Union Nat. Bank of Columbia v. Cook

• Court: South Carolina Supreme Court
• Writing for the Court: WATTS, J.
• Citation: Union Nat. Bank of Columbia v. Cook, 96 S.E. 484, 110 S.C. 99 (S.C. 1918)
• Decision Date: 25 June 1918
• Docket Number: 9994.
• Parties: UNION NAT. BANK OF COLUMBIA v. COOK ET AL.

96 S.E. 484

110 S.C. 99

UNION NAT. BANK OF COLUMBIA v. COOK ET AL.

No. 9994.

Supreme Court of South Carolina

June 25, 1918

Appeal from Common Pleas Circuit Court of Laurens County; Jas. E Peurifoy, Judge.

Action by the Union National Bank against Kate E. Cook and others. Judgment for plaintiff, and defendants J. C. Cox and the Bank of Fountain Inn appeal. Affirmed.

Special Referee F. P. McGowan made report herein as follows:

At the November term of court the above-stated action was referred to me to take the testimony and decide all the issues of law and fact.

In obedience to said order, I held a reference on the 15th day of January, 1917, and took the testimony which is herewith reported. At a later day in January I held a reference and heard the arguments of the attorneys for plaintiff and for defendants.

Statement of Issues.

The action was commenced in the court of common pleas for the county of Laurens on March 9, 1916, and is ostensibly for the foreclosure of a mortgage of 160.85 acres of land situate in Laurens county in said state, executed by the defendants Mrs Kate E. Cook on March 26, 1913, to her husband and codefendant, James I. Cook, and by him transferred to the plaintiff on said day. The complaint seeks to have a receiver appointed and placed in control of the rents and profits of the premises and that the plaintiff's mortgage be foreclosed, the premises sold, and proceedings applied to the amount secured by the different liens according to their date and legal priority. All of the defendants have been served with the summons and complaint and the Union Central Life Insurance Company has answered disclaiming any interest in the premises or to any right to be adjudicated in the action.

Conclusions of Fact.

On the 29th day of May, 1912, Mrs. Kate E. Cook and her husband Jas. I. Cook, executed to the Union Central Life Insurance Company of Cincinnati, Ohio, a mortgage upon 160.85 acres of land situate in Laurens county in said state to secure a debt of $2,500 due to said company, which mortgage was recorded in the office of the clerk of the court of common pleas for the said county and state on the 5th day of June, 1912, in Book 39, p. 144.

On March 20, 1913, Kate E. Cook executed to the said James I. Cook a promissory note in the sum of $2,000, as follows:

"$2,000.00. Columbia, S. C., March 20, 1913.

On March 20, 1914, after date, for value received I promise to pay to the order of James I. Cook, two thousand dollars ($2,000), negotiable and payable at Union National Bank, of Columbia, South Carolina, with discount before, and interest after maturity at the rate of eight (8) per cent. per annum until paid, with ten (10) per cent. attorney's fees should this note be collected by law or through an attorney.

Kate E. Cook."

Indorsed on back: "James I. Cook."

On the 26th day of March, 1913, the said Kate E. Cook executed to the said Jas. I. Cook, his heirs and assigns, a mortgage of 160.85 acres of land situate in said county and state, the same land as above described, which was recorded in the office of the clerk of the court of common pleas for the county of Laurens in said state on the 27th day of March, 1913, in Book 45, p. 6.

Although Jas. I. Cook joined with Mrs. Kate E. Cook in the execution of the mortgage of the same land to the Union Central Life Insurance Company, Mrs. Kate E. Cook was the owner in fee of the said land, and was the owner when she executed the mortgage to Jas. I. Cook on the 20th day of March, 1913, to secure the $2,000 note. No part of this note and mortgage has been paid.

On March 26, 1913, Jas. I. Cook and Kate E. Cook executed the Union National Bank a promissory collateral note in the sum of $1,500 due and payable to the said bank on January 15, 1914, and therein pledged Jas. I. Cook in the sum of $2,000 maturing March 20, 1914, as follows:

"$1500.00. Columbia, S. C., March 24, 1913.

Jan. 15, 1914, after date we or either of us promise to pay to Union National Bank, or order, the sum of fifteen hundred & no-100 dollars, value received payable at Union National Bank with discount before and interest after maturity at the rate of eight per cent. per annum.

As collateral security for payment of the above note, and any other liability or liabilities to said Union Nat. Bank, due or to become due, or that may be hereafter contracted we have this day deposited with said bank note and mortgage of Kate E. Cook to Jas. I. Cook for $2,000.00 maturing March 20, 1914.

Power of sale of collaterals.

Jas. I. Cook,

Kate E. Cook."

Interest was paid on this note to November 16, 1914.

