context: South Carolina law recognizes, upon proper proof, an equitable lien on insurance proceeds in favor of a mortgagee. South Carolina law also provides that an equitable lien arises following the entry of a judgment recognizing its existence.
citation_a.signal: no signal
citation_a.identifier: 450 S.E.2d 77, 81
citation_a.parenthetical: "An equitable lien is a mere floating equity until a judgment or decree subjecting the property to the payment of the debt or claim is rendered."
citation_a.sentence: Lloyd, 458 B.R. at 300 (citing In re Houston, 409 B.R. 799, 811 (Bankr.D.S.C.2009)); First Fed. Sav. & Loan Ass’n v. Bailey, 316 S.C. 350, 450 S.E.2d 77, 81 (Ct.App.1994) (“An equitable lien is a mere floating equity until a judgment or decree subjecting the property to the payment of the debt or claim is rendered.”). The cases the Court has found which hold that a mortgagee has an equitable lien on insurance proceeds all involve a contract between the mortgagor and mortgagee requiring that the mortgagor maintain insurance.
citation_b.signal: see
citation_b.parenthetical: holding, where two brothers were involved in a partnership operating a business in a barn and one brother purchased insurance on the barn, which later burned, that the partner who did not purchase insurance had an equitable lien because the insurance was taken out for the benefit of the partnership and therefore, the insurance company was jointly and severally liable to both brothers
citation_b.sentence: See Knapp v. Victory Corp., 279 S.C. 80, 302 S.E.2d 330 (1983) (holding, in a dispute between first and second mortgagee regarding entitlement to insurance proceeds, that because both mortgages required the mortgagor to maintain insurance on the property, both mortgagees had a claim to the proceeds and that the first mortgagee was entitled to recover a portion of the proceeds to the extent of the insured amount, with the second mortgagee to recover the remainder); Blackwell v. State Farm Mut. Auto. Ins. Co., 237 S.C. 649, 118 S.E.2d 701 (1961) (holding that a bank holding a chattel mortgage on an automobile damaged in a collision had an equitable lien in insurance proceeds because the mortgage required mortgagor to insure the vehicle and name mortgagee as a loss payee); Cromer v. Cromer, 293 S.C. 360, 360 S.E.2d 528 (App.1987) (holding, where two brothers were involved in a partnership operating a business in a barn and one brother purchased insurance on the barn, which later burned, that the partner who did not purchase insurance had an equitable lien because the insurance was taken out for the benefit of the partnership and therefore, the insurance company was jointly and severally liable to both brothers).