Court Opinion

ID: 6674385
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:39.749867+00
Date Added: 2024-06-11T16:00:39.493908
License: Public Domain

The opinion of the court was delivered' by
McGowan, A. J.
Samuel Smith died intestate as to part of his property in 1858, leaving as his heirs-at-law his widow, Sarah, and children and grandchildren, John L., Stephen S., *592Samuel S., William EL, Elizabeth, wife of Joseph W. Allen, Mary, wife of R. Q,. Roberts, Jincey Ellis, widow, and a granddaughter, Mary Frances Moody, now Mullins, whose mother had pre-deceased. There was a will which disposed of part of the estate, of which John L. Smith was executor, and he filed a bill against the heirs, among other things, for partition of so much of the estate as was intestate. At the February Term of the court of equity, 1860, the court ordered the intestate lands sold, and they were sold by C. D. Evans, Esq., commissioner in equity, April 1st, 1860, and purchased by S. S. Smith, one of the distributees, who executed .to the commissioner a bond for $2750, with E. J. Moody and William H. Moody sureties, received title for the same, and executed mortgage as required of the premises to secure the purchase money. The sale was confirmed by the court, and we suppose that at the same time the usual order for distribution was made, but it is not in the brief, and we are uninformed whether, if made, it was in the usual form to pay to the adult parties, to the guardians of. minors, and the shares of married women, upon the joint receipt of husband and wife.
The mortgage, taken as required, was not recorded until January 6th, 1876. In the meantime, the purchaser undertook to pay the parties in interest their respective shares and to lodge their receipts with the commissioner, instead of paying directly to him. Several receipts were thus delivered to the commissioner, who, wishing time to make calculations, did not credit the bond, but placed the receipts in the record. The purchaser produced receipts in this way to about the amount of. the bond, and he states that he thought it was paid in full.
Before the mortgage was recorded, and after it was supposed that the bond was paid, S. S. Smith sold the land to his brother Stephen, and he conveyed different parcels of it at different times to other persons who are in possession and have been made parties. The action ivas brought on the bonds in the name of the clerk of the court against S. S. Smith, obligor, and the parties in possession of the land to foreclose a statutory lien alleged to exist and for judgment on the bond for any balance after applying the proceeds of the land. It does not appear, *593precisely, when the action was brought, but the order of court authorizing suit bears date March 22d, 1876, and it is supposed the action was brought soon after. The defendants all resisted the recovery on various grounds. They demurred, denying that the plaintiff was the successor to the commisssioner, and that he had not legal capacity to sue, or, if so, that he had not the right to foreclose the statutory lien, and that these two separate causes of action on the bond and to foreclose the mortgage, were improperly uuited. If the demurrer should be overruled they insisted that there was no statutory lien in the case, that having been superceded by the mortgage required and actually executed but not recorded. That the bond had been settled in full by the payment of their respective shares to the distributees. That the persons for whose benefit the suit was brought were barred by ladies, lapse of time, and the statute of limitations; and that the defendants in possession of the different parcels of land were purchasers for value without notice, and that they had title by adverse possession for more than ten years.
The issues of law and fact were referredto W. W. Harllee/Esq., as special referee, who overruled the demurrer and the pleas of purchaser without notice, and of the statute of limitations; found that all of the distributees had been paid except Mrs. Elizabeth Allen and Sarah Frances Mullins, the latter claiming her mother’s share, and, also, the share of her grandmother by assignment, and that for these two shares, judgment should be rendered on the bond for the sum of $4082.51, with interest from January 2d, 1878, and, if not paid, that all the lands should be sold under the statutory lien. This report was confirmed by the Circuit judge, and from his order the appeal comes to this court.
The referee’s report is so full as to make it unnecessary to state at length the arguments and authorities upon which the different questions are determined.
The first question is whether the clerk of the court had legal capacity to maintain the action to foreclose a statutory lien under the act of 1791. That act is now repealed, but these transactions occurred while it was of force, and this case must be considered as if it were still on the statute book. The bond *594was made payable to the commissioner or his successor in office.
