Court Opinion

ID: 3878164
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:10:32.190229+00
Date Added: 2024-06-11T14:15:15.403213
License: Public Domain

While I concur in holding that there has never been any legal tender of the mortgage debt and that the plaintiff is entitled to a judgment of foreclosure, I am unable to resist the conclusion that the legal propositions laid down in the majority opinion are opposed to the former decisions of this Court and contrary to the statute law of the State. The importance of the question seems to require a statement of my reasons for this conclusion. *Page 534 
In this action to foreclose a mortgage executed by the defendant to the plaintiff on real estate in the city of Sumter, the defense set up was discharge of the lien of the mortgage by tender of the amount due thereon. Upon the report of the testimony taken by the master, the Circuit Court held that the defendant, by her attorney, Mr. Geo. D. Levy, had tendered to the plaintiff the full amount of principal and interest due under the bond, and that the plaintiff had refused to accept the sum offered and had thereby lost the lien of his mortgage.
The facts, as established by the testimony, are these: When the principal sum, together with one year's interest, became due on December 18, 1908, the defendant was evidently unable to pay the debt, and negotiations were begun with the plaintiff, Mr. Reynolds, a member of the Sumter bar, to secure an extension of time for payment. In January, 1909, one W.T. Andrews, in behalf of the defendant, went to Mr. Levy, also an attorney of Sumter, and asked him to assist in negotiating a loan on the property covered by the mortgage. The agreement between Andrews and Mr. Levy, as testified to by the latter, was that Levy should advance the money to pay the debt and take an assignment of the bond and mortgage from Mr. Reynolds as security until a new bond and mortgage could be executed. Accordingly, Mr. Levy, with this end in view, approached the plaintiff on February 3, 1909, and told him that he represented the mortgagor, Margaret O. Price, and wished to take up the mortgage debt. Mr. Reynolds replied that it would be agreeable to him and on the same day furnished Levy with a statement of the amount claimed, consisting of the principal and interest to date, a "renewal fee" of $2, and an attorney's fee of $10, a total of $668. Upon Mr. Levy's calling the plaintiff's attention to the $12 charge for fees, he replied, "Well, that is my charge. If you want the paper, you will have to pay it." On the next day Mr. Levy, taking with him $656 in currency, and accompanied by Mr. Horace *Page 535 
Harby, another attorney, went to Mr. Reynolds' office and offered him this sum, stating that he had come "to take up the mortgage," but had been instructed by his client to refuse to pay the $2 renewal fee and the $10 collection fee. Mr. Reynolds' answer was: "Well, sir, you can't get it." Mr. Levy then said.: "Mr. Reynolds, I desire to comply with the law and stop interest on this money, and I herewith tender you the amount of your statement, less the $12, in currency." Mr. Reynolds replied: "I won't take it." It appears from Mr. Levy's own statement that W.H. Price, the husband and agent of the mortgagor, Margaret O. Price, who resided in Columbia, did not come to Sumter or communicate with Levy until February 5, the day after this occurrence, and that Levy had never been advised by either the defendant or her agent, by letter or otherwise, to refuse to pay the disputed amount of $12. It is admitted by plaintiff's attorneys that he had no legal right to claim the additional amount.
The question is whether there was a legal tender discharging the lien of the mortgage. The law of this State, as established by the decisions of this Court, we think is perfectly fair to debtor and creditor and makes it impossible for either to obtain any advantage over the other.
Section 2375 of the Civil Code provides: "Any person who shall have received full payment or satisfaction, or to whom a legal tender shall have been made, of his debts, damages, costs and charges, secured by mortgage of real estate, shall, at the request of the mortgagor, or of his legal representatives, or of any other person being a creditor of said debtor, or a purchaser under him, or having an interest in any estate bound by such mortgage, and on tender of the fees of office for entering such satisfaction, within three months after such request made, enter satisfaction in the proper office, on such mortgage, which shall forever thereafter discharge and satisfy the same." *Page 536 
The first contention of plaintiff's counsel, sustained in the majority opinion, is that even under this statute a tender of the amount really due will not defeat the lien, if there is abona fide dispute on reasonable grounds as to the amount due. It is true that some decisions in other jurisdictions hold this to be the common law rule. Crain v. McGoon,86 Ill. 431, 29 Am. Rep. 37; Renard v. Clink, 91 Mich. 1, 30 Am. St. Rep. 459; Union Mut. L. Ins. Co. v. Union MillsPlaster Co., 37 Fed. 286, 3 L.R.A. 90. Even if the statute be left out of view, the doctrine seems to me clearly unsound. There can be no dispute that the definition of tender is the unconditional offer of a debtor to his creditor of the amount of his debt. This does not mean that the offer must be of an amount beyond reasonable dispute, or of the amount claimed by the creditor, but of the real amount as fixed by the law. It would be a great hardship on the debtor to require that, in order to have any benefit of the law of tender, he must not only prove that he tendered the amount actually due, but must go further and prove that the creditor had no reasonable ground to claim any more. Indeed, the purpose of the entire law of tender is to enable the debtor to relieve himself of interest and costs and to relieve his property of incumbrance by offering to his creditor all that he has any right to claim.
