Pickett v. Geer

Supreme Court of South Carolina

Decided May 18, 1930

Supreme Court of South Carolina · decided 1930-05-18

Cited by 2 later decisions — most recently November 1957

2 state decisions

Good law ✅— No negative treatment on recordhow we know

Decided 1930-05-18

View the full empirical analysis of this case →

¶1 Opinion of the Court delivered by

Mr. Chief Justice Watts.

¶2 For the reasons assigned by his Honor, Judge Mauldin, it is the judgment of this Court that the judgment of the Circuit Court be affirmed.

Messrs. Justices Cothran, BeEase, StabeEr and Carter concur.

Download

Copy

Embed on your site

Hover to preview · click to copy the code

Search Wikipedia →

Case posture

Posture: Before MAULDIN, J., Greenville, July, 1929. Affirmed.Action by Mamie L.G. Pickett against B.E. Geer and another. From the judgment plaintiff appeals. Affirmed. The decree of Judge Mauldin is as follows: After all pleadings were field the plaintiff served notice of a motion to strike out certain portions of the answer filed by the Trustees. The matter was argued before Judge De Vore, who refused to grant the motion but failed to file a formal order. Thereafter, the case was referred to E. Inman, Master, to take the testimony and report his findings of fact and conclusions of law and the trustees were directed to account. The motion to strike out was renewed before the Master, who declined to hear the same, as it had already been decided by Judge De Vore. Pursuant to the order of reference the Master took the testimony, and on August ____, 1928, filed his report, whereby he found that all the acts and doings of the trustees should be ratified and confirmed and the complaint dismissed. Within due time plaintiff filed exceptions to the report of the Master, and on July 12, 1929, the case was argued before me at length. I have given very careful consideration to the testimony in this case and to the arguments of counsel for both sides and the authorities relating to the issues involved. I am satisfied that the findings of the Master are correct and fully sustained by the testimony and should be confirmed by the Court. There is practically no dispute as to the facts. The real controversy relates to the conclusions to be based thereon. In June, 1915, the only property of any kind owned by plaintiff consisted of a life interest in two lots situate on Buncombe and Parker streets, in the City of Greenville. The buildings on the property were old and in a very dilapidated condition and yielded a gross income not exceeding $250.00 per year. At plaintiff's request, W.G. Sirrine, her attorney, purchased from S. Van Howard on June 19, 1915, for $525.00 the remainder interest in the property and in April, 1016, with her approval, executed a deed conveying the estate in remainder to H.P. McGee, B.E. Geer and William Goldsmith upon the following terms and conditions: In trust, however, to hold said property and make repairs and improvements, and, for such purposes to borrow money and execute mortgages conveying said property or any part thereof to secure the loans; to lease said premises, collect the rents, profits and proceeds, and, after paying the expenses of this trust, the taxes, the expenses of upkeep, repairs and interest on money borrowed or to be borrowed, to pay over the net income to Mamie L.G. Pickett during her lifetime, and from and after her death to pay the same to the First Baptist Church of Greenville, S.C. its successors or assigns, or to sell said property, or any part thereof, and pay over the net proceeds, after payment of expenses and debts, to said church, or upon request of said church to convey the said property or any part thereof to said church or its duly designated officers. Thereafter, on July 1, 1916, the plaintiff conveyed her life interest in the same property to H.P. McGee, B.E. Geer and William Goldsmith upon the same terms and conditions. Prior to the execution of the deeds in question, to-wit, on June 19, 1915, plaintiff's financial status was as follows: Sole Assets A life interest in certain property on Buncombe Street, the buildings on which were of little value and yielded the meagre gross income of $250.00 per annum. The net income after payment of taxes, repairs, insurance, interest and so forth was utterly insufficient to meet the plaintiff's living expenses. Liabilities Note and mortgage to B. Moss ..................... $ 375.00 Interest from Dec. 23, 1914, to June 1, 1915 ..... 13.17 Wm. G. Sirrine, for cash advanced for repairs and living expenses as per his ledger ......... 182.69 Note Morgan Austin, Balance May 15, 1915 204.53 Interest to June 1, 1915 ......................... .73 City taxes 1915 and County taxes 1915 ............ 19.20 Payment S. Van Howard ............................ 525.00 Counsel fees three years (including collecting rent) ......................................... 75.00 -------- Total ............................................ $1,395.32 Plaintiff's annual living expenses average $800.00 or $900.00 per annum. By reason of the insufficiency of the income plaintiff's indebtedness between June 1915, and July 1, 1916, had increased by the sum of $519.35. $49.31 represented interest which had accrued and $470.04 moneys advanced by Furman University to meet plaintiff's living expenses. On July 1, 1916, therefore, plaintiff's indebtedness amounted to $1,914.67. When therefore, the trustees, B.E. Geer, et al., on July 1, 1916, took charge of plaintiff's property there was an existing indebtedness against plaintiff of $1,914.67, an indebtedness which she herself had incurred and for the payment of which her estate could have been subjected. One item of $375.00 was represented by a mortgage executed by plaintiff to Miss Moss, and which was already past due. In view of plaintiff's circumstances and of the testimony adduced, it is evident that the plaintiff entered into the trust arrangement in order that her debts could be met and she could be provided with her living expenses. Pursuant to their understanding with the plaintiff and the terms of the trust deed, the defendants, B.E. Geer et al., as trustees, collected the rents from the property, paid the expenses of upkeep, repairs, taxes, insurance and interest on plaintiff's indebtedness and paid over the balance to the plaintiff. The testimony conclusively shows, however, that the income received was far from sufficient to pay the costs of upkeep of the property and to provide for plaintiff's support, the only source of income being from two or three dilapidated old buildings located on the property. It further appears that the plaintiff was persistent in her demands to the trustees to give her more money. In order, therefore, to meet the necessary expenses and to comply with plaintiff's wishes and demands, the trustees were forced to borrow from time to time and succeeded in securing the necessary advances from Furman University. By 1919 the indebtedness against plaintiff amounted to $4,131.84. Of this amount $1,395.32 had been incurred by the plaintiff before the creation of the trust, $1,300.00 had been borrowed by the trustees pursuant to the authority contained in the deed and had been used in the construction of a dwelling on plaintiff's property, and the balance represented amounts which the trustees were required to borrow or advance in order to meet the necessary expenses of the upkeep of the property and of the support of the plaintiff. This indebtedness represented a claim for the payment of which the interest of the plaintiff in the lots in question could have been subjected. It is apparent that the situation which existed in 1919 could not continue. The income averaged only $250.00 per annum, while the expenses averaged $800.00 to $900.00 and were continually mounting by reason of the increasing indebtedness and the interest payable on account thereof. In order to discharge the existing indebtedness, all of which had been incurred for plaintiff's benefit, the trustees pursuant to the authority contained in the deed to them borrowed from Furman University $4,131.84 and paid off all plaintiff's debts. There is no doubt that they had full power to do this. In the first place the primary duty of a trustee is to preserve the estate and this involves the right to pay debts chargeable against the trust estate. When the trustees took charge there was an existing indebtedness of $1,914.67. Secondly, under the statutes of South Carolina (Section 5476, Volume 3, Civil Code) and under the common law, the trust estate was liable for the payment of these debts and had they not been paid the creditors could have secured judgment and sold the property under execution. One debt was represented by a mortgage. This might have been foreclosed and the property sold thereunder. The balance of the indebtedness had been incurred for the benefit of plaintiff pursuant to the terms of the trust deed, which expressly authorized the trustees to pay the expenses of upkeep, taxes, insurance, etc., and interest on money borrowed and to borrow money for the purpose of the trust. Such moneys as were borrowed or advanced by the trustees for the plaintiff's living expenses were also chargeable against the estate. One of the main purposes of plaintiff in creating the trust was to provide for her support and advances for this purpose were clearly within contemplation of the parties. It furthermore appears that plaintiff was constantly demanding more money and that it was in order to meet such that the trustees acted as they did. Although the mortgage was executed in the name of B.E. Geer et al., as trustees of the First Baptist Church, remainderman under the trust deed, the entire proceeds of the loan are conclusively shown to have been solely for the plaintiff's benefit. In 1920 when prices were abnormally high the defendants, Price and Cameriero, offered to purchase from the trustees lot No. 1 on Buncombe Street for the sum of $13,216.66. The trustees considered this an exceptionally good price, and subsequent events proved that their judgment was sound. The undisputed testimony shows that even including improvements subsequently erected on the property costing approximately $8,000.00 or $9,000.00 the property would not today bring as much as it did in 1920. The sale was made by the trustees to Price and Cameriero for the sum of $13,216.66, $2,500.00 being paid in cash and credited to plaintiff's account; the mortgage of $4,141.84 to Furman University being assumed by Price and Cameriero and the balance being represented by a purchase money mortgage of $6,584.82. This mortgage was subsequently paid and the entire proceeds credited to the plaintiff's account. Under the terms of the trust deed the plaintiff was only entitled to the income from the property for life, the remainder being vested in the First Baptist Church. By the terms of the trust, plaintiff was not entitled to the principal of the funds received from the sale of the property, but only to the income therefrom. The testimony shows, however, that the entire corpus was credited to plaintiff's account and a large portion thereof has been either paid to her directly or used for