Allgood v. Spearman

June 26, 1923. The opinion of the Court was delivered by The statement of facts contained in this case reads:

"This is an action for the foreclosure of a mortgage given to the plaintiff's testate by W.D. Spearman to secure five promissory notes, each for $5,203.87, dated January 1, 1920, for part of the purchase money for four tracts of land in Anderson County, South Carolina, with interest at 7 per cent. from date. R.G. Sheck purchased the land from W.D. Spearman after the mortgage, and the defendant, L.W. Campbell, claimed under a lease in the year 1922. The prayer of the complaint was for judgment against the defendant W.D. Spearman for a receiver for the rents and profits, for the foreclosure of the mortgage, and for 'such other and further relief as the Court may deem just and proper.'

"The defendant, W.D. Spearman, in the fourth paragraph of his answer alleges that on July 30, 1920, he conveyed to R.G. Sheck the lands described in the complaint, and that the consideration 'was the sum of $50,000, the said defendant R.G. Sheck assuming the indebtedness of the defendant, W.D. Spearman, under his notes and *Page 133 mortgage to E.F. Allgood,' the balance of the consideration being paid in other property and notes. The defendant, Sheck, admitted that he purchased the lands, but denied that he assumed the payment of any notes, and that there was any obligation upon him to pay to the plaintiffs anything further than they might receive by foreclosure of the premises. This defendant also set up other defenses, but it is not necessary to consider the same, as the purpose of this appeal is to raise the single question, namely, that under the law and the testimony in this case there is no obligation resting upon Sheck to pay any deficiency judgment which may be obtained against his codefendant, Spearman.

"The case was referred to W.P. Nicholson as special master, who took testimony and found that Sheck was liable for any deficiency which might arise from the sale of the mortgaged premises. On exceptions taken the master's report was sustained by Hon. Charles Carroll Simms sitting as special Judge. Notice of appeal to this Court was given in due time. Judgment was entered up and the property sold on sales day in December, 1922, for $10,000. After applying the proceeds of sale to the mortgage debt there remained a deficit of $ ____ which was entered up against the defendants, W.D. Spearman and R.G. Sheck."

The question is: What did Sheck buy? He claims to have bought only Spearman's equity of redemption. The Master and trial Judge concur in finding that he bought the land and assumed the debt. They do not give their reasons for so holding, but the reason is manifest. Sheck freely admits that the consideration was $50,000 and that he paid the difference between the $50,000 and the mortgage debt. If the consideration was, as he admits, $50,000, then he did not buy simply Spearman's interest, but the land itself, and reserved from the consideration the amount of the incumbrance. *Page 134

In Dargan v. McSween, 33 S.C. 338; 11 S.E., 1081, we read:

"There can be no doubt at this day that where the purchaser of land incumbered by a mortgage agrees to pay a particular sum as purchase money, and on the execution of the contract of purchase the amount of the mortgage is deducted from the consideration, and the land conveyed subject to the mortgage, that the purchaser is bound to pay the mortgage debt, whether he agreed to do so by express words or not. This obligation results necessarily from the very nature of the transaction. Having accepted the land subject to the mortgage, and kept back enough of the vendor's money to pay it, it is only common honesty that he should be required either to pay the mortgage or stand primarily liable for it."

The judgment appealed from is affirmed.

MR. CHIEF JUSTICE GARY and MR. JUSTICE MARION concur.