Morris v. Carlisle

• Decision Date: 15 April 1924
• Docket Number: 11469.
• Citation: 122 S.E. 511,128 S.C. 417
• Parties: MORRIS v. CARLISLE.
• Court: South Carolina Supreme Court

122 S.E. 511

128 S.C. 417

MORRIS v. CARLISLE.

No. 11469.

Supreme Court of South Carolina

April 15, 1924

Appeal from Common Pleas Circuit Court of Laurens County; C. C Featherstone, Judge.

Action by Miss M. A. Morris against W. K. Carlisle. Judgment for defendant, and plaintiff appeals. Reversed.

G. H Griger and J. M. Paget, both of Anderson, for appellant.

Dial & Todd, of Laurens, for respondent.

FRASER J.

This is an action to foreclose a mortgage. The mortgagor borrowed $1,000 from the People's Bank of Anderson on January 14 1916, and gave his promissory note for $1,080, payable in 12 months from date. This note was secured by a mortgage of real estate. A few days after the note and mortgage were executed they were assigned for full value to Miss M. A. Morris by the bank. Mr. Holleman, the president of the bank, acted for Miss Morris in the collection of interest. Miss Morris would take the securities to the bank when the payments of interest were made, and Mr. Holleman would indorse the payments upon the note. The mortgagor was accustomed to pay the interest to Mr. Holleman. One year the mortgagor did not pay the interest, but Mr. Holleman made out a check for the interest and signed the check in the name of the mortgagor. Of this action the mortgagor at first complained, but afterwards withdrew his objection. This continued for four years. The mortgagor then sent to the bank $600 by his wife, who turned over the money to Mr. Holleman as president of the bank. Some time afterwards he sent by his wife $480. The mortgagor had no notice of the assignment. At some time, the record does not show when, the mortgagor demanded possession of the note and mortgage. Mr. Holleman said he did not have the mortgage; that he had filed it for record, and it had not been returned; and gave to the mortgagor a letter to the clerk of court requesting him to deliver the mortgage to the mortgagor. The bank got into financial trouble; Mr. Holleman died, and Mr. Vandiver was made president in his stead. The mortgagor then demanded a satisfaction of the mortgage, and a satisfaction was written out on a separate piece of paper and entered on the records. After this was done Miss Morris demanded payment, and when it was refused this action was commenced. The defendant pleaded payment to Miss Morris through her agent, Mr. Holleman.

The case was referred to a special master, who is a lawyer of large experience and great ability, who held that Mr. Holleman was the agent of Miss Morris to collect the interest and principal, and by her negligence she had made the loss possible, and under the well-known principle that, where one of two innocent people shall suffer loss, that one must suffer who has made the loss possible. The circuit judge affirmed the findings of the master in a short order, that was simply an order of affirmance, so we will discuss only the master's report.

The basis of the master's finding that Mr. Holleman was the agent of Miss Morris to collect the principal is by no means clear from the record unless it is the law that an agent to collect the interest due on a note is as a matter of law the agent to collect the principal. We have been cited to no South Carolina authority on the subject, and we can find none. In 2 Corpus Juris, p. 621, we find:

"The fact that an agent is authorized to receive installments of interest as they become due on a note or other obligation does not give him implied power to collect the principal."

When the note and mortgage were assigned to Miss Morris they were delivered to her, and she carried them home with her. She became uneasy about their safety at home and carried them back to the bank, and they, with other papers, were kept there for awhile; but Miss Morris says: "All the time they were in bank they were under my absolute control." There is nothing in the record to show that at the time the payments were made, the securities were even in the vault of the bank, or that if they were there they were accessible to the officers of the bank.

Payment is an affirmative...