Case ID: sc_112/html/0243-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. ChiEE Justice Gary.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

10233
    HILL v. WINNSBORO GRANITE CORPORATION ET AL.
    
    (99 S. E. 836.)
    1. Chattel Mortgages — Nature of Transaction — Sales Agreement.— Agreement whereby seller agreed to sell and transfer to buyer tools and other equipment, “title to remain in the hands of” seller “until purchase price is paid in full when same will be turned over to” buyer, held a mortgage or an instrument in the nature of a mortgage with the incidents of a mortgage, and not a conditional sale.
    2. Chattel Mortgages — Legal Title — Possession of Property — Rights of Mortgagee.- — Generally, the execution of a chattel mortgage vests the legal title in the mortgagee and gives him the right to the possession of the property, unless there are circumstances indicating that such was not the intention of the parties.
    3. Chattel 'Mortgages — Possession of Property — Presumption. — If mortgagor is given possession at time of execution of mortgage, it will be presumed that the parties intended that he should retain it until the condition broken.
    4. Chattel Mortgages — Right of Possession — Sale by Mortgagor— Right of Mortgagee. — Mortgagor’s right to possession until condition broken is personal to mortgagor, and may be forfeited by his sale of property or other disposition of its possession, whereupon mortgagee may retake possession wherever he may find property.
    
      5. Chattel Mortgages — Duty of Mortgagor — Fiduciary Relation.— Mortgagor in possession of mortgaged property occupies a fiduciary relation to the property and is íequired to so act as not to impair rights of mortgagee.
    6. Chattel Mortgages. — Removal of Property from State — Security. — Mortgagor will not be permitted to remove property beyond limits of State unless he gives ample security to protect rights of mortgagee, such removal impairing mortgagee’s rights and being against policy of the law, in view of Cr. Code 1912, sec. 447.
    7. Chattel Mortgages — Sufficiency of Tender. — Tender by mortgagor before maturity of indebtedness and without including expenses of mortgagee in seizing the property upon mortgagor’s attempt to remove property to another State held insufficient.
    Before Prince, J., Fairfield, Spring term, 1918.
    Reversed.
    
      Messrs. McDonald & McDonald, for appellant,
    submit: Is the contract of sale in this case to be construed as a conditional sale or as a chattel mortgage? 6 Am. & En. Enc. of Law, p. 453; Harper’s Raw 391; 16 (S. C. R. 391) ; Rice’s Raw 421; 24 S. C. R. 421; 14 S. C. 522; 18 S. C. 446; 21 S. C. 212; 27 S. C. 624; 43 S. C. 39. But, assuming for the purpose of argument, that the agreement between the plaintiff and the defendant, Winnsboro Granite Corporation, is to be construed as a mortgage, still the defendant had a right to seise the property: 105 S. C. 137; 5 S. C. R. (3 Brev.) 68; S. C. Eq. (1 McCord Eq.) 486; 20 S. C. R. (2 Speers) 181; 31 S. C. R. (2 Rich.) 80; 5 A. & En. R. 985; 29 S. C. R. (2 Speers) 181; 5 S. C. R. (2 Strob. R.) 457; 23 S. C. 282; 32 S. C. R. (1 Strob.) 121; 5 R. C. R., p. 438; 18 Am. Dec. 558 (note); 96 S. E. R. (S. C.) 541. The tender in this case was insufficient, in that respondent not only failed to tender costs of seizure, but the company was holding granite which respondent had not paid for: 108 S.- C. 206.
    
      Messrs. J. W. Hanahan and G. W. Ragsdale, for respondent,
    submit: The paper in this case was a chattel mortgage, and that defendant had no right to seise the property, the condition therein not being broken as the debt evidenced by 
      
      the note was not due at the time of the seizure: 1 Benjamin on Sales (6th American Edition), pp. 358-421; 35 Cyc., p. 661; 40 S. C. 529; 43 S. C. 39; 21 S. C. 212; 19 S. C. 445; 14 S. C. 522; 27 S. C. 624; 74 S. C. 452; 35 S. C. 512; 35 S. C. 578; 40 S. C. 531 and 533. But if the instrument of zvriting in this could be construed as a conditional sale it would not avail appellant. Surely a conditional sale may not be arbitrarily rescinded or abrogated at the caprice of the seller and before any breach of condition. The statute provides for the taking of property where the debt is not due and the debtor about to depart from the State: Civil Code 1912, sec. 230, subsec. 5 and sec. 288. Heyward, appellant’s agent, wilfully and knowingly took this property before the mortgage was due, or the note which was a part of the mortgage was due — that in itself should carry the case to the jury on punitive damages — he was a trespasser — “a trespasser, though, acting in honest belief of his rights, may so grossly and negligently assert his rights that his acts will be regarded as a wilful and reckless invasion of the rights of the real owner:” 69 S. C. 160; 88 S. C. 70; 91 S. C. 486; 98 S. C. 89.
    July 14, 1919.
   The opinion of the Court was delivered by

Mr. ChiEE Justice Gary.

This is an action in claim and delivery and for actual and punitive damages, for the alleged wrongful seizure of certain personal property.

The third paragraph of the complaint is as follows:

“That on the 24th day of September, 1915, the plaintiff intended to ship said property to Elberton, in the State of Georgia, had loaded a large part of the same onto a car belonging to the Southern Railway Company, and was engaged in loading said car for shipment when the defendant, the Winnsboro Granite Corporation, through its officers, agents and servants and the defendant, B. H. Heyward. wilfully, wantonly, recklessly and maliciously, and with a high hand, regardless of the rights of the plaintiff, unlawfully, wrongfully took possession of said property and now has the same in their possession although they had no right to so do, and after having unlawfully and wrongfully taken and seizing the property of the plaintiff as aforesaid, the defendants removed the said personal property from the station of Rockton, on the Southern Railway, where it was being loaded for shipment, to its quarry at Rion, several miles away and now keeps the said property wrongfully and unlawfully from this plaintiff and refuses to deliver the same to him.”

