Woodrow v. Frederick

• Decision Date: 25 January 1926
• Docket Number: 11899.
• Citation: 131 S.E. 598,133 S.C. 431
• Parties: WOODROW v. FREDERICK.
• Court: South Carolina Supreme Court

131 S.E. 598

133 S.C. 431

WOODROW v. FREDERICK.

No. 11899.

Supreme Court of South Carolina

January 25, 1926

Appeal from Common Pleas Circuit Court of Richland County; W. H Townsend, Judge.

Action by F. B. Woodrow against Joe Frederick. From a judgment for defendant, plaintiff appeals. Affirmed.

The decree of the circuit court is as follows:

I. This case comes before me upon report of the master for Richland county, dated April 11, 1924, and upon exceptions thereto by the defendant. The case was argued before me fully by counsel for both parties, and I have carefully considered both the law and the facts.

II. (a) The complaint alleges an ordinary action for the foreclosure of a mortgage securing a bond for $2,750, dated December 10 1920, payable three years from date, with interest at the rate of 8 per centum per annum, payable semiannually on the 1st day of January and the 1st day of July of each year; the bond and mortgage having been originally given to Charles H Barron and thereafter, on December 31, 1920, assigned to the plaintiff.

(b) The answer of the defendant admits the execution of the mortgage sued on, but alleges it was executed in pursuance of an agreement by and between the defendant Frederick and the mortgagee Barron to the effect that Barron would buy and pay for the lot, and that Frederick would repay Barron by applying on the purchase price the commissions which were to become due to Frederick for building some houses for Barron that the sole consideration for the execution of the mortgage was the purchase of the lot for $2,750 by Barron; that Frederick thereupon proceeded to build six houses for Barron intermittently during the years 1920, 1921, and 1922, for which his commissions on the basis of 10 per cent. of the cost of building the houses were more than sufficient to repay Barron the amount of the mortgage, as was admitted by Barron during his lifetime; that under these circumstances the assignment of the bond and mortgage to the plaintiff was a fraud on the rights of the defendant, and that the defendant was never notified by the plaintiff or any one else that the bond and mortgage had been assigned to the plaintiff until after the death of Barron in November, 1922, and that the defendant never paid any interest on the obligation to the plaintiff or to Barron, and that the mortgage should therefore be declared satisfied and the defendant discharged from liability thereon.

III. On the issues thus joined I find the following facts:

(a) In the early spring of the year 1920, the defendant Frederick, who is an ignorant negro carpenter, was employed by Charles H. Barron (who was at that time a prominent lawyer in the city of Columbia, S. C., with large business and financial interests) to build a group of houses on the 2300 block of Pendleton street in the city of Columbia, on property belonging to the said Barron; it being understood that Frederick was to have general charge of the building and of the labor, and the ordering of materials, and that for his services he was to receive 10 per cent. of the total cost price of the houses as commissions. At the same time the defendant Frederick was contemplating the purchase of a lot situate on the 2100 block of Gervais street in the city of Columbia, of which the price was $2,750. It was thereupon agreed by and between Frederick and Barron that Barron would buy and pay for the lot, and that Frederick would repay Barron by applying the commissions which were to become due to Frederick for the building of the houses on the amount so paid out by Barron as the purchase price of the lot. This agreement was fulfilled on the part of Barron by his paying off the mortgage then existing on the property and paying the balance of the purchase money then due to the owner of the property, Kibler, and having the property conveyed to Frederick at a total cost to him of $2,650; the other $100 having been advanced on behalf of Frederick by his brother-in-law, Robinson.

(b) In pursuance of this agreement, Frederick went to work on the houses in the spring of the year 1920 and worked more or less continuously until the fall of the year 1920, at which time the houses were in large part completed except for the finishings, trimmings, painting, fences, etc. At this time, about the fall of 1920, work on the houses was somewhat suspended owing to a lack of funds on the part of Barron, but the work continued intermittently until all the six houses, which were built by Frederick, were finally and fully completed in the early spring of the year 1922, after which no further work was done or was necessary on the houses. The total cost of the houses, in accordance with the evidence presented in this case, was approximately $35,000, on which the commissions due Frederick according to the arrangement would therefore be $3,500. Barron admitted that the houses were properly built; that Frederick had performed his part of the agreement, and that the commissions due Frederick were more than sufficient to repay him for the amount which he had paid out for the lot; and that upon a settlement between him and Frederick there would be a balance coming to Frederick after deducting the cost of the lot. Barron, however, never had a final settlement or accounting with Frederick, though frequently requested so to do, and put Frederick off on the ground that he had not yet got in all of the bills for materials with which to calculate the total cost of the houses.

