Groce v. Jenkins

The opinion of the court was delivered by Mr. Justice McGowan. This was an action to foreclose a mortgage. The complaint, among other things, (let it be set out in the report of the case,) stated that one James L. Ballenger, in order to secure a debt due by him, executed to the plaintiff a mortgage of a certain tract of land particularly described, and containing 125 acres, “being the tract whereon the said Ballenger then lived, and a part of the Westley Gilreath lands;” that afterwards, in December, 1881, the said Ballenger sold and conveyed 75 acres of the mortgaged premises to the defendant, Jenkins, who in part payment of the purchase money executed to the plaintiff his note for $800, “and said note was substituted for a corresponding amount of the indebtedness of the said Ballenger to the plaintiff under the mortgage aforesaid, the intention, understanding, and agreement of all the parties being that said mortgage should stand as security for the substituted note to the extent of the land conveyed by the said Ballenger to the said Jenkins;” and that afterwards Jenkins executed a mortgage of the said 75 acres to the defendant Reese. Both Jenkins and B.eese were made defendants and answered. The case was referred to the master, and when it came up for trial on exceptions to his report, a verbal demurrer was interposed that the complaint did not state facts sufficient to constitute a cause of action. The Circuit Judge sustained the demurrer, and the plaintiff appeals to this court upon the following grounds: I. Because his honor erred in holding that it was necessary to allege that the agreement between the plaintiff and the defendant, Jenkins, set out in the complaint, was not in writing. II. Because his honor erred in holding that the complaint did not state facts sufficient to constitute a cause of action. [175] A demurrer admits the facts as alleged, and that being so, it seems to us that there can be no douht whatever that the complaint did state facts sufficient to constitute a cause of action. There was valuable consideration for Jenkins’s note for $300 to the plaintiff. If the land was not the consideration of the note, then Jenkins to that extent got it for nothing. The mortgage from the beginning covered the identical land sold to Jenkins, and by the agreement of all parties the note of Jenkins “was substituted for a corresponding amount of Ballenger’s indebtedness to the plaintiff under the mortgage, the intention of all the parties being that said mortgage should stand as a security for the substituted note.” The parties had a right to make the arrangement. Neither the plaintiff’s debt nor his mortgage was thereby satisfied. The note of Jenkins took the place of the original debt, and to the extent of the land the mortgage still covered and secured it. See Burton v. Pressly, Cheves Eq., 1; Gibbes v. Railroad Company, 13 S. C., 245. But it is urged that the subject matter of the alleged agreement being lands, it could not, under the statute of frauds, be proved by parol; and therefore it was necessary that it should have been alleged to be in writing. The allegations do not state whether the agreement spoken of, was or was not in writing. Nothing is said on that subject. For aught that appears, the agreement may be in writing. “The statute of frauds did not prescribe a rule of pleading, but a rule of evidence, and it will be time enough to consider the question as to the character of evidence admissible, wdien in the progress of the case the proofs are reached.” So far as concerns the question now before us, proof has been dispensed with by the implied admissions of the demurrer. “If an agreement or contract is stated in the declaration (complaint) to have been made, it is not necessary to allege that it was in writing, as that will be presumed until the contrary appears.” Brown St. Fr., § 505; Poag v. Sandifer, 5 Rich. Eq., 180; Hubbell v. Courtney, 5 S. C., 90 ; 7 Wait. Act. & Def., 56. In the case of Hubbell v. Courtney, it is said: “The fact that the complaint does not allege that the contract was in writing, is not conclusive, for the plaintiff was not bound to plead that fact.” [176] In the citation from Wait. Act. Def., it is said: “In an action upon a contract required by the statute of frauds to be in writing, it is not necessary to allege in the complaint that it is in writing. For the purposes of the complaint, this will be presumed, and unless the contract is denied in the answer, or alleged to be void because not in writing, the statute furnishes no defence.” Marston v. Swett, 66 N. Y., 206. In 1 Jones Mortg., § 750, it is said : “Even a verbal promise by a purchaser to assume and pay a mortgage is valid, and may be enforced in equity not only by the grantor, but by the holder of the mortgage. * * * The assumption of the payment may be proved by parol evidence, although the deed to the purchaser contains covenants of warranty, and makes no mention of the mortgage or is simply subject to it.” The judgment of this court is, that the judgment of the Circuit Court be reversed.