Magovern v. Richard

• Decision Date: 20 September 1887
• Citation: 3 S.E. 340,27 S.C. 272
• Parties: MAGOVERN and others v. RICHARD and others. BATES and others v. SAME.
• Court: South Carolina Supreme Court

3 S.E. 340

27 S.C. 272

MAGOVERN and others v. RICHARD and others.

BATES and others v. SAME.

Supreme Court of South Carolina

September 20, 1887

Appeal from circuit court, Darlington county; COTHRAN, Judge.

Mr Mordecai, R. W. Boyd, J. T. Nettles, and Mr. Rutledge, for appellants.

E. K Dargan, Dargan & Dargan, and Ward & Nettles, for respondents.

SIMPSON C.J.

These two cases were heard together below, and also in this court but they have no necessary connection with each other, nor are they governed by the same principles; therefore, though embraced in the same opinion, they have been considered and determined separately, as will appear below. The object of the action in each case was to annul and set aside a chattel mortgage executed in 1883, by the defendant Richard, to his co-defendants, Bollman Bros. In the first-named case, the ground of the attack was that the alleged mortgage was really intended as an assignment, in which a preference was given to the said Bollman Bros., and therefore void under the assignment act, (Gen.St.;) that of the second was that said mortgage was void under the statute of Elizabeth. The plaintiffs in the first action had not reduced their claim to judgment. But those in the second had.

In the first action, his honor, Judge HUDSON, on ex parte application of plaintiffs, granted a preliminary injunction restraining Bollman Bros. from enforcing their mortgage. This injunction, on proper notice of motion thereto, was dissolved by his honor, Judge KERSHAW, at his chambers; his honor holding that the mortgage in question could in no sense be regarded as an assignment with preference. From this order there was no appeal. But on the hearing of the case afterwards, by Judge COTHRAN, the ground upon which Judge KERSHAW had dissolved the injunction was reversed, and the mortgage was held an assignment, and executed in violation of the spirit, at least, of the assignment act, and therefore null and void. The same holding was had by his honor, Judge COTHRAN, in the second case, and also that the said mortgage was fraudulent and void, as intended to delay, defeat, and defraud the creditors of the said Richard.

From the decree rendered below, embracing the two cases, the appeal is now before us, in which error is alleged to said decree in the first case-- First, because his honor, Judge COTHRAN, reviewed and reversed the ruling of Judge KERSHAW, and, second, that, if Judge COTHRAN had jurisdiction of the matter ruled by Judge KERSHAW, then he erred in holding the mortgage an assignment with preference, and therefore void under the assignment act; in the second case, that he erred in holding the mortgage void, whether his said holding was based on the idea that the mortgage was an assignment, or in fraud, or a contrivance to defeat, delay, etc., creditors, and therefore void under the statute of Elizabeth.

Now applying our remarks to the first above-named case, we are compelled to say that we do not find in the testimony anything more than an ordinary mortgage executed by a debtor,--insolvent, no doubt, at the time,--covering a large portion of his property, in favor of one creditor over other creditors. This has been done in the exercise of a right which has been recognized almost time out of mind, in this state and elsewhere, in numerous cases still standing unoverruled, and which, until they are overruled, are authority upon this court. See numerous cases in our own Reports. The recent cases of Wilks v. Walker, 22 S.C. 108, and Austin v. Morris, 23 S.C. 393, have not touched this principle. Nor did the assignment act intend to touch it, or, if such was the intention, it does not appear in the language used in said act. That act was intended to meet an evil which at the time of its passage was in existence, and was growing in the commercial world, to-wit: The practice of making general assignments, ostensibly for the benefit of all creditors, but yet preferring in said assignment some creditors to others. And the purpose of the act was to cut up this practice root and branch, which it was hoped could be accomplished by simply declaring that the preference given should in itself, whether fraudulent or not, avoid the instrument or assignment. There was not a word, or an intimation, that the long-established right of securing one creditor over others by mortgage, judgment, or sale of property was stricken at. On the contrary, in the second section of that act, as Judge KERSHAW very forcibly says in his decree dissolving the injunction: "The distinction is there clearly drawn between the two kinds of instruments, in this: that a mortgage or other conveyance to a creditor, whereby such creditor is secured by the debtor, is made void if the debtor was at the time insolvent, and if the creditor knew of such insolvency, and if the debtor should, within ninety days...