Clark v. Leverett

Citation159 Ga. 487,126 S.E. 258
Decision Date16 December 1924
Docket Number(No. 4329.)
PartiesCLARK v. LEVERETT et al.
CourtSupreme Court of Georgia
159 Ga. 487

126 S.E. 258

CLARK
v.
LEVERETT et al.

(No. 4329.)

Supreme Court of Georgia.

Dec. 16, 1924.


Rehearing Denied Jan. 23, 1925.

(Syllabus by the Court.)

Russell, C. J., and Gilbert, J., dissenting.

Error from Superior Court, Meriwether County; C. E. Roop, Judge.

Suit by L. C. Clark, guardian, against H. B. Leverett, guardian, and others. Judgment for defendants, and plaintiff brings error. Reversed.

An equitable petition was filed by L. C. Clark against H. B. Leverett and W. B. Butts, which as amended alleges, in substance: That plaintiff was appointed by the ordinary of Meriwether county as guardian for Joycie Ruth Butts, a minor, and qualified on January 31, 1922; that H. B. Leverett had previously been the guardian of the minor named, but his letters of guardianship had been revoked; that the bond of Leverett for $20,000, conditioned upon the faithful performance of his duties as guardian, was signed by W. B. Butts as security; that Mrs. Joycie Leverett, wife of H. B. Leverett, had by her will bequeathed to H. B. Leverett an estate for life in a certain house and lot together with the furnishings of the house, with remainder to Joycie Ruth Butts; that Leverett went into possession of said property as life tenant under said will; that, while acting as guardian and executor of the will of Mrs. Leverett, H. B. Leverett insured the house and furniture mentioned for an aggregate of $4,500; that H. B. Leverett was named as the assured in the policy; that the property insured was subsequently destroyed by fire; that the sum of $4,349.15 was collected by Leverett under said policy of insurance; that he asserts that this fund belongs to him individually and that the minor named has no interest whatever in the same; that he fails to account for the same or to secure the same that it may be forthcoming at his death for the benefit of the remainderman; that he is entitled to deduct from the amount collected the amount paid by him as premium upon the insurance; that at the time of the collection of the money under said policy H. B. Leverett and W. B. Butts were engaged in business under the firm name of H. B. Leverett & Co.; that

[126 S.E. 259]

said fund was used to pay indebtedness of said firm and in purchasing new stock; that W. B. Butts knew the money so used by said firm was the money collected by Leverett under said policy of insurance; that Leverett, being old and feeble in body and mind, is being unduly influenced, dominated, and controlled by W. B. Butts; that Butts manipulated and managed the obtaining of said insurance with the purpose and object of getting the benefit of the same for himself and converting it to use in his own behalf; that there was collusion between the defendants to get and receive the benefit from said insurance; that since the burning of the property W. B. Butts, in order to defraud and hinder and delay plaintiff and his other creditors, conveyed large quantities of real estate and personal property to his wife; that W. B. Butts has removed from the land mentioned the bricks and stones used as pillars and chimneys, thereby committing waste upon the property of petitioner's ward; that both defendants are insolvent, having disposed of the mercantile business mentioned; that, considering the amount of the bond, the security is insufficient; that both defendants, composing the firm of H. B. Leverett & Co., are jointly and severally liable and bound to account to petitioner for the amount collected under said insurance policy.

The prayers are (a) that Leverett, as guardian, be required to account to petitioner, as guardian, for the amount collected under said policy of insurance, after deducting the amount paid as premium, and to give bond with security for the preservation and forthcoming of the same at the death of himself as life tenant; (b) that Butts, security for Leverett, guardian, be equally bound to account for said sum; (c) that, upon failure of the defendants to account for and secure said sum, judgment be rendered against them jointly and severally; (d) for general relief; (e) that, upon failure of Leverett to comply with the prayers, he be required to pay said fund over to a trustee to be named by the court; and that, upon his failure to do this Butts be required to pay the same to a trustee; that the trustee be required to use said fund as directed by the court, and pay the interest from the same over to Leverett during his life.

The defendants demurred generally to the petition, upon the grounds: (1) The same falls to set forth a cause of action; (2) there is a misjoinder of parties, because the facts alleged are insufficient to show that W. B. Butts should be made a party, or that any property has come into the hands of Leverett as guardian which should be accounted for by said Leverett as guardian to the ward or to the plaintiff at the time of commencement of the suit; (3) the petition is multifarious because it sets out separate and distinct causes of action, in that it seeks to sue Leverett as principal in the breach of a guardian's bond and Butts as security on said bond, and also to sue Leverett and Butts severally and jointly and equally as members of the firm of Leverett & Co. for trust funds used by the said Leverett in the aforesaid partnership; (4) that the suit is prematurely brought, because the petition shows on its face that the life tenant under the will of Mrs. Leverett is entitled to the custody, control, use, benefits, and profits arising from the insurance collected by H. B. Leverett for and during his natural life, and he is not bound to account to any person for the same, also that no money arising from said insurance has ever come into his hands as guardian for said minor, and there is nothing in his hands for which he should account as such guardian; (5) that the petition is without equity, and plaintiff has a complete and adequate remedy at law, which should arise in the court of ordinary if said bond is not sufficient as alleged. There are several grounds of special demurrer. The court sustained the general demurrer and dismissed the petition, and error was assigned upon that judgment

Jones & Jones and N. F. Culpepper, all of Greenville, for plaintiff in error.

J. F. Hatchett and H. H. Revill, both of Greenville, for defendants in error.

HIKES, J. 1. Where a policy of insurance to the full value of the property is taken out by the life tenant for his own use, and the premises are destroyed by fire, and the full insurance is collected by him, the authorities on the question of the rights of the remaindermen in the proceeds of the insurance money are in conflict. Different rules have been adopted by different courts. We may designate them as the Massachusetts, Rhode Island, and South Carolina rules. The Massachusetts rule is as follows: "A life tenant is not required to use the proceeds of insurance obtained by him on a total loss of buildings insured in his own interest, in rebuilding on the premises, and cannot be held accountable to the remaindermen for such money, even if it amounts to more than the value of the life tenant's interest, " and is equal to the whole value of the property destroyed. Harrison v. Pepper, 166 Mass. 288, 44 N. E. 222, 33 L. R. A. 239, 55 Am. St. Rep. 404. The Rhode Island rule is this: If the policy covers merely the life tenant's interest, he is entitled to the insurance in full; but if the policy is issued to him for the full value of the fee and this amount is recovered by him, he is a trustee for the remainderman as to the excess of the amount received over the value of his life interest. Sampson v. Grogan, 21 R. I. 174, 42 A. 712, 44 L. R. A. 711. The

[126 S.E. 260]

South Carolina doctrine is this: Moneys collected by a life tenant upon a policy of fire insurance upon a building subject to the tenancy, though the premium has been paid with the personal funds of the life tenant, stand in place of the property destroyed, and should therefore be used in rebuilding it, or should be held by the life tenant for the benefit of the remainderman after such tenant's death, in which case the life tenant would be entitled to the interest on the fund during his life. Green v. Green, 50 S. C. 514, 27 S. E. 952, 62 Am. St. Rep. 846.

The question involved in this case has never been passed upon by this court; and we are now required to lay down the true rule applicable under the facts of this case. We are now free to establish in this state such rule. The Massachusetts doctrine is based upon two propositions. One is, that, in the absence of anything that requires it in...

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