Kirklin v. Atlas Savings & Loan Ass'n.

• Decision Date: 06 September 1900
• Citation: 60 S.W. 149
• Court: Tennessee Supreme Court
• Parties: KIRKLIN et al. v. ATLAS SAVINGS & LOAN ASS'N.

Page 149

60 S.W. 149

KIRKLIN et al. v. ATLAS SAVINGS & LOAN ASS'N.

Court of Chancery Appeals of Tennessee.

September 6, 1900.

Appeal from chancery court, Hamilton county; T. M. McConnell, Chancellor.

Suit by George W. Kirklin, Jr., and others, by next friend, against the Atlas Savings & Loan Association, to establish the right of the minor plaintiffs to certain land, and to restrain the defendant from interfering with the possession thereof. From a decree in favor of defendant, plaintiffs appeal. Affirmed.

Shepherd & Frierson, for appellants. Daniels & Garvin and T. C. Latimore, for appellee.

WILSON, J.

This bill was filed May 4, 1899, by a next friend of the minor complainants, George W., Mary S., and Charles A. Kirklin, to establish the right of said minors to a tract of land (described) in Catoosa county, Ga. Incident to this relief, an injunction was prayed, to restrain the defendant from interfering with the possession of the farm by complainants, and for a removal of its claim, as a cloud upon their right thereto, and that, if this could not be done, the defendant be held liable for the value of the interest of complainants at the time it intermeddled with their rights in and to their property, located at St. Elmo, in Hamilton county, Tenn.

The original bill averred, in substance, this state of facts: (1) That prior to May 21, 1892, the minor complainants were the owners of the fee in valuable real estate situated at St. Elmo, in Hamilton county, — the life estate therein being in their father, G. W. Kirklin, Sr., who was their regular guardian, — and that a part of this land had been sold under the orders of the chancery court, and the proceeds expended, under the direction of the court, in improving the remainder so as to put it on a revenue producing basis. (2) That George W. Kirklin, Sr., for himself and as the guardian of the minor complainants, May 26, 1892, assumed to make a contract with W. G. Cook, of Catoosa county, Ga., by which he bound himself to convey to said Cook the property aforesaid, at St. Elmo, consisting of four houses and lots, for $7,000, and that Cook, as a method of paying for said houses and lots, bound himself to convey to George W. Kirklin, Sr., for life, with remainder in fee to complainants, a large and valuable farm in Catoosa county, Ga., and a lot of stock and farming utensils thereon, and that these parties executed to each other title bonds; it being a part of the contract and understanding between them that Kirklin, Sr., should file a bill in the chancery court to have it ratify the contract for the exchange of the properties, and to have deeds made in conformity to it. (3) That the contracts between Kirklin, Sr., and Cook were drawn up by the general attorney of the defendant, in its office, and were acknowledged before one James, a director of the defendant (he being also a notary public), and that immediately upon the execution of said contracts, May 26, 1892, complainants, with their father and mother, moved to the farm in Catoosa county, Ga., took possession of the same, and proceeded to cultivate it, and that they still reside on it as a home. (4) That, at the time the contracts aforesaid were being made, Cook had negotiations pending with defendant to borrow from it $1,600 on the security of the St. Elmo property aforesaid, but as he needed the money at once, and could not then mortgage said property, inasmuch as the contract of Kirklin, Sr., conveying it, had to receive the approval of the chancery court, defendant and Cook resorted to the expedient of taking a mortgage from Cook on the Catoosa county farm which he (Cook) had already sold by title bond to Kirklin, Sr., and complainants, and that Cook did make a deed of trust conveying said Georgia farm to the Citizens' Bank & Trust Company of Chattanooga, as the trustee of the defendant, to secure a loan from it of $1,600. (5) That, shortly after this, Kirklin, Sr., to wit, July 23, 1892, as guardian of the complainants, filed a bill in the chancery court at Chattanooga (its docket number being 6,295) stating the trade between him and Cook, and alleging that it was an advantageous one, and ought to be ratified by the court; that the court referred the cause to its master, to hear proof and report whether or not it was to the manifest interest of the minors to ratify the trade; that the master heard the proof, and among the items of evidence produced by the parties was the deposition of the keeper of record of conveyances in Catoosa county, Ga., which exhibited Cook's chain of title, and showed that his title to the Catoosa county farm in question was unincumbered; and upon the evidence the master reported in favor of confirming the trade between Kirklin, Sr., and Cook, and the report was confirmed, and a decree entered vesting Cook with title to the St. Elmo property, and Kirklin, Sr., and complainants with title to the farm in Catoosa county, Ga. (6) That Cook died, and the St. Elmo property conveyed to him as aforesaid was sold by his devisee under the will to an innocent purchaser, and thus has been put beyond the reach of complainants. (7) Upon information and belief, that the expedient of Cook giving a deed of trust on the farm in Georgia to the aforesaid bank and trust company for the benefit of the defendant was, by the contract of the parties, to be only a temporary arrangement; the agreement being that when Cook got a title, through the chancery court proceeding, to the St. Elmo property, this said deed of trust was to be transferred from the Georgia farm to it. (8) That all the papers between Cook and Kirklin, Sr., were drawn by one of the general officers of the defendant, in its office, and were acknowledged before another of its officers or directors, and that the defendant had notice when it took the deed of trust of Cook on the Georgia farm that Cook had previously conveyed it by title bond to Kirklin, Sr., for life, with remainder in fee to complainants, and that proceedings would be instituted in the chancery court to ratify the trade or transaction. (9) That Cook made default in the payment of the debt to the defendant, secured by the trust deed on the Georgia farm, and the farm was advertised and sold under the trust deed (the sale being made in front of the court house in Chattanooga), and at the sale was bid in by the defendant, who took a deed thereto from the trustee, under which it is claiming title against complainants, and is about to take steps to eject them. (10) That the several contracts between Kirklin, Sr., and Cook and the defendant were a fraud upon the rights of complainants, and that defendant had notice of the contracts between Kirklin, Sr., and Cook before it took its deed of trust from the latter, and that, if defendant is allowed to prevail by its fraudulent title to said farm, it will result in despoiling complainants of their estate. (11) That the decree of the court confirming the deed of their guardian to Cook to their St. Elmo property is not open to attack, and, the devisee of Cook having sold the same to an innocent purchaser, said purchaser got a good title thereto, and hence this property is beyond their reach. (12) That Cook's devisee is dead, and died insolvent, so that, if a judgment were recovered against her or her representative on account of Cook's breach of the covenants in his deed, it would give no relief, as Cook died insolvent. (13) That a gross fraud was perpetrated upon the chancery court, by which it was made the medium of robbing complainants of their property, and the condition of affairs that made such a thing possible was brought about by the defendant, its agents and officers, and that it should suffer, rather than the minor complainants, who had no capacity to speak and act in the preservation of their rights. (14) That at the time of said trade the property at St. Elmo was worth $7,000, and the interest of complainants therein $5,000, and that it was all the property they had. The prayer of the bill is as stated in the beginning of this opinion. An injunction issued thereunder.

