Bd.Man v. Taylor

• Court: Georgia Supreme Court
• Writing for the Court: Jackson, Chief Justice
• Citation: Bd.Man v. Taylor, 66 Ga. 638 (Ga. 1881)
• Decision Date: 28 February 1881
• Parties: Boardman, next friend, et al. vs. Taylor et al.

66 Ga. 638

Boardman, next friend, et al. vs. Taylor et al.

Supreme Court of the State of Georgia

FEBRUARY TERM, 1881.

Continuance. Deeds. Title. Trusts. Evidence. Principal and agent. Notice. Service. Minors. Usury. Verdict. Before Judge Simmons. Bibb Superior Court. April term, 1880.

Boardman, in his own right and as next friend of the minor children of Charles T. Holmes, filed his bill against Mrs. E. A. (or A. E.) Watkins, Charles T. Holmes and his wife, Mrs. Georgia A. Holmes, and Gibbons M. Taylor. He alleged, in brief, as follows:

In 1863, John D. Watkins, the husband of one of the defendants, was the trustee of a Mrs, Edwards, and heldthe property now in controversy. In that year he gave to complainant money to purchase from himself this land for the benefit of his wife and daughter. Complainant accordingly took a deed from Watkins as trustee, and on the same day made a deed to the lot to Rutherford, as trustee. This deed provided that the trustee should hold for the following uses: For the sole use of Mrs. Watkins for life; after her death, for the use of Mrs. Holmes (at that time Miss Watkins) for life; if the latter should die without leaving any children, and leaving her mother surviving her, then Mrs. Watkins should have power to dispose of the property by will. This deed did not carry out the intention of the parties, which was to convey the remainder after the life estates to the children of Mrs. Holmes who might be born of her marriage, and the omission of such a provision was a mistake of the scrivener, which left a reversion in the grantor, who, in fact, disclaimed any interest in the property.

In 1872 Rutherford resigned the trust, and Holmes succeeded him. In 1874 Mrs. Watkins, Holmes, trustee, and Mrs. Holmes united in a petition to the chancellor, in which they alleged that there were taxes due by the trust estate which they had no means of settling, and prayed that the trustee be allowed to secure a loan and to execute such deed, mortgage, or other instrument as might be necessary for that purpose. At that time Mrs. Holmes had one minor child. A guardian ad litem was appointed for it, and recommended the granting of the petition. It was accordingly granted at chambers; the money, $1,250.00, was borrowed from Taylor, and a deed made to him to secure the loan, Mrs. Holmes and Mrs. Watkins assenting thereto in writing.

In 1876 the debt became due, but the trustee was unable to pay it. Accordingly in April of that year Mrs. Watkins, Mrs. Holmes, and Holmes, trustee, again petitioned the chancellor to allow a renewal of the note to be made for eight months and the execution of a deed tosecure this renewal, which should include a power of sale; the petition also stated that the trustee contemplated securing money from a building and loan association to pay off this note at maturity, and prayed that he have power to execute such instruments as might be necessary for that purpose. At that time another child had been born to Mrs. Holmes. A guardian ad litem was appointed for the minors, but no service was had directly upon them; the guardian ad litem answered recommending the order, and it was granted at chambers. On April 28th, 1876, Holmes, trustee, with the written assent of his wife and Mrs. Watkins, executed the renewal note and the deed to secure the same, the latter containing a provision that if the debt was not paid at maturity Taylor should have the right to advertise the property for thirty days and sell it to pay the claim.

On August 3d, 1877, in consideration of indulgence on the note, Holmes, trustee, his wife and Mrs. Watkins, signed an agreement to allow the property to be advertised on November 3d, following, and after being advertised for thirty days, to be sold without opposition. At this time one of the children living at the date of the second order had died, and a third child had since been born to Mrs. Holmes. Under this agreement Taylor has advertised the lot for sale; the advertisement appeared November 6th, and the sale was set for December 6th.

The bill charges that the whole proceeding was illegal, for the following reasons: (1) Because the debt was not contracted for the benefit of the trust estate, but was for the personal benefit of Holmes. (2) Because no service was effected upon minor beneficiaries at the time of taking the second order, as required by the act of 1876. (3) Because of misdescription of the property. (4) Because the advertisement does not conform to the agreement. (5) Because the interest of the cestui que trusts is not such as is subject to levy and sale under mortgage with power of sale attached.

The prayer was for injunction to restrain the sale by Taylor, for reformation of the deed made by complainant to Holmes, trustee, for general relief and subpœna.

Taylor answered denying any notice whatever of any misapplication of the trust funds, insisting that the description of the land was substantially correct and was sufficient, alleging that he was a bona fide purchaser for value, and praying, by way of cross-bill, that the property be sold and this debt paid. He alleged that I. C. Plant & Son, bankers, acted as his agents to loan the money and take the security.

The other defendants, who were substantially complainants, concurred heartily with the allegations of the bill. They also alleged that the whole transaction was tainted with usury.

It is unnecessary to set out the evidence except the following: At the time of the original loan (April 20, 1874), the note provided for interest at the rate of one and three-eighths per cent. per month. This was paid in advance or deducted from the amount loaned. Plant & Son also charged Holmes, trustee, a commission for negotiating the loan, the amount of which was differently stated by the witnesses. This they kept themselves, and Taylor had nothing to do with it. In 1875 (after the passage of the usury law of that year) a first renewal of the note was had, and the interest specified at twelve per cent., which was paid. Whether Plant & Son again required commissions was a disputed point. This rate was continued afterwards, and the second renewal was made at the same rate. After the loan was consummated, Holmes, trustee, deposited the money in the bank of I. C. Plant & Son, and subsequently drew it out on his checks

The jury found for the defendant (Taylor), and that the lot be sold to pay his debt; and a decree was entered accordingly. Complainant moved for a new trial, on the following grounds:

(1). Because the court refused to continue the case on account of the sickness of Mrs. Watkins, one of defendants, who was a material witness for complainant to show misappropriation of the trust funds and want of knowledge on her part of the contents of the orders of the chancellor, etc. [The court certified that the case had been set ten days in advance, and no effort had been made to secure her testimony by interrogatories.]

(2). Because the court refused to allow the draftsman of the deed from Boardman to Rutherford, trustee, to testify that he inadvertently omitted to include a provision conveying the remainder to the children of Mrs. Holmes, as he was instructed to do. [The court certified that this was ruled out after admission by counsel that they did not expect to show notice thereof to Taylor.]

(3). Because the court ruled out the same testimony when offered simply to reform the deed, and without reference to Taylor.

(4), (5). Because the court rejected testimony offered to show what use the trustee made of the money borrowed, and also checks drawn by him on Plant & Son after the loan and deposit with them as bankers, which were offered to show notice to them of use of the funds by the trustee.

(6). Because the court rejected testimony of Holmes to the effect that neither his wife nor Mrs. Watkins read the petitions or other papers under which the loan was made.

(7). Because the court overruled the objection of counsel to the admission in evidence of the petition of 1876, on the ground that the minors were not served.

(8). Because the court erred in ruling that there was no usury in the transaction between Holmes, trustee, and Taylor.

(9). Because the court overruled the objection of counsel to the admission in evidence of the order of April, 1876, based on the ground that there was no authorityof law allowing a trustee to make deed with such power of sale, and the chancellor had no power to grant such an order.

The motion was overruled, and complainants excepted.

James T. Nisbet; Whittle & Whittle, for plaintiff in error.

Lanier & Anderson, for defendants.

Jackson, Chief Justice.

This case arose on a bill filed by Boardman in his own right, and as next friend of the minor children of Holmes...