McCoy v. Hydrick

• Decision Date: 13 January 1928
• Docket Number: 12357.
• Citation: 141 S.E. 174,143 S.C. 135
• Parties: McCOY v. HYDRICK.
• Court: South Carolina Supreme Court

141 S.E. 174

143 S.C. 135

McCOY v. HYDRICK.

No. 12357.

Supreme Court of South Carolina

January 13, 1928

Appeal from Common Pleas Circuit Court of Orangeburg County; M. M Mann, Judge.

Action by Ellen B. McCoy, as guardian for Nellie Brady McCoy and others, infants, against Andrew J. Hydrick. Judgment for defendant, and plaintiff appeals . Affirmed.

Cothran J., dissenting.

L. A Hutson, of Orangeburg, for appellant.

C. H. Whetstone, Brantley & Zeigler, and Lide & Felder, all of Orangeburg, for respondent.

BLEASE J.

This is an appeal by the plaintiff from a directed verdict in favor of the defendant by his honor, Judge M. M. Mann, in the court of common pleas for Orangeburg county.

The plaintiff is the guardian of her three minor children, and sued as such. The defendant is a practicing attorney at law.

The complaint contained three causes of action, and each of these set forth general allegations to the following effect:

(1) That plaintiff, from time to time, placed large sums of money in the hands of the defendant, to be loaned by him on real estate security, "with the distinct understanding and agreements that he (the defendant Andrew J. Hydrick) would pass on the value of all security and make good in cash any loss, by reason of an investment or loan that he made, and would repay to the plaintiff in cash any loss sustained, if the security taken for any loan or investment made by him failed to bring enough to repay to the plaintiff, after foreclosure and sale, the full amount of such loan or investment, with interest, attorney's fees, and cost, and such agreement was duly entered into by the plaintiff and the defendant, Andrew J. Hydrick."

(2) That plaintiff instructed the defendant, in making the loans, not to "invest or loan any of her money on a second real estate mortgage, and not to invest in or take as security, any property on which existed a prior claim or lien, and the defendant, Andrew J. Hydrick, agreed that he would not take such questionable security for any of the loans that he made."

(3) That, in disregard of his agreement, the defendant negligently loaned certain sums of money on unauthorized security to the plaintiff's loss, and that he thereby became "indebted unto the plaintiff" in the sum mentioned.

In each cause of action the loan complained of is described, and the loss alleged to have been sustained thereby, and the manner of the loss is stated.

The defendant interposed a general denial, and alleged further that the agreement sued upon was within the statute of frauds (section 5516, vol. 3, Code 1922), in that it was sought to charge the defendant upon a promise to pay the debts of other persons, and the agreement so to do rested only in parol.

On motion of defendant, the presiding judge required the plaintiff to elect if she would proceed on a cause of action ex contractu or ex delicto, and the plaintiff chose the former; and it was announced by plaintiff's attorney that he contended, under the complaint, that the defendant was liable "as a borrower and guarantor." There is no exception as to this particular ruling of the trial judge.

While plaintiff offered five witnesses, whatever case she had was made out by her own testimony, and we need only review what she testified. In some respects, her testimony went further than matters alleged in her complaint, and in some instances there are inconsistencies in her statements. Her testimony, pertinent to the inquiry here, was, in effect, as follows:

In June, 1917, defendant called to collect from plaintiff a premium due on her bond as administratrix of her husband's estate. Upon being informed by her that she had a great deal of money in banks at a low rate of interest, defendant requested that he be allowed to handle the money for plaintiff, and that he would guarantee absolutely every dollar put out by him. Plaintiff consulted her attorney, the late Honorable Thomas M. Raysor, as to permitting defendant to handle the money and was advised by Mr. Raysor to allow the defendant to do so, but not to permit the defendant to make loans outside of Orangeburg county, or to take second mortgages, and not to go over two-thirds value of real estate. The plaintiff, on August 15, 1917, advanced the defendant $850 to be loaned to one Westberry; and it appears that this loan was repaid in full. At the time, plaintiff wrote in a ledger, which she kept, the following memorandum:

"Mr. A. J. Hydrick guarantees the absolute safety and security of all mortgages made by him and all money loaned to any parties by him."

