South Carolina Federal Sav. Bank v. San-A-Bel Corp., SAN-A-BEL

CourtCourt of Appeals of South Carolina
Writing for the CourtBELL; SHAW, J., and BRUCE LITTLEJOHN
Citation413 S.E.2d 852,307 S.C. 76
PartiesSOUTH CAROLINA FEDERAL SAVINGS BANK, Appellant, v.CORPORATION, Hal C. Neese, Jr., Robert J. Foster, Allen L. Teague, Maria F. Teague, Chris J. Chris, William C. Latham, Fred A. Serral, George B. Sasin, S.W. Rumph, Robert E. Bryan, Graham Bell, Paul Joseph, Martin Brann, John M. Hall, R.F. Kirkpatrick, Jr., John W. Davis, Diane R. Davis, Southern Coastal Outdoor Advertising, Inc., David W. Howe, D. Scott Scarborough, William S. Holland, Equipment Leasing and Robert O. Ziglar, Defendants, of which D. Scott Scarborough, William S. Holland and Robert O. Ziglar, Respondents. . Heard
Docket NumberSAN-A-BEL,No. 1745
Decision Date16 October 1991

Page 852

413 S.E.2d 852
307 S.C. 76
SOUTH CAROLINA FEDERAL SAVINGS BANK, Appellant,
v.
SAN-A-BEL CORPORATION, Hal C. Neese, Jr., Robert J. Foster,
Allen L. Teague, Maria F. Teague, Chris J. Chris, William C.
Latham, Fred A. Serral, George B. Sasin, S.W. Rumph, Robert
E. Bryan, Graham Bell, Paul Joseph, Martin Brann, John M.
Hall, R.F. Kirkpatrick, Jr., John W. Davis, Diane R. Davis,
Southern Coastal Outdoor Advertising, Inc., David W. Howe,
D. Scott Scarborough, William S. Holland, Equipment Leasing
and Robert O. Ziglar, Defendants,
of which D. Scott Scarborough, William S. Holland and Robert
O. Ziglar, Respondents.
No. 1745.
Court of Appeals of South Carolina.
Heard Oct. 16, 1991.
Decided Jan. 6, 1992.

Page 853

[307 S.C. 77] Edward T. Kelaher, Surfside Beach, for appellant.

Susan C. Pardue, Myrtle Beach, for respondents.

BELL, Judge:

This is an action in equity to foreclose a mortgage. San-A-Bel Corporation, a real estate developer, granted the mortgage to South Carolina Federal Savings Bank to secure a construction loan for a condominium project in North Myrtle Beach. As a precondition for making the construction loan, the Bank required the Developer to "presell" a certain number of residential units in the project. D. Scott Scarborough, William S. Holland, and Robert O. Ziglar were among a number of purchasers who, prior to the loan from the Bank, executed preconstruction sales contracts with the Developer for the purchase of condominium units. Under the terms of these sales contracts, the Purchasers deposited a cash down payment with the Developer at the time the contracts were executed[307 S.C. 78] . The sales contracts expressly permitted the Developer to use the deposit money in the development of the project, including acquisition. The sales contracts also obligated the Developer to refund the deposit money to the Purchasers if it did not complete the project within two years.

At the time it made the construction loan, the Bank knew the Developer had already entered these preconstruction sales contracts and had received the deposit money. Neither the sales contracts nor the

Page 854

Bank's note and mortgage contained any provision subordinating the rights of the Purchasers to the rights of the Bank. Instead, the Bank's mortgage obligated the Developer to pay any liabilities "which, if unpaid, would become a lien or charge upon the Mortgaged Property prior to or equal to the lien of this Mortgage."

Thereafter, the Developer acquired the property and began construction. Before the project was completed, the Developer defaulted on its obligations to the Bank. It also failed to complete the project within two years, prompting the Purchasers to demand return of their deposit money. The Developer did not return the money.

When the Bank brought this foreclosure action, the Purchasers joined as parties, asserting an equitable lien on the property superior to the Bank's mortgage lien. The master in equity found that the Purchasers were entitled to the return of their deposit money and that this liability of the Developer created an equitable lien on the property with priority over the Bank's mortgage lien. The circuit court affirmed the master's order on appeal. The Bank now appeals from the judgment of the circuit court. We affirm.

