Case Name: FRADY ET AL v. IVESTER
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1921-12-19
Citations: 118 S.C. 195
Docket Number: 10787
Parties: FRADY ET AL v. IVESTER
Judges: Mr. Justice Watts and Mr. Justice Fraser concur.
Reporter: South Carolina Reports
Volume: 118
Pages: 195–225

Head Matter:
10787
FRADY ET AL v. IVESTER
(110 S. E. 135)
1. Appeal and Error—Refusal to Permit Amendment Not Prejudicial.-—In an action to recover the possession .of land from a mortgagee, to whom the mortgagors had conveyed and for an accounting for the rents and profits, and the refusal to permit an amendment of the complaint by adding allegations that defendant had taken possession unlawfully, and held the lands for a number of years, and was due to account for the rents and profits and deliver possession, held not prejudicial.
2. Appeal and Error—Findings as to Possession and Claim of Ownership Relate to Legal Issue and are Not Reviewable.— In an action to recover the possession of land from a mortgagee, and for an accounting for the rents and profits, the issue as to title was legal in its nature, and findings that defendant took exclusive possession of the land, claiming it as her own, etc., were not reviewable by the Supreme Court.
3. Mortgages—Stipulation That Mortgagee's Title Should Be. come Absolute After Certain Date Held Void; Mortgagee Entering Under Deed Upon Mortgagor's Failure to Pay Not Entitled to Hold Adversely.—Under Civ. Code 1912, § 3460, providing that- no mortgagee shall be entitled to maintain a possessory action, that the mortgagor shall be deemed the owner of the land, but that releases of the equity of redemption shall be binding, etc., where mortgagors executed a deed to the mortgagee providing that it should be a mortgage until a specified date, and should then become absolute if the mortgagors had failed to pay, and the mortgagee, after such date, without other consideration than the mortgagor’s inabiliy to pay, took possession, the relation of mortgagor and mortgagee continued and the law imposed the duties of a trustee upon the mortgagee, and she could not hold adversely to the rights of the mortgagors until she either surrendered possession .or gave notice of an adverse possession.
4, Adverse Possession—Possession, to Authorize Presumption of Conveyance, Must be Adverse.—The possession which authorizes the presumption of a conveyance must be adverse, and not permissive.
5. Limitation of Actions—Do Not Run Against Infant Mortgagor Who Was Infant When Mortgagee Took Possession.—Where an infant mortgagor was still an infant when the mortgagee took possession under a conveyance from the mortgagors, neither limitations, adverse possession, nor the presumption of a grant commenced to run againt her, and her disability also protected the adult mortgagors against limitations and adverse possession, though not against the presumption of a grant.
Before Prince, J., Oconee, July, 1920.
Reversed and new trial ordered.
Action by A. J. Frady et al against Mrs. W. O. Ivester. Judgment for defendant and plaintiffs appeal.
The record contains the following statement:
“This ‘action was commenced on or about the 7th day of March, 1919, by the plaintiffs. A. J. Frady, Mrs. Mary V. Hughes, Mrs. Delilah E. Marlin, Mrs. Martha M. Miller, and Choice Frady, against Mrs. W. C. Ivester, defendant, for the purpose of recovery of the tract of land herein described, and an accounting for the rents and profits and waste against the defendant. The cause was referred to John F. Craig as special referee, by consent of counsel in open Court, to hear and decide all issues of law and fact, and report his findings to the Court, who found in favor of the defendant. Upon exceptions the cause was heard before the Circuit Judge, who confirmed the report of the Special Referee, and dismissed the complaint; but neither the Referee nor the Circuit Judge passed upon the question as to what would be reasonable rents and profits and waste.”
The complaint is as follows:
“(1) That Mrs. Elizabeth E. Tate departed this life on the - day of September, 1905, seized in fee and possessed of all that certain piece, parcel, or tract of land situate, lying, and being in Wagener Township, Oconee County, S. C., on branches of Cane Creek, waters of Little River, adjoining lands of Dennis Harkins, Elsie Deaton, Mrs. Mary V. Hughes, Mrs. Delilah E. Marlin, J. W. Cox, C. O. Deaton, and Mrs J. M. Griffin, containing 100 acres, more or less
“(2) That the said Mrs Elizabeth E. Tate left no will, and as her only heirs at law at the time of her death her daughter, Amanda Frady and her daughter Georgia Evers.