This memorandum was not signed by the defendant.

Statements in the testimony of the plaintiff in her own language were as follows:

"It was understood that he was to loan this money to these people and take mortgages from the people to whom he loaned money; he was to take first mortgages and not to go full value on them. Money was advanced as the loans were made." "I told him not to take second mortgages, and not to go out of county and not to take over two-thirds value of property; I told Mr. Hydrick that, before I advanced anything. After writing was entered in book, I told him not to take second mortgages, not to go out of county and not to take over two-thirds value of property no matter where it was. He took second mortgages as security on property. He took securities contrary to the instructions given him, property outside of county of Orangeburg."

"He usually sent the borrower out to see me. I could have talked with the borrower about the security, but I trusted Mr. Hydrick."

"When Mr. Hydrick had these securities he kept them in his safe. He kept them about five years in his safe. The first time I saw them was when I went there and got them, some time before this suit, January, 1923. *** Every time he made a loan he told me that the security was ample, and phoned me and told me about the loan, that it was ample security, and sent the check out for me to sign. I do not know whether the checks were made to Mr. Hydrick or t he respective parties; he just sent me out a check and telephoned me and said the security was ample and for me to sign it, and I did sign it."

Plaintiff's testimony further showed that all notes, bonds, and mortgages, and assignments of such papers, were taken in her name. The loans she complained of losses about were loans made to D. H. Hydrick, a brother of the defendant, D. B. Bell, and W. F. Stroman. Against these parties foreclosure suits were had, the lands, in almost every instance, were bid in by the plaintiff, and deficiency judgments were entered up in her favor. Her total loss on loans to these three parties she alleged to be the sum of $13,732.40, for which she made demand on the defendant. The defendant was not made a party to any of these suits.

While it is not necessary, for the purpose of determining the appeal, to review the testimony on behalf of the defendant, it may be stated that his testimony was a denial of the agreement alleged by the plaintiff to have been made by him, and he also offered testimony to show that, at the time the loans complained of were made, the properties were considered to be worth more than the amounts loaned thereon, and that the loss to the plaintiff was due to the deflation in values of farming lands.

The master of the county, Hon. E. C. Mann, testified that there had been, during recent years, a large number of sales of farming lands, under foreclosure proceedings, for loans made through lawyers of the Orangeburg bar, where the lands, on account of the deflations existing, were bid in by the mortgagees for nominal sums.

The defendant objected to practically all of the testimony offered by the plaintiff, and the circuit judge sustained the objection as to the alleged agreement, on the ground that the same was not signed by the defendant. The directed verdict was granted for the same reason.

The seven exceptions question the correctness of the presiding judge's ruling in refusing to admit the testimony and the granting of the motion for a directed verdict. All the exceptions may be disposed of together.

Mr. Justice Cothran, in the recent case of Gaines v. Durham, 124 S.C. 435, 117 S.E. 732, reviewed to some extent our cases which pass upon the provision contained in the statute of frauds, which is under consideration here. That case involved the sale of fertilizer by a merchant to a tenant upon the agreement of the landlord to be liable for the debt contracted, and it was held that the landlord was liable, as the agreement was an original undertaking on his part and was not a collateral agreement to answer for the debt of another within the statute of frauds. In the opinion, there was quoted with approval the following declaration from the case of Lorick v. Caldwell, 85 S.C. 94, 67 S.E. 143:

"Wherever the main purpose and object of the promisor is, not to answer for another, but to subserve some purpose of his own, his promise is not within the statute, although it may be in form, a promise to pay the debt of another."

The appellant relies strongly upon the principle from the Lorick Case. Appellant also depends upon the case of Partin v. Prince, 159 N.C. 553, 75 S.E. 1080, where the North Carolina Supreme Court made this holding:

"'Where a person orally promised another that, if she would put money in his hands for investment, he would guarantee its safety, this was not a promise to answer for the debt of another within the statute of frauds; there being no other debt contracted or contract made except the contract of guaranty." Syllabus.

We do not think the case at bar comes within the principles announced in either the Gaines, Lorick, or Partin Cases. It does not appear from the testimony that "the main purpose and object of the...