Court Opinion

ID: 8294793
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:00:55.410433+00
Date Added: 2024-06-11T16:43:59.667206
License: Public Domain

FEW, C.J.,
dissenting.
I would reverse the circuit court’s decision to award the Borchers a penalty under sections 29-3-310 and -320 of the South Carolina Code (2007) because there is no evidence in the record the Bank received a cancellation request from Richard C. Strawn — the only person entitled to make that request. Because no request to cancel was made, section 29-3-310 did not require cancellation of the mortgage and the section 29-3-320 penalty does not apply.
This case involves an open-ended mortgage. Section 29-3-50 of the South Carolina Code (2007) provides that an open-ended mortgage survives a sale of the underlying property and is binding on a subsequent purchaser. Our courts have recognized that open-ended mortgages serve a valid purpose and the occasional incidence of a seemingly-unfair result like the one in this case is justified by the purpose the open-ended mortgage was designed to serve. See Cent. Prod. Credit Ass’n v. Page, 268 S.C. 1, 8, 231 S.E.2d 210, 214 (1977) (“A holding that an open-end mortgage dies when there is currently no debt for it to secure, would severely limit its beneficial use and defeat the legislative intent.”). Therefore, the mere fact that the balance of the loan secured by the mortgage is paid off does not require cancellation of the mortgage. Rather, the mortgage may not be cancelled unless the proper person requests it. Under some circumstances, a “person ... having an interest in any estate bound by the mortgage” may request cancellation. § 29-3-310. Here, however, the terms of the mortgage provided the only person with authority to request cancellation of the mortgage was Richard Strawn. See Cent. Prod. Credit Ass’n, 268 S.C. at 8, 231 S.E.2d at 214 (stating the predecessor to section 29-3-310 “permits the parties to agree that the mortgage live on until the mortgagor requests its cancellation”). This information was filed in the public record of Anderson County, and thus was readily available to the Borchers and their closing attorney. Viewing the evidence in the light most favorable to the Borchers, no person or entity even purporting to speak on behalf of Richard Strawn made any request to have the mortgage cancelled. The October 31, 2003 letter incorrectly states the mortgagor is “Cammie B. Strawn,” who had been divorced from Richard Strawn since 2001. Cammie Strawn had no authority to *546request cancellation of the mortgage. The closing attorney who made the request relied on by the majority did not represent Richard Strawn, who was not a party to the real estate transaction, and therefore the attorney’s request was not made on Richard Strawn’s behalf. There is no evidence in the record of any other request to cancel the mortgage. Because no evidence exists that a proper request for cancellation was made, there can be no liability under section 29-3-320 for failure to honor the request. The circuit court’s award of punitive damages and attorney’s fees is dependent on the validity of the statutory penalty. I would reverse and enter judgment for the Bank.