Jones v. Galbraith

• Decision Date: 25 September 1900
• Citation: 59 S.W. 350
• Parties: JONES v. GALBRAITH et al.
• Court: Tennessee Supreme Court

59 S.W. 350

JONES v. GALBRAITH et al.

Court of Chancery Appeals of Tennessee.

September 25, 1900.

Appeal from chancery court, Knox county; George W. Henderson, Special Chancellor.

Action by Charles M. D. Jones, by next friend, against Galbraith & Maloney and others. From a judgment for plaintiff, defendants appeal. Modified and affirmed.

Sansom, Welcker & Parker, for appellants. Green & Shields, for appellee.

NEIL, J.

The bill in this case was filed on the 26th day of July, 1899, by Charles M. D. Jones, by his next friend, Sarah M. Jones, his mother, against H. H. Galbraith and G. E. Maloney, composing the firm of Galbraith & Maloney, and W. A. Galbraith, trustee. The bill alleges that John A. Jones died in Knox county in August, 1881, having first made his last will and testament, by which he devised to his wife, the complainant Sarah M. Jones, a life estate in certain real estate described in the bill, and to his three children by his wife, namely, Anna, Frank, and Charles M. D. Jones, the remainder interest therein; that this land consists of 165 acres lying immediately south of, and across the Tennessee river from, the city of Knoxville, and about 14 acres lying on the Woodlawn pike, in Knox county; that, ever since the death of John A. Jones, his widow, Sarah M. Jones, has been in the possession of the land, occupying the same as a life estate, with her three children residing with her, — her daughter being married to one Inslee King, but still living at the old home. The bill further alleges that Charles M. D. Jones, upon whose behalf the present bill was filed, obtained his majority about two years prior to the filing of the bill (that is, about July 26, 1897); that the said Charles M. D. Jones has from his infancy been in a weak mental and physical condition, to such an extent that he is incapable of making contracts, or transacting business, or taking care of his property and of his rights. It is further alleged that on July 25, 1899, the said Charles M. D. Jones conveyed by warranty deed his undivided one-third interest in the 165-acre tract and in the 14-acre tract above mentioned to the defendants Galbraith & Maloney, for the recited consideration of $1,000, and that they immediately, within an hour after the recording of the deed, placed a deed of trust thereon to the defendant W. A. Galbraith, trustee, for the purpose of securing G. E. Maloney in the sum of $1,000, borrowed money. It is further alleged that the said Charles M. D. Jones was at the filing of the bill, and also at the time of the execution of the deed just referred to, mentally incapable of making such contract and transfer; that he was then, and is now, and has been for many years past, of unsound mind. It is further alleged that consideration of $1,000 recited in the deed to have been paid by the defendants Galbraith & Maloney for the said land was not a full and fair consideration, but, on the contrary, was grossly inadequate; that said land, by reason of its close proximity to Knoxville, is of great value; that much land adjacent thereto has already been divided into town lots and improved as city property; that, by reason of the construction of the new county bridge across the Tennessee river at Knoxville, the property is rendered more valuable than it ever was; that it is now within a few minutes' walk of the court house. It is further alleged that the said Charles M. D. Jones has been overreached and defrauded by the said defendants Galbraith & Maloney, and that they have gotten his interest in the land for $4,000 less than its real value. This was followed by a prayer for proper relief. To this bill the defendants filed a demurrer on the 1st day of August, 1899, incorporated with their answer. The substance of the demurrer was that the bill nowhere tendered the $1,000 alleged to have been paid to Charles M. D. Jones for the property by the defendant, and in no wise offered to restore the same to the defendants. As stated, this demurrer was incorporated in the answer. The answer itself admitted the death of John A. Jones and the execution of his will, the existence of his widow and children as such, and referred to the will itself for a correct statement of its contents. It denied that Charles M. D. Jones was in such a state of weakness, mentally and physically, as to incapacitate him from making contracts. It further proceeded: "Respondents admit, as alleged in paragraph 4 of the bill, that on the 25th day of July, 1899, the complainant Charles M. D. Jones sold and conveyed by warranty deed, which is registered in the register's office of Knox county, Tennessee, his entire undivided interest in the lands of which his father, John A. Jones, died seised and possessed, to these respondents, for the recited consideration in said conveyance of $1,000 cash, which sum was by these respondents, there and then, upon the delivery of the deed, paid him by them; and it is further true that, within a very short time after the registration of said deed, respondents conveyed the same in trust to their co-defendant W. A. Galbraith, to secure $1,000 to G. E. Maloney, the $1,000 thus secured being the $1,000 paid said Charles M. D. Jones by them for said property. Respondents specifically deny that Charles M. D. Jones is, or was at the time of the execution of said contract and transfer, incapable of making same. They deny that he is now, was then, or has ever been of unsound mind. * * * The $1,000 consideration recited in said conveyance as the consideration for said interest is not the entire contract between the parties, as respondents will show during the progress of the cause, and in the course of its preparation." The answer then denies that the consideration was grossly inadequate, and all allegations of fraud made in the bill.

