Watson v. Goldsmith

• Decision Date: 05 September 1944
• Docket Number: 15674.
• Citation: 31 S.E.2d 317,205 S.C. 215
• Parties: WATSON v. GOLDSMITH.
• Court: South Carolina Supreme Court

31 S.E.2d 317

205 S.C. 215

WATSON v. GOLDSMITH.

No. 15674.

Supreme Court of South Carolina

September 5, 1944

B F. Martin and John C. Henry, both of Greenville, for appellant.

Mann & Arnold, of Greenville, for respondent.

STUKES Justice.

Important background of this action and appeal is found in the prior proceeding for the foreclosure of five real estate mortgages commenced by H. P. McGee as trustee of the B. M. McGee trust fund and concluded by C. E. Robinson as successor trustee (after the death of H. P. McGee) against the plaintiff in the present case. Decision of appeal in the first suit is reported in 198 S.C. 396, 18 S.E.2d 215, under the title of Robinson v. Watson et al.

The complaint in the instant action against the executor of H. P. McGee was served with summons on May 7 1943, and recites at tedious length the creation and history of the B. M. McGee trust, the foreclosure action aforesaid and sets up alleged payments which it is claimed should have been credited upon the debts of plaintiff to the McGee trust which were secured by the mortgages formerly foreclosed.

With painstaking care this Court has compared and checked the alleged credits and has found from the testimony and master's report in the former action for foreclosure that the presently claimed items are identical with some of them asserted in the first action, upon which the issues were concluded against Watson upon the grounds that the alleged payments were never made or were properly credited by Mr. H. P. McGee upon obligations owing by Watson to the McGee trust estate or the several other obligations of his which H. P. McGee held in his individual or other representative capacity. The report of the Master of Greenville County, the Honorable E. Inman, in the first action, that of foreclosure against Watson, is unusually full, clear and convincing. It was confirmed by decree of the trial Judge and his decision was affirmed on appeal to this Court.

The present case is unusual in that the merits of it were considered and decided on demurrer, a course blazed by plaintiff by his fulsome references to the earlier case in his complaint and in argument. The agreed statement in the Transcript of Record for appeal contains the following:

"In this action plaintiff seeks an accounting for moneys alleged to have been collected by H. P. McGee as alleged trustee of the Plaintiff on six certain contracts, notes and mortgages, which moneys it is alleged should have been applied by the said H. P. McGee on five certain notes and mortgages made by plaintiff to B. M. McGee trust, of which trust H. P. McGee was the Trustee. Plaintiff seeks judgment, impressing these alleged funds with a trust in favor of the Plaintiff, and for judgment for the amount determined by the accounting. These same items were involved in a former foreclosure proceeding by the B. M. McGee trust against E. E. Watson, which was decided by the Supreme Court on December 20, 1941, and is reported in 198 S.C. 396, 18 S.E.2d 215. This opinion and the record in said appeal, which is extensively referred to in plaintiff's 'Amended Complaint' was used and the record referred to by attorneys for appellant and the defendant in the hearing before Judge Dennis on the demurrer."

The complaint is upon the alleged theory that H. P. McGee received the claimed payments, disallowed by the judgment in the first action, and failed to properly apply them to plaintiff's obligations held by him as trustee of the B. M. McGee trust, whereupon, it is said, he became the trustee of plaintiff and his private estate should now account for the alleged payments. For a better understanding of plaintiff's present claim, the following is quoted from his complaint in the action now before the Court:

"9. *** This said general plan of collection and application was in recognition of and pursuant to the rights of the said B. M. McGee trust estate to have the proceeds of such sales of all the lands applied first to the preferred liens of the said five (5) mortgages hereinabove referred to.

10. The said H. P. McGee made collections upon the principal sums of the said six (6) contracts, notes and mortgages, referred to in paragraph 9 hereinabove and in exhibit 'B,' and interest thereon, items that should have been by him applied to the payment of the five (5) notes and mortgages referred to in paragraph 8 hereinabove and in 'Exhibit A,' but he never applied said items to the payment thereof; and this plaintiff is entitled to have said H. P. McGee and his estate and his Executor account, as Trustee, to him and pay same over to him; and the said items (with appropriate dates of payment) are set forth in the attached Exhibit 'C,' which is made a part of this complaint.

That said items were not so applied was adjudicated by decree of this Court, by Hon. Wm. H. Grimball, Presiding Judge, dated 12th day of April 1941, in an action brought against this plaintiff and others, in the year 1936, by said H. P. McGee and C. M. McGee, as Trustees of the B. M. McGee estate, and continued after the death of the said H. P. McGee, by C. E. Robinson, as such Trustee, same appearing on file in the office of the Clerk of said Court in judgment roll E-9190 ***.

The collections so made upon the principal sums of the said six (6) contracts, notes and mortgages, and the interest thereon, benefits accruing to and enriching the said H. P. McGee, his estate and his executor, are and should be impressed with a trust in favor of this plaintiff ***.

11. The Plaintiff alleges, on information and belief, that at no time prior to the institution of said foreclosure suit by H. P. McGee, as Trustee of the estate of B. M. McGee, did said H. P. McGee commit any act in violation of, nor did he have any intention to violate, the rights either of said trust estate or of this plaintiff under the said agreement with this plaintiff and under the law as to the proper application of the funds to the said prior liens." It should be said parenthetically at this point that in the answer of Watson in the previous foreclosure action he sought the same relief in another form and forum, expressly that all credits to which he was entitled upon the mortgage indebtedness be ascertained and determined and that the plaintiff in that action be required to make an accounting thereof. Thus the factual issues in the two actions are identical.

One of the exceptions made by Watson in his appeal before, overruled by this Court, was as follows:

"Because his Honor, the Circuit Court, erred in confirming Master's Report, holding that defendant-appellant is not entitled to judgment on credits for $6,121.46, as of proper date, and disallowing same on the following claims: (1) Bruton Temple Church; (2) Prince Nesbit; (3) Moses Young; (4) Jeff Zimmerman; (5) Sam Goodjion; (6) John H. Butler; and (7) misapplication of a certain credit of $373.40 as of December 21, 1939 (?), to Isbell mortgage; whereas defendant-appellant showed conclusively that a trust relation, a fiduciary relation, existed between himself and plaintiff H. P. McGee, as Trustee of B. M. McGee estate, as to all of same, rendering it incumbent on said Trustee to account and show that he had complied with his trust relation toward defendant-appellant and had legally and properly disbursed or paid over such funds after defendant-appellant traced such funds

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