Johnson v. Gordon
| Decision Date | 10 August 1897 |
| Citation | 30 S.E. 507,102 Ga. 350 |
| Parties | JOHNSON et al. v. GORDON et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. When a widow elects to take a gross sum in settlement of her claim for dower in her deceased husband's estate, the sum allotted to her should be estimated upon the basis of her age at the time of her husband's death, and upon the basis of the value of the lands of the estate at the time the gross sum is assigned to her; and she having, by virtue of her dower right, a vested interest in one-third of the accruing rents and profits, she should likewise be allowed that sum in addition to the value of her dower estate, estimated as above indicated, subject to any proper deduction on account of anything she may have received upon such rents and profits or to any fair charge against her for use and occupation of the realty.
2. Upon the death of a member of an insolvent co-partnership, the deceased member being himself solvent as to his individual debts, but insolvent when both his own and the debts of the partnership are taken into account, a court of equity, in administering, under the Code of this state, the assets of his estate, and at the same time adjusting the relative rights of the creditors of the partnership and the creditors of the deceased person, should decree: First, that the former, as a class, be allowed to exhaust the partnership assets, and that, in the distribution of the same to the members of this class, the priorities among themselves relatively to each other, be observed; second, that the individual creditors, as a class, be then paid from the individual assets of the deceased the same amount upon the total sum due this class as has been received by the partnership creditors from the partnership assets, and that in paying this amount upon the claims due this class, the priorities among its members, relatively to each other, shall likewise be observed; and, third, that the residue of the individual assets be then divided pro rata among both partnership and individual creditors,--also keeping in view in this division the priorities of the several debts participating, and preserving therein the dignity of liens and other secured debts.
3. If the partner whose estate is being administered has pledged a portion of his individual property as security for a debt of the partnership creditor, full effect should be given to the lien created by such pledge, and this result should be accomplished by having him first compete with the partnership creditors, as above indicated, and then having the balance of his claim, if any, satisfied out of the proceeds of the pledged property, without regard to whether there will remain a sufficiency of individual property to pay to the partnership and individual creditors, out of both partnership and individual effects, a proportion of their debts equal to the proportion received by such secured creditor in consequence of the security afforded to him by such pledged individual property. If, however, after so appropriating the sum realized from the property pledged there be still a portion of such secured debt unpaid, and there be a residue of individual effects after advancing individual debts and other partnership debts until they have received a percentage equal to that paid upon such secured debt, such residue should be applied to the debts of all the creditors, both individual and partnership, including such creditor, pro rata, preserving priorities as indicated in the second headnote supra.
4. Where, by separate deeds executed under section 1969 et seq. of the Code of 1882 (Civ. Code, § 2771), two separate promissory notes were severally secured, but at the same time, by collateral instruments, the debtor contracted that each conveyance should operate as a security for the note described in the other the effect of these instruments, construed together, was, as between the parties, to put in the creditor a title to all the realty described in both deeds, as a security for both notes; and such security was effectual, as against other creditors who acquired no lien, by judgment or otherwise, binding the property described in such deeds.
Error from superior court, Bibb county: W. H. Felton, Jr., Judge.
Equitable suit by W. M. Gordon, administrator, and others, against Laura B. Johnson and others, to marshal the assets of the estate. From the judgment rendered, defendants bring error. Reversed in part.
Ryals & Stone, John L. Hardeman, and Hardeman, Davis & Turner, for plaintiffs in error.
Steed & Wimberly, A. Lane, Smith & Jones, Hill, Harris & Birch, Anderson & Anderson, S. A. Reid, M. G. Ogden, A. Dasher, M. Erwin, Bacon, Miller & Brunson, Dessan & Hodges, and Gustin, Gurry & Hall. for defendants in error.