As said by Chancellor Harper in Wistar v. Robinson, 2 Bail. 274, there is generally a dispute as to the amount when the question of tender is involved. In Baker v. Gasque, 3 Strob. 23, it was held that it is enough for the debtor to offer to perform his contract and tender to the creditor everything that he is entitled to. The case negatives the idea that it is necessary to a good tender that the debtor should offer not only the sum actually due but all that the creditor bona fide with show of reason, but unjustly, claims to be due.
The other position that the defense of tender in discharge of the lien of a mortgage is unavailing unless it be pleaded *Page 537 
and proved that the tender was kept good seems to me also unsound. In sustaining this position the Court has overruled several cases heretofore decided. At common law there can be no doubt that tender has no greater effect on a debt than to stop interest, unless the tender be kept good by bringing the money into Court; while the tender alone of the amount due on a mortgage discharges the lien although the tender be not kept good. Coke on Littleton, 207a, section 335; Blac v. Rose, 14 S.C. 278; Lynch v. Hancock,14 S.C. 86; Salinas v. Ellis, 26 S.C. 337, 2 S.E. 121;Kortright v. Cady, 21 N.Y. 343, 78 Am. Dec. 145;Security Bank v. Waterloo Lodge (Neb.), 122 N.W. 992;Murray v. O'Brien (Wash.), 105 P. 840. Numerous authorities to the same effect are collated in the note toBeasley v. Parker (N.C.), 33 L.R.A. 231, and Moynahan
v. Moore (Mich.), 77 Am. Dec. 489. It is true that in the case of Walker v. Walker, 17 S.C. 329, the Court by Judge Fraser, without drawing any distinction between the effect of tender on the debt and the lien, lays down the general rule that tender to avail the debtor must not only be made but must be kept good. This remark, however, is merely adictum; for the Court held that much more was due on the equitable mortgage involved than had been tendered, and that was conclusive that the defense of tender had failed. But even if on the general proposition the case could be regarded authority, it cannot be doubted that it was overruled by the later case of Salinas v. Ellis, supra.
But if there were any doubt as to the law announced by the Courts in the cases cited on the two questions we have discussed, it seems to me to have been dispelled by the words of the statute above quoted. The tender which entitles the debtor to satisfaction of his mortgage within three months by the terms of the statute is not tender of the amount bonafide claimed, but tender of the real debt, damages, costs and charges secured by the mortgage. Further, to produce such right of satisfaction the only requirement with respect to *Page 538 
tender is that it shall be made. There is no requirement in the statute that it should be kept good. It will hardly be denied that tender is one thing, and keeping a tender good is another. When the statute provides that a tender of the amount due shall discharge a mortgage, the Courts cannot interpolate the provision that the mortgage shall not be discharged by the tender if there be a bona fide dispute of the amount due, or if the tender be not kept good.
In view of these considerations it seems to me that the conclusion of the Court in the case of Salinas v. Ellis, supra, was thoroughly sound. It is true that in the course of the discussion Mr. Justice McGowan does intimate that, even if the tender had been made on condition that the mortgage involved in the dispute should be immediately cancelled, nevertheless the mortgage would have been discharged. This proposition is not opposed to other decisions of this Court nor to the provisions of the statute if limited to the cases where there is no dispute as to the amount due on the mortgage. In that case there was no dispute as to the mortgage debt, but the creditor refused to accept the tender and to cancel the mortgage unless the debtor at the same time paid a debt entirely separate from the mortgage debt. So also in Spears v. Fields, 72 S.C. 395, 52 S.E. 44, where it was held that the debtor had a right to demand the cancellation of the mortgage and note, there was no dispute as to the debt. In Sparks v. Green, 85 S.C. 109, 67 S.E. 230, there was no dispute as to the amount due on one of the papers and the Court held that if the tender of the amount claimed on that paper had been conditioned on the surrender of that paper only, the demand would not have affected the validity of the tender. This distinction is recognized inWistar v. Robinson, 2 Bail. 274.
