Finance, Inc. v. Haltiwanger

188 S.E.2d 472, 258 S.C. 305, 1972 S.C. LEXIS 337
CourtSupreme Court of South Carolina
DecidedMay 2, 1972
Docket19408
StatusPublished

This text of 188 S.E.2d 472 (Finance, Inc. v. Haltiwanger) is published on Counsel Stack Legal Research, covering Supreme Court of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finance, Inc. v. Haltiwanger, 188 S.E.2d 472, 258 S.C. 305, 1972 S.C. LEXIS 337 (S.C. 1972).

Opinions

Littlejohn, Justice:

The plaintiff, Finance, Inc., commenced this action to recover a deficiency judgment in the amount of $7,202 alleged to be due because the chattel mortgage foreclosure sale of a timber jack logging machine did not bring the amount of the total debt due according to the terms of the note.

The defendants, M. L. Haltiwanger (maker of the note), and G. E. Haltiwanger (endorser), answered the complaint, denying liability, and alleged by way of counterclaim that the plaintiff removed the winch and other parts from the machine and replaced them with defective parts, thereby decreasing the value of the machine prior to the foreclosure sale and causing it to bring less at the auction. Defendants alleged that the machine was worth $3,528 more than the debt the mortgage secured, and asked a judgment against the plaintiff in the amount of $3,528 actual damages, plus [308]*308$10,000 punitive damages because of alleged breach of contract, accompanied by a fraudulent act.

The plaintiff replied to the counterclaim, interposing a general denial.

At the end of all the testimony plaintiff moved for a directed verdict, which was denied. The jury found in favor of the defendants, $3528 actual damages plus $10,000 punitive damages on the counterclaim.

Thereafter plaintiff moved for judgment in the amount of $7,202 non obstante veredicto, which was granted by the trial judge. From such order defendants appeal, asking this Court to reinstate the verdict of the jury as the judgment of the lower court.

The facts out of which this litigation arose are as follows: On June 3, 1966, M. L. Haltiwanger purchased the timber-jack machine in question from Woods Machinery, Inc. of Columbia. The conditional sales contract (mortgage) and an installment note were executed by him at the time of the sale. The contract called for a cash payment of $10,261, with a balance of $18,940 to be paid in 36 monthly installments. Woods Machinery, Inc. subsequently assigned the note and finance contract to Finance, Inc., the plaintiff. By winter and spring of 1968 the defendant had defaulted in the payments which eventually brought about the public foreclosure sale on July 1, 1968. There was no judicial proceeding incident to the sale.

The defendants, in their answer, admitted that according to the terms of the contract $9,472 remained unpaid. The gist of the counterclaim of the defendants is the allegation that between June 14, 1968 when the plaintiff took possession of the equipment, and July 1, 1968, when the sale was conducted, the plaintiff or its agents removed the winch from the machine and replaced it with a defective winch, thereby lessening its value and depressing the bidding at the sale. Plaintiff sold the equipment after notice that the winch was [309]*309switched and over the objection of the defendants. It sold for $3,700; defendants contend it was worth $12,000 to $13,000.

The winch is an important and expensive component of a timberjack. The sole question for the determination of the trial judge below, and for this Court, is whether the evidence created a jury issue on the contention of the defendants that a good winch was removed and a defective winch substituted by plaintiff or its agents between June 14 and July 1.

For several weeks prior to June 14, 1968, the defendants tried unsuccessfully to sell the machine advantageously. The machine was placed by the defendants with the Pioneer Logging Company, a dealer in heavy equipment in Columbia. Arrangements were made to have the machine steam cleaned in hopes that Pioneer could find a buyer. Pioneer’s attempts to sell the machine were in vain. Finally, the plaintiff and the defendants agreed that the plaintiff should repossess the timberjack and proceed under the contract to sell it.

On June 14, C & K Enterprises, at plaintiff’s request, dispatched a truck to Pioneer and picked up the timberjack. C & K was also located in Columbia, and was engaged in the trucking, storing, repairing and selling of heavy equipment. The timberjack remained at C & K’s yard until after the foreclosure sale on July 1.

The order of the trial judge disturbing the jury verdict and granting the non obstante veredicto motion of the plaintiff was bottomed on three basic findings:

1. That there was no evidence offered to indicate that C & K Enterprises was an agent of the plaintiff ;

2. That there was no evidence offered to indicate a fraudulent act on the part of the plaintiff;

3. That there was no evidence as to the condition of the timberjack at the time C & K took possession of it on June 14.

[310]*310These three rulings make the issues before us on this appeal.

The judge opined that the evidence produced “was not sufficient to take the case beyond the realm of speculation and conjecture.”

In ruling upon the question we are required, as was the trial judge, to view the evidence in the light most favorable to the party against whom the motion was directed, or in the light most favorable to the defendants.

Assuming that a substitution of winches occurred, it was not necessary for the defendants to prove whether the substitution was brought about by C & K or by the plaintiff. It is not as though the winch disappeared, in which event one might only speculate as to who removed it. In the case of a substitution the inference arises that those in charge of the machinery (and responsible therefor) brought about the exchange.

From June 14 to July 1 the plaintiff held the timberjack in trust. It was the plaintiff’s duty to safely keep the machine and to refrain from doing or permitting others to do any act which might depress its value or cause injury to the defendants.

“A person exercising his right to sell must have due regard to the interests of the mortgagor, or other persons, in the property. He is not entitled to act as the owner of the property, and, where he is the mortgagee, he is regarded as being an agent or trustee of the mortgagor, and his conduct and fairness in making the sale is always open to investigation by any person having a sufficient interest in the property.” 14 C. J. S. Chattel Mortgages § 367.

During this time the timberjack was beyond the control of defendants and solely within the control of plaintiff. We do not agree with the trial judge when he held that the evidence is not susceptible of the inference that C & K were agents of the plaintiff. Counsel for plaintiff in their brief, admit “. . . it is clear that the plaintiff repossessed the trac[311]*311tor and used the services of C & K to pick up the logging tractor from Pioneer Logging Company on June 14, 1968, and that the tractor was taken to the lot of C. & K Enterprises in Columbia and sold there by the plaintiff at public sale on July 1, 1968.”

Plaintiff cannot excuse itself from its duty by placing the machine in the custody of another. C & K was acting as plaintiff’s agent and its acts became the acts of the plaintiff. And if C & K or its agents and servants substituted the winch, plaintiff would be liable therefor the same as if it had done the act itself.

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Related

Boykin Ex Rel. Estate of Boykin v. Prioleau Ex Rel. Estate of Dickerson
179 S.E.2d 599 (Supreme Court of South Carolina, 1971)

Cite This Page — Counsel Stack

Bluebook (online)
188 S.E.2d 472, 258 S.C. 305, 1972 S.C. LEXIS 337, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finance-inc-v-haltiwanger-sc-1972.