People's Nat. Bank v. Cleveland

• Decision Date: 08 April 1903
• Citation: 44 S.E. 20,117 Ga. 908
• Parties: PEOPLE'S NAT. BANK OF SHELBYVILLE, TENN., v. CLEVELAND et al.
• Court: Georgia Supreme Court

44 S.E. 20

117 Ga. 908

PEOPLE'S NAT. BANK OF SHELBYVILLE, TENN., v. CLEVELAND et al.

Supreme Court of Georgia

April 8, 1903

Syllabus by the Court.

1. Petitioners brought their equitable petition in this state against a domestic and a foreign corporation--the latter having no agency or place for doing business in Georgia--claiming that they were the real owners of certain shares of stock of the domestic corporation, the certificate of which was held by the foreign corporation as transferee and prayed for a decree canceling the transfer, removing the cloud upon their title to such shares, and adjudging that they were entitled to the same. Held:

(a) The shares of stock were personal property, and, for the purposes of this suit, their situs was the domicile of the domestic corporation.

(b) The foreign corporation could be legally served by publication under Civ. Code, § 4976, providing that in suits brought to remove a cloud from, or to quiet the title to, property in this state to which a nonresident claims title, or an interest therein, such nonresident may be served by publication.

(c) When, in such a suit, service was duly perfected upon the nonresident defendant by publication, the proceeding against him was by due process of law.

2. In an equitable proceeding of this character there was no misjoinder of causes of action; the plaintiffs having one connected interest, centering in the point in issue, or one common point of litigation with the defendant.

3. The shares of stock in question having been bequeathed to a trustee, who, under the provisions of the will, was to pay over to a life tenant the dividends thereon for his support and maintenance--the corpus of the trust estate, upon the death of the cestui que trust, to go to remaindermen--and the original petition having been brought by the trustee during the lifetime of the life tenant, the action did not abate by reason of the death of the cestui que trust pendente lite but could proceed in the name of the trustee, at least for the recovery of unpaid dividends declared upon the stock during the life of the cestui que trust.

4. The life tenant having died during the pendency of the suit brought by the trustee, the remaindermen, who upon his death intervened as parties plaintiff in the case, were, under the allegations of the petition, entitled to recover unpaid dividends which had been declared after the death of the cestui que trust.

5. The persons who intervened as remaindermen intervened also as the heirs at law of the life tenant, for the purpose of recovering the unpaid dividends which had been declared prior to his death; but neither as remaindermen, nor as such heirs at law, were they entitled to recover such dividends. As remaindermen they had no interest in these dividends, and as heirs at law they could not maintain an action to recover personalty; the right to recover personal property which belonged to a decedent being in his administrator or executor, save in a case like the present, where a trustee has the right to recover it as part of the trust estate committed to his keeping.

6. An executor's assent to a legacy divests him of the title to the property embraced therein, and perfects the inchoate title of the legatee, so as to give the latter a right of action to recover such property if held adversely to him.

Error from Superior Court, Richmond County; E. L. Brinson, Judge.

Action by Jesse Cleveland, trustee of Vannoy Cleveland, against the Georgia Railroad & Banking Company and others. Judgment for plaintiff, and defendant the People's National Bank of Shelbyville, Tenn., brings error. Affirmed.

Jas. C. C. Black, for plaintiff in error.

Jos. B. & Bryan Cumming, for defendants in error.

FISH J.

