Whatley v. Musselwhite

• Decision Date: 11 October 1939
• Docket Number: 12932.
• Citation: 5 S.E.2d 227,189 Ga. 91
• Parties: WHATLEY v. MUSSELWHITE et al.
• Court: Georgia Supreme Court

5 S.E.2d 227

189 Ga. 91

WHATLEY v. MUSSELWHITE et al.

No. 12932.

Supreme Court of Georgia

October 11, 1939

Syllabus by the Court.

1. Title to property devised by will, and to be divided among a group of persons upon the happening of a particular event vests in the executors of the will pending its sale, for the purpose of paying debts of the testator, or for the purpose of distribution, in the absence of assent by the executors to the legacy. An executor may withhold from a legatee whatever portion of his distributive share may be necessary to pay an indebtedness due by the legatee to the estate, so as to equalize distribution among legatees. Such right of retainer may be asserted as against the transferee or assignee of a legatee. So also the lien of a judgment against a legatee does not attach to property passing under a will as above stated, either in the hands of the executor or of purchasers under him at a valid sale.

2. In an equitable action to subject the legacies of certain persons under a will to the payment of claims against such legatees, where it appears that the executors have sold the property passing by such legacies, for the purpose of making distribution among the legatees, and have retained the portions of certain legatees to satisfy their indebtedness to the estate, there is nothing upon which a trust or other equitable claim in favor of the plaintiff may operate, and a judgment denying the relief sought is appropriate. In such a case a showing of fraudulent purposes on the part of the legatees in connection with the sale of such property will not aid the plaintiff, in the absence of a further showing that they hold some interest in the property which might be otherwise subject to seizure.

3. The facts in the present case show that the plaintiff, who by transfer and assignment and succeeded to the interests of certain legatees, took such interest subject to the prior right of the executors to retain such legacies as against indebtedness due to the estate by the named legatees; and for this reason the alleged fraud in the sale of the property passing under the will does not, in respect to such property alter the rights of the parties.

On April 5, 1937, T. Whatley filed a petition in Taylor superior court, alleging in substance that on March 1, 1922, W. M Musselwhite died testate, seized and possessed of both real and personal property, and by his will disposed of the property by providing that it should be 'kept together operated and handled' just as the testator had done during his life, and until his youngest child reached the age of majority. The will also provided: 'Item 4th: It is my will and desire, and I so desire, that when my youngest child living at the time of my death becomes twenty-one years old, that all my property, both real and personal, and wherever situated, be equally divided among my children in kind or by sale either public or private, as may seem to the best of my said children by my executors, hereinafter named, and the money derived from the sale of said property to be equally divided among my children, should the same be sold, instead of being divided in kind. The children to participate in the division of said property as follows: J. W. Musselwhite, Ed. Musselwhite, Mrs. John D. Goodman, Frank Musselwhite, Ruth Musselwhite, James A. Musselwhite, Mattie Musselwhite, Brown Musselwhite, Clara Musselwhite, Judson Musselwhite and Jessie Musselwhite.' The will was probated bated in April, 1922, but pending the administration of the estate the executors resigned, and thereupon administrators de bonis non cum testamento annexo were duly appointed. They qualified and since their appointment have acted as such. The youngest child arrived at her majority at some time before February, 1933. Thereafter the court of ordinary of Taylor County, according to allegations in the petition, passed a valid and proper order authorizing the sale of the real estate. It was sold under said order to nine legatees, defendants in error, for $10,600, and a deed to them was executed by the administrators, and this deed was by 'some agreement' placed in escrow with and delivered to R. A. Hinton, for him to hold until all debts, including delinquent taxes were paid, and until 'full settlement of all the heirs should be effected.' The escrow agreement by its terms specified: 'that the other devisees should not receive any part of said property or of the proceeds thereof.' Hinton, the escrow agent, delivered the deed to the nine legatees on March 25, 1936. Four of the legatees, who were not parties to the purchase and are not parties before this court, were, as set out in the petition, indebted in varying amounts to the plaintiff as transferee on several notes and on one judgment. These notes and this judgment were secured by bills of sale, assignments, and security deeds executed by these four legatees, conveying to the plaintiff's predecessor in title their interests in the estate. Al of said obligations, except one, were originally made to the First National Bank of Reynolds, Georgia. All of the conveyances, bills of sale, and assignments made to secure said obligations were recorded immediately after their execution, and by proper authority were duly transferred to the plaintiff by J. B. Downs, receiver of said First National Bank.