her benefit. The balance has been invested by the trustees in preferred stock of American Building Loan Association and Hunter Manufacturing and Commission Company, and the dividends derived therefrom have also been paid directly to the plaintiff or used for her benefit. The First Baptist Church, to whom the corpus rightfully belonged, has not only made no objection to the use of the proceeds for the plaintiff, but has consented and has furthermore for many years and is now contributing monthly to the plaintiff's support. This sale made by the trustees should be ratified and confirmed for the following reasons: The indebtedness existing in 1919 was a valid charge against the estate and such indebtedness was increasing. Unless it had been discharged the entire estate would eventually have been lost. The trustees, in accordance with the duty imposed upon them to preserve the estate made this sale of a portion of the property in order to preserve the remainder. As a result the estate was freed from debt and a fund has been provided which yields almost double the annual income received prior thereto. The plaintiff without objection has been receiving the income from this fund and in addition has received a large portion of the principal amount derived from the sale to which legally she was not entitled. It appears that plaintiff lived on the property and knew when the sale was made. She must have known that the rents from the balance of the property constituted a very small portion of the moneys she was receiving. She has accepted the benefits arising from the sale and if sui juris must be held to have ratified the acts of the trustees, and is now precluded from questioning the same. Some question was raised as to plaintiff's mental competency. On this point I hold that if she was sui juris , her action in accepting year after year the benefits of the transaction entered into by the trustees constitutes a ratification and confirmation of such transactions. There can, also, be no doubt that if she is not mentally competent and the trustees had prior to the sale made application to the Court for authority, their request would have been granted and the Court will now, therefore, ratify and confirm that which it would have authorized. The plaintiff was insistent in her demands for additional moneys, the estate was already heavily indebted, the income was very small and the estate was in danger of being lost. The price offered for the property was an exceptionally good one and it is clear that upon such a showing the Court would have authorized the sale. A comparison of the plaintiff's financial condition in 1916 prior to the execution of the trust deed, in 1920 prior to the execution of the deed to Price and Cameriero and her condition at the time this case was heard shows beyond question that the trustees have wisely managed her affairs, that all transactions entered into by them in connection with the trust have been beneficial to the estate. 1916 Annual income approximately ...................... $ 250.00 Annual expenses approximately .................... 800.00 Indebtedness (incurred by plaintiff) ............. 1,914.67 1920 Annual income approximately ...................... $ 250.00 Annual expense (not including amounts contributed by trustees personally or by First Baptist Church) approximately .......................... 800.00 Indebtedness ...................................... 4,131.82 Present Condition Annual income .................................... $ 420.00 Expenses (not including amounts contributed by trustees personally or by First Baptist Church) approximately ................................. 800.00 Indebtedness ..................................... Nothing The testimony conclusively shows that the sale was highly beneficial to the plaintiff: that she is now in far better financial condition than she has ever been, even prior to the creation of the trust. It would be inequitable therefore, to allow the plaintiff to profit through a cancellation of the trust when the trustees have managed the estate for the best interests of plaintiff and in such a way that had they applied for authority the Court would have granted it. Furthermore the trustees have served without compensation, and one of them at least has contributed $500.00 from his own personal funds, none of which has been charged against plaintiff. The First Baptist Church has also been and still is contributing liberally to plaintiff's support without charge. The fact that the deed and mortgage given by the trustees does not affect the result. The legal title was vested in the trustees and they alone could convey the property. They were trustees both for Miss Pickett, the life tenant, and for the First Baptist Church, was executed by them as trustees for the First Baptist Church, remainderman, and the fact that they designated themselves as trustees for the First Baptist Church without also naming the plaintiff does not affect the title, the mortgage and sale now being ratified, confirmed and declared by the Court to have been made by them as trustees for plaintiff. It is therefore ordered, adjudged and decreed that all of the trustees be and they are hereby ratified and confirmed, and the complaint dismissed. It is further ordered, adjudged and decreed, that the trustees be and they are hereby granted leave to petition to be discharged from the trust upon a full accounting, and to have some other person or persons substituted in their places and stead.

Source: CourtListener

Court

Supreme Court of South Carolina

Parallel citations

153 S.E 349