Wescoat v. Crawford

• Decision Date: 19 September 1895
• Citation: 22 S.E. 792,45 S.C. 189
• Parties: WESCOAT et al. v. CRAWFORD.
• Court: South Carolina Supreme Court

22 S.E. 792

45 S.C. 189

WESCOAT et al. v. CRAWFORD.

Supreme Court of South Carolina

September 19, 1895

Appeal from common pleas circuit court of York county; Aldrich Judge.

Action by Julius J. Wescoat and others, partners as Marshall Wescoat & Co., against Edward A. Crawford. Judgment for plaintiffs. Defendant appeals. Affirmed.

The charge, and reasons of the judge for refusing a new trial were as follows:

Charge.

"The pleadings in this case present the issues which you are called to pass upon. Those pleadings have been read in your presence, and to you, and I shall not undertake to reiterate or to read those pleadings to you a second or third time, but will briefly summarize the substantial or material allegations in the complaint and the allegations contained in the answer. Therefore, briefly stated, this action is a special proceeding, brought under the provisions of the law of this state which regulates actions for a claim and delivery of personal property. The property the subject-matter of this action is alleged to be the stock of mercantile goods described in the complaint, owned by a Mr Gelzer. The plaintiffs contend and allege that they are entitled to the possession of those goods by reason of the rights conveyed to them by Mr. Gelzer in certain notes and mortgages. Those mortgages are what you term 'chattel mortgages'; that is, liens upon personal property,--in this case, alleged to be the stock of goods to which I have alluded. It is the law of this state that the owner of chattels may give a mortgage upon them to secure his indebtedness, and if such mortgages are drawn properly, so as to be sufficient and in compliance with the law, it vests in the mortgage the rights it purports to convey, namely, that it is a security for the debt therein described; and the law is that upon the maturity of the debt--that is, upon the expiration of the credit given by the mortgagee to the mortgagor--that the 'condition,' as it is so frequently termed, is broken, and the mortgagee then has the right to peaceably and legally take into his possession those goods and chattels, and sell them, either in the manner provided by the statute for the sale of chattels under such circumstances, or in the manner specifically stipulated in the mortgage. Upon condition broken, if the mortgagor refuses to give up possession of those chattels covered by the mortgage, or those chattels are in the custody of any outside party, and such party refuses to render or to deliver the possession thereof to the mortgagee, then the mortgagee (the owner of the mortgage) has a right to bring his action of claim and delivery in the court for the recovery of the possession of those chattels; and if he establishes that his mortgage is a valid and sufficient mortgage, and the first lien, or that he is entitled to the possession of those goods under that mortgage, then the courts award the possession to him, and will put him in possession of the goods. To apply that doctrine: It is alleged here that Mr. Gelzer was the owner of this stock of goods, and that he gave first a mortgage to one J. J. Wescoat, trustee, for the amount therein specified. The second is to the Savings Bank of Rock Hill, and the third is also given by John Gelzer to the Savings Bank of Rock Hill, S.C. All these mortgages, it is alleged, have been assigned to, and now are the property of Marshall, Wescoat & Co., the plaintiffs in this action. And perhaps, before going to the other questions, it may be better for me to take up these mortgages, and explain them to you, as it is made the duty of the court to construe the meaning of all written instruments, and instruct the jury as to their force and effect.

