Perkins v. Loan & Exchange Bank

• Decision Date: 08 January 1895
• Citation: 20 S.E. 759,43 S.C. 39
• Parties: PERKINS v. LOAN & EXCHANGE BANK OF SOUTH CAROLINA
• Court: South Carolina Supreme Court

20 S.E. 759

43 S.C. 39

PERKINS v. LOAN & EXCHANGE BANK OF SOUTH CAROLINA

Supreme Court of South Carolina

January 8, 1895

Appeal from common pleas circuit court of Richland county; J. H Hudson, Judge.

Action by Wilis J. Perkins, trading under the name of Perkins & Co. against the Loan & Exchange Bank of South Carolina. There was a judgment for plaintiff, and defendant appeals. Reversed.

Allen J. Green, for appellant.

Abney & Thomas and Raysor & Summers, for respondent.

McIVER C.J.

The Ft Motte Lumber & Shingle Company purchased from James A. Peterkin the "timber leaf" upon a certain tract of land in Richland county, together with certain machinery, boilers, etc., then on said land; and, to secure the payment of the purchase money thereof, on the 8th of August, 1892, executed a mortgage to said Peterkin upon all its stock of timber, lumber, and shingles, as well that which it should thereafter manufacture and prepare for market or otherwise acquire as that which was then in existence, and also all the sheds, buildings, property, machinery, and plant then on the mill sites of said company, and also that which it should from time to time thereafter place on its said mill sites. This mortgage was duly assigned, for value, by said Peterkin to the defendant, on the 13th of August, 1892, and the same was duly recorded, in the proper office, on the 22d of August, 1892. On the 23d of September, 1892, the said lumber and shingle company entered into a written contract for the purchase of the several articles of personal property mentioned in the complaint from the plaintiff, consisting of machinery and other appliances to be used in its work as a portion of its "plant," a copy of which contract is set out in the case, and should be incorporated in the report of this case. In that contract it was stipulated that the title and ownership of the said property should remain in the plaintiff until the full purchase price was paid, and, in case of default in payment, the property might be taken back, and such payments as had been made should be applied for rent, or the plaintiff might bring suit for the amount remaining unpaid. Upon the execution of this contract the property mentioned in the complaint was delivered to the said lumber and shingle company, and by it placed upon its mill sites. On the 20th of December, 1892, the defendant, upon breach of the condition of its mortgage, seized the said property, and took it into its possession, where it remained until it was destroyed by fire, some time in August, 1893. In the meantime, to wit, on the 27th of June, 1893, the plaintiff demanded from the defendant possession of said property, which demand being refused, this action was commenced to recover damages for the conversion of said property. It is conceded that no part of the purchase money of the property in dispute was ever paid by the lumber and shingle company to the plaintiff; that the contract above referred to, for the purchase of said property, was never recorded until the 7th of February, 1893; and that the defendant never had any notice, either actual or constructive, of such contract until that date. All the material facts being conceded, a jury trial was waived, and the case was heard by his honor, Judge Hudson, upon the pleadings and the agreed statement of facts, who rendered judgment in favor of the plaintiff; and from his judgment defendant appealed upon the several grounds set out in the record, which need not be repeated here, as the sole question presented is one of law,--which of the two parties have the legal right to the property in dispute, under the agreed facts?

It seems to us that the first question to be determined is, what is the true nature and legal character of the contract between the plaintiff and the Ft. Motte Lumber & Shingle Company, a copy of which is set out in the case, under which the property in question was sold and delivered to said company by the plaintiff? Looking at the terms of that paper in the light of the decisions of this court cited below, we cannot doubt that it was nothing more nor less than a mortgage on the property in dispute to secure the payment of the purchase money of said property. Talmadge v. Oliver, 14 S.C. 522; Herring v. Cannon, 21 S.C. 212; Straub v. Screven, 19 S.C. 445; Talbott v. Sandifer, 27 S.C. 624, 4 S.E. 152; Manufacturing Co. v. Smith, 19 S.E. 132. If, then, this paper must be regarded as a mortgage, which was not recorded until the 7th day of February, 1893, and if, as it is conceded, the defendant had no notice of it, either at the time when the Ft. Motte Lumber & Shingle Company purchased the property in question from the plaintiff, and the same went into its possession, or at the time when the defendant acquired possession by the seizure thereof under its mortgage, in December, 1892, it follows necessarily that the defendant has the superior right. By section 1776 of the General Statutes of 1882, now incorporated in the Revised Statutes of 1893 as section 1968, it is declared that "all mortgages, or instruments of writing in the nature of a mortgage of any property, real or personal, *** shall be valid, so as to affect the right of subsequent creditors or purchasers for valuable consideration without notice, only when recorded within forty days," etc.; with a proviso in these words: "That the above-mentioned deeds or instruments of writing, if recorded subsequent to the expiration of said period of forty days shall be valid to affect the rights of subsequent creditors and purchasers for valuable consideration without notice only from the date of such record." And this court, in construing that section, in the case of King v. Fraser, 23 S. C., at page 569, held that a mortgage recorded after the time...