“(3) That Georgia Evers and her husband, Earnest Evers, and their daughter, Hattie Evers, accepted a deed of conveyance to 50 acres of land from the said Elizabeth E. Tate, in full of all claims in and to the estate of Elizabeth E- Tate that she might have at the time of her death.
“(4) That Amanda Frady departed this life on the - day of October, 1905, leaving as her only heirs at law her husband, the plaintiff, A. J. Frady, and her three daughters, Mrs. Mary V. Hughes, Delilah E. Marlin, and Mrs. Martha M. Miller, and a son, Choice Frady, the plaintiff.
“(5) That the plaintiffs herein, Mary V. Hughes and Delilah E. Marlin, own as tenants in common 50 acres of land east of the 100-acre tract mentioned.
“(6) That Mrs. W. C. Ivester claims some interest in the said tract of land by reason of a mortgage to secure a debt, which plaintiffs allege has been fully paid and satisfied.
“(7) That the defendant, Mrs. W. C. Ivester, has held possession of some part of said land, and received rents and profits therefrom to the amount of $2,000.00, * * * and has cut and sold timber, by her agents and servants, from the premises to the value of $500.00.
“Wherefore plaintiffs demand judgment: First, that the said tract of land be sold and the proceeds thereof divided amongst the plaintiffs herein according to their several rights; second, for judgment against the defendant, Mrs. W. C. Ivester, in the sum of $2,500.00, rents and profits and timber sold from said lands; third, for costs of this action; fourth, for such other and further relief as to the Court shall seem meet and proper.”
The defendant denied the allegations of the complaint, and set up the pleas of title by adverse possession, presumption of a grant, the statute of limitations and laches.
The following are the findings of fact by the Referee :
“(1) The plaintiffs and. the defendant claim from a common source of title, to wit, Elizabeth E. Tate.'
“(2) On the 1st day of October, 1896, the said'Elizabeth E. Tate made and delivered to T. E. Alexander her note of that date for $64.00, due January 1, 1897, payable to the order of T. E. Alexander, with interest at 8 per cent, per annum from maturity until paid, with provision for payment of 10 per cent, attorney’s fees, and, to secure the payment of the said note, on the same day executed and delivered her mortgage deed on the 100-acre tract of land described in paragraph 1 of the complaint. This note and mortgage were assigned by T. E. Alexander to the defendant, then W. C. Von Lehe. On the 24th day of July, 1896, the plaintiff, Mary V. Hughes, made and delivered to the defendant, then Wilhelmina C. Von Eehe, her note for $67.68, due the 24th day of July, 1898, which provided for the payment of 10 per cent, attorney’s fees, and on the 24th day of July, 1896, to secure the payment of the note, made and delivered her mortgage deed upon the tract of land described in Paragraph 5 of plaintiff’s complaint.