The defendant alleged that it seized the property, under the following instrument of writing, which was signed by the plaintiff and the defendant, Winnsboro Granite Corporation :

“Rion, S. C., January 1, 1915. In consideration of the sum of five hundred seventy-five dollars ($575.00), payable as follows: Cash, $34.00. Two W. O. W. jobs ‘B’ design, $66.00. Balance to be paid as Mr. Hill ships out his work, he to pay Winnsboro Corporation 10% (ten per cent.) of the contract price of the work; he to pay interest at 8% on the standing balance. The Winnsboro Granite Corporation agrees to sell and transfer to I. B. Hill the land, shed, tools and other equipment formerly owned by R. R. Beauchamp & Company, and viewed this day by R. R. Beauchamp, I. B. Hill and R. C. Brockington. Title to the property to remain in the hands of the Winnsboro Granite Corporation until purchase price is paid in full, when same will be turned over to I, B. Hill.”

The defendant also alleged that it seized the property by reason of the fact that the plaintiff had caused it to be taken from Rion to Rockton and placed on board certain cars, for shipment beyond the limits of the State.

The jury rendered the following verdict:

“We find for-plaintiff the property in dispute; the sum of fifty dollars actual damages, and the sum of seven hundred and fifty dollars punitive damages; and as a special verdict we find that plaintiff is due defendant, Winnsboro Corporation, two hundred and eighty-three and 86-NO dollars on the mortgage debt.”

The defendants appealed, and the first ex^mtion is as follows :

“(1) That his Honor erred in his charge to the jury, in construing the agreement of sale introduced in evidence (Exhibit A) to be a chattel mortgage, and not a conditional sale, and that under said paper the defendants had no right to seize the property covered by same; the error being that under said agreement the defendant, Winnsboro Granite Corporation, retained the title to said property, and had the right to seize it upon the plaintiff attempting to remove it from the State under circumstances indicating to the minds of the defendants an attempt to fraudulently evade the .payment of the purchase price.”

The following- authorities show that the instrument of writing is a mortgage or an instrument of writing in the nature of a mortgage with the incidents of a mortgage: Talmadge v. Oliver, 14 S. C. 522; Straub v. Screven,. 19 S. C. 445; Herring v. Cannon, 21 S. C. 212, 53 Am. Rep. 661; Talbott v. Sandifer, 27 S. C. 624, 4 S. E. 152; Munroe v. Williams, 35 S. C. 572, 15 S. E. 279; Singer Co. v. Smith, 40 S. C. 529, 19 S. E. 132, 42 Am. St. Rep. 897; Perkins v. Bank, 43 S. C. 39, 20 S. E. 759; Quattlebaum v. Taylor, 45 S. C. 512, 23 S. E. 617; State v. Haynes, 74 S. C. 450, 55 S. E. 118.

The next question for consideration is whether there was error, on the part of his Honor, the presiding Judge, in ruling that the mortgagee did not have the right to seize the property.

At the time of the seizure,' the indebtedness secured by the mortgage had not become due.

As a general proposition, the execution of a mortgage vests the legal title to the property in the mortgagee; and, likewise, gives him the right to the possession of the property, unless there are circumstances indicating that such was not the intention of the parties. If at the time the mortgage is given, the possession of the property is delivered to the mortgagor, there is a presumption that it was the intention of the parties that he should retain possession until condition broken. This right to the possession of the property until condition broken, is personal to the mortgagor, and may be forfeited by him, if he should sell the property or otherwise dispose of its possession. In such case, the mortgagee may retake possession of it, wherever he may find it.

The plaintiff occupied a fiduciary relation to the property, and it was his duty to act in such a manner as not to impair the rights of the mortgagee.

If the plaintiff had instituted a judicial proceeding for the purpose of getting the consent of the Court to a removal of the property beyond the limits of the State, the Court, in no event, would have allowed the removal, unless he gave ample security to protect the rights of the mortgagee.

Not only does a removal of mortgaged property beyond the limits of the State impair the mortgagee’s rights, but it is against the policy of the law.

Section 447 of the Criminal Code provides that “Any person or persons who shall sell or dispose of any personal property on which any mortgage or other lien exists, without the written consent of the mortgagee or lienee, * * * shall be guilty of a misdemeanor. * * *”

This statute was construed with reference to the removal of property beyond the limits of the State in the cases of State v. Rice, 43 S. C. 200, 20 S. E. 986, and State v. Haynes, 74 S.C. 450, 55 S. E. 118. In the last mentioned case it was held: “That removal of property from the jurisdiction of the State with the purpose or necessary effect of defeating the mortgage lien, is such a disposal of property, as falls within the meaning of the statute.” (Italics added.)

It is true this is not a criminal case, but we have cited these cases for the purpose of showing that the policy of the law is against the removal of mortgaged property beyond the jurisdiction of the State. The necessary effect of such a removal is to increase the opportunities of the mortgagor to defeat the lien. Furthermore, if it should become necessary for the mortgagee to resort to the remedies provided by law for the enforcement of his rights, they would be impaired by reason of the necessity of resorting to another jurisdiction. If it was the intention of the plaintiff to make his permanent home in Georgia, our conclusion is that he did not have the right to remove the property without the consent of the mortgagee.

The plaintiff made a tender, after the property had been taken back to Rion by the mortgagee, but the amount due under the mortgage was not then due, and the note was in Charleston, and for that reason the tender was declined. It was insufficient for the further reason that it did not include the expenses of seizing the property.

Reversed.