Prudential Inv. Co. v. Connor
|11 March 1921
|112 S.E. 539,120 S.C. 42
|PRUDENTIAL INV. CO. v. CONNOR ET AL.
|South Carolina Supreme Court
On Petition for Rehearing, October 21, 1921.
Appeal from Common Pleas Circuit Court of Richland County; Edward McIver, Judge.
Action by the Prudential Investment Company against Julia R. Connor M. Smoak, Jr., and others, for the foreclosure of a mortgage. From an order requiring the master to pay the surplus of the proceeds of the sale above the mortgages to plaintiff as assignee of judgments which had been decreed to be liens upon the land, M. Smoak, Jr., appeals. Reversed and remanded.
M. S Connor, of St. George, and Henry F. Jennings and A. D. McFaddin, both of Columbia, for appellant.
Weston & Aycock and W. N. Graydon, all of Columbia, for respondent.
There are a great many parties in this case, and to state the interest of each party would produce confusion and obscure the questions involved. Only such facts will be stated as are necessary to understand the questions.
The appellant Smoak took title to a certain lot of land in the city of Columbia. This land was subject to the liens of certain mortgages and judgments. The mortgage executed by A. J. Bethea was assigned to Prudential Investment Company. Mr. Bethea was the president of this company and also owned the large majority of the corporate stock. The judgments set up were judgments against Bethea. The plaintiff foreclosed its mortgage. The judgment of foreclosure provided for a sale of the mortgaged premises, the payment of the mortgage debt, and out of the surplus the payment of the judgments. After the decree was taken, Mr. Bethea, claiming to act for the plaintiff, gave his individual checks to the judgment creditors and took an assignment of the judgments to the plaintiff corporation. The appellant Smoak objected to the payment of the judgments out of the surplus, on the ground that Mr. Bethea had paid for the assignment of the judgments with his own money, that the judgments were paid, and the assignment was a mere pretense. The appellant was the owner of the equity of redemption and claimed the surplus freed from the liens of the judgments, which he claims had been paid by the judgment debtor, Mr. Bethea.
The master took testimony in the case, attended by the attorneys for both sides; but the attorneys for the plaintiff withdrew from the references and applied to the court of common pleas for an order requiring the master to pay the judgments to the plaintiff, as assignee of the judgments. The trial judge granted the order on the ground that the matter was res adjudicata, inasmuch as the payment of the judgments had been decreed by the judgment of foreclosure.
The only question proper for decision at this time is: Was the matter res adjudicata?
Stripped of the unnecessary facts, the question is a very simple one. Conditions had changed since the judgment was rendered. That there had been a change of conditions since the judgment was rendered is admitted by both sides. The judgment of foreclosure could not have provided for the payment of the judgments to the plaintiff, because the plaintiff did not at that time own the judgments. The order (appealed from) to pay the judgments to the plaintiff included necessarily the fact that there was a valid assignment of the judgments to the plaintiff. If the court had jurisdiction to declare the assignments valid, it had also the jurisdiction to declare the assignments invalid. The appellant claimed that the assignments were invalid because Mr. Bethea had paid the judgments with his own money and that the assignment was practically to Mr. Bethea himself. Mr. Bethea was the judgment debtor. Was the money paid, Mr. Bethea's own money? Was the assignment only pretensive? The order appealed from practically decides that question adversely to the appellant, but does so on the theory that the matter is res adjudicata, and he is not at liberty to decide the question at all.
The judgment is reversed, and the case remanded to the court of common pleas to try the question of the validity of the assignments of the judgments to the respondent.
On Petition for Rehearing.
The opinion in this case determines no ultimate rights. It simply holds that the judgment for foreclosure and sale is not res adjudicata as to the things that may have happened since the date of the decree, and the case was remanded to determine the effect of subsequent transactions, and no finding has been made as to the transactions or their effect.
The petition is therefore dismissed.
I do not think that it made a particle of difference whether the money paid for the assignments of the judgments was furnished by Bethea or not, and for that reason think that the judgment of the circuit court should be affirmed. See opinion on this petition.