"All three of these mortgages, broadly speaking, are drawn in compliance, and executed in compliance, with law, and, upon their face, appear to be regular and correct. The first mortgage, namely, that to J. J. Wescoat, trustee, is given to secure a debt of $700, forty days after date, to wit, August 17, 1892, due by John Gelzer to J. J. Wescoat, trustee. That mortgage, as I stated, and the note it was given to secure, are, upon their faces, apparently regular. The first mortgage--and that is the one that I wish to call your attention to, because it is incumbent upon me to construe this note and this mortgage with reference to certain questions that have been mooted and argued in your presence--the first mortgage is dated the 21st of January, 1893, and is given to secure a note, which reads as follows: 'Rock Hill, South Carolina, January 21st, 1893. One day after date I promise to pay to the order of the Savings Bank of Rock Hill, S. C., the sum of two thousand dollars, with interest from date at the rate of eight per cent. per annum, payable annually, until the whole be paid, negotiable and payable at the Savings Bank of Rock Hill, S. C.; and in case it shall become necessary to collect the said sum and interest, or any part thereof, by action at law, then I agree to pay the additional sum of ten per cent. on the amount due for attorney's fees. Value received. [Signed] John Gelzer.' And the mortgage refers to that note, and purports to be given to secure it. That note is dated January 21, 1893, and payable one day after date, and the point to which I wish to direct your attention just now is this: If this is an agreement to pay money rising out of the transaction out of which the money, or money's worth, is derived, and the note is the evidence of the existence of that debt, the note does not merely, because it is a written note, make the debt. It is evidence of that which is already in existence, because it is said to be given for value received, and the note be renewed, and if it is renewed, in law, the meaning of it is that the debt is continued, and the promise to pay is renewed; and it is a question of fact, when, as in this case, a check is presented to the bank by Gelzer, and afterwards notes are taken, then, upon its face, the check is an order to pay money in there. A note, upon its face, is a promise to pay a debt, but if it is intended as a renewal of an old debt, and the jury are satisfied that it is a renewal of an old debt, it is merely evidence of the continuance of the former debt; and under this mortgage,--this chattel mortgage that I hold in my hand, to wit, of January, 1893,--the mortgage would secure and protect the renewal of a note. But, in passing, just now, this paper, upon its face, purports to be--this note--for two thousand dollars, and this mortgage of January, 1893, is given to secure it; and if the defendant here, either from constructive notice, such as by recording, or actual notice, had obtained information or notice of the existence of these papers, it would only serve as a security to the bank to the amount of two thousand dollars, and the interest fixed in it. It couldn't go above that amount, because it says so upon its face. The third mortgage, dated the 2d of December, 1893, purports to be given as security to insure the payment of $3,100, for which,

in his mortgage, Mr. Gelzer recites, 'I have given my promissory notes as follows,' and enumerates several notes, in the aggregate amounting to $3,100, and the notes to which the mortgage refers are alleged to be the notes that are in evidence before you. If on that date (the 2d day of December, 1893) Mr. Gelzer owed the savings bank $3,100, he had a perfect right (Mr. Gelzer did) to give, if he did it honestly and bona fide, the security to secure that $3,100; and it would make no difference whether he had other security, either direct or collateral, to secure that debt, or a part of the debt. Whether he had that security for the sum of $3,100, or only for $2,000, he would have the right to give the mortgage, and the savings bank would have the right to take it as additional security, or as further security, because I know of no law which limits the amount of security which one may give to another. That is a matter for their own individual agreement, which the law does not purport to regulate. Now, we go a step further. Under our law, the mortgage, as between the mortgagee and the mortgagor (the parties to it, who have notice), the execution and delivery thereof makes it binding and valid upon them (the mortgagor and the mortgagee). But as to subsequent creditors, and subsequent purchasers for value, the law says that, in order that subsequent creditors and purchasers shall have some notice of these liens, the mortgagee shall record his mortgage within forty days, and if he records his mortgage in forty days the recording of such, under the law, constitutes constructive notice to all subsequent purchasers and creditors, because they are bound by the law of the land, and it is incumbent upon a man dealing with another (or it is his privilege, at least) to search the records, and see whether the property upon the faith of which and concerning which he is dealing is unincumbered. And therefore recording a paper is constructive notice to subsequent purchasers, if recorded according to law; that is, within forty days, and in the place the statute provides in regard to chattel mortgages. That is, that they must be recorded within forty days, and if the mortgagor is residing in the state it must be recorded in the office of the register of mesne conveyances of that county in which the mortgagor resided at the date of its execution or delivery; and, if he is not in this state, then it must be recorded where the property is situated. Now, in regard to Mr. Wescoat's mortgage, the first in the line of mortgage, and as requested by defendants in their tenth request to charge: 'In order that a mortgage of personal property may avail against the claims of subsequent creditors without notice, the mortgage must be

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