Trapnell v. Swainsboro Production Credit Ass'n, 17434

• Decision Date: 15 May 1951
• Docket Number: No. 17434,17434
• Parties: TRAPNELL v. SWAINSBORO PRODUCTION CREDIT ASS'N.
• Court: Georgia Supreme Court

Page 179

65 S.E.2d 179

208 Ga. 89

TRAPNELL v. SWAINSBORO PRODUCTION CREDIT ASS'N.

No. 17434.

Supreme Court of Georgia.

May 15, 1951.

Syllabus by the Court.

Where, as here, after signing a waiver of all liens upon the crops grown by his tenant in favor of a lien of a third party for advances to aid in making crops, the landlord receives the proceeds from the crops, which are sufficient to satisfy the lien for advances, and converts the same to his own use, a petition of the holder of the lien for such advances against the landlord and the tenant, seeking judgment against them as trustees ex maleficio for the full amount of such advances, alleges a cause of action against both the defendants, and an answer by the landlord which admits these material facts constitutes no defense thereto.

Swainsboro Production Credit Association sued John E. Barfield and M. E. Trapnell on a note executed by Barfield, which was secured by a bill of sale on crops growing or to be grown on described lands belonging to the defendant Trapnell, and payable to the plaintiff for loans made for the purpose of buying necessary supplies in making the crops. Attached to the petition is a copy of the note and an instrument signed by the defendant Trapnell as landowner, wherein he expressly waived any and all liens against the crops in favor of the petitioner's lien to secure the advances made for the purpose of making the crop. The petitioner alleges that the cotton and the tobacco were sold for more than $1700, and that this was more than enough to pay the petitioner's claim, but all of these proceeds from the cotton and the tobacco were delivered to the landlord, M. E. Trapnell, who had converted the same to his own use. The prayer was for judgment decreeing both of the defendants to be trustees ex maleficio and for judgment against each as such for the full amount of the petitioner's claim. To this petition the defendant Trapnell filed his demurrer upon the general ground and upon the special ground that there was a misjoinder of parties and of causes of action. The defendant Trapnell filed an answer, in which he admitted the allegations of the petition except that he denied the allegations as to the amounts received from the cotton and tobacco crop and his conversion thereof to his own use 'as alleged.' For further answer he alleged that some of the crops, without specifying what portion, were raised on lands of the defendant other than lands described in the plaintiff's bill of sale. The answer admitted that Trapnell had received all crops as alleged, and admitted the allegations that the proceeds of the tobacco and cotton crops were more than sufficient to pay the note secured by the bill of sale, but asserted that they were applied to claims of his and that such application was lawful. The plaintiff demurred to this answer upon the ground that no defense was therein set forth, and this demurrer was sustained. The defendant Trapnell excepts, assigning error upon the judgment overruling his demurrers to the petition and also upon the judgment sustaining the plaintiff's demurrer to his answer.

Anderson & Trapnell, Metter, for plaintiff in error.

Rountree & Rountree, Swainsboro, for defendant in error.

DUCKWORTH, Chief Justice.

1. Whenever the circumstances are such that a person taking property, either from fraud or otherwise, can not enjoy the beneficial interest without violating some established principle of equity, the court will declare him a trustee for the person beneficially entitled. Code, § 108-107. This sound principle of equity is applicable in the present case. Here the landlord executed an express waiver of his claims upon the crops involved, and he did that in order to induce the petitioner to extend credit which was necessary to make those crops. Now it is shown that, disregarding his waiver of claims to the crops, he has appropriated to his own use the proceeds of those crops to the loss and injury of this petitioner. In such circumstancs he can not be allowed to enjoy the benefits of these crops, since that would violate established principles of equity. The sole object of the petition is to invoke this principle of equity and to claim for the petitioner the rights conferred upon it by the foregoing Code section. In Smith Co. v. W. E. Austin Co., 143 Ga. 254, 84 S.E. 444, this court held that, where a debtor transferred his assets, thereby rendering himself insolvent, it was a fraud on all creditors, and that the transferee was a trustee ex maleficio as to the creditors to the extent of...