Loan & Exch. Bank Op South v. Peterkin

• Decision Date: 04 April 1898
• Citation: 52 S.C. 236,29 S.E. 546
• Court: South Carolina Supreme Court
• Parties: LOAN & EXCHANGE BANK OP SOUTH CAROLINA. v. PETERKIN et al.

29 S.E. 546

52 S.C. 236

LOAN & EXCHANGE BANK OP SOUTHCAROLINA.

v.PETERKIN et al.

Supreme Court of South Carolina.

April 4, 1898.

Mortgages—Foreclosure—Issues—How Triable —Actor.

1. When a defendant in an action to foreclose a mortgage raises the question of paramount title in himself, which would defeat the plaintiff's recovery as to him, he is entitled to have the issue of title tried by a jury.

2. In an action to foreclose a mortgage, where an issue of title to the land is raised in the answer, the case should be transferred to the docket for trial of issues of fact by a jury, to be by them determined.

3. Where a defendant in an action to foreclose a mortgage sets up a defense of title paramount and possession of the land prior to the date of plaintiff's mortgage, plaintiff must prove title in the mortgagor, in order to oust party in possession.

Mclver, C. J., dissenting.

Appeal from common pleas circuit court of Richland county; W. C. Benet, Judge.

Action by the Loan & Exchange Bank of South Carolina against J. A. Peterkin, Ross S. McKenzie, and others. From an order referring certain issues of fact to a jury, defendant McKenzie appeals. Reversed.

F. H. Weston and Abney & Thomas, for appellant.

Allen J. Green, for respondent.

JONES, J. The complaint in this case Is for the foreclosure of a mortgage recorded August 16, 1892, and executed July 30, 1892, by defendant Peterkin to plaintiff, on a tract of 5, 000 acres in the Congaree River swamp, In Richland county. Ross S. McKenzie was made a party defendant, under an allegation that he "had or claimed to have some interest In or lien upon the mortgaged premises, * * * that arose subsequent to the lien of the plaintiff's mortgage." McKenzie, in his original answer, set up (1) a general denial; (2) title in himself to 627 acres of said tract under deed of Sheriff Cathcart dated November 4, 1895; (3) that neither plaintiff, as mortgagee, nor Peterkin, as mortgagor, has any right, title, or interest in the said 627 acres. And, by amended answer, pursuant to an order of the court, he alleged further: (4) That he is in possession of the 627 acres, and claims title in fee thereto; "that his title and possession to said 627 acres Is derived from different and independent sources than the defendant J. A. Peterkin; that, long prior to the date of said mortgage, this defendant, his ancestors, predecessors, and grantors, were seised and possessed of said tract of land, claiming and holding the same adversely to the whole world, " etc. (5) That the court Is without jurisdiction to order an issue to be tried upon the title between the parties. And for a second defense he pleaded the statute of limitations. On the call of the case, on motion to refer issues of fact to a jury, Judge Benet passed the following order (omitting recitals): "Ordered, that the following issue be submitted to a jury: Has the defendant R. S. McKenzie title to the 627 acres of land described in paragraph 2 of his answer? That in the trial of this issue the said R. S. McKenzie shall be the actor." We are asked by appellant, McKenzie, to reverse this order, on exceptions raising the following questions: (1) Should the complaint, have been dismissed as to McKenzie? (2) Was it error to order an issue? (3) Was it error to require McKenzie to be actor in such issue? (4) Was the issue ordered in proper form?

As to the first question, the case of Sale v. Meggett, 25 S. C. 72, settles that when a defendant in a cause in equity raises the question of paramount title in himself, which would defeat the plaintiff's recovery as to him, the complaint should not be dismissed as to him, but that he is entitled to have the issue of title tried by a jury.

As to the second question, It Is now neither necessary nor proper to frame an Issue out of chancery to be submitted to a jury on an Issue of title. The proper practice, when an issue of title to land is raised in the answer, whether In proceedings to partition land or to foreclose a mortgage thereon, is to order the case to be transferred to the docket for trial of issues of fact by the jury, and the jury must try the question on the issues of fact raised in the pleadings. McGee v. Hall, 23 S. C. 392; Reams v. Spann, 28 S. C. 533, 6 S. E. 325; Carrigan v. Evans, 31 S. C. 265, 9 S. E. 852; Capell v. Moses, 36 S. C. 561, 15 S. E. 711. In the last-mentioned case, Mr. Justice Pope, speaking for the court, said, most explicitly: "Unless a Jury trial is waived, actions that involve such issues must be placed on calendar 1, and submitted to the jury; and no interference with such trials, such as framing Issues, must be bad." This was spoken with reference to an action to partition land, but it applies as well to actions of foreclosure. It applies to any cause in equity wherein is raised the issue of title to land, which, if successful, would defeat plaintiff's recovery, as against the party setting up title. It was therefore error for the Judge to frame an Issue of title.

As to the third question, if it was error to prove an issue at all, of course It was error to make the defendant McKenzie the actor In such Issue, as this is a mere incident to the principal thing, the ordering of the issue. It may not be out of place to say that plaintiff having brought defendant Into court under an allegation that he claims an interestin the premises sought to be foreclosed, and the defendant having set up a defense of title paramount and possession of the land prior to the date of plaintiff's mortgage, plaintiff must be the actor in the issue of title. It would be unjust to a defendant in possession of land to compel him to be the actor in an issue as to his title. Carrigan v. Evans, supra. Besides, plaintiff, in order to become entitled to judgment of foreclosure, as against the defendant McKenzie, claiming possession and title paramount to that of plaintiff's mortgagor, must show that the lien of his mortgage is paramount; and to this end it must show that Peterkin at the time of the execution of the mortgage had such title to the land as would enable him to give a lien thereon superior to the alleged title and possession of defendant The case of Daniel v. Hester, 24 S. C. 303, does not conflict with this view. In that case the defendants did not deny the allegation of the complaint that they set up some interest in the land accruing since the execution of the mortgage. In this case the defendant doesdeny a similar allegation, by denying every allegation not afterwards admitted in the answer, and by not afterwards admitting it In that case the suit was to foreclose a mortgage executed September, 1868; suit brought In 1883. Hence the allegation in defendants' answer in that case, that they had been in possession of the land for more than 10 years, might have been true, and still their title or possession be subordinate to that of the mortgagor. And in that case the court is careful to say, "Their [defendants'] assertion of title Is carefully limited to the present, that they are now seised, etc. This does not necessarily exclude the idea that Hester and his wife had title when they executed the mortgage, " etc. In this case the allegation of the answer is "that his [defendant's] title and possession to the said 627 acres is derived from different and independent sources than the defendant J. A. Peterkin, the mortgagor mentioned in the complaint, and that long prior to the date of said mortgage this defendant, his ancestors, predecessors, and grantors, were seised and possessed of said tract of land, claiming and holding the same adversely to the whole world, " etc. The case of Daniel v. Hester correctly holds that while an allegation of title 'in the mortgagor is not required, in an action to foreclose, yet such allegation is involved in the other usual allegations; and the case was treated as if such allegation was In. The answer in that case,...