Koster v. Welch

The opinion of the Court was delivered by Mr. Justice Gary. This is an action to foreclose a [96] mortgage hereinafter more particularly described. The answer of Juanita P. Welch to the complaint herein, after denying certain allegations, contains the following: “Por a partial defense to the alleged cause of action. That except as to a small portion thereof, the bond and mortgage mentioned in the * * * complaint were given without any consideration therefor.” The master, to whom all issues were referred, thus states the transaction in regard to the mortgage, after first showing from the testimony that there was not a failure of consideration: “Mrs. Christian owed the plaintiff a large bill for groceries furnished her, which groceries were used for the support of the household, and were consumed by them. Credit was given by the plaintiff to Mrs. Christian, and the goods were charged to her. On the 19th day of July, 1890, the bill for these groceries amounted to $380, and the plaintiff desiring some security for the debt, and being willing to allow some further credit for goods to be furnished at a future period, Mrs. Christian and Mrs. Collins, the life tenant and contingent remainder-man of the property, executed and delivered to the plaintiff their bond, under seal, in the penal sum of $960, conditioned to pay $480, with interest at the rate of seven per cent, per annum, on or before the 19th day of July, 1891, and secured said bond by a mortgage of even date of said premises, signed by both said parties, and duly recorded on the 22d of July, 1890, in R. M. C. office, Charleston, in book C, 21, page 282. Shortly thereafter the'plaintiff made and delivered to the obligor of the bond a due bill, which is in evidence, and is marked exhibit C, and which reads as follows: 'Charleston, July 26th, ’90. Due Mrs. E. C. Christian and Mrs. Juanita Collins, one hundred dollars, value received on mortgage. $100.00. John E. Koster.’ Mr. Koster testifies that the object of this due bill was to enable Mrs. Christian to use it in obtaining from him groceries to' that . amount, and that as a matter of fact she did obtain on account thereof groceries to the value, to the best of his recollection, of $67 or $76, he cannot remember which. Inas [97] much, however, as he is unable on account of the loss of his books to verify these items, he is willing to waive them and to allow the whole amount of the due bill, viz: $100, as a credit on the bond and mortgage; claiming only, therefore, an amount of $380 principal, with interest from the date of the bond.” The respondent testified that $380 of the amount mentioned in the bond and mortgage were to be paid to her, but that the appellant failed to make the payment. His Honor; the Circuit Judge, finds that the plaintiff failed to comply with the agreement as to thepayment thereafter to be made, that the bond and mortgage as to the respondent were without consideration, and that nothing is due thereon by the respondent. He discussed the questions raised by the exceptions to the master’s report under two heads, as follows: “1st. Was there any consideration moving to Mrs. Welch for joining in the execution of the bond and mortgage in question ? 2d. Can a sealed instrument voluntarily entered into, and with no pretense of fraud on the part of the obligor, be impeached for want of consideration in the manner herein attempted?” He ruled that the first question should be answered in the negative and that the second in the affirmative. 1 The giving of the due bill shows that the respondent is mistaken in testifying that the sum of $380 was to be paid to her, and also mistaken as to the amount of Mrs. Christian’s indebtedness intended to be secured by the bond and mortgage. If the bond and mortgage had been executed for the purpose of securing only $100 of Mrs. Christian’s indebtedness, it seems unreasonable that a due bill would have been given for that sum. We agree with the master, that the bond and mortgage were executed to secure Mrs. Christian’s indebtedness, amounting to $380, and in consideration of $100 thereafter to be advanced. The failure of consideration only extends to the $100 which he has not advanced, but he does not ask that this sum be included in the judgment of foreclosure. [97] Having shown that the question as to failure of consider [98] ation does enter into the case, we will next consider whether the Circuit Judge erred in ruling that a sealed instrument voluntarily entered into, and with no pretense of fraud on the part of the obligor, can be impeached for want of consideration. While a person who signs an instrument of writing under seal is not allowed to show that it was without consideration, the rule has long prevailed that he has the right to show failure of consideration. If this cannot be done, a party who failed to comply with his part of the contract would be enabled to take advantage of his own wrong. Equity and good conscience require that when one has failed to carry out his part of a contract, he shall not be allowed to enforce the other provisions thereof. This question has been considered so recently by the Supreme Court, that we deem it only necessary to refer to the cases and the former cases therein cited to show that his Honor, the Circuit Judge, erred, to wit: Brown v. Brown, 44 S. C., 378, and Whitmire v. Boyd, 53 S. C., 315. This consideration renders unnecessary the consideration of the question first discussed by the Circuit Judge hereinbefore mentioned. It is the judgment of this Court, that the judgment of the Circuit Court be reversed, and the case remanded to the Circuit Court for such further proceedings as may be necessary to carry out the views herein announced.