Clements v. Hollingsworth

• Decision Date: 12 September 1947
• Docket Number: 15908.
• Citation: 44 S.E.2d 381,202 Ga. 684
• Parties: CLEMENTS v. HOLLINGSWORTH.
• Court: Georgia Supreme Court

44 S.E.2d 381

202 Ga. 684

CLEMENTS v. HOLLINGSWORTH.

No. 15908.

Supreme Court of Georgia

September 12, 1947

The exceptions in this case are to the overruling of general and special demurrers to the petition as amended, and an ancillary petition as amended. There was also an oral motion to dismiss the ancillary petition as amended. By the pleadings the plaintiff sought to recover upon the theory of an implied or resulting trust, and prayed also for an injunction and general relief.

The suit was brought in the superior court of Macon County, on August 19, 1946, by Mrs. Gladys Hollingsworth, suing as executrix of the will of Mrs. Johnnie Bell Clements, against R. L. Clements, a resident of said county, as defendant.

As shown infra, paragraph 6 of the petition alleged that 'Mrs. R. L. Clements * * * is the same person as Mrs Johnnie Bell Clements,' and by an amendment that was later made to this paragraph, it was alleged that Mrs. R. L Clements was the wife of the defendant, R. L. Clements, at all times herein mentioned and up to the time of her death.

One amendment to the original petition and one amendment to the ancillary petition were offered and allowed before April 4 1947, the date of the first order to which exception is taken; the order being one in which rulings on demurrer were made. Two amendments to the petition (as distinguished from the ancillary petition) were allowed after that date; and on May 13 after allowance of the two last mentioned amendments, another order was passed overruling demurrers, to which final exceptions were taken.

Omitting formal parts, the amended petition as it existed on April 4, that is, without the two amendments that were allowed after that date, was substantially as follows:

1. The defendant, R. L. Clements, is a resident of the above State and county.

2. On or about April 5, 1943, the defendant received a check for $10,000; said check was payable to Mrs. Johnnie Bell Clements and was her property; and $10,000 of said check was deposited on or about April 5, 1943, in Citizens National Bank of Montezuma, Georgia, to R. L. Clements', the defendant's, special account.

3. First State Bank of Albany, Georgia, issued a cashier's check to H. H. Hedrick on March 30, 1946, same being for $4210.31. Said check was endorsed to Johnnie Bell Clements, or order, and 'he' in turn endorsed said check to Clements Hardware Company, and deposited the amount to the credit of Clements Hardware Company in Citizens National Bank of Montezuma, Georgia. Said check was the property of and belonged to Mrs. Johnnie Bell Clements.

4. The following checks were signed, 'Mrs. R. L. Clements, by R. L. Clements,' and were charged to her account; said checks were given in payment of debts owing or due by the defendant: (a) Check dated January 18, 1945, for $151,35, payable to W. T. Jolly; (b) check dated 3/6/46, for $66.21; (c) check dated 12/6/43, for $106.56, payable to B. C. Smith; (d) check dated 12/9/43, for $85.35, payable to the City of Montezuma. (It is stated in the brief of counsel for the plaintiff in error that the items set forth in paragraph 4 'were eliminated by agreement of counsel.')

4 1/2. Clements Hardware Company is R. L. Clements doing business under the style and name of Clements Hardware Company.

5. The plaintiff has demanded of the defendant an accounting for said $10,000 and $4,210.31, and now demands that he account for the same.

6. The 'checks above enumerated which were charged to the account of and paid from the account of Mrs. R. L. Clements, who is the same party as Mrs. Johnnie Bell Clements; defendant is indebted to plaintiff in said sums.'

The checks referred to in paragraphs 2 and 3 of the petition at the time they were delivered to the defendant were the property of Mrs. Johnnie Bell Clements and were not the property of the defendant. (This sentence was added by amendment March 7, 1947, after demurrer by the defendant had been filed.)

The prayers were that the defendant account to the plaintiff for the proceeds of the checks referred to in paragraphs 2 and 3, for judgment, and for process.

On March 19, 1947, the plaintiff filed a petition, entitled in the original cause, and denominated by her, an ancillary petition. This petition was in substance as follows:

1. The above suit was filed to the November term, 1946, of the Superior Court of Macon County, Georgia, and the same is ripe for trial at the May term of said court.