“(3) That on the 26th day of February, 1897, the debts secured by the two mortgages of real estate above referred to were unpaid, and the said Elizabeth E. Tate, Mary V. Hughes, and E. D. Frady executed and delivered to the defendant, then Wilhelmina Von Lehe, a deed covering both the 100-acre tract described in Paragraph 1 of the complaint, and the 50-acre tract described in Paragraph 5 of the complaint, as follows:
“ ‘The State of South Carolina.—Know all men by these presents that we, Elizabeth E. Tate, Mary V. Hughes, and E. D. Frady, in the State aforesaid» for and in consideration of the sum of $125.00, to ús in hand % paid, at and before the sealing of these presents, by Miss W. C. Yon Lehe (the receipt whereof is hereby acknowledged)., have granted, bargained, sold, and released, and by these presents, do grant, bargain, sell, and release unto the said Miss W. C. Von Lehe, her heirs and assigns, all that certain parcel or tract of land, being situate in Oconee County, in the State aforesaid, on branches of Oconee Creek, waters of Little River, adjoining lands of Mrs. George Evers, M. G. Brewer, Elijah Deaton, Tollison, and others, containing 150 acres, more or less, conveyed to Elizabeth E. Tate on the 1st day of September, 1894, by J. W. Holleman, master. It is understood by and between the parties hereto that this deed of conveyance shall be considered and regarded as a mortgage on said real estate until the 1st day of November, 1897, but if the said Elizabeth E. Tate, Mary V. Hughes, and E. D. Frady shall fail to pay the said Miss W. C. Von Lehe two mortgages which she now holds against said real estate, then this deed of conveyance shall become absolute in fee forever to the said Miss W. C. Von Lehe. Also $7.75 taxes paid by. Miss W. C. Von Lehe on said lands. Together with all and singular the rights, members, hereditaments, and appurtenances to the said premises belonging, or in any wise incident or appertaining. To have and to hold all and singular the said premises before mentioned unto the said Miss W. C. Von Lehe, her heirs and assigns forever. And we do hereby bind ourselves, our heirs, exécutors, and administrators to warrant and forever defend all and singular the said premises unto the said Miss W. C. Von Lehe, her heirs and assigns, against us'and our heirs, and every person whomsoever lawfully claiming or to claim the same, or any part thereof.
• '' 'Witness our hands and seals this 26th day of February, A, D. 1897. in the year of our Lord one thousand eight hundred and ninety-seven, and in the one hundred and twentieth year of the sovereignty and independence of the United, States of America. Signed, sealed, and delivered in the presence of John E. Hoops, H. A. FI. Gibson, Gus Hawkins, J. A. Ivester.
“ 'E. E. Tate [Seal.]
“ 'M. V. Hughes [Seal.]
“ ‘E. D. Frady [Seal.]’
“B. B. Tale, Mary V. Hughes, and B. D. Frady remained in- possession of the tract of land described in this deed until some time in November, 189J, at which time, being ■unable to make payments of the mortgage debts, the land was surrendered to defendant in payment of the mortgage debts, and the defendant took exclusive possession of the land, claiming it as her own, and has paid taxes and used it as her own from that time to this. So far as the evidence shows, neither B. B. Tate, Mary V. Hughes, or B. D. Frady nor anyone claiming under them, has made any claim to the land since the. land was surrendered to the defendant and taken possession of by her. No accounting has ever been made by the defendant,-nor any demand made upon her for such accounting
The Referee’s conclusions of law are as follows:
“ (1) I find the instrument executed by E. E. Tate, Mary V. Hughes, and E. D. Frady, dated February 26, 1897, • (Exhibit 2), to the defendant was a mortgage, though the intention of the parties was that it should take effect as a deed upon the failure of the mortgagors to pay the mortgage debt as provided in the condition set out in the instrument.
“(2) That where a mortgagee enters into possession of the mortgaged premises with the intention of holding the mortgaged premises as security for the mortgage debt, or for the collection of the rents and profits for application to payment of the mortgage debt, the mortgagee becomes a trustee for the mortgagors.
"(3) That the possession of the defendant here was not as a trustee, but under a claim of exclusive ownership, and that the taking of possession by the defendant of the mortgaged premises under the circumstances in this case was a repudiation of any trust relationship which started the running of the statute of limitations against the mortgagors of the instrument and those claiming under or through the mortgagors.
“(4) That, under the provisions of the Code, §§ 123, 124, and 143, the plaintiffs are now barred from a recovery of the possession of the premises from the defendant.
“(5) T think the plaintiffs are further barred by the more than 20 years’ adverse possession of the defendant: (a) For the reason that the right to foreclose and the right to redeem are reciprocal rights, and when one is barred the other is barred; (b) by presumption of a grant or deed; (c) by their laches.”
The first exception was to the refusal to permit plaintiffs to amend the sixth paragraph of the complaint to- allege that defendant had taken possession of all or certain parts of the said tract of land under said written instrument unlawfully and held them for a number of years, and was due to account for rents and profits thereof and deliver possession and to amend the prayer accordingly.