On the 26th day of March, 1913, the Union National Bank received this $1,500 note from Jas. I. Cook and Kate E. Cook and as collateral security to same the note and mortgage of Kate E. Cook to Jas. I. Cook in the sum of $2,000 and paid to Jas. I. Cook the net proceeds of said securities the sum $1,404.08, and that the said Union National Bank is a bona fide holder of the said $2,000 note and mortgage of the said Kate E. Cook for value, and that there is now due the said Union National Bank thereon the sum of $1,963.50, as follows:

Face of note, due January 15, 1914 ..	$1,500.00
Interest from November 16, 1914 ........	285.00
	---------
Total ............................	$1,785.00
Ten per cent. attorney's fee ...........	178.50
	---------
Total ............................	$1,963.50

The $2,000 note and mortgage of Kate E. Cook were never out of the possession of the Union National Bank from the 26th day of March, 1913, to the present time.

On the 28th day of November, 1913, Jas. I. Cook executed to J. C. Cox a promissory note whereby he promised to pay J. C. Cox or order, on February 26, 1914, the sum of $1,800, at the Bank of Fountain Inn, for value received, with interest after maturity at the rate of 8 per cent. per annum and 10 per cent. of the amount due as attorney's fee in case of suit or collection by an attorney. On the 28th day of November, 1913, the said J. I. Cook executed and delivered to J. C. Cox and the Bank of Fountain Inn a satisfaction piece wherein he acknowledged payment of $2,000 mortgage of Mrs. Kate E. Cook and authorized the register of mesne conveyance to enter satisfaction of the same upon record. At said time Jas. I. Cook stated to J. C. Cox and R. W. Davis, cashier of the Bank of Fountain Inn, that he had the $2,000 mortgage of Kate E. Cook, and that the same was paid, and at same time delivered the imperfect satisfaction above stated dated on the 28th day of November, 1913; the same not giving the maturity of the mortgage nor the book and page. Jas. I. Cook did not exhibit the said note or mortgage of $2,000, nor did J. C. Cox or R. W. Davis ask for the mortgage to be exhibited to them for inspection, nor did they or either of them make inquiry as to where the mortgage might be seen. They simply relied upon the statement of Jas. Cook that he had the mortgage and would have it properly canceled of record by the clerk of the court. At that time both J. C. Cox and R. W. Davis, as cashier of the Bank of Fountain Inn, knew that there was a mortgage on record executed by Kate E. Cook to Jas. I. Cook in the sum of $2,000, and that there was of record the mortgage given by Kate E. and Jas. I. Cook in the sum of $2,500 to the Union Central Life Insurance Company. Mrs. Kate E. Cook was not at Fountain Inn on the 28th day of November, 1913, when the $1,800 note and mortgage were drawn up by Mr. W. R. Davis and when the first satisfaction piece was delivered by J. I. Cook. She and her husband, J. I. Cook, were living at Hopkins, Richland county, at that time. On the 29th day of November, 1913, J. I. Cook went to Laurens courthouse and signed a second satisfaction piece of the $2,000 mortgage before C. A. Power, clerk of the court, which was by the said clerk of the court entered upon the record of said mortgage in his office on December 12, 1913. On a day between the 1st and 12th of December, 1913, Jas. I. Cook and Kate E. Cook executed a mortgage over the same tract of land to secure the payment of the $1,800 note of Jas. I. Cook to J. C. Cox which was filed for record on the 12th day of December, 1913; but as the said mortgage was not probated until the day after, to wit, the 13th day of December, the mortgage must have been returned to Hopkins for probate which bears the 13th day of December, 1913. On the 12th day of December, 1913, the Bank of Fountain Inn discounted the said $1,800 note and mortgage and placed the net proceeds to the credit of Jas. I. Cook on its books.

J. C. Cox indorsed this note to the Bank of Fountain Inn, and on the 14th of November, 1915, this note is stamped paid by the said bank.

On February 9, 1915, J. I. Cook and Kate E. Cook executed to J. C. Cox a promissory note in the sum of $1,337.32, payable February 9, 1916, at the Bank of Fountain Inn, and on the same day executed a mortgage over the same tract of land to secure payment of said note, which mortgage was recorded in the office of the clerk of the court of common pleas for the county of Laurens in said state on the 23d day of March, 1915, in Book 46, p. 95.

The full amount of this note and mortgage was advanced by J. C. Cox to Jas. I. Cook.

On the 24th day of March, 1915, the Union Central Life Insurance Company commenced an action in the court of common pleas for the county of Laurens in said state against Kate and Jas. I Cook and J. C. Cox, and later the Bank of Fountain Inn by its intervention for the foreclosure of the mortgage executed by Kate E. and Jas. I. Cook to said company, and the said action ripened into judgment of foreclosure and sale of the land under the three mortgages, to...