An equitable proceeding was brought in the superior court of Richmond county by Jesse Cleveland, as trustee of Vannoy Cleveland, a resident of this state, against the Georgia Railroad & Banking Company, a corporation under the laws of this state, having its principal office and place of business in the county of Richmond, and the People's National Bank of Shelbyville, Tenn., a corporation under the laws of the United States, located and conducting its business in Shelbyville, Tenn. The petition, when finally amended, made the following case: R. M. Cleveland, late of Bedford county Tenn., died testate in April, 1876. The fifth item of his will was: "I will to my son, William C. Cleveland, trustee for my son, Vannoy Cleveland, one-ninth of all my railroad stock, bonds and notes, to be paid to him by a trustee as hereinafter directed. The interest on said bonds and stock and the interest on said notes as they are paid, to be allowed to him for his maintenance and board and clothing, and at his death, the portion allowed for his maintenance to go to my other children, unless he in the future should have a family and leave children, in that event, I desire it should go to his children." W. C. Cleveland failed to qualify as trustee, and B. F. Cleveland was duly appointed trustee of Vannoy Cleveland, under the provisions of the will, by the court having jurisdiction of such matters in Tennessee. After the payment of the debts and the distribution of the estate of R. M. Cleveland, there were set apart, under the fifth item of his will, in trust, as therein stipulated, for Vannoy Cleveland, certain railroad stock, bonds, and notes, including 36 shares of the capital stock of the Georgia Railroad & Banking Company, which stock stands upon the books of the company in the name of B. F. Cleveland, trustee of Vannoy Cleveland. On June 30, 1896, B. F. Cleveland, having lost all of his estate, and being pressed for money, by persuasion, influence, and importunities induced Vannoy Cleveland to sign a paper by which he authorized and empowered B. F. Cleveland to pledge the 36 shares of stock above mentioned as security for a loan from the People's National Bank of Shelbyville to B. F. Cleveland. Vannoy Cleveland received no consideration whatever for executing such paper, but did it solely for the benefit of B. F. Cleveland, and in compliance with his importunities, and in consequence of his influence over his cestui que trust. On and before the death of his father, R. M. Cleveland, and during the year 1896 and since, Vannoy was a paralytic, and, by reason of his mental and bodily infirmities, wholly unable to attend to any business touching the management or control of his estate or of the stock referred to. He had no fixed residence, but lived most of the time at the residence of his brother and trustee, B. F. Cleveland, and was entirely subject to the will and control of his trustee, who had overpowering influence over him. "By reason of the said Vannoy's mind, the impairment of his health, and being subject to the will, control, and influence of the said trustee, the said Vannoy was unable to resist doing anything asked, desired, or demanded by the said B. F. Cleveland, however improvident or improper it might be, and any transfer, sale, contract, or agreement signed by the said Vannoy at the instance, request, or command of the said B. F. Cleveland was not the act of the said Vannoy, because he was not a free agent, nor fully capable of understanding the effect of any paper signed by him; and *** the paper of June 30th, authorizing the pledge of the thirty-six shares of Georgia Railroad & Banking Company stock, *** physically signed by the said Vannoy, was not binding as his act and deed, but was signed under and by virtue of the influence of B. F. Cleveland, his trustee, with whom he was living, and upon whom he was dependent for care and attention rendered necessary by his mental and bodily impairment." B. F. Cleveland, having secured such nominal authority to pledge such stock with the Shelbyville bank, in violation of his trust deposited the scrip for the 36 shares of stock with such bank as security for an individual debt. The officers and agents of the bank knew of the mental condition, as above stated, of Vannoy Cleveland, and knew that the paper had been signed by him by reason of the persuasion and undue influence exercised over him by his trustee, B. F. Cleveland. The bank continues to hold the certificate of such stock, under the transfer made as above stated, as security for the debt of B. F. Cleveland, and, after demand therefor, has refused to return the same to petitioner. By reason of the facts above stated, the bank has no title or estate in and to such stock. By proper proceedings subsequently had in the circuit court of Bedford county, Tenn., having jurisdiction of the persons and subject-matter, B. F. Cleveland was removed as the trustee of Vannoy Cleveland, and petitioner was appointed in his stead as such trustee. Having subsequently learned of the illegal transfer and pledge of the stock, petitioner duly notified the Georgia Railroad & Banking Company not to recognize the transfer, and not to pay any dividends accruing upon the stock to the People's National Bank of Shelbyville. Petitioner demanded the payment of the dividends which have accrued upon the stock of the Georgia Railroad & Banking Company, which it refused to pay, because of such transfer, and its inability to determine who was entitled thereto. The Georgia Railroad & Banking Company is indebted to petitioner, as such trustee, the amount of the accrued dividends upon the stock, and judgment is prayed for the same. The paper of June 30, 1896, signed by Vannoy Cleveland, and the transfer of the certificate of stock by B. F. Cleveland, former trustee of Vannoy, to the Shelbyville bank, constitute a cloud upon the title of petitioner, as trustee of Vannoy, to such stock. The prayers of the petition were that the paper signed by Vannoy Cleveland, authorizing B. F....