Wells Fargo Bank Minn. v. Luther
| Decision Date | 17 February 2005 |
| Docket Number | 2005-UP-123 |
| Parties | Wells Fargo Bank Minnesota, National Association, FKA, Norwest Bank Minnesota, National Association, as Trustee, for the registered Holders of Option One Mortgage Loan Trust 1999-C, Asset-Backed Certificate, Series 1999-C, without recourse, Appellants, v. Peggy M. Luther and the South Carolina Department of Public Safety, and all unknown persons with any right, title or interest in the mobile manufactured home described herein being a class designated as John Doe now known to be Denise Gardner, Respondents. |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR
Heard January 11, 2005
Appeal From Kershaw County Jeffrey M. Tzerman, Master-In-Equity
Robert J. Thomas, of Columbia, for Appellant.
Rolland E. Greenburg, III and William L. Todd, both of Columbia, for Respondent.
This appeal arises from an order allowing foreclosure on a piece of real property but not on a mobile home located on that property. We affirm.
In 1996, Denise Gardner acquired sole ownership of a mobile home that she placed on a piece of vacant real estate in Lugoff. Both Denise and her mother, Peggy Luther, had an ownership interest in the real estate. [1] Peggy moved into the mobile home with Denise after Denise was involved in an automobile accident.
While Peggy was living with Denise, an agent of Approved Federal Savings Bank (Bank”) contacted Peggy offering to consolidate her various debts by refinancing her real property. Peggy agreed and understood the consolidation transaction was going to be a refinance on her property. Pursuant to section 37-10-102(a) of the South Carolina Code (Supp. 2003), the Bank provided Peggy with a notice that explained she could choose her own closing attorney and insurance agent. Because Peggy indicated she had no preference in legal counsel, Brett F. Kline was chosen by the Bank and served as Peggy's counsel. Kline met with Peggy twice in her home during this transaction.
In order to effectuate the refinancing, Denise signed a limited warranty deed on September 3, 1999, conveying her interest in the real estate to Peggy, such that Peggy would become the sole owner of the real estate. While the face of the deed did not purport to transfer the mobile home, the legal description of the deeded property which was contained on a separate paper and attached to the deed, included a statement that the transfer included all improvements on the real estate and that it is the borrower's intent that the mobile home loses its nature as personalty and becomes realty.”
Peggy also executed a promissory note in favor of the Bank [2] for $65, 500 on that same day. The promissory note was secured by a mortgage on the real estate. The legal description of the mortgaged property also stated that the transfer included all improvements and that it is the borrower's intent that the mobile home loses its nature as personalty and becomes realty.” Peggy also executed an Affixation Affidavit Regarding Manufactured Home, ” and a manufactured housing rider to the mortgage, in which Peggy attested to the permanent affixation of the mobile home to the real estate.
Peggy testified that she was seventy years old, did not necessarily understand what she was signing, did not finish the ninth grade, and was in poor health. Peggy also testified that at the time she signed these papers, she believed that the land and the mobile home belonged to her daughter, Denise. During Peggy's deposition, Peggy represented that she knew she was signing the papers in order to have the trailer refinanced, The documents revealed Robert V Harrelson to be the subscribing witness.
Denise testified that it was never her intent to transfer the mobile home to her mother, and that she told Kline that she would not sign anything that could ever cause her to lose her mobile home. Denise also testified that she thought her mother was borrowing money on the land and not the mobile home. The loan proceeds were used to pay off Peggy's medical bills and to pay off money Denise owed on the mobile home.
On December 1, 2000, Peggy defaulted on the promissory note and mortgage. The Bank brought a declaratory judgment action seeking a determination that the mobile home was subject to the mortgage and an action for foreclosure of the mortgage. The case was transferred to the master-in-equity.
The master issued an order on February 11, 2004, finding that each page of the mortgage was initialed by Peggy except the legal description, which was prepared and attached to the document after the execution of the Mortgage and was never presented to or reviewed by Peggy.” The master also found, in relevant part, that (1) the deed and mortgage were not properly witnessed, (2) the mortgage was invalid as a legal mortgage, (3) the deed failed to transfer title to the mobile home to Peggy, (4) the Bank failed to perfect a lien on the mobile home, (5) the failure to perfect was fatal to the Bank's claim that it was entitled to foreclose on the mobile home as an improvement located on the real property and (6) the Bank was entitled to foreclose pursuant to an equitable mortgage against the real estate only. The Bank appeals the master's failure to include the mobile home in the equitable mortgage.
Actions for foreclosure or the cancellation of instruments are actions in equity.” Wilder Corp. v. Wilke, 324 S.C. 570, 576-77, 479 S.E.2d 510, 513 (1996). Since the master-in-equity heard this equitable action without appeal to the circuit court, the appellate court may find the facts on appeal in accordance with its own view of the preponderance of the evidence. Id. However, the appellate court should not disregard the findings of the master who saw and heard the witnesses and was in a better position to judge their credibility. Id.
The Bank's sole argument on appeal is that the master erred in concluding that the mobile home was not a fixture and not subject to the equitable mortgage. We disagree.
The Bank argues that it was the intent of the parties to subject the mobile home to the equitable mortgage and permanently affix the mobile home to the real estate. In making this argument, the Bank asserts the master erred in making certain findings of fact. First, the Bank alleges the master erred in omitting from the order the fact that the legal description of the deeded property included the mobile home. Second, the Bank alleges that the master erred in finding the legal description, which included the mobile home, was prepared and attached to the mortgage and deed after Peggy signed the papers. Third, the Bank argues the master erred in finding that Denise testified the mobile home at no time was to be transferred or included in the contemplated loan.” We disagree and find that the facts, in accordance with our own view of the preponderance of the evidence, support the order of the master-in-equity.
Initially we find the Bank's equitable mortgage did not extend to the mobile home. For an equitable lien to arise, there must be a debt owing from one person to another; specific property to which the debt attaches; and an intent, expressed or implied, that the property will serve as security for the payment of the debt. First Federal Sav. and Loan Ass'n of Charleston v. Bailey, 316 S.C. 350, 356 450 S.E.2d 77, 80-81 (Ct. App. 1994). If a mortgage is actually signed by the mortgagor and intended to secure the debt, it can be treated as an equitable mortgage. See Stelts v. Martin, 90 S.C. 14, 16-17, 72 S.E.2d 550, 551 (1911); Bryce v. Massey, 35 S.C 127, 142, 14 S.E. 768, 774 (1892).
In this case, there is no doubt that Peggy owes a debt to the Bank. Moreover, it is uncontested that Peggy sought to secure the debt with her real estate. However, we do not find that Denise or Peggy intended for the mobile home to serve as security. The Bank does not appeal from the master's finding that the deed purporting to transfer the mobile home from Denise to Peggy was invalid. This unappealed ruling becomes the law of the case and precludes consideration of the validity of the deed on appeal. See ML-Lee Acquisition Fund, L.P. v. Deloitte & Touche, 327 S.C. 238, 241, 489 S.E.2d 470, 472 (1997). As a result, Peggy never had an ownership interest in the mobile home to subject to a mortgage. Cf. McDavid v. McDavid, 187 S.C. 127, 139, 197 S.E. 204, 209 (1938) ().
Therefore we must look to the intent of Denise, as sole and exclusive owner of the mobile home, to see if she entered into any transaction that would subject her mobile home to the Bank's equitable mortgage. Denise, however, owes no debt to the...
To continue reading
Request your trial