Mr. J. R. Barle, for appellant,
cites: Title of mortgaged premises cannot be transferred except by judicial pro ceeding: 1 Civ. Code 1912, Sec. 3465. Mortgagor remains owner until sale: Id. Sec. 3460. The right to foreclose and the right to redeem are reciprocal, and if one is barred the other'is barred: 93 S. C., 513. Court will carefully scrutinise all conveyances from mortgagor to mortgagee: 21 S. C., 400. Party gaining possession under a lease, nor a trustee or mortgagee can acquire title by possession: 112 S. C.> 10.
Mr. E. L. Herndon, for respondent,
cites: Appellants are concluded by all findings of fact and conclusions of law not excepted to: 58 S. C., 495. Findings of Referee concurred in by Circuit Judge will not be disturbed if there is any evidence to sustain them: 100 S. E., 148; 103 S. C., 307. Rulings not appearing in the record cannot be considered on appeal: 105 S. C., 62. Action is for recovery of land: 98 S. C., 175. Release of equity of redemption is equivalent to conveyance: 108 S. C., 397. If the Trustee does an act which he intends and which the cestui que trust understands to be a discharge of his trust, the statute will commence to run: 3 Rich., 445; Bail. Eq., 195; 4 Rich. Eq., 63; 4 Strob. Eq., 196; 7 Rich. Eq., 34; 1 Strob. Eq., 79; 2 Strob. Eq., 340; 3 Strob. Eq., 39; 2 Hill Eq., 228: 2 Rich Eq., 446; 26 S. C, 237; 32 S. C., 253; 82 S. C„ 497. Action is barred: Code Proc., Secs. 123, 124, 143; 27 Cyc., 1821. Right to foreclose and to redeem are reciprocal: 92 S. C., 513; 11 Ene. E., 248; 27 Cyc., 1816. Presumption of grant: 80 S. C., 112; 71 S. C., 521. Barred by laches: 64 S. C., 502; 2 Rich. Eq., 446; 4 Rich Eq., 64; 28 Ene. E., 1135. Statute once it commenced to run was not interrupted: 20 S. C., 52; 53 S. C., 126; 59 S. C., 451; 94 S. C., 79. Infancy of grantor would not make deed void: 27 S. C., 302. His interest would now be barred: 9 Enc., 117. Release of equity of redemption is conveyance to holder of encumbrances: 11 Rich. E., 704; 10 S. C., 373; 26 S. C., 410. Sufficient as color of title: 71 S. C, 331; 87 S. C.. 393; 86 S. C., 498.
December 19, 1921.

Opinion:
The opinion of the Court was delivered by
Mr. Chies Justice Gary.
The record shows that the issue of title was raised by the pleadings, as to which either the plaintiffs or the defendant had the right to demand a trial by a jury; but that it was waived.
The appellant's first exception assigns error on the part of his Honor, the Circuit Judge, in refusing to allow the plaintiffs' attorney to amend the complaint. He has failed to satisfy this Court that there was prejudicial error. The exception is. therefore overruled.
The argument of the appellants' attorney contains this statement:
"The other exceptions raise two practical questions: (1) Are the plaintiffs whose ancestor, Mrs. E. E. Tate, executed the mortgage in question, barred by the lapse of 20 years? (2) Is the plaintiff, D. E. Frady (now Marlin), having signed the mortgage during her minority, barred- by the lapse of more than 10 years?"
The question will be considered next whether the plaintiffs are barred by the lapse of 20 years.
The issue of title is legal in its nature. Therefore the.findings of fact by the Circuit Court which we have italicized are not reviewable by this Court. The Circuit Court's conclusions of law-from those facts have already been set out. It will be observed that the Circuit Court ruled, in effect, that the defendant did not become á trustee when she entered into possession of the lands by reason of the fact that she did not enter with the intention of holding the mortgaged premises as security for the mortgage debt, or for the collection of the rents and profits for the application to the payment of the mortgage debt. That the Circuit Court also ruled, in effect, that the defendant was not a trustee, by reason of the fact that her entry into possession without such intention was a claim of exclusive ownership, and a repudiation of any trust relationship, which started the running of the statute of limitations against the mortgagors and the plaintiffs. Section 3460, Code of Laws 1912. is as follows:
"No mortgagee shall be entitled to maintain any possessory action for the real estate mortgaged, even after the time allotted for the payment of the money secured by mortgage is elapsed; but the mortgagor shall be deemed owner of the land, and the mortgagee as owner of the money lent or due, and shall be entitled to recover satisfaction for the same out of the land by foreclosure and sale according to law: Provided, That notwithstanding the foregoing provision all releases of the equity of redemption shall be binding and effectual in law."
