Marx v. Clisby

• Decision Date: 29 June 1901
• Citation: Marx v. Clisby, 130 Ala. 502, 30 So. 517 (Ala. 1901)
• Parties: MARX ET AL. v. CLISBY ET AL.
• Court: Alabama Supreme Court

30 So. 517

130 Ala. 502

MARX ET AL. v. CLISBY ET AL.

Supreme Court of Alabama

June 29, 1901

Appeal from city court of Birmingham; W. W. Wilkerson, Judge.

Bill by Warner C. Clisby and others against Otto Marx and others. Decree for complainants, and defendants appeal. Reversed.

All the complainants except Warner C. Clisby are under the age of 21 years, and sue by their next friend. This is the second appeal in this case. On the former appeal the decree of the chancellor overruling the demurrers to the bill as originally filed was affirmed. After the affirmance of this decree the bill was amended by striking out the portion thereof which averred that the mortgage by A. A. Clisby was given by him individually, or to secure individual debts. The bill as amended averred that Fannie T. Clisby died testate in January, 1889, leaving her husband, A. A. Clisby, and the complainants, surviving her; that at the time of her death she was possessed of a large estate of real and personal property; that her will was duly probated in March, 1889, and by said will, after providing for several legacies of personal property, she devised all the remainder of her estate, both real and personal, to her husband, Alfred A Clisby, upon certain trusts for the benefit of her children that said A. A. Clisby was nominated as executor of the will of Fannie T. Clisby, and after the probate thereof he entered upon the discharge of his duties as executor of said will and as trustee under it; that out of the rents and profits received from said estate A. A. Clisby, as trustee under said will, purchased a lot in the city of Birmingham, which is the subject-matter of the present suit, from D. R. Maddox; that the deed from Maddox was executed on May 12, 1891, and conveyed said lot to "A. A. Clisby, as trustee for Warner Clisby, Louise Clisby, Angus Clisby, Kathleen Clisby and John H. Clisby, under and by the will of Fannie T Clisby, deceased; *** to have and to hold to the said A. A Clisby, as trustee as aforesaid, his heirs and assigns forever"; that prior to the purchase of said lot from Maddox, to wit, on May 4, 1889, A. A. Clisby, being indebted, as executor of the will of Fannie T. Clisby, to one Samuel Hirsh, in the sum of $12,500, to secure said indebtedness executed to said Hirsh a mortgage upon certain property which belonged to Fannie T. Clisby at the time of her death, and which adjoined the lot purchased from Maddox; that at the maturity of this mortgage debt, on May 4, 1892, said Hirsh agreed to an extension of such mortgage indebtedness for two years on condition that A. A. Clisby would execute a mortgage to him on the lands which had been conveyed to A. A. Clisby, as trustee, by Maddox, in addition to the lands included in the mortgage from Clisby to Hirsh executed in 1889, and that, in order to secure the extension from Hirsh, A. A. Clisby executed such mortgage; that the extension in the time of payment of the indebtedness was the only consideration for including in the mortgage the lot conveyed to Clisby, as trustee, from Maddox, and this mortgage, as well as the first, was duly recorded in the office of the judge of probate. It was then averred in the bill that, default being made in the payment of the mortgage debt, the said last mortgage to Hirsh was foreclosed under the power of sale contained therein on September 22, 1894, and said Hirsh became the purchaser at said sale; that on April 21, 1896, said Samuel Hirsh sold and conveyed said lands to Steiner Bros., and from said Steiner Bros. the lot involved in this controversy passed by mesne conveyances to the defendant Otto Marx. It was then averred that the said A. A. Clisby had no power, as trustee, as executor, or otherwise, to include the lot in controversy in the mortgage given by him to Samuel Hirsh; that said lot was conveyed by Maddox to A. A. Clisby as trustee, and purchased with the rents and incomes arising from the property owned by Fannie T. Clisby at the time of her death, and that, therefore, those claiming said lot under A. A. Clisby took the legal title to said lands with notice that said title was burdened with a trust for the benefit of complainants set out in the will of Fannie T. Clisby, deceased. Otto Marx, Cornelia A. Sellew, through whom said Marx immediately claimed, and A. A. Clisby, as executor of and trustee under the will of Fannie T. Clisby, were made parties defendant to the bill. The prayer of the bill was that the several conveyances of the lot in controversy "be held and decreed to have been subject to the equitable rights of complainants as beneficiaries