(c) On December 10, 1920, Barron took from Frederick the bond and mortgage herein sued upon in the sum of $2,750 to secure him for the purchase money of the lot which he had bought and had conveyed to Frederick. This finding is based upon testimony of C. B. Elliott, one of the former law partners of Barron, who personally closed the transaction of the purchase of the lot by Barron, who afterwards prepared the mortgage herein sued upon at the request of Barron, and who witnessed the execution of the bond and mortgage by Frederick, and who testified clearly and unequivocably that the consideration for the execution of the mortgage was the purchase of the lot by Barron; that the mortgage was given to cover that consideration.

(d) The defendant Frederick also testified that Barron, in asking him to execute the mortgage, assured him that the mortgage was only intended to evidence the purchase price of the lot, and that he would soon have a settlement with the defendant, and would then deliver up the mortgage for cancellation and satisfaction. This testimony, however, relating to the transaction or communication with Barron, the plaintiff's assignor, since deceased, I have disregarded, for the reason that I think it is incompetent under section 708 of the Code of 1922, though under the circumstances of this case where fraud is involved there is authority to the contrary. Jones on Evidence, § 774.

(e) This bond and mortgage so obtained Barron thereafter, on the 31st day of December, 1920, assigned to the plaintiff, Mrs. F. B. Woodrow, Mrs. Woodrow having given her checks therefor, payable to Douglas McKay, another one of Mr. Barron's law partners, who thereupon indorsed and delivered the check to Mr. Barron, who indorsed the check in the name of the firm and deposited same to his account in the bank. At the time of the assignment, however, Mrs. Woodrow took possession only of the bond and left the mortgage in the possession of Mr. Barron or of the firm of Barron, McKay, Frierson & McCants, of which he was senior member. Mr. McKay, who testified that he was in a sense Mrs. Woodrow's personal attorney, allowed the mortgage to remain in Mr. Barron's possession, for the reason that Mr. Barron told him that he had not been able to get renunciation of dower or for some other reason had been unable to get the papers completed; but, upon his withdrawing from the firm in January, 1922, he made a drastic demand for the mortgage on behalf of Mrs. Woodrow. Thereupon Barron, who had been unable to secure the renunciation of dower of Frederick's wife through Frederick, finally secured the renunciation of dower by the assistance of one Taylor. The renunciation of dower was dated January 21, 1922, on which date the mortgage was recorded, and soon thereafter delivered to Mr. McKay for the plaintiff.

(f) Mrs. Woodrow never at any time, either after the assignment of the bond or the obtaining possession of the mortgage, notified or advised Frederick that she held the bond and mortgage, nor did she or any of her attorneys make any inquiry of Frederick as to the consideration for, or the validity of, or amount due on, the bond and mortgage. She never even called on the defendant Frederick for the payment of any interest, but received the payment of the interest by checks of the firm of Barron, McKay, Frierson & McCants, which interest was so paid by the firm in July, 1921, January, 1922, and July, 1922. Mrs. Woodrow received interest on this alleged Frederick bond and mortgage from this firm, through whom she had lent out approximately at the time in question $35,000, and who acted as her agents for the collection of the interest, and in many cases for the investment of the principal of her money, and who paid the interest on these loans by their own checks to her. The defendant Frederick, however, never paid any interest or anything else to Barron on account of the bond and mortgage, except by the commissions for the work above referred to, nor did Barron ever call on him for any other payments either of interest or of principal on the bond and mortgage.

(g) I further find that defendant Frederick was an ignorant and uneducated negro, and had implicit trust and confidence in Barron, who was a man of considerable business and legal experience...