The suit was against the administrators and all of the legatees, except Ed Musselwhite, who had settled his interest in the estate. It was alleged: 'The purpose and effect of said agreement between the said administrators and the said nine of said legatees who were purchasers of the property when sold, and the administrators' deed made in pursuance thereof, was a fraud upon plaintiff and his predecessor in title, and to prevent collection of the debts justly due from the other four legatees, all of whom were at the time of said agreement and now are wholly insolvent, and the said administrator's deed having been made to the purchasers at said sale under the above-stated agreement as to the administrators and the four legatees set out as being indebted to plaintiff; said sale being under a valid order of the court of ordinary providing for said sale. The assets of the insolvent debtors thereby passed into the hands of said grantees under the said administrators' deed; therefore the said grantees should be deemed and treated as trustees for the respective shares of the said debtor legatees excluded from said deed, and thereupon plaintiff's liens upon the said shares should be set up and established, and the respective interest of said debtors in said lands represented by said shares should be decreed to have been sold to the said nine legatees as trustees for the said debtors as to their respective shares and interest; and that the said land purchased by the said nine legatees should still be subject to plaintiff's respective claims against said four eliminated debtors, and the lien of plaintiff should also apply as to any other funds in the hands of said administrators. Plaintiff is entitled to assert against the said administrators and against said nine purchasers his demands as a prior lien against each of the respective shares of said four debtors that were eliminated by said agreement and deed made by the administrators in pursuance of said sale to the said nine legatees as purchasers as to the property purchased as aforesaid, and to any funds that may remain in the hands of said administrators.' The prayers of the petition, omitting formal parts, were: '(a) That he as plaintiff have judgment on each of said claims against each of said four eliminated debtors, setting up the amount due thereon. (b) That plaintiff's demands against the said J. W. Musselwhite, Frank Musselwhite, Clara Musselwhite, and J. A. Musselwhite be set up and established as prior liens as to their full shares as legatees under the will of their father, the said W. M. Musselwhite.

(c) That plaintiff have such other and further relief in the premises as the court shal deem meet and proper.' To the petition the administrators demurred generally, and the nine legatees demurred generally and specially.

An amendment of the petition was sworn to on December 15, 1937, but the record is silent as to the date when the amendment was presented or filed. It was allowed subject to demurrer, by order not dated. This amendment alleged, that at the time of the agreement between the administrators and the nine legatees, these legatees and the administrators had knowledge of the execution of the eonveyances upon which this suit is predicated; that the administrators agreed that the nine legatees were to buy in said property and to pay for it with their distributive shares of the estate; that immediately after Hinton delivered this deed to the nine legatees they went into possession of said real estate; that at the time of said sale plaintiff's predecessors owned and held the notes and the liens set forth in the original petition; Clara Musselwhite, Frank Musselwhite, and J. A Musselwhite executed their deeds to secure said indebtedness, thereby conveying all of their distributive share to the First National Bank, Reynolds, Ga., which fact was known to the said administrators and to the said nine legatees purchasing said property at the time the agreement was made as to how the purchase should be made. 'Plaintiff contends that the acts in connection with said agreement, the agreement itself, and the deed made in pursuance thereof and the taking of possession of the property described in said deed was a fraud, and the property purchased at said sale under the above-stated facts was impressed with an implied trust for the benefit of all of the legatees or their assignees to all of said estate.' Further it was alleged...