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18 practice notes
  • In re 222 South Caldwell Street, Ltd. Partnership, Bankruptcy No. 08-31710.
    • United States
    • U.S. Bankruptcy Court — Western District of North Carolina
    • 17 Junio 2009
    ...notice of an existing third party equity in the property takes subject to the third party's interest[.]" See San-A-Bel, 307 S.C. at 79, 413 S.E.2d 852. The San-A-Bel court granted the priority of an equitable lien based on such The South Carolina holding in San-A-Bel is substantively opposi......
  • Bank v. Wingard Properties Inc., No. 4846.
    • United States
    • Court of Appeals of South Carolina
    • 22 Junio 2011
    ...Bank asks the court to distinguish Covington's claim from the facts in South Carolina Federal Savings Bank v. San–A–Bel Corporation, 307 S.C. 76, 413 S.E.2d 852 (Ct.App.1992), because Covington is an experienced real estate broker who should have known his account did not contain sufficient......
  • In re 85-02 Queens Blvd. Associates, Bankruptcy No. 196-18487-353
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Eastern District of New York
    • 29 Agosto 1997
    ...(New Mexico); Howard v. Linnhaven Orchard Co., 228 F. 523, 526 (D.Or.1913) (Oregon); South Carolina Fed. Sav. Bank v. San-A-Bel Corp., 307 S.C. 76, 413 S.E.2d 852, 854 (App.1992) (South A vendee's lien differs from a judgment lien in important respects. A vendee's lien is an equitable lien ......
  • Walker Inv. Mgmt. Tr. v. GrandSouth Bank, 2004-UP-606
    • United States
    • Court of Appeals of South Carolina
    • 6 Diciembre 2004
    ...sufficient that one either knows or ought to know some third party interest exists.” South Carolina Fed. Savings Bank v. San-A-Bel Corp., 307 S.C. 76, 79, 413 S.E.2d 852, 854 (Ct. App. 1992) (emphasis added). See S.C. Code Ann. § 30-7-10 (Supp. 2003). The inclusion of the surety bond requir......
  • Request a trial to view additional results
18 cases
  • In re 222 South Caldwell Street, Ltd. Partnership, Bankruptcy No. 08-31710.
    • United States
    • U.S. Bankruptcy Court — Western District of North Carolina
    • 17 Junio 2009
    ...notice of an existing third party equity in the property takes subject to the third party's interest[.]" See San-A-Bel, 307 S.C. at 79, 413 S.E.2d 852. The San-A-Bel court granted the priority of an equitable lien based on such The South Carolina holding in San-A-Bel is substantively opposi......
  • Bank v. Wingard Properties Inc., No. 4846.
    • United States
    • Court of Appeals of South Carolina
    • 22 Junio 2011
    ...Bank asks the court to distinguish Covington's claim from the facts in South Carolina Federal Savings Bank v. San–A–Bel Corporation, 307 S.C. 76, 413 S.E.2d 852 (Ct.App.1992), because Covington is an experienced real estate broker who should have known his account did not contain sufficient......
  • In re 85-02 Queens Blvd. Associates, Bankruptcy No. 196-18487-353
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Eastern District of New York
    • 29 Agosto 1997
    ...(New Mexico); Howard v. Linnhaven Orchard Co., 228 F. 523, 526 (D.Or.1913) (Oregon); South Carolina Fed. Sav. Bank v. San-A-Bel Corp., 307 S.C. 76, 413 S.E.2d 852, 854 (App.1992) (South A vendee's lien differs from a judgment lien in important respects. A vendee's lien is an equitable lien ......
  • Walker Inv. Mgmt. Tr. v. GrandSouth Bank, 2004-UP-606
    • United States
    • Court of Appeals of South Carolina
    • 6 Diciembre 2004
    ...sufficient that one either knows or ought to know some third party interest exists.” South Carolina Fed. Savings Bank v. San-A-Bel Corp., 307 S.C. 76, 79, 413 S.E.2d 852, 854 (Ct. App. 1992) (emphasis added). See S.C. Code Ann. § 30-7-10 (Supp. 2003). The inclusion of the surety bond requir......
  • Request a trial to view additional results

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