Lathrop v. White

Simmons, Justice. George H. White, as guardian of Leah E. Adkisson, brought his complaint for land against Margaret A. Lathrop et al., in Houston superior court. He claimed title to the land as guardian, under and by virtue of a deed made by George H. White, in whom was the legal title, to William T. White, as trustee for the latter’s wife. He alleged that said trustee purchased the lands with the proceeds of a trust estate which he held for the petitioner’s ward’s mother, in trust to hold the same for her use during life, and at her death for her children. He further alleged that said trustee went immediately into possession of the land under the deed, and so remained until 1871, when he removed beyond the limits of the State, and left tenants in possession, who so remained until after his death in 1872, leaving petitioner’s ward the sole heir; that the wife of the trustee had died before the death of the trustee in 1868 or 1869. Attached to the declaration was an abstract of title. The abstract consisted of a deed from Whitehead to McLane, — 32 — dated January, 1842; a deed from' McLane to John G. White, November, 1849 ; a deed from John G. White to Geoi'ge II. White, September, 1866 ; and a deed from George II. White to William T. White, trustee, January 2d, 1867. This latter deed recited that it was an indenture made between George II. White, of the one part, and William T. White, trustee for his wife, Leah E. White, of the other part, “ to have and to hold said land to the only proper use, benefit and behoof of him, the said William T. White, trustee as aforesaid, his heirs, executors, etc., in fee simple.” The warranty is to William T. White, trustee for- his wife aforesaid, his heirs, etc. It appears from the record in the case that, in October, 1867, White, the trustee, and his wife made application to the chancellor for leave to sell said land, stating that White held said land as trustee; and gave certain reasons for the sale thereof. On October 10th, 1867, the chancellor passed an order in chambers, allowing White to sell the land and reinvest the proceeds thereof. All these proceedings were placed upon the records of Houston superior court. In this petition and order no reference whatever was made to any child or remainderman. Soon after this order for sale was granted, White sold the land to one Boon, for $2,000, and took Boon’s notes for the purchase money, payable in four equal instalments, due at one, two, three and four years. Boon took White’s bond for titles to the land, and went into possession in 1868. Boon paid two notes when they fell due, but was unable to pay the other two. In 1868 or 1869, Mrs. White, the cestui que trust, died. After her death, White became indebted to Lathrop & Co., and gave his individual note to them for $912.49, dated January 12th, 1871. After giving this note toLathrop & Co., White put into their hands as collateral security the two unpaid notes of Boon, amounting to $1,000, which had been given to him as trustee, — 33 — for the land. After this transaction, "White moved to the State of Louisiana, and died there in 1872. Lathrop & Co. sued these notes to judgment at the May term, 1874; and were pressing Boon for the money. At this point there was a settlement or an arrangement made between Lathrop & Co. and Boon and Geo. H. "White, the plaintiff in the court below, whereby Boon transferred in writing the bond for titles which he held from White, the trustee, to Latbiop & Co., and gave up the possession of the land. Lathrop & Co. had the execution against Boon marked “ satisfied in full,” and filed in the clerk’s office the $912 note given by White to them. There was a conflict in the testimony at this point, White contending that there was a parol agreement between him and Warren that Lathrop & Co. should keep the land until the rents were sufficient to pay the debts due them by William T. White, and then the place should be surrendered up for the benefit of the child; while Warren denied this, and insisted that the trade was unconditional, that he gave White twelve months in which to redeem the land, and White failed to redeem it. Much testimony was introduced on this point. It seems that this point in the case was not submitted by the court to the jury. The firm of Lathrop & Co. was dissolved at the death of Lathrop, and on the distribution of assets this land fell to the wife of Lathrop, and a deed to it was mad.e to her by the surviving partner and the other heirs of Lathrop. Upon the trial of the case, under the charge of the court, the jury returned a verdict in favor of the ^plaintiff, with mesne profits, and the defendant made a motion for a new trial, which was overruled, and she excepted. It seems to us that this case was tried in the court below upon a wrong theory; and it is, therefore, unnecessary to review the many