Carrigan v. Drake
| Decision Date | 12 May 1892 |
| Citation | 15 S.E. 339,36 S.C. 354 |
| Parties | CARRIGAN et al. v. DRAKE et al. |
| Court | South Carolina Supreme Court |
Appeal from common pleas circuit court of Chesterfield county WITHERSPOON, Judge.
Action to foreclose a mortgage by Carrigan and Silcox against James F. Drake, trustee, and others. Judgment for plaintiffs, and defendants appeal. Cause remanded for modification of the judgment.
R. T Caston and John M. McQueen, for appellants.
Johnson & Hursey, for respondents.
The complaint exhibited in the court of common pleas for Chesterfield county, by the plaintiffs against the defendants, alleges that on the 9th day of October, 1883, the defendant James F. Drake, as trustee for his wife and children, who are also defendants here, executed to the plaintiffs a bond in the penalty of $1,600, conditioned to pay $800 12 months after its date, with interest from its date at the rate of 10 per cent. per annum, and that to secure such bond said defendant, as such trustee, at the same time, executed a mortgage upon a house and lot in the town of Cheraw, in this state; that only $32.14 has been paid on said bond; that the bond and mortgage before recited were executed in pursuance of an order in an action, to which all the defendants were parties, whose object was to empower such trustee to raise $800 for the benefit of his cestuis que trustent, and to secure such amount by a mortgage of such trust property; that the condition of said bond and mortgage has been broken. Plaintiffs pray that the mortgage be foreclosed; the premises sold; the proceeds of sale applied to the payment of the bond; that execution issue against trustee for any balance thereafter found due. The answers contain, among others, the following allegations That James F. Drake, the trustee, on the 9th October, 1883 borrowed only $650, instead of $800, to be used by him in business in Wadesboro, N. C., and that plaintiffs knew full well such purpose of the trustee at the time of their transactions with the trustee; that the defendant Mrs. Drake was at that time a married woman, and that such loan of money by the plaintiffs was not for the benefit of her separate estate; that the order referred to in the complaint, as authorizing the borrowing of the money and mortgaging her estate to secure the same, is null and void; that at the date of such order her children were all minors except Mrs. Mary E. Hearn; that no guardian ad litem was legally appointed to represent them, because not made parties as required by law.
All the issues of law and fact were referred to Edward McIver, as special referee. Testimony was taken for both sides. By the report of such referee it was determined: (1) That on the 9th October, 1883, the defendants Mrs. Drake and Mrs. Hearn were adults; the remaining defendants were minors at that time, the last two being under 14 years of age. (2) That a copy of the petition asking that the trustee be given the right to borrow money and mortgage trust property to secure the same was not served on the infants, though a subp na ad respondendum was probably served, and that no papers were served on the father, mother, or guardian of the infants in their behalf. (3) That the order of Judge PRESSLEY, dated 4th October, 1883, was signed without the county of Chesterfield. (4) That the amount advanced under the mortgage was $650. (5) That the payments were made out of the proceeds of the hotel business conducted by Mr. and Mrs. Drake jointly. (6) That the amount of $425.31 has been paid at the times and in the amounts stated by the witness W. A. Carrigan in his testimony. (7) That it was the understanding between Drake and the plaintiffs that the payment should go as a credit on the mortgage debt. (8) That the amount of $422.51 is due on the mortgage debt on the 15th November, 1889. As conclusions of law, the referee found: (1) That the statute has not executed the use under the terms of the deed of 27th February, 1878, but that the legal title remains in the trustee, James F. Drake, in trust for A. E. Drake during her natural life, and, at her death, in trust for her children. (2) That while a married woman has no authority to charge or incumber her separate estate held in trust, except in pursuance of the power given her in the instrument creating it, yet a court of equity has jurisdiction to authorize the trustee to incumber the estate, when it is for the interest of the estate so to do, even though the deed contains no such authority. (3) That the infant defendants, James F., Jr., Henry, Lemuel, and Francis, were not properly before the court when the order of Judge PRESSLEY, dated 4th October, 1883, was signed. (4) That the judge did not have jurisdiction to hear and determine this matter in any other than the county where the land is situated, it being a determination of the rights or interests in real estate. (5) That the complaint must be dismissed as to all the defendants. (6) That the payments made, amounting to $425.31, must be credited on the bond debt (being $650) at the times and in the amounts made. (7) That the amount of $422.57 is due on the bond on the 15th November, 1889.
The plaintiffs duly excepted to this report. The whole cause came on to be heard before Judge WITHERSPOON, who by his decree sustained all the findings of fact by the special referee, but reversed the 1st 4th, and 5th conclusions of law of the special referee. From this decree the plaintiffs do not appeal, but the defendants appeal upon eight grounds: (1) His honor, the presiding judge, erred in holding that Judge PRESSLEY had the right to hear and determine the petition of James F. Drake, trustee, at Bennettsville or Marion, "as same was not the determination of any right to or interest in land." (2) His honor erred in holding that, the trustee being authorized in his discretion to sell and reinvest the proceeds for the benefit of Mrs. Drake and her children, the court could not control the exercise of such discretion, and therefore sustaining the mortgage to plaintiffs. (3) He erred in holding that, under trust deed to James F. Drake, the trust was executed under the statute. (4) He erred in holding that, there being no duty imposed on the trustee by said trust deed which the court could enforce, the statute executed the use, and that title vested in Mrs. Drake. (5) He erred in holding that, under the rule in Shelley's Case, the title in fee simple vested in Mrs. Drake, and that her children have no interest in the trust property. (6) Having held that title to lands described in the complaint was in Mrs. Drake, she being a married woman, his honor erred in holding that said mortgage was binding upon her separate estate, there being no evidence that it was for its benefit, but it appearing, on the contrary, that it was for the benefit of said James F. Drake. (7) He erred in holding that Mrs. Drake and Mrs. Hearn are estopped from denying the validity of said mortgage. (8) He erred in sustaining the plaintiffs' 7th, 9th, and 10th exceptions to referee's report, in overruling the referee's 1st and 4th conclusions of law, and in not dismissing the plaintiffs' complaint.
The respondents present the following grounds of support to the decree of the circuit judge: (1) Because the money obtained on the mortgage in question was for the benefit of the cestuis que trustent, and therefore the trust estate is liable for its payment, and equity will subject said estate to such purpose. (2) Because Mrs. A. E. Drake, the life tenant, had such an interest in the trust property for her natural life, under and by virtue of the trust deed, that a court of equity will subject such life estate to payment of debts contracted for benefit of trust estate and cestuis que trustent. (3) Because a...
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