Willoughby v. Ray
| Decision Date | 03 April 1925 |
| Docket Number | (No. 11739.) |
| Citation | 127 S.E. 441 |
| Parties | WILLOUGHBY. v. RAY et al. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Horry County; S. W. G. Shipp, Judge.
Action by Mrs. P. A. Willoughby against E. L. Ray and the Farmers' & Merchants' Bank of Tabor, N. C. From decree for plaintiff, defendants appeal. Affirmed.
The following are the referee's report and decree on which the court bases its decision:
Referee's Report.
This is an action to foreclose a purchase-money mortgage given the plaintiff, P. A. Willoughby, by the defendant E. L. Ray. The defendant Farmers' & Merchants' Bank, by its answer, asks for the foreclosure of a mortgage given by the plaintiff, P. A. Willoughby, to Burroughs Bank & Trust Company, and which it now holds as security to a note of its co-defendant, E. L. Ray.
Under an order of reference out of the court of common pleas, I held a reference and took testimony as to the issues raised in the pleadings and submit herewith the said testimony as a part of this report.
I find that on July 16, 1920, the plaintiff, Mrs. Polly Ann Willoughby, made, executed, and delivered to the Burroughs Bank & Trust Company her certain note for the sum of $825 payable 60 days after date, securing said note with a mortgage of even date therewith on the lands in question, making the maturity date of this note and mortgage September 14, 1920.
I find that thereafter on or about October 20, 1920, the plaintiff contracted to sell the lands described in the above mortgage to E. L. Ray, one of the defendants, for $4,500. This land trade was consummated by the delivery of a deed by Mrs. P. A. Willoughby to E. L. Ray on October 20, 1920—the arrangements for the payment of the purchase price of said lands was $1,500 in cash and $3,000 in six equal annual installments of $500 each, with interest on the credit portion of the purchase price at 8 per cent. per annum, payable annually.
It appears that in accord with the agreement to buy and sell, Mrs. Willoughby and Mr. Ray appeared at the office of Sherwood & McMillan to close their deal. The deed was drawn and executed; the notes and mortgage for the credit portion of the purchase price were prepared and executed. As to the $1,500 cash payment, a part was used to pay the note and mortgage debt due by Mrs. Willoughby to Burroughs Bank & Trust Company and the balance paid to Mrs. Willoughby in cash. It appears that Mr. Ray and Mrs. Willoughby's husband went to the bank and paid this paper, and that Mr. Ray, when paying same, instead of having it marked paid, had it transferred to himself and gave Mrs. Willoughby a check for the difference between $1,500 and the sum he paid the bank.
I feel constrained to say here that Mrs. Willoughby and her husband have the appearance of being ignorant old people, and have little or no knowledge of the law and rules governing the handling of papers in a transaction like this. They both stated they thought that when they saw Mr. Ray take a part of the purchase money for this land which wasdue them and pay their mortgage debt, and, as Mr. Willoughby says, "take the papers up, " that this was the end of it.
Mr. Willoughby testified that he went to the bank with Mr. Ray, saw him pay for the papers, and saw the bank hand the paper to him; that he heard nothing about transferring. And the testimony of Mrs. Willoughby is to the same effect; that when she was informed that her mortgage had been taken up and paid for out of her money, she thought this was the end of it.
It is clear from the testimony that Mr. Ray required a clear and unincumbered title of Mrs. Willoughby. He had the title abstracted, deeds corrected, and required this mortgage cleared. The deed in question is a full warranty deed. Ray's expressed intention was to have everything cleared, and it appears to have been the purpose of Mrs. Willoughby to meet the requirements of her warranty. So far as Mr. Ray and Mrs. Willoughby are concerned, it is clear from the testimony that it was intended that the mortgage should cease to be a lien so far as she was concerned, and that it should merge in the title, and that from the moment of its payment at the bank with Mrs. Willoughby's money the title of Ray to the land should be clear and unincumbered except as to the purchase-money papers made by Ray to her. So far as Burroughs Bank & Trust Company is concerned, this Willoughby paper is paid. So far as Ray is concerned, it is paid, and that with Mrs. Willoughby's money. Ray knew this, for he personally saw to it and attended to it. Prom the testimoney he was there acting for himself and the defendant bank. The defendant bank is bound by the transaction; if it is the victim of fraud, its privy, Ray, is responsible, and there is nothing to indicate that Mrs. Willoughby had any direct or indirect participation in it.
It appears from the testimony that, pursuant to an arrangement already made, but not disclosed, the defendant E. L. Ray took this mortgage and carried it to the defendant bank's office at Tabor, N. C, and there deposited it as security to a loan he had made with this bank to raise a portion of the $1,500 he had paid Mrs. Willoughby, and that there is due the bank on the Ray note $723.5S, with interest at 6 per cent. from December 15, 1921.
The defendant E. L. Ray admits both debts. Mrs. Willoughby insists that her note and mortgage now held by the defendant Farmers' & Merchants' Bank has been paid, and that there is nothing due on it, so far as she is concerned, and if it is a lien on the land its existence is by virtue of a reissue of the old mortgage by the defendant E. L. Ray. and that her mortgage from Ray is a first lien.
The defendant Farmers' & Merchants' Bank contends that the mortgage from Polly Willoughby to Burroughs Bank & Trust Company, now in their hands as security for the payment of the E. L. Ray note, is, so far as they are concerned, a first mortgage, and that Mrs. Willoughby is estopped to contest its validity as such.
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