grounds of error set out in the motion for a new trial. From the evidence disclosed in — 34 — this record, we do not think the plaintiff in the court below was entitled to recover in this case, unless it was upon a theory which was not submitted by the court the jury, — that is the conflict between George IT. "White and "Warren, as to what the contract between them was when the bond for title was transferred by Boon to Lathrop & Go., of which we will speak later on. 1. It will be remembered, from the statement of facts in this case, that on January 2d, 1867, George II. "White made to his brother, as trustee for the latter’s wife, a deed to this land. In that deed there is no other cestui que trust mentioned but the wife of "William T. "White. That deed was made subsequent to the passage of the act of 1866, generally known as the “woman’s law.” It was therefore the same in law as if it had been made regularly to the wife of "William T. "White. At that time she was capable of taking and managing her own property, and there was no necessity for a trustee. Nor was there any necessity for her and her trustee to apply to the chancellor for leave to sell this land. The legal title was in her, and she could have sold it and made a good title thereto without leave of the court. Sutton vs. Aiken 62 Ga. 733; Carswell vs. Lovett, decided at last term, (80 Ga. 36,) and cases there cited. 2. This property being hers, and the legal title being in her, when she died in 1868 or 1869, all of her property descended to her husband. At that time he was her sole heir at law, regardless of the fact whether she had children or not. The act allowing children of a married woman, who has a separate estate, to share with the father upon her death was not passed until December, 1871, (acts 1871-2, p. 48,) subsequent to the death of Mrs. "White. This child, the plaintiff in this case in the court below, therefore had no right or interest in this property upon the death of her mother. All went, under the law, to the husband and father. This being true, — 35 — White inherited the two unpaid notes given by Boon for the purchase money. The title to them was in him after the death of his wife, and he had a right, they being his property, to dispose of them as he saw proper. He had a right to place them with Lathrop & Co. as collateral security for his individual note. If Mrs. White was dead when the • sale was made to Boon, as contended by counsel for defendant in error, then White having inherited this property, he certainly had a right to sell.it to Boon. If she was living, and White sold it as trustee and afterwards acquired title, his title went to Boon. Parker vs. Jones, 57 Ga. 204. 3. Nor has the guardian or his child any right now to complain of that transaction, whether there was usury in the notes or not. Lathrop & Co. had a right to sue them to judgment and make any settlement with Boon in relation thereto that they and Boon saw proper to make; and-no one has a right to object to that settlement, unless it be W. T. White, who placed them in Lathrop & Co’s, hands as collateral. See Partridge vs. Williams, 72 Ga. 807. 4. But it is alleged by the counsel for the defendants in error that Lathrop & Co. had notice that this land was purchased with the proceeds of trust property arising under the will of Uriah Jones, the father of Mrs. White and the grandfather of this plaintiff; or if they did not have actual notice, there were sufficient facts and circumstances to put them upon inquiry. We have carefully read and considered the evidence in this record, and we have been unable to find any facts or circumstances sufficient to put Lathrop & Co. upon notice or upon inquiry as to where the fund came from which purchased this land from George II. White in January, 1867. In the case of Bazemore vs. Davis, 55 Ga. 504, this court held that “the record of a settlement or trust deed is not constructive notice, except in relation to the prop — 36 — erty conveyed therein. It is not of itself notice as to property purchased by the trustee with the proceeds of that property.” As before remarked, the deed from George H. "White to William T. White, trustee, recites that it is made to him as trustee for his wife, and does not mention the child or children, or remainderman, or any other usee except the wife. The application filed by White and his wife to the chancellor for leave to sell this land, nowhere mentions any other usee than the wife. It is true that in 1864, there was an application on record by J. M. Davis, reciting the will of Uriah Jones, in which one Woodward was appointed trustee for Leah Jones, and stating that Woodward declined to accept the trust, and asking the chancellor to appoint William T. White trustee for his wife, Leah White, formerly Jones. There is nothing in the items of the will referred to, or in this application to