under said deed executed by said D. Maddox and under said will; that said Cornelia A. Sellew and said Otto Marx be required to account to complainants for the rents of said land received by each of them respectively; and that all title in said lands be devested out of said Cornelia A. Sellew and said Otto Marx, and be vested in said Alfred A. Clisby, to be by him held for the use and benefit of complainants on the trusts set out in said will; and for such other, further, and general relief as complainants may be entitled to." The will of Fannie T. Clisby and the several conveyances referred to were made exhibits to the bill. The first provision of the will as to the trust under which A. A. Clisby was to hold the property real and personal, conveyed to him for the benefit of the complainants, was in the following language: "To keep the same together for and during his natural life, and during that time to manage, control, and use the same for the benefit of my children, Warner Clisby, Louise Clisby, Angus Clisby, Kathleen Clisby, Leonard Clisby, and all other children that may hereafter be born unto me, and it is my further will and desire that in the managing and control of said property and the expenditures of the rents and profits thereof for the purposes aforesaid my said husband and trustee shall use his own discretion and exercise his own judgment, and that he shall not be held to account by my said children for his actings and doings, or for the manner of expending and using the rents and profits aforesaid, during his said life, but that he shall be free from liability to so account during his said life." The will also contains the following provision in reference to the powers of A. A. Clisby as trustee: "My said husband and trustee shall also have the power, and he is hereby authorized, to mortgage any or all of the real estate that I may die owning (legally or equitably) in the state of Alabama for the purpose of raising such amount or amounts of money as he may find necessary to pay my debts, including the indebtedness of others assumed by me, as part of the consideration of sales of real estate made by me, and shall apply the proceeds arising from the mortgage or mortgages as aforesaid to the payment of said indebtedness by me; and, if he cannot raise sufficient money for said purpose by mortgaging said property in whole or in part, then he is hereby authorized and empowered to sell at public or private sale such portions of my said estate as is absolutely necessary for that purpose and thus paying said indebtedness; said sale to be at such price and on such terms as my said trustee shall think for the best interest of my estate." There was a decree pro confesso against A. A. Clisby. The defendants Otto Marx and Cornelia A. Sellew filed a joint and separate answer to the bill, in which they set up that the money borrowed by A. A. Clisby from Samuel Hirsh was borrowed and solely used for the purpose of paying off the debts which were owing by said Fannie T. Clisby at the time of her death; that in borrowing and using said money A. A. Clisby did not act for his own benefit, but for the exclusive use and benefit of the estate of Fannie T. Clisby; that the second mortgage to Hirsh, executed on May 4, 1892, to secure the extension of the indebtedness, and in which the lot in controversy was included, was executed to avoid a sale and sacrifice of the mortgage first given, and to give the complainants the benefit of retaining the possession of said property; and that by reason of such extension A. A. Clisby, as executor and trustee under the will, remained in possession of the lot first conveyed in the mortgage to Hirsh for more than two years, during which time he received of the rents and profits of said lot, for the benefit of complainants, a much larger sum of money, amounting to about $5,000, and that by reason of the execution of each of said mortgages the debts of the estate of Fannie T. Clisby were paid, which resulted in benefits to the complainants, inasmuch as their interest in the estate was bound for the payment of such indebtedness; and that, therefore, it would be against conscience and inequitable for complainants to repudiate the authority of Clisby, as trustee and executor, to execute said mortgage, and at the same time retain the benefit which they derived by reason of the same. There was an agreed statement of facts in the case, the substance of which is sufficiently set forth in the opinion. On the final submission of the cause upon the pleadings and proof the chancellor rendered a decree granting the complainants the relief prayed for, and ordering that all title in and to the lot in controversy be devested out of Cornelia A. Sellew and Otto Marx and invested in A. A....