The case of Salinas v. Ellis, has been supposed to lay down a rule very harsh to the creditor, in placing him in a position where he runs the risk of losing his entire debt if he should refuse to accept as full satisfaction that which he *Page 539 
believes to be less than his debt. That no such hardship is placed on the creditor and that the rule laid down in the case is just and fair is made manifest when the case is viewed in connection with the nature of the act which constitutes tender. The rule, established by unbroken authority, is that an offer to a creditor of the amount due him is not a good legal tender unless it be unconditional. And this rule makes perfectly safe the rights of both creditor and debtor. If the debtor accompanies his offer to pay with the condition that the mortgagee should presently give up his contest by cancelling or surrendering his mortgage or by giving a receipt in full, in case of a difference or a dispute as to the amount it is no tender. The utmost that the debtor can exact in such case is a receipt on account, or a written acknowledgement that so much money has been paid on a certain debt. The creditor, on the other hand, who accepts a legal tender made by the debtor — that is, money offered without condition — incurs no risk whatever with respect to his debt in accepting it. If it be the full amount, then the debtor is free of his debt, and the creditor can recover nothing more; and if he sues the costs fall on him. If it be not the full amount, the creditor holds his claim for the remainder, and may sue and recover it together with his interest and costs.
This rule, established beyond all controversy in this State, has the great advantage of being simple as well as just. The creditor loses no right by accepting any sum unconditionally offered him, and the debtor in case of a difference or dispute effects nothing in his own favor if he couples his offer to pay with any condition beyond a request for a receipt showing the amount paid. In Wistar v. Robinson, supra, Chancellor Harper thus states the rule: "It is argued that a party who offers to pay all that is really due, is entitled to a receipt in full, and if the creditor refuses to give it, it ought to be at his own risk. I do not think this the fair or reasonable view of the subject. If there be ground of doubt as to the amount really due, the creditor has the right to try the *Page 540 
question. It is imposing a hardship on him to say that he must either accept what is offered and give up his claim for more; or refuse the money and lose the use of it, interest and costs, if he should prove to be wrong. If he receives the money he litigates at his own risk, with respect to costs, and I do not see that he ought to be subjected to greater risk than this. No harm is done to the debtor in such case. If he tenders all that is really due, a receipt on account will discharge. If his right be the clearest possible, he suffers not the slightest hardship or prejudice. A contrary rule would enable debtors to coerce in some degree their creditors to abandon doubtful claims." The rule is reaffirmed inDoty v. Crawford, 39 S.C. 1, 17 S.E. 377, and recognized in Jones on Mortgages, sec. 900. It is also laid down in the leading case of Kortright v. Cady, 21 N.Y. 343, 78 Am. Dec. 145, in Moore v. Norman (Minn.), 18 L.R.A. 359, and the numerous authorities cited in those cases and the note to Moynahan v. Moore, 77 Am. Dec. 476.
The only modification in this State of this rule is that provided by the statute above quoted in allowing a mortgagor who has made tender or payment of the amount due to require the mortgagee to enter satisfaction of his mortgage within three months after such request has been made — that period, no doubt, being considered a reasonable time for the mortgagee to investigate fully and determine whether the entire debt has been paid or tendered. Imposing the condition on the debtor, therefore, that to discharge the lien of a mortgage he must tender not only the amount really due but any additional amount which the creditor may bonafide and with show of reason demand, and that he must in addition keep this tender good, is not only without judicial authority in this State, but is contrary to the express provision of the statute.
Applying to the evidence adduced in this case the principles of tender which I have set out as those which I understand to be established in this State, the conclusion seems *Page 541 
irresistible that no tender was made to the mortgagee. Confessedly, Mr. Levy approached Mr. Reynolds for the purpose of paying his own money on the mortgage and taking an assignment of it. In the second interview when he offered to Mr. Reynolds the real sum due on the mortgage, Levy's proposition, according to his own statement, was "to take up the mortgage." Construing this language in the light of the intention declared in the first interview to have the mortgage assigned to himself, and in the light of the fact that it was his own money that he was offering to the mortgagee and that he had not a particle of security from the mortgagor, there cannot be the least doubt that the money offered was intended as the consideration of an assignment of the mortgage to be held by Levy as his security, and not as a payment discharging the mortgage and leaving Levy with no security. The offer of the money was therefore an offer of the full amount due on the mortgage as the consideration of an assignment and not a tender of payment on behalf of the mortgagor. Levy had no other lien and no equity which entitled him to demand of Reynolds an assignment of the mortgage, and certainly his offer of money for the purchase of the mortgage was entirely unavailing as evidence of a tender.
On this ground I concur in reversing the judgment of the Circuit Court.