Sebrite Corp. v. Transouth Financial Corp.
| Decision Date | 07 February 1979 |
| Docket Number | No. 20878,20878 |
| Citation | 252 S.E.2d 873,272 S.C. 483 |
| Court | South Carolina Supreme Court |
| Parties | , 26 UCC Rep.Serv. 544 SEBRITE CORPORATION, Appellant, v. TRANSOUTH FINANCIAL CORPORATION, Respondent. |
James Coffas, Columbia, for appellant.
John W. Foard, Jr., and Isadore S. Bernstein, Columbia, for respondent.
The court below, and here, is called upon to determine which of two innocent corporations must bear a loss growing out of a deception by third parties.
The facts are not in dispute. The defendant Transouth Financial Corporation (Floor-planner) is engaged in the business of lending money to retail mobile home dealers and taking floor-plan agreements covering inventory, owned and/or afterwards acquired, as security for loans. Sebrite Corporation (Retail Financier) is engaged in the business of lending money to retail purchasers of mobile homes and taking mortgages on them as security for consumers' debts. B.C.L. Mobile Homes (Dealer) is a partnership, owned by Messrs Bland, Crenshaw and Lowe, and engaged in retail sales to the public.
A floor-plan agreement was entered into by the Floor-planner and the Dealer on January 15, 1970, and was recorded, as required by law, in the office of the Secretary of State for South Carolina. On March 15, 1974, the Dealer executed and delivered to the Floor-planner a collateral promissory note, under the terms of which the Floor-planner was given a valid floor-plan type lien on a 1974 Winco mobile home. The Dealer delivered to the Floor-planner a manufacturer's certificate of origin and the Floor-planner advanced the sum of $8,500.00. The mobile home became a part of the Dealer's inventory for sale to the public.
One of the partners, Bobby L. Lowe, and his wife, Minnie Lowe, bought the mobile home from the Dealer, which financed it through the Retail Financier, delivering to the Retail Financier a duplicate manufacturer's certificate of origin. Thereupon, the Retail Financier disbursed its check to the Dealer in the amount of $8,742.00. The sale was not reported to the Floor-planner by the Dealer. The Retail Financier procured a certificate of title, similar to those issued for motor vehicles, from the South Carolina Highway Department. It recited that the Lowes were owners and that the Retail Financier (Sebrite) held a first lien on the mobile home. The Lowes moved the unit to Horry County and made ten monthly payments, in the amount of $186.00 each, to the Retail Financier. They then defaulted. The Floor-planner, acting under its security agreement, brought an action in claim and delivery for possession of the mobile home, naming only the Dealer partners as parties-defendants. The Court of Common Pleas for Horry County granted possession to the Floor-planner, which sold the home to an innocent purchaser, Mrs. Corley, of Lexington. Presumably, she is still in possession of it.
This action was brought by the Retail Financier, alleging that the Floor-planner wrongfully repossessed the mobile home. The complaint alleges that the Retail Financier had a first lien mortgage. The prayer for relief demands judgment in the amount of $50,000.00, actual and punitive damages. It does not ask possession of the unit. The answer asserts a general denial and alleges that the Floor-planner's lien was prior.
After all of the testimony had been taken, the judge ruled that only questions of law were involved and dismissed the jury; there is no appeal from this ruling. Apparently, while studying the case, the judge detected that there was on the certificate of title, issued by the Highway Department in favor of the Lowes (an exhibit), a "Release of First Lien," signed by an authorized agent of Sebrite Corporation. This release had not been mentioned in the pleadings, nor referred to in the evidence. The evidence was to the effect that the Lowes still owed Sebrite, the Retail Financier,.$9,876.00. The judge, by letter, asked counsel to comment upon the question and the effect of the release. Counsel for the Retail Financier, by letter, explained the signing of the release as being a mistake and submitted an affidavit of the Retail Financier's Customer Credit Manager, explaining that the release was a clerical error. Counsel for the Floor-planner, by letter, objected to receipt of the affidavit by the court.
We think that the judge erred in receiving the affidavit without reopening the case. In light of the fact that...
To continue reading
Request your trial
-
Johnson v. Johnson
...all testimony has been taken, receive additional contested evidence without reopening the case. See Sebrite Corp. v. Transouth Financial Corp., 272 S.C. 483, 252 S.E.2d 873 (1979). It was, therefore, error on the part of the judge to make a finding of fact as to value of these properties ba......