Court Opinion

ID: 6674110
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:29.799989+00
Date Added: 2024-06-11T16:00:38.655932
License: Public Domain

The opinion of the court was delivered by
Haskell, A. J.
This was an action brought to foreclose a mortgage of real estate given by J. G. Thorpe to William Thorpe, to secure a pre-existing debt. After the mortgage had been recorded the land was levied on and sold by the sheriff under a lien junior to that of the mortgage. The mortgagor made no answer. The purchaser at sheriff’s sale, however, having been made a party defendant, filed his answer, in which he charges that the mortgage and the note it was.given to secure, were given in fraud and to hinder, delay and defeat the claims of creditors of the mortgagor. He prays, therefore, that the note and mortgage be set aside as null and void. By an order of the court, all the issues in the action were submitted to a referee. The referee, in his report, finds the note to be a valid and subsisting debt; but he finds that the mortgage “ was given to hinder and delay the creditors ” of the mortgagor, “ and that the same is null and void.” His conclusion of law is that the mortgage must be “ set aside and made of no effect, the same being void because of fraud.” The report, so far as it relates to the mortgage, is not confirmed by the Circuit judge, who decides that the evidence is insufficient to establish fraud or to otherwise affect the mortgage, and foreclosure in the usual form is ordered. The appeal is from such judgment. The evidence which we are obliged to examine in an appeal from the finding of facts in an equity case can be much reduced by inquiring into its relevancy. So much as relates to what is called the $6000 note and the mortgage to secure it, is only admissible as tending, by way of inducement, to unravel the intent in the transactions directly in issue, and is too remote unless sustained by other evidence. That much, therefore, of the evidence need not be separately considered. As regards the $1000 note and mortgage, which are the cause of action, the validity of the note is admitted. There is evidence that the debt had been for some years past due and unpaid, and that the holder of the note, in 1874, urged payment, and that the maker promised to pay as soon as he could sell certain real estate then in the hands of a broker, or, if he failed to sell, that he would secure the note by mortgage. The land is the same which is now in question. Further, there is no evi*167dence of any promise or agreement or understanding on the part of the mortgagee, by which, for valuable consideration, his debtor was induced to give security or preference to the injury of other creditors. Nor is there evidence of any fraud in this transaction by which other creditors have been injured; but, even if there had been fraud as to the other creditors on the part of the mortgagor, there is no evidence of any knowledge of the same, or collusion therewith on the part of the mortgagee. It is difficult to perceive more than the facts that the debtor, J. G. Thorpe, being sued as surety on the bond of a public officer, and apprehending judgment, sought to secure his own creditor, who happened to be his brother, and, to do so, executed a mortgage which he had promised nearly two years before. An effort is made to cast doubt upon the letters which were produced in evidence to prove that J. G. Thorpe had promised this security in 1874, but we are unable to perceive any force in the objection, even if the evidence were much more important to the case. It only strengthens what could have stood without it. Such measures as were pursued by J. G. Thorpe amount merely to a preference. It is entirely settled that such preference is lawful; and while, practically, it may hinder or delay some of the creditors, it does not hinder, delay or defraud creditors in the sense in which those words are used in the statute. Maples v. Maples, Rice Eq. 300. And while a preference to secure a valid debt may, under some circumstances, be impeached, one of the essential grounds is that the preferred creditor has conspired with the debtor at the expense of the other creditors. Bird v. Aitken, Rice Eq. 73. We perceive no evidence of such fact in the preference now in question. There is no merit in the ground that because the creditor was a brother, and had shown kindness to the debtor in other matters, that the debtor may have made the preference with a view to his own ultimate benefit. Doby v. Cureton, 10 Rich. Eq. 411. The referee does not place his conclusion distinctly upon such ground; but that impression seems to have influenced his mind. It is not, however, the report of the referee which is before us on appeal, but the judgment of the court, which, in our opinion, is fully sustained by the evidence.
The other question to be decided is, whether the Court of *168Common Pleas has jurisdiction to hear exceptions to the report of a referee of the whole issue. The appellant relies upon Section 296 of the code and Perry v. Sullivan Manufacturing Company, 6 S. C. 312. The case cited does not consider the question of jurisdiction, and we deem it unnecessary to enter into an inquiry as to the whole force and effect of Section 296 of the code. The Court of Common Pleas is clothed with equity jurisdiction. Const., Art. IV., § 16. And in all cases which come within that classification, the judge, in the exercise of his chancery powers, is obliged to determine, by his judgment or decree, all questions of fact as well as of law. There is no difference between the report of a referee in an equity case now and that of a master, commissioner or referee, under the former practice. The report comes up subject to exceptions, and stands for confirmation by the judge. It may be confirmed in whole or in part, or entirely rejected, and the judgment be entered up accordingly. The judge is not more bound by the.finding of a referee in a chancery case than by the verdict of a jury, where feigned issues are sent over from the chancery side to the law side of the court. He is not bound by the finding of fact in either mode, but is merely aided in arriving at the conclusion on which his judgment must rest. The action cannot be determined except by a judgment of the court in the exercise of its equity power, and that judgment can only be rendered by a judge of that court. See Sloan v. Westfield, 11 S. C. 445; Charlotte, Columbia and Augusta Railroad Company v. Earle et al., 12 S. C. 53.
The judgment is affirmed. Motion refused.
Willard, C. J., and McIver, A. J., concurred.