2. The defendant is indebted to the plaintiff as executrix for a large sum of money, as shown in the petition. The defendant, in an effort to avoid the payment of whatever judgment is obtained in said suit, is preparing and attempting to transfer all of the property of Clements Hardware Company, a business owned by him, to one Ham Company Inc.

3. The conveyance to Ham Company Inc. is in furtherance of a fraudulent scheme to cover up said property.

4. Upon completion of said sale to Ham Company Inc., a corporation is to be formed to take over said property, and the intent and purpose of all of these transactions are to defraud plaintiff.

5. Upon the consummation of said sale, the defendant, R. L. Clements, would be insolvent.

6. The money sued for in the original petition is held by the defendant in trust for the estate of Mrs. Johnnie Bell Clements.

Wherefore, the plaintiff prays: (a) That said R. L. Clements be enjoined from disposing of his stock of goods to the said Ham Company Inc., and said Ham be enjoined from purchasing same either for himself or for other parties; (b) that the defendant, R. L. Clements, be enjoined from changing the status quo of said business, except such changes as might occur in operating same in the ordinary and usual way; (c) for such other and further relief; (d) that process issue.

The petition was verified by the affidavit of one of the plaintiff's attorneys, who deposed only that the facts alleged in the foregoing petition 'are true to the best of his knowledge and belief.' On presentation of this petition, Honorable W. H. Harper, judge of the circuit, passed an order, enjoining the 'defendant, R. L. Clements, and Ham * * * as prayed until further order of this court,' and requiring 'said parties' to show cause on March 25 why the injunction should not be continued. It appears that the interlocutory hearing as ordered for March 25 was not had until March 29, and the judge then reserved his decision until April 4. The plaintiff, however, on March 29, by leave of the court, amended her 'ancillary petition,' as follows:

1. Clements Hardware Company is a trade name under which the defendant operates.

2. The money sued for in this case is held by the defendant as a trust fund, and the same can be traced into Clements Hardware Company, having been used by the defendant in said business.

3. Unless the defendant is enjoined from disposing of Clements Hardware Company, the plaintiff will be without adequate remedy at law and necessarily there will be a multiplicity of suits.

4. By adding to the prayer, subsection (3), that the defendant be declared to hold such funds as may be found due the plaintiff in trust and to account for the same as trustee.

Verification was again by affidavit of the attorney, who deposed that the 'facts alleged in the foregoing amendment are true and to the best of his knowledge and belief.'

At the interlocutory hearing on March 29, the defendant renewed original general and special demurrers, which he had filed to the original petition, and also demurred generally and specially to the petition as amended, and to the ancillary petition as amended. There were numerous grounds of special demurrer, but only three of them need be stated. One ground of special demurrer, numbered 3, assailed paragraph 3 of the original petition, for the 'reason that nowhere in said paragraph nor in the petition is it alleged the manner in which the defendant is responsible for a check alleged to have been received and deposited by the Clements Hdw. Company.'

Two grounds of special demurrer to the ancillary petition were as follows:

'6. Defendant demurs specially to paragraph 6, upon the ground that the allegations therein are conclusions of the pleader with no allegations upon which to base the same.

'7. Defendant demurs specially to said petition for the nonjoinder of proper parties thereto, and defendant says hereby that Ham Company Inc. and _____ Ham are necessary parties to said bill, inasmuch as it is alleged in paragraph 2 of said ancillary petition that this defendant is attempting to transfer the property of the Clements Hwd. Co. to Ham Company Inc.; said petition alleges in paragraph 3 that the conveyance to Ham Company Inc. is in furtherance of a fraudulent scheme to cover up said property; that said petition alleges in paragraph 4 that, upon completion of said sale to Ham Company Inc., a corporation is to be formed to take up said property, and the intent and purpose of all these transactions are to defraud plaintiff; that said petition prays, (a) 'and the said Ham be enjoined from purchasing same either for himself or for other parties.'

'Defendant shows that none of the parties mentioned herein are made parties to this proceeding.'

On April 4, 1947, Judge Harper passed an order reciting that at the interlocutory hearing certain evidence was introduced and the defendant urged demurrers on general and special grounds, to the original petition and to the said petition as amended, and also to the ancillary petition, and to the amendment to the ancillary petition, and to the ancillary petition as amended; whereupon the court reserved decision. The order then proceeded to overrule all grounds of demurrer, general and special, except paragraph 3 of the original...