Upon the abolition of the office of commissioner, 1869, the bond was transferred to the custody of the clerk of the Court of Common Pleas, and was under the control of said court. Judge Townsend ordered the clerk to place the bond in the hands of the attorney of Mary Frances Mullins for collection. That, itself, would seem to confer the authority to sue in the name of the clerk. ■ The statutory lien, the existence of which is not controverted by the exceptions to the order of the Circuit judge, notwithstanding the execution of a mortgage, was only a security for the bond, and, as an incident, went with it. The authority to sue the bond carried with it the right to foreclose the lien. Billings v. Williamson, 6 S. C. 122.; Code, §§ 134 — 136. The act of 1791 did not direct who should enforce the lien thereby given, but simply declared that the “ courts shall direct a sale to be made on such credit and on such terms as to them shall seem right and proper, and the land so sold shall stand pledged for the payment of the purchase money.” As the bond for the purchase money was payable to the commissioner or his successor in office we must consider that the pledge was to him in the same way, and that both were transferred to the clerk of the court, who was the proper person to bring the action. Daniels v. Moses, 12 S. C. 130.
Upon the subject of the alleged payment of the bond, the Circuit judge sustained the referee in holding that the share of Mrs. Elizabeth Allen, paid to her husband, Joseph W. Allen, according to her order, should not be considered a payment, for the reason that there is no proof that she received the money or other consideration for her order in favor of her husband. The referee reports as matter of fact that most of the distributees were paid, but “with respect to the amount due Mrs. Allen, wife of Joseph W. Allen, there is more difficulty. The proof by S. S. Smith was that he gave to C. D. Evans, commissioner in equity, the receipt of Joseph W. Allen, with others, in full of the bond, but it was not received, as the wife’s signature was not on it. [So as to the receipt of B. Q,. Boberts.] He states that the commissioner told him to get the ordér of the married *595women, and he produces the order of Mrs. Allen (the only one ■contested) in these words :
“ Mr. C. D. Evans, please pay to Samuel S. Smith all my interest in the depot lands.
(Signed) “Elizabeth Allen.
“April 13th, 1863.”
“ The referee concludes as fact that the order was signed by Mrs. Allen, but she then received no money for it. He also would hold that he did get Mr. Allen’s receipt, and as he is fully sustained by the then commissioner in his account of the whole transaction he would hold that if he had a right to receive the money that that distributive share was paid. But Mr. Allen had no such right, and there is no evidence that any money was paid Mrs. Allen. She was under the disability of coverture at the time. Her order was not sufficient in the judgment of the referee to authorize the commissioner to credit the bond with such a payment or compel satisfaction for the amount due her unless it could be shown she received the amount.”
Accepting this statement of the referee, we are to inquire whether his conclusion of law is correct; that no order or consent of Mrs. Allen that her husband should receive her share would authorize him to give a receipt and legal discharge for the same, unless Mrs. Allen received the money or some other valuable consideration for her consent. This must be determined by the law as it existed at the time. The constitution of 1868 secures to a married woman her separate estate in all respects as if she were sole and unmarried, but such was not the law in South Carolina before that time. By the old law, marriage imposed certain duties upon the husband, and in consideration therefor conferred on him some interest in all the property of the wife not settled to her sole and separate use. That interest was not the same in all kinds of property, realty and personalty, in possession and in action, but he did not stand as a stranger to any part of her property. As it was expressed by Chanceller Johnson in the case of Durr v. Bowyer, 2 McC. Ch. 372: “By the common law all the chattels which belonged to the wife before marriage, or to which she becomes entitled in *596her own right, are vested in the husband absolutely with respect to things in possession, and he may dispose of them as he pleases ; but with respect to things in action, although the right to reduce them into possession is by law vested in him, the courts of equity have built up a system founded in good sense and common justice, which is intended to secure to the wife a suitable possession for her support and maintenance.”
The interest which the wife has in choses in action, which belonged to her at the marriage, constitutes what is technically called the wife’s equity, with respect to which it may be laid down as a general rule that if it be within the reach of the court it will not be permitted to be removed out of that jurisdiction until an adequate provision is made for the wife, unless she has-already been sufficiently provided for, or on her own personal examination she thinks proper to waive the benefit of the provision. McCauley v. Phillips, 4 Ves. 17; Clancy’s Rights of Married Women 188. When the land was sold, Mrs. Allen was divested of her interest in it and became the equitable owner of the money. This did not belong to her husband until he reduced it into possession. The commissioner had no right to pay it upon the single receipt of the husband, but it was the privilege of the wife not to insist on her equity, or to waive it. Such waiver, when made, even if she received no valuable consideration for it, was sufficient to authorize the husband to receive the money and give a legal discharge. Waiver did not depend upon consideration paid, but upon its being actual, bona fide and without undue influence. To secure this, the practice at first was to subject the wife to personal examination. Later it was held that the court would not volunteer to set up the wife’s equity, and it was finally settled that it was a discharge to pay the wife’s money upon the joint receipt of husband and wife,, and the chancellors generally ordered that it should be paid upon such receipt. It was considered- sufficient evidence of the waiver of her right to join her husband in a receipt “ or to do-some equally significant and unequivocal act.” Ex parte Geddes 4 Rich. Eq. 302; Yeldell v. Quarles, Dud. Eq. 55; Muse v. Edgerton, Ib. 179; Gillett v. Powell, 1 Spears’ Eq. 150.