The opinion of the court by Mr. Justice FRASER, concurred in by the other members of this court, was filed on March 11, 1921. Thereafter the respondent filed a petition for a rehearing and secured a stay of remittitur.
I have again gone over this record and have become convinced that a material issue in the case has been overlooked by the court, as I shall endeavor to show. I therefore withdraw my concurrence in the opinion filed and favor a rehearing.
It is but due to the justice who wrote the opinion, and to the others who concurred in it, including myself, to say that the matter which has controlled my judgment was not suggested by counsel for respondent, so far as I am informed; in fact, I have not been furnished with any printed brief from them, if indeed any was filed.
The contest is over a balance of $2,912.45, remaining in the master's hands, after foreclosure and sale and the payment of two mortgages which were conceded to be first and second liens upon the property.
The plaintiff claims said balance as the assignee of certain judgments which are decreed to be liens upon the property, junior to said mortgages, and directed by the decree to be paid out of the proceeds of sale.
The defendant, M. Smoak, Jr., the owner of the legal title at the time of the sale, claims said balance upon the ground that, after the decree of foreclosure and before the sale thereunder, the judgments, by virtue of which the plaintiff claims the balance, were in fact paid off by the judgment debtor; that said payment discharged the liens of the judgments, the effect of which was to create a surplus to which he as the owner of the land was entitled; that the assignment to the plaintiff, of these judgments, were pretensive.
A determination of the issues involved in this appeal requires a review of a maze of business transactions and judicial proceedings.
Prior to September 2, 1913, the defendant Andrew J. Bethea was the owner of a certain tract of land near Gadsden, S. C., containing 305 acres. On that day he executed his note secured by a mortgage upon the tract, to J. B. McLaughlin, for $3,500, payable January 1, 1916, with interest at 7 per cent. (whether from date or maturity is not stated), the interest upon which appears to have been paid up to September 2, 1916, from which date by agreement the rate of interest was increased to 8 per cent.
On December 6, 1913, Bethea executed his note, secured by a second mortgage upon this tract, to Ada B. McLaughlin, for $1,300, the maturity date and rate of interest of which are not stated in the record for appeal. This mortgage was subsequently assigned to the Commercial Bank of Columbia and by it, at a later date, prior to the sale, to the plaintiff, Prudential Investment Company.
On July 27, 1916, the Bank of Columbia entered judgment against A. J. Bethea for $2,072, with interest from July 17, 1916.
On October 7, 1916, Bethea conveyed the tract to J. B. Stinespring, the latter assuming the payment of the McLaughlin mortgages, and taking the land subject to the judgment of the Bank of Columbia, above stated, which was a lien upon it.
On October 23, 1916, T. W. Berry entered judgment against A. J. Bethea for $918, with interest from September 20, 1916.
On October 23, 1916, Columbia Savings & Trust Company entered judgment against A. J. Bethea for $750 with interest from that date.
On March 31, 1917, J. B. Stinespring conveyed the tract to Julia R. Connor. It does not appear in this transaction that Julia R. Connor assumed the payment of the two McLaughlin mortgages which had been assumed by Stinespring, or of the three judgments hereinbefore referred to, though the land at the time of the conveyance to her was subject to the liens of said two mortgages and of the judgment of the Bank of Columbia for $2,072; the judgments in favor of T. W. Berry for $918, and Columbia Savings Bank & Trust Co. $750, having been entered subsequently to the conveyance from A. J. Bethea to J. B. Stinespring, the dates being, respectively, October 23, 1916, and October 7, 1916, did not become liens upon the land.
On or about January 21, 1918, the note and mortgage of A. J. Bethea to J. B. McLaughlin dated September 2, 1913, due January 1, 1916, for $3,500, was for value assigned to the plaintiff, Prudential Investment Company.
On March 6, 1918, the plaintiff instituted this action for the foreclosure of the $3,500 McLaughlin mortgage which had been, as stated, assigned to it on or about January 21, 1918. The parties defendant were the several alleged purchasers and claimants of liens by mortgage and judgment and A. J. Bethea.
The defendant Commercial Bank of Columbia answered setting up its claim as assignee of the second McLaughlin mortgage for $1,300.
The defendant bank of...
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