The defendant answered the bill May 31, 1899. (1) It admits that the complainants were, prior to May 26, 1892, owners of the remainder interest in fee of the St. Elmo property described in the bill, and that their father was their regular guardian, and the owner of the life estate in said property. (2) That a part of the St. Elmo real estate was sold, under the orders of the court, to secure funds to improve the balance. (3) That May 26, 1892, George W. Kirklin, Sr. for himself and as guardian of complainants, made a contract with W. G. Cook, of Catoosa county, Ga., binding himself to convey to said Cook four lots, and the improvements thereon, situated in St. Elmo, Hamilton county, Tenn., and that Cook, in consideration therefor, bound himself to convey to said Kirklin the farm in Catoosa county, Georgia, described in the bill, and that this contract between George W. Kirklin and Cook was evidenced by title bonds executed by the parties, in the penalty of $7,000 each. It denies that the St. Elmo property was worth $7,000, and alleges that this sum is in excess of the value of said property or of the Georgia farm. It denies that the Cook contract was to convey the Georgia farm to Kirklin, Sr., for life, with remainder in fee to complainants, but alleges, on the contrary, that Cook agreed to convey the same absolutely to said Kirklin, Sr. It admits, on information and belief, that Kirklin, Sr., under the contract between him and Cook, was to file a bill in the chancery court to have the contract ratified, and deeds made in conformity thereto, but denies that it knew of the contract, or that complainants had any interest in the St. Elmo property, or that it heard of this until long after these transactions had occurred. It denies that the contracts between Cook and Kirklin were drawn up, made, and signed in its office, but says, on information, that the...