Johnson & Harris were a partnership engaged in business at Macon, Ga Johnson died April 14, 1893, and Harris was left as surviving partner. The partnership was insolvent. Harris was insolvent. The estate of Johnson was sufficient to pay his individual debts, but insufficient to pay both these and the firm liabilities remaining after applying to the latter the firm assets. On the death of Johnson, J. S. Rodgers, as his administrator, took charge of his estate. Subsequently he was removed, and W. M. Gordon was appointed administrator de bonis non. The widow of Johnson, with the assent of the administrator and the approval of the ordinary, on September 12, 1894, elected to take in lieu of her dower an amount of money to be estimated and determined by the commissioners appointed to assign dower. She agreed to accept certain lands, at the value fixed in the appraisement of the estate, in place of money, and pay to the administrator, in cash, any excess of appraised value over the amount awarded her in lieu of dower. The commissioners awarded her $20,931.55, which was on November 22, 1895, paid to her by the administrator in land, as agreed. This sum did not include rents and profits, or interest on dower, from the death of Johnson to date of payment, and all of her rights as to this were expressly reserved. It was agreed that the amounts of rents and profits, or interest on dower, were each $1,010.20 a year from the death of Johnson. The widow had occupied the mansion house from Johnson's death, and admitted her liability to account for its value for occupancy, which aggregated $6,500, if allowed the rents and profits or interest claimed. At the time of Johnson's death, he was indebted to the Macon Fire Insurance Company. This indebtedness was represented by two notes, each of which was secured by a deed to a separate piece of land. These notes were each in the usual form of a note secured by collateral, and recited that it was secured by such deed,--describing the deed given to secure it. Each note contained a clause stating that the collateral securing it should also secure any other debt due from Johnson to the insurance company. The firm was also largely indebted to the Exchange Bank of Macon, which indebtedness was partially secured by the pledge of certain shares of stock of the Planters' Real-Estate & Warehouse Company, the individual property of Johnson, delivered to the bank. After Johnson's death, Harris, as surviving partner, transferred to the bank, as further security for its debt, nearly all of the choses in action due to the late firm. With the approval and by order of the ordinary of Bibb county, and by direction of a decree of the superior court, Rodgers, as administrator, made a settlement with Harris, the surviving partner. By direction of this decree, in such settlement the estate of Johnson assumed the debts of the firm of Johnson & Harris, and agreed to pay Harris $2,000; the administrator giving him a note as evidence of the same. Harris, as surviving partner, under this agreement turned over certain assets of the late firm to the administrator of Johnson, including all notes and accounts not previously transferred to the Exchange Bank. On March 11, 1895, Gordon (as administrator de bonis non, and individually), with the Macon Fire Insurance Company and four other creditors of the firm of Johnson & Harris, brought an equitable suit to marshal assets, and for direction to the administrator in the payment of debts. The contentions and claims made at the trial, which are material to be here considered, were: (1) Mrs. Johnson's contention that the sum of $20,931.55, received by her in lieu of dower, should be augmented by the rents and profits (or interest on the sum assigned to her) from Johnson's death to November 22, 1895, less $6,500, the value for rent of the mansion; (2) the claim of the individual creditors of Johnson that they should be fully paid out of the individual assets before the firm creditors should be paid anything, or, if this was not allowed, that they should be paid on individual debts a sum equal to the amount received by the Exchange Bank pro rata upon its claims, before firm creditors should participate; (3) that the Exchange Bank should receive nothing from Johnson's estate until the individual creditors had received an amount pro rata on their claims equal to what the Exchange Bank had received from its collateral on its debts; (4) the claim of the Macon Fire Insurance Company, based upon the notes and security deeds held by it. The presiding judge, who, by agreement, tried the case without the intervention of a jury, overruled the contentions of the widow and of the individual creditors. He held that the sum allowed in lieu of dower was in full of all of the widow's claims, and that she should receive nothing for rents and profits or interest. He decided that all of the creditors (both individual and firm) were entitled to share equally in the estate of Johnson, the Exchange Bank sharing for the...
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