Here the facts, as found by the referee, are that nearly twenty *597years ago, Samuel S. Smith purchased at' commissioner’s sale a tract of land, in which his sister, Mrs. Allen, had an interest. Her husband, at the time, received her share from the purchaser, and gave his receipt. The commissioner refused to take that receipt unless the wife of Allen would signify her assent by giving an order in writing for the payment to her husband. She gave that order in writing. This was a compliance certainly with the ■requirement of the commissioner and with the order of distribution, if one was made in the usual form, and, we think, was a waiver of her equity in favor of her husband by “ an act equally •as significant and unequivocal” as if she had signed a joint r - ■oeipt with her husband and he had drawn the money upon such receipt. The bond should be credited with the share of Mrs. Allen as paid.
The interest of Sarah Prances Mullins in the estate of her ■grandfather arose in two ways: first, her share in the land bond, which is claimed in this suit, and the other funds relinquished to her in the same way by the other distributees, which are not involved here. When these transactions took place she was of tender years, and lived .with her father, E. J. Moody, who was believed by all parties to be her regularly appointed guardian-He acted as such. The commissioner in equity treated him as guardian, and to him, as such guardian, S. S. Smith paid the full •share of Sarah Prances in the land bond, viz., the sum of $1100; took his receipt for the same in full and delivered it to the commissioner, who filed it in the office with the bond. The matter stood in this condition until Sarah Prances attained full age, ■married and brought this suit, when it was discovered that E. J. Moody was not her appointed guardian, or at least no evidence ■of the appointment could be found. Under these circumstances it is insisted that the court should presume that Moody was appointed guardian of his daughter, and that the payment to him should operate as satisfaction to that extent of the land bond. It ■seems that he held himself out as guardian, and that both Smith and the commissioner acted in good faith and were deceived; but in the absence of all proof of its existence, and as against one, then an infant, the court could not, from mere lapse of time, less *598than twenty years, presume that E. J. Moody was appointed guardian of his daughter, Sarah Frances.
Besides the money paid to him, as above stated, by S. S. Smith, E. J. Moody received for his daughter other sums, given to her by the other distributees of the estate. This latter fund he also-received without proper authority, by giving receipts in the following form: “[Received of John L. Smith a conditional gift to my daughter, Sarah F. Moody. The conditions are as follows r If Sarah F. Moody lives to have lawful issue, and Samuel Smith’s will is not protested or broken, then final,” &c. The conditions were performed. It seems that after the marriage of' Mrs. Mullins, E. J. Moody paid her in part of the money he had received for her, viz., about the sum of $2800. Clearly this-should be a payment upon her claim against her father, and as he is-unable to pay the remainder it becomes important to ascertain to-which part of the money in his hands it should be credited— that received from the land bond, or the donation fund The-referee holds that the whole payment should be credited on the donation fund, and that no part of it should be set down to the-money received for the land, upon the ground that, as to the donation fund, he had made himself “a self-constituted trustee to-pay to the daughter,” &c., while the appellants insist that the-payment should be considered as made first from the land fund,, or at least that the payment should be credited to both funds in proportion to their respective amounts. The whole evidence is-not before us, but from what appears we can discover no error-in the decree in this respect. The principle is well settled that the owner of the money — the debtor — has the right at the time-of payment to direct the application, but if he does not make the-application the creditor has that right. Heilbron v. Bissell, Bail. Eq. 430; Williams & Co. v. Vance & Mosely, 9 S. C. 348.
