of the proceeds of the sale was asked for. The proceeding will hereinafter be more fully referred to.

Bradford Keel, the only child of one of C. A. Keel's seven children, on October 22, 1919, executed a mortgage in favor of P. K. Livingston covering his (Bradford's) "undivided right, title, interest and estate" in the tract of land in question. This mortgage was not recorded until January 22, 1920. Livingston assigned this mortgage to Johnson, the present claimant, in July, 1922. The Johnson claim arises out of this mortgage.

The partition proceeding resulted in the court's first ordering the executor of C. A. Keel's will to sell the property publicly. At this sale the highest bid was $28,000. Later, an offer was made to the executor of $30,000, by W. H. Keel, S. A. Keel, and Bradford Keel. This bid was accepted by the executor, confirmed by the court, and under order of court an executor's deed was made to the three purchasers on the 14th of January, 1920, said deed, however, not being recorded until the 17th day of February, 1920. This deed recites the payment to the executor of the sum of $30,000. W. H. and S. A. Keel were sons of C. A. Keel, and the final decree in the partition proceeding ordered that out of the $30,000 received by the executor for the land, after paying many items of cost and an executor's commission of $1,500, and an attorney's fee of $1,250 to Mr. Searson, plaintiff's attorney, that the executor pay "to J. H. Keel, Bradford Keel, Mrs. W. D. Nelson, W. H. Keel, and S. A. Keel, each the sum of $3,075" as their share of the proceeds. Neither Livingston nor Johnson were parties to these proceedings.

The purchasers borrowed $15,000 of the money they paid to the executor from the Bank of Western Carolina, and executed a mortgage now owned by Mrs. Swygert covering the property which they bought from the executor. This mortgage is dated January 21, 1920, and was recorded February 17, 1920, which is the same day upon which the deed was recorded. It is evident, while there is a slight difference in the dates of the two papers, that the transaction of purchasing and the transaction of borrowing from the bank nil constitute one transaction. Any question arising out of this proposition is set at rest by a stipulation of counsel embodied in the testimony, reading as follows, which is adopted as the court's finding of fact on that subject, to wit: "It is stipulated that it stands as admitted that the $15,000 borrowed from the Bank of Western Carolina, and secured by the mortgage which was later assigned to the plaintiff, was borrowed by S. A., W. H., and Bradford Keel, for the purpose of paying the same to J. H. Keel as executor, as the purchase money of the 400 acres conveyed by him to said purchasers, and that the deeding of the property by J. H. Keel, executor, to S. A., W. H., and Bradford Keel, and their mortgaging the same to the bank for $15,000, and the payment of the said sum directly by the bank to the executor, were all part and parcel of the same transaction."

Oral testimony was offered by the claimant to the effect that Mr. H. M. Dibble (now deceased), president of the Bank of Western Carolina, was notified of the existence of a mortgage to Livingston before he made the loan. On account of Mr. Dibble's death, his version of the proposition is not before the court However this may be, he and the bank were affected with constructive notice of the existence of the Livingston mortgage, as the mortgage to the bank was not recorded within ten days.

Upon this point of the case, however, if a finding of fact is pertinent, coupling the testimony of Bradford Keel to the effect that what Mr. Dibble was told was that Bradford had given a mortgage on his share of the estate, with the recital in the mortgage to the bank which Mr. Dibble later took at the end of the partition proceedings, which read, "This is the only mortgage over the above described property, " and adding thereto the admitted fact that Mr. Livingston knew that the property upon which he claimed to hold a mortgage was being sold for partition, and that he imparted this knowledge to Mr. Dibble—considering all these facts together I find that Mr. Dibble, as president of the bank, was fully justified in the belief, and probably did believe, that Livingston had collected, or was about to collect, his money secured by the aforesaid mortgage out of Bradford Keel's share in the proceeds of sale, when the Keels signed a mortgage in favor of the bank reciting that the same was the first mortgage upon the property in question.

It was suggested by counsel for the claimant that Mr. Dibble either agreed with Livingston or led Livingston to suppose, and thereby lulled him into security and into the belief that Mr. Dibble would see to it that his mortgage was paid, or that it would be recognized as a prior claim upon the property. I find no basis for such a contention, and my finding of fact thereupon is entirely to the contrary.

Hence, we have presented a case of a prior mortgage in point of time, and of recording— the mortgage given by Bradford Keel to Livingston and later assigned to Johnson, upon his "interest and estate" in C. A. Keel's estate, whatever that turned out to be, a mortgage later given to the bank after the partition sale, by the purchasers thereat, Bradford Keel being one of them, in which the mortgagor recited that said mortgage constitutes a first mortgage upon the property—these two balanced against each other. Both cannot be paid, as the funds held by the master are not sufficient; the question to be decided by the court is which is superior.

After an exhaustive study of the law applicable to the facts, it is clear to me that under the well-settled law of the state of South Carolina that a tenant in common (even in the ordinary case and without considering the terms of the will of C. A. Keel for the present) has no vested estate in the tract of land held in common with others, but that it is held subject to the paramount right of partition amongst the parties, and that when said partition is had, the right of any lienholder against one of the tenants in common is transferred to what that tenant in common gets out of the partition. If he gets a specific parcel...