South Carolina Nat. Bank v. Central Carolina Livestock Market, Inc.

• Decision Date: 04 November 1985
• Docket Number: No. 22566,22566
• Citation: 289 S.C. 309,345 S.E.2d 485
• Court: South Carolina Supreme Court
• Parties: SOUTH CAROLINA NATIONAL BANK, Appellant, v. CENTRAL CAROLINA LIVESTOCK MARKET, INC., John W. Conder, III, individually and as trustee, Gay L. Conder, William L. Tetterton as trustee, and Patrick D. Partin as trustee, Defendants, of whom Central Carolina Livestock Market, Inc. and John W. Conder, III, individually, are Respondents. . Heard

Page 485

345 S.E.2d 485

289 S.C. 309

SOUTH CAROLINA NATIONAL BANK, Appellant, v. CENTRAL CAROLINA LIVESTOCK MARKET, INC., John W. Conder,

III, individually and as trustee, Gay L. Conder,

William L. Tetterton as trustee, and

Patrick D. Partin as trustee, Defendants,

of whom Central Carolina Livestock Market, Inc. and John W.

Conder, III, individually, are Respondents.

No. 22566.

Supreme Court of South Carolina.

Heard Nov. 4, 1985.

Decided June 9, 1986.

Hamilton Osborne, Jr., of Boyd, Knowlton, Tate & Finlay; and L. Henry McKellar, of Legal Dept., of South Carolina Nat. Bank, Columbia, for appellant.

George W. Speedy, of Furman, Speedy & Stegner, and William R. Byars, Jr., of Savage, Royall, Kinard, Sheheen & Byars, Camden, for respondents.

PER CURIAM:

This is an appeal from an order which extinguished the right of appellant South Carolina National Bank to a deficiency judgment in a mortgage foreclosure action against respondents Central Carolina Livestock Market, Inc. and John W. Conder, III. We affirm.

I

The appeal first challenges the constitutionality of Act. No. 264 of 1933, which is now codified as S.C. Code Ann. §§ 29-3-680 to -770 (1976). The Bank argues that the Act denies due process of law because it fails to provide a judicial determination of value after a hearing at which the parties present evidence and cross-examine witnesses. We reject this argument.

Under the Act, a person who is personally liable for the debt remaining after the sale of real property in a mortgage foreclosure action may petition the Circuit Court for an appraisal. If an appraisal is requested, the court appoints three appraisers. One appraiser is appointed by the debtor, and one is appointed by the creditor. The remaining appraiser is appointed by the court.

The appraisers then view the mortgaged property and determine "the true value of the property as of the date of sale, taking into consideration sale value, cost and replacement value of improvements, income products and all other proper elements which, in their discretion, enter into the determination of value." The Act provides the parties with no opportunity to attend the viewing or to present evidence to the appraisers.

When a majority of the appraisers agree on a value, they file a return with the court. The clerk then issues an order decreasing the deficiency by the amount the appraised value exceeds the net proceeds from the foreclosure sale. A party aggrieved by the order has the right to appeal to the Circuit Court within ten days after receiving notice that the order has been filed.

If an appeal is taken, the Circuit Court hears the appeal without a jury. The Act provides the judge with a veritable smorgasbord of procedures from which to choose in determining the appeal. He may hear the appeal "upon affidavits or oral testimony as he deems advisable." If he determines that the appraisal does represent the true value of the property, he confirms the appraisal and an aggrieved party has the right to appeal to this Court. On the other hand, if the judge determines that the appraisal does not fairly represent the value of the property, he may "order a new appraisal upon such terms as he may deem equitable."

The Bank commenced this action to foreclose several mortgages given by Central Carolina and Conder to secure certain loans. Pursuant to a decree of foreclosure, the property was sold at public auctions. At the auctions, the Bank purchased the two parcels of realty involved in this appeal.

After the sales were final, the Bank obtained deficiency judgments against Central Carolina and Conder as provided under the decree of foreclosure. Central Carolina and Conder then moved for an appraisal under the Act.

The Circuit Court directed an appraisal of the property, and the appraisers unanimously found that the true value of the two parcels on the date of the sale exceeded the balance due under the notes. Under the Act, this finding extinguished the deficiency judgments.

The Bank appealed the appraisal to the Circuit Court as provided by the Act. Over the objection of the Bank, the judge ruled that he would hear the appeal on affidavits without any testimony. After this ruling, the judge agreed, with the consent of all parties, to consider depositions rather than affidavits.

After considering the depositions and briefs of the parties, the judge issued an order confirming the appraisals and extinguishing the deficiency judgments. It is from this order that the Bank appeals.

A statute will not be declared unconstitutional unless its repugnance to the constitution is clear and beyond reasonable doubt. Southeastern Home Building & Refurbishing, Inc. v. Platt, 283 S.C. 602, 325 S.E.2d 328 (1985). A court must uphold the constitutionality of legislation if possible, and if its construction is doubtful, the doubt will be resolved in favor of the law. Duke Power Co. v. S.C. Public Service Commission, 284 S.C. 81, 326 S.E.2d 395 (1985).

Under Both Article I, Section 3 of the South Carolina Constitution and the fourteenth amendment to the United States Constitution, a person cannot be deprived "of life, liberty, or property without due process of law."

To evaluate the challenge of the Bank, we must determine whether it was deprived of a protected interest, and if so what process was its due. Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982). There can be no doubt that the right of the Bank to a deficiency judgment under the notes which the mortgages secured and the decree of foreclosure is a property interest protected under the due process clauses.

The fundamental requirement of due process is the opportunity to be heard "at a meaningful time and in a meaningful manner." Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965). Due process does not mandate any particular form of procedure. South Carolina Ports Authority v. Kaiser, 254 S.C. 600, 176 S.E.2d 532 (1970). Instead, due process is a flexible concept, and the requirements of due process in a particular case are dependent upon the importance of the interest involved and the circumstances under which the deprivation may occur. Walters v. National Ass'n of Radiation Survivors, 473 U.S. ----, 105 S.Ct. 3180, 87 L.Ed.2d 220 (1985); Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983).

The only case of which we are aware addressing the constitutionality of a similar mortgage appraisal procedure is Society for Savings v. Chestnut Estates, 176 Conn. 563, 409 A.2d 1020 (1979). There, the Supreme Court of Connecticut held the appraisal statute of that state violated due process. The Connecticut statute, however, is clearly distinguishable...