Ex Parte Cockfield Middleton & Co. v. Cockfield

Supreme Court of South Carolina January 25, 1922

Ex Parte Cockfield Middleton & Co. v. Cockfield, 110 S.E. 393 (S.C. 1922)

118 S.C. 239; 1922 S.C. LEXIS 6

Cothran, Watts

Opinion of the Court

The opinion of the Court was delivered by

Mr. Justice Cothran.

The facts of this case are quite complicated, and the difficulty of readily comprehending them is increased by the number of parties of the same name connected with the transaction. J. A. Cockfield is the father of the petitioner, H. W. Cockfield, and also of S. R. Cockfield. To render the statement of facts more readily understood we will refer to them as the father, the petitioner, and the brother.

The father was the owner of a tract of land; on January 16, 1913, he mortgaged it to Farmers’ & Merchants’ Bank to secure his note for $1,090.76. On November 3, 1914, the father conveyed the land to the petitioner, subject to the bank’s mortgage, which the petitioner assumed. On November 3, 1914, the petitioner mortgaged the land to the brother to secure his note for $2,500, which the brother assigned to Home Fertilizer Company before maturity. On February 2, 1915, the petitioner intrusted his brother with $223.03 in cash and his note for $901.03, indorsed by the brother and another, for the purpose of taking up the note and mortgage which the father had given to the bank and which the petitioner had assumed. Instead of satisfying the note and mortgage, the bank assigned them unconditionally to the brother for the purpose of securing him and the other indorser upon their obligations as such on the note for which the note and mortgage were surrendered.

On December 31, 1915, the petitioner mortgaged the land to the brother to secure his note for $1-,831.84, which was assigned by him to the bank before maturity. On February 26, 1916, the brother, claiming to be the absolute owner of the note and mortgage given by the father to the bank, and by the bank assigned to the brother to secure his indorsement of the $901.03 note, assigned said note and mortgage to *243 Middleton & Co. as security for advances to be made him-during the year 1916. Middleton & Co. took the assignment in good faith, without notice of the agreement between the brother and the bank, relying upon the unconditional assignment to the brother and his statement that he was the absolute owner. On January 17, 1917, M. B. Joye (presumably the grantee of the petitioner) mortgaged the land to the brother to secure his'note for $5,000, which was assigned at once to the bank.

Thereafter the brother died, and Middleton & Co. instituted an action to foreclose the mortgage first referred to, that of the father to the bank, assigned by the bank to the brother, and by him to Middleton & Co.

The defendants in this action were the father, the petitioner, the bank, and the Home Fertilizer Company. The father and the petitioner filed no answers. The other defendants answered, claiming that the mortgage upon which Middleton & Co. were asking foreclosure had been paid by the transaction with the bank hereinbefore related. The special referee found in favor of their contention. The Circuit Judge overruled the report and ordered foreclosure, the proceeds to be applied in order to Middleton & Co.’s mortgage, to the Home Fertilizer Company’s’mortgage, and to the bank’s mortgage. The bank and the fertilizer company appealed from this decree, but the same was affirmed by this Court on January 27, 1920: 113 S. C., 282, 102 S. E., 328. It appears that, notwithstanding the appeal, we assume by agreement, the land was sold under the foreclosure decree and brought $3,750; the proceeds being held by the clerk pending the appeal.

While the appeal was pending from the decree of foreclosure, the bank brought suit against the petitioner upon the $901.03 note which he had given to the bank, as he had intended, in satisfaction of the original note and mortgage given by the father, and which were wrongfully obtained *244 by the brother and assigned to Middleton & Co. The petitioner defended this action upon the ground that his land had been sold and the proceeds applied to the payment of the debt for which the note had been given; that is, the original nóte and mortgage of the father to the bank. Upon the trial of that case Judge Townsend directed a verdict for the bank, and from that judgment there has been no appeal. Execution was issued upon this judgment, and the full amount collected from the petitioner.

After the remittitur in the case of Middleton & Co. v. Cockfield et al., 113 S. C., 282, 102 S. E., 328, had been filed, the petitioner filed a petition in the said cause, claiming to be subrogated in the proceeds of sale in the hands of the clerk to the extent of the amount paid by him upon the judgment of the bank on the $901.03 note. Upon the hearing on the petition Judge Rice dismissed the petition, in an order which will be reported, and from that order the petitioner has appealed.

1 The petitioner claims to be subrogated to the rights of Middleton & Co. in the proceeds of sale under foreclosure proceedings instituted by them, upon no other ground than that, if Middleton & Co. be allowed to take this fund, the petitioner, having paid the bank judgment, will be compelled to pay the same debt twice. In order to entitle the petitioner to subrogation against the rights of Middleton & Co. it must appear that he has discharged a debt which Middleton & Co. were under an obligation to discharge. On the contrary, it appears that the petitioner discharged his own debt to the bank, the note which he gave to take up the mortgage, and that Middleton & Co. were in no wise connected with that debt. It is unfortunate that the petitioner’s misplaced confidence in his brother had brought about a condition in which he loses his land and has.had to pay the bank’s judgment, but that is a condition for which Middleton & Co. are in no wise responsible.

*245 2 Furthermore, the petitioner has had two opportunities to assert whatever rights he may have had in the matter. In the suit which Middleton & Co. brought to foreclose the father’s mortgage the petitioner made default. In that action the other defendants raised the question that the giving of the $901.03 note amounted to a satisfaction of the original mortgage, and the petitioner was a witness for them in support of that contention. The Court decided against it. In the latter case, of the bank against him, he raised the same question, and it was again decided against him. He is therefore estopped from again contesting the matter.

The judgment of this Court is that the judgment of the Circuit Court be affirmed.

Mr. Justice Watts did not participate on account of sickness.

Reference

Full Case Name: Ex Parte Cockfield Middleton & Co. v. Cockfield Et Al.
Status: Published
Syllabus: 1. Subrogation—Mortgagor Held Not Entitled to be Subrogated to to Rights of Holder of Mortgage.-—Where mortgagor intrusted money to a brother to pay off the mortgáge, and the brother obtained an assignment of the mortgage to secure him and another as indorsers on the mortgagor’s note delivered to the mortgagee, and assigned the original note and mortgage to a third party without knowledge as security for advances made, and such third party foreclosed and sold the property, and the first mortgagee, pending an appeal in the foreclosure proceedings, sued on the note held, by it and compelled mortgagor to pay it, held, that mortgagor was not entitled to be subrogated to the rights of the plaintiff in the fore- . closure, by being required to pay the note given to the mortgagee, since, to entitle him to subrogation against the rights of the plaintiff, it must appear that he has discharged a debt which plaintiff was under an obligation to discharge. 2. Mortgages—Mortgagor Held , Estopped to Claim Satisfaction of Mortgage.—Where mortgagor intrusted a note and cash to a brother to satisfy a mortgage, and the original note and mortgage were assigned to such brother unconditionally, and he transferred them to a third party making- advances to him, which third party foreclosed on the land after it had been conveyed by mortgagor, in which proceeding such mortgagor was a party defendant and defaulted, and the original mortgagee sued such mortgagor and recovered on the note given in satisfaction of the mortgage, held, that mortgagor was estopped from claiming that the giving of the note to the mortgagee amounted to a satisfaction of the original mortgage in a proceeding under a petition filed by such mortgagor in the foreclosure proceeding to be subrogated to the rights of the plaintiff in the proceeds of the sale of the land.