have White appointed trustee for his wife, to show what was the character of the property given in the will to Leah. When the purchasers came to look at these records, and saw that this property now in controversy was conveyed by George H. White to William T. White as trustee for his wife, was that a sufficient circumstance to put them upon notice or inquiry ? Could they not have properly concluded that this was an original trust, created by George to William in those hazardous times ? Were they compelled to go hack three or four years and look to the application to appoint White trustee under the will of Uriah Jones, and then to trace all the trust funds in his hands so as to bring them to this particular land ? We are inclined to think that this would be putting too great a hardship upon purchasers. It would be too strict a rule in regard to commerce and the daily transactions of the people. The plaintiffs, on the trial of this case, seemed to realize that the records of the court were not sufficient to show notice, and resorted to parol tes — 37 — timony in order to trace this fund. They had to introduce as a witness George TI. White, the person who made the deed to his brother in 1867; and his evidence is rather weak as to the fund having arisen from the estate of Uriah Jones. It seems to us that he testifies to a presumption rather than to a fact. The only way in which he says he knows that the fund that he borrowed from his brother was a trust fund, was his familiarity with his brother’s business. Whether this particular money which he borrowed did arise from the trust estate, he does not say positively. See Bazemore vs. Davis, supra. 5. Besides all this, it is not even contended-by the defendant in error that Boon had any notice, or that there were any facts or circumstances that would put him upon inquiry. From the facts disclosed in this record, he certainly was an innocent purchaser. He had no notice. Nor was there any fact to put him upon inquiry as to this land having been conveyed to William T. White by George White in payment of money that-George had borrowed of the trust estate. Boon being an innocent purchaser, and having transferred his bond for title to Lathrop & Co. and put them in possession of the land, it matters not whether Lathrop & Co. had notice or not. If Boon’s title was pure, they purchased a pure title, and no bad faith on their part would render it impure. Our conclusion, therefore, is (1) that the deed made by George H. White to William T. White, trustee for his wife, put the title into the wife; (2) that she having died in 1868 or 1869, and prior to the act of December, 1871, the husband became her sole heir, and was entitled to all of her property, real and personal; (3) that the title of all her property being in him, he had a right to place with Lathrop & Co. Boon’s two notes as collateral security for his own individual note; (4) that Lathrop & Co. had a right to settle these — 38 — two notes with Boon, upon his turning over to them his bond for titles and putting them in possession of the land; (5) this record does not disclose that Lathrop & Co. had any notice, nor were there sufficient facts and circumstances to put them upon inquiry as to whether the fund which originally paid for this land arose under the will of Uriah Jones; (6) that Boon certainly was an innocent purchaser without notice; (7) that Lathrop & Co., having purchased from Boon, who was an innocent purchaser, got his title, and it was good to them, whether they had notice or not. Therefore the plaintiff’ has no right to recover. 6. White, the guardian, however, contends that Lathrop & Co. never went into, possession of this land. He claims that when Boon surrendered the possession, he surrendered it to him, and that he and Warren, one of the partners of Lathrop & Co., made a verbal contract, whereby it was agreed that White should take the land and rent it and pay the debt of his brother, and when that was done, the land should belong to his ward. This Warren denies. The court below seemed to take a different view of the law of the case from what we have taken, and failed to submit this matter to the jury. We think that if White made this contract with Warren, that he was to take the land and rent it and pay the debt of his brother, and after the debt was paid the land was to go to his ward and niece, then if the debt was paid, she would be entitled to it. But if there was no such contract as that made, and Warren only gave him twelve months in which to redeem the land, and he failed to redeem it, then of course she cannot recover. This is a matter entirely for the jury as to which theory they will adopt after hearing the evidence. If the case should be tried again in the court below, we presume that the court will submit this matter to the jury, under proper instructions. Judgment reversed.