As the mortgagees had not released their equity of redemption at the time the defendant entered into possession of the lands, the legal title remained in them. Navassa Guano Co. v. Richardson, 26 S. C., 401; 2 S. E., 307.
The'-rights of the mortgagor and the mortgagee are thus stated in Walling v. Aiken, McMul. Eq., 1:
"It is the well known rule of the Court that that which was originally intended as a security shall never be turned into an absolute conveyance. Even if it be expressly stipulated that, if the money be not paid at a given day, the title shall be absolute, and the estate irredeemable, this stipulation operates nothing. And it is equally incompetent to stipulate from what source the funds to redeem may be derived. The mortgagee is considered in this Court, only as a creditor, and all that he is entitled to is his money, coming át what time (within the known limits) or from what source it may."
To the same effect, is the following language of the Court, in Brownlee v. Martin, 21 S. C., 392:
"The law-looks with jealousy and suspicion upon all dealings between the mortgagee and the mortgagor, from the supposed influence which the former has over the latter. If therefore a deed absolute on its face is shown (as it maybe shown by parol evidence) to have been executed merely-as a security for a debt, it will operate only as a mortgage, and it cannot be converted by any subsequent agreement into an absolute conveyance, unless such subsequent agreement is based upon a sufficient consideration, and is shown to have been fairly made, without undue influence by the creditor; and the burden of showing this is upon the mortgagee. In other words, it must amount to a sale of the equity of redemption, fairly made, upon sufficient consideration. These views are fully supported by authority,"—citing numerous decisions.
The only consideration stated in the findings of fact by the Circuit Court is that, the mortgagors "being unable to make payments, the land was surrendered to the defendant in payment of the mortgage debts." It will thus be seen that there was no new consideration, and that, after the defendant entered into possesion, the relation of mortgagor and mortgagee continued to exist between her and the mortgagor. Under these facts the law imposed upon the mortgagee the duties of a trustee. Sims v. Steadman, 62 S. C., 300; 40 S. E., 677.
The defendant's entry into possession was permissive, and, as she had a duty to perform, she could not hold adversely to the rights of the mortgagors until she either surrendered the possession or gave notice of an adverse possession. Wilson v. Weathersby, 1 N. & McU, 374; McCutchen v. McCutchen, 77 S. C., 129; 57 S. E., 678; 12 L. R. A. (N. S.) 1140; Pinckney v. Knowles, 112 S. .C., 7; 99 S E, 354; Milhouse v Patrick, 6 Rich., 350.
The possession which authorizes the presumption of a conveyance must be adverse, and not permissive. Trustees of Wadsworthville v. Meetze, 4 Rich., 51.
It will thus be seen that the Circuit Judge's conclusions from the facts found by him were erroneous.
We proceed to the consideration of the question whether the plaintiff, D. E. Frady, having signed the mortgage during her minority, is barred by the lapse of more than 20 years. The respondent's attorney-says:
"The statute of limitations commenced to ru'n against Elizabeth E. Tate, the owner of the lands, the 1st day of November, 1897. Elizabeth E. Tate died in September, 1905, and the running of the statute was not arrested by the infancy of E. D. Frady, appellant."
He has failed to take into consideration that E. D. Frady was one of the mortgagors. As she was laboring under this disability of infancy when the defendant entered into possession, neither the statute of limitations, claim of title by adverse possession, nor the presumption of a grant then commenced to run against her. Her disability was also a protection to the adult mortgagors against the statute of limitations and claim of title by adverse possession, but not from the presumption of a grant. McGee v. Hall, 26 S. C., 179; 1 S. E., 711. Ihley v. Padgett, 27 S. C., 300; 3 S. E., 468. Garrett v. Weinberg, 48 S. C., 28; 26 S. E., 3.
Reversed and remanded for a new trial.
Mr. Justice Watts and Mr. Justice Fraser concur.