Mrs. Mullins had a claim against her father, originating in-two distinct sources, entirely different in character. One was a contract, by which he assumed a trust, cognizable as such in equity, at the instance of the cestui que trust. The other was a. payment by mistalce, to her father as her assumed guardian, and as to which the only obligation imposed was to refund the sum to those from whom it came. By that wrongful payment no in*599debtedness arose from Moody to his daughter which she was bound to recognize and set up. To have done so to any extent might have imperilled her recovery against those who were her debtors. If the erroneous payment to Moody made him the debtor of his daughter, as it would have done if he had been in fact her guardian, the payment would have discharged those making it. Moody had the right to pay the money back to those who made the payment, which is inconsistent with the view that the payment itself made Moody the debtor of his daughter. Did the parties making the wrongful payment have the right to insist that the daughter should take a new debtor in discharge of them? If Mrs. Mullins were bound by any rule or principle of law or equity to receive part of the money on one account and part on the other, then we might hold that she received the money under that rule, and the credits should be applied to both in proportion to their respective amounts; but we know of no such rule, unless the parties have a right to say to her, you shall take your father as your debtor in our place. Not being under any such restraint by the law, she declares that it was Moody’s money due her as a cestui que trust. She had a perfect right to say to her trustee, as you have not indicated how it shall be applied, I receive the money on account of the trust. As against the trustee she has the right to say so now; and we know of no equity to control that right upon her part as creditor. This exception is overruled.
It appears that at least three of the parties, George W. Smith, R. Vampill and George W. Harrelson, had been, at the time the suit was brought, in possession of their respective parcels of the land purchased from Mi\ Stephen Smith more than ten years, and they insist that they have title under the statute of limitations. We agree with the referee and Circuit judge that this defence cannot avail. The lien bound the lands in the possession of S. S. Smith, and also that of Stephen Smith, as they, being parties, had actual notice. They conveyed and the purchasers took no higher right than they could give. They purchased property subject to an encumbrance, and their possession, like that of the vendor, was not adverse, unless, by some act or declaration, they gave notice that they did not hold subject to, but *600adversely to, such lien; and. we do not think that merely receiving title and holding possession without anything else, would be enough to prove such possession adverse. The case of Me-Rhea v. Smith, relied on by the defendants, was the case of a purchaser from defendant in execution, in whose possession before the sale the land was bound by the lien. The principle on which that case is placed is not clearly perceived, as the statute of limitations refers in terms to title claim for the land itself, and does not expressly include the case of a lien or mere power. But the case has been recognized and we do not propose to disturb it. We are not, however, disposed to extend that construction of the statute beyond the actual case.
In reference to a purchase from a mortgagor, a different doctrine has been held and sustained by a long line of decisions from Thayer v. Cramer, 1 McC. Ch. 395, down to Gillison v. S. & C. R. R. Co., 7 S. C. 181. We think the correct doctrine is stated in the case of Wright v. Eaves, 5 Rich. Eq. 81, where the court say: “ To a bill filed to foreclose a mortgage of land against mortgagor, the statute of limitations is not applicable, although the defendant and those under whom he claims has been in possession for more than ten years.” It was also held in the late case of Norton v. Lewis, 3 S. C. 25, that a purchaser holding possession for the period of ten years, with notice of the mortgage, cannot avail himself of the defence of the statute of limitations in bar of the right of the mortgagee to foreclose.”
But it is urged that a statutory lien is a secret lien — that it is never recorded, and in such case parties cannot be chargeable with constructive notice. The declaration of the* statute, of which all are presumed to have knowledge, and the record in a public office ojien to all, taken together, are considered equivalent to recording. McQueen v. Fletcher, 4 Rich. Eq. 164. This precise question was decided in the case of Daniels v. Moses, before cited, in which Judge Mclver, as the organ of the court, says: “ We do not see how a purchaser of jiroperty, covered by a statutory lien of which he has no express notice, can stand in any better position than the purchaser of projierty covered by a formal mortgage duly recorded, of which he lias no express notice. In the former case no recording is required, the pro-; *601ceeding under which it arises being regarded, doubtless, as a substitute for such recording, and which, therefore, operates as notice, just as the formal recording does in the other.” This, also, disposes of the alleged laches on the part of the commissioner as the agent of the parties in interest.
The only remaining exception is “ because the referee erred in overruling the plea of purchaser for valuable consideration without notice.” We have already determined that the defendants had the knowledge of such facts as should have put them upon inquiry, and, therefore, were not without notice. The statutory lien must be considered on the same footing as a regular mortgage, which, although generally enforced by proceedings ■equitable in their character, gives a legal right, and it is so well settled that against such right the mere equity of a purchaser for value cannot prevail; that it cannot be necessary to do more than refer generally to some of the authorities upon the subject. Finch v. Shaw, 19 Beav. 500; 2 Lead. Cas. in Eq. 59; Collins v. Archer, 1 Russ. & M. 284; Blake v. Heyward, Bail. Eq. 208; Donald v. McCord, Rice’s Eq. 340.
The judgment of the Circuit Court, except as herein modified, is affirmed, and the case is remanded to that court for such further proceedings as may be necessary.
Willard, C. J., and Pressley, A. J., concurred.