Proof was taken, and the cause came on for a hearing, but, before it was taken up on its merits, the defendants again called up their demurrer incorporated in the answer, which had been previously overruled, on the 5th of August, 1899, and again prayed the action of the court thereon, and it was again disallowed by the chancellor. Thereupon the complainant moved the court to be allowed to amend the bill so as to introduce the following matter: "Complainant, the 6th of May, 1900, by leave of the court, amends his bill, and shows to the court that since the filing of this bill it has developed in the proof that by an unrecorded contract the defendants contracted that, when they made sale for the interest of said Charles M. D. Jones, they would pay to the said Charles M. D. Jones one-half of the net proceeds of said sale over and above the $1,000 paid therefor, and interest, taxes, insurance, improvements, repairs, and other expenses; that said agreement should not constitute a lien on said property, but was simply a personal obligation of defendants. Complainant charges that said agreement is invalid, null, and void, for the same reason the said deed is null and void; that said price set out in said bill is grossly inadequate; that defendants thereby defrauded, imposed upon, overreached, and swindled Charles M. D. Jones, and that there is no lien or security that defendants would carry out the said contract, and not only so, but said lien is expressly cut off by the terms of the agreement; that by cutting off the lien the defendants not only deprived Charles M. D. Jones of his land, and of the security therefor, but that said personal obligation offers no protection whatever to said Charles M. D. Jones." This amendment was offered after both complainant and defendants had announced themselves ready for trial, and after the demurrer in the answer had been overruled, and the pleadings — the bill and answer — had been read. This amendment by leave of the court was entered on the margin of the bill. This motion to amend was resisted by the defendants on the following grounds: First, because it came too late; second, because the bill was sworn to, but the amendment was not; and, third, because the amendment raised a new question, namely, that of the solvency or insolvency of the defendants, which would require issue and proof. The defendants further insisted that in no event should the amendment be allowed at that stage of the cause, except upon the condition that the complainant would pay all of the accrued costs. The court, however, allowed the amendment, as already stated, overruling the defendants' objection thereto, and stating that the defendants would be accorded such reasonable time as was necessary for answering the amendment, and, if desired by defendants, a continuance would be granted by the court to afford them time to answer. The defendants, not wishing to delay the hearing, expressed their willingness to prepare their answer by the opening hour (9 o'clock a. m.) of the court the following day, and complainant expressed willingness, by counsel, to waive formalities, and take proof that afternoon, as though answer to the amendment had been filed and issue raised, whereupon the court adjourned at 2 o'clock p. m. to 9 a. m. the following morning, when the answer of the defendants and the deposition of G. E. Maloney were filed, and the hearing was proceeded with. The court, however, announced that, if defendants needed further time in which to take proof, a continuance would be granted. The defendants replied, announcing their readiness to proceed. The court declined to tax complainant with the costs as terms of the amendment. To this action the defendants excepted. Sundry exceptions were made to testimony, most of which were overruled by the chancellor. He thereupon rendered a decree rescinding the contract for fraud, gross inadequacy of consideration, but decreeing the defendants a lien for the $1,000 which they had paid. The defendants thereupon appealed, and have assigned errors.

The first error assigned is upon the action of the chancellor in overruling the demurrer. The second was to the...