Lavenstein v. Plummer

• Decision Date: 13 April 1942
• Citation: 19 S.E.2d 696
• Court: Virginia Supreme Court
• Parties: LAVENSTEIN. v. PLUMMER.

19 S.E.2d 696

LAVENSTEIN.

v.PLUMMER.

Supreme Court of Appeals of Virginia.

April 13, 1942.

Appeal from Hustings Court of Petersburg; Richard T. Wilson, Judge.

Suit by Sadye L. Lavenstein against Charles E. Plummer, trustee, to enjoin a sale of property under a trust deed. From a decree dissolving a temporary injunction, complainant appeals.

Affirmed.

Before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, JJ.

J. H. Lavenstein, of Petersburg, for appellant.

Willis W. Bohannan, of Petersburg, for appellee.

HOLT, Justice.

For some years prior to 1931, M. E. Lavenstein, H. H. Lavenstein and A. L. Lavenstein were prominent business men in Petersburg. As the Lavenstein Corporation, they conducted a department store. As the Lavenstein Realty Corporation, they dealt in real estate, as they did through the DuPont City Development Company.

As of July 13, 1931, the Lavensteins in their several capacities were indebted to the Petersburg banks in these sums: There was then due from the Lavenstein Corporation to the National Bank of Petersburg $18,718.92, and from the Lavenstein Realty Corporation, $22,194.49--a total of $40,913.41. There was also due from these corporations to the Virginia National Bank of Petersburg $38,350, all of which was secured by collateral.

At that time the Lavensteins needed more money and applied to the National Bank of Petersburg for an additional loan of $25,000. This loan the bank was willing to make provided it was adequately secured and suggested that the wives of the Lavensteins endorse the note or notes to be executed; that life insurance policies be deposited and that certain deeds of trust be given. These wives declined to become endorsers, but life insurance policies were assigned and deeds of trust given.

Mrs. Sadye L. Lavenstein, wife of A. L. Lavenstein, was willing to and did execute as collateral a note for $4,000, secured by a trust deed on certain real estate in Petersburg. Mr. A. L. Lavenstein estimates the value of this collateral as of July, 1931, at $150,000, exclusive of the life insurance policies. From them there was later realized $26,093.39; that is to say, the value of these securities was then somewhere around $175,000.

It is the contention of Mrs. Lavenstein that her $4,000 note and the trust deed securing it were executed with the understanding that when the sum of $25,000 should have been paid on the Lavenstein indebtedness, independent of the sources from which it came, her note should be returned to her and her trust deed released. It is the contention of the trustee that all collateral deposited with the bank when the $25,000 loan was made was given to secure not only the money then loaned but all of the Lavensteins' preexisting indebtedness; that the assignment was unconditional and given to secure all indebtedness then or theretofore incurred.

It was the intention of Mr. Plummer, who was trustee in the $4,000 trust deed, to sell the land conveyed to him and to apply the proceeds of sale on the general indebtedness due to the National Bank of Petersburg. He was president of that bank when the $25,000 loan was made. This suit was brought to enjoin that sale, and in accordance with the prayer of the bill, a temporary injunction issued. It was afterwards dissolved, and it is from that decree of dissolution that this appeal has been taken.

This case turns upon evidence. Little law is involved and as to it there is no dispute. Since the evidence is in the form of depositions, we take it de novo; subject, however, to this qualification: The judgment of the chancellor below is presumed to be correct and stands until error has been pointed out.

Mr. A. L. Lavenstein explained to his wife what the Lavensteins wished to do and what the bank was willing to do. She told her husband that under no circumstances would she endorse for the $25,-000 loan. She was willing, however, under certain conditions and as collateral, to give her secured note for $4,000.

"I did tell him that I would be willing to give him whatever collateral I had; which was my lot on Westover Avenue, with the understanding, however, that this would be collateral on a new loan that would be taken care of or reimbursed first. In other words, I told him that I would give this collateral with the understanding that the first money paid back should be applied to this $25,000.00 loan and when the first $25,000.00 had been paid in that I would get back my collateral note."

This confidential conversation between husband and wife has no evidential-value, save that it makes plain the contention which Mrs. Lavenstein is now making.

Mr. A. L. Lavenstein has also testified, in the course of which he said:

"At the time that this loan was being made, Mr. Charles Plummer called a meeting of the Lavenstein brothers, Moses E. Lavenstein, Harry H. Lavenstein and A. L. Lavenstein, in his private law office. He stated that you boys want a loan of $25,-000.00. In order to get this loan through --now understand, fellows, I am not asking for any collaterals for the loans that you already have--we are perfectly satisfied with the papers that we are holding-- but in order to get this loan through-- I would ask that you, individually, furnish me with all the real estate that you may own personally and also your life insurance policies, together with your wives' signatures and their personal properties, if they own same. Moses Lavenstein answered him that we will take this under consideration, and we will bring you a list of what we own personally and we will take the other end of it up with the wives."

He further said:

"I went back on the following morning to see Mr. Plummer. I met him at his office as he was leaving for Richmond. He stated that he had an appointment and had to be in Richmond within the next hour and that I could speak to Mr.-Buck Franklin and that when he got back he would take it up with him."

Mr. Franklin was then the bank's vice president. Mr. Lavenstein said that he explained to him the conditions under which his wife was willing to give her $4,-000 note.

On the following morning, he was called to the telephone by Mr. Owen, who told him that Mr. Franklin wished to speak to him, whereupon the following conversation over the telephone took place:

" * * * I picked up the receiver and this was his remark: 'Abe, I spoke to Charlie, and it won't be necessary for any of the wives to sign that note, but it will be all right for you to get your wife to fix up the collateral note, and when this $25,000.00 is paid...