Opinion
14028.
MARCH 10, 1942.
Cancellation of deed. Before Judge Perryman. Taliaferro superior court. November 24, 1941.
W. A. Slaton, for plaintiff in error.
Park Park and Hawes Cloud, contra.
1. The purchaser of land at a guardian's sale is liable for the amount of his bid, and can be required at the suit of the guardian to pay the same. The guardian who has accepted the highest bid may be required by legal process, upon the payment of the amount of the bid, to convey the land thus sold. Where, as in the instant case, the purchaser has with the consent of the guardian delayed payment of his bid, he has such an interest as entitles him to join the guardian in an action to remove the cloud on the title, although he has not received a deed of conveyance from such guardian.
2. While the due registration of a deed is presumptive evidence of its delivery, this presumption is rebuttable; and where evidence is introduced which would authorize the jury to find that this presumption has been rebutted and that the deed has not been delivered, an issue of fact is thereby made, and it is the sole province of the jury to decide that issue. In the present case the evidence was sufficient to authorize the jury to find that the deed in question had not in fact been delivered.
3. A grantor and those claiming under him are, as a general rule, estopped to assert that a deed was executed for the purpose of hindering, delaying, or defrauding creditors. This rule is based upon the principle that one may not profit by reason of his own wrong. But where such a deed has not in fact been delivered, the above rule does not apply, and the grantor and those claiming under him are authorized to allege and prove that the deed was signed for such fraudulent purpose. In the latter case the grantor has stopped short of completing his fraudulent purpose, and neither his creditors nor the person named in the deed as grantee suffer any injury by reason of such purpose, and evidence of such a nature tends to account for the execution of the deed and explain why it was never intended to confer a benefit upon the person named therein as grantee.
4. The verdict is supported by the evidence, and the exceptions to the ruling on the demurrer and to portions of the charge are controlled adversely to movant by the rulings made in headnotes 1, 2, and 3.
No. 14028. MARCH 10, 1942.
J. R. Bemis, as guardian of B. Lawrence Battle, and Wales T. Flynt brought an action against Mrs. Minnie Battle Allen. The petition as amended alleges that B. L. Battle, deceased, owned and possessed at the time of his death a described tract of land in Taliaferro County, known as the Doughty place; that B. L. Battle left a will devising the Doughty place to his two sons, B. L. II and Allen, for life, and to the child or children of said two sons at their death; that Allen Battle died without ever having married, and leaving no children; that B. L. II died leaving one child, B. Lawrence Battle, for whom J. R. Bemis is guardian; that J. R. Bemis as guardian, under a proper order of the superior court authorizing him to sell the land for the purpose of reinvestment, sold the same at public outcry to the plaintiff Flynt, who was the highest bidder for the sum of $2350; that immediately after the sale Flynt's attorney in investigating the title discovered a number of recorded security deeds against the land, one of which purports to convey the land to the defendant to secure described notes; that upon request the grantees in all such recorded security deeds executed orders of satisfaction thereof, except the defendant, who refused to do so. The petition alleges, that the grantor, B. L. Battle, was insolvent at the time he signed the security deed to the defendant; that it was without consideration, and executed solely for the purpose of hindering and delaying the creditors of the grantor, which purpose was known to grantee at the time; that although the deed to the defendant was recorded, it was never delivered to her, and consequently never became a valid conveyance of the land therein described; that B. L. Battle died in possession of the land; that his will was probated on April 5, 1926; that all debt of the estate were paid by the executor; that the executor assented to the legacy on January 1, 1927; that the sons, Allen and B. L. II, thereupon entered into actual possession of the land, which possession continued until the death of Allen in 1929; that thereafter B. L. II held possession until his death in 1934, since which time B. Lawrence Battle by his guardian has held possession, which continued adverse possession has given petitioners a valid title by prescription as against the security deed to the defendant. The petition prayed that the security deed be ordered canceled as constituting a cloud upon the title to the land.
To this petition as amended the defendant demurred, the only grounds of the demurrer here insisted upon being that the petition failed to show that plaintiff Flynt had paid the purchase-money or that he had received from the guardian a deed to the land. The demurrer was overruled. The defendant's answer denied the material allegations of the petition, and the case went to trial before a jury. It was stipulated, that B. L. Battle died on February 19, 1926; that his will was probated in April, 1926, and letters testamentary issued to the nominated executor, J. H. Battle, on April 5, 1926; that under the will the land described in plaintiffs' petition, containing 329 acres, more or less, and known as the Doughty place, was devised to his two sons, Lawrence and Allen, jointly for their lives and at their deaths to their children, and if both should die without children surviving it should revert to his estate; that Allen Battle died in 1932, leaving no child; that Lawrence died May 11, 1929, leaving only one son, B. Lawrence Battle, a minor, for whom J. R. Bemis is the duly appointed guardian. Without objection, the records of the court of ordinary of Taliaferro County, showing the application of the executor for discharge from his trust, reciting that he had paid all debts and had fully administered the estate, and that the application was regularly granted at the February term, 1928, and the complete returns of the executor as recorded, were admitted in evidence, which returns showed in brief that the executor received $51,994.46, of which $42,430.46 was life insurance, and disbursed the same amount. The plaintiffs introduced a number of witnesses who testified in substance to the sale of the land as alleged; that the defendant was present or close enough to the court-house to hear the sale; that there were a number of bidders, but the plaintiff Flynt was the highest bidder and the land was knocked off to him for his bid of $2350; that the defendant went to the office of witness Cloud while the advertisement was appearing in the paper, and talked with him about the sale; that she stated to the witness that "she had seen the notice that was being published, and that notice was for the purpose of securing an order to sell the land of that boy Lawrence Battle for the purpose of reinvestment; that she thought that it was all right to sell it for reinvestment; that she had no interest in it." This witness testified, that before the sale Mr. Miller was renting the land and had a contract to buy it; that he was to pay $200, half of which was for rent and the other half was for an option to buy the land at a certain price. This contract was between Miller and guardian Bemis, and was dated May 18, 1939. The defendant Mrs. Allen had nothing to do with it. Mr. Miller was refunded the $100 paid on the purchase-price when Mr. Flynt was the purchaser at the sale. A guardian's deed to Mr. Flynt has been prepared and is ready to the delivered to him upon the payment of the purchase-price. The clerk of the court testified that he had held that office since January 1, 1911; that as clerk he recorded the security deed to the defendant; that his brother, who was an attorney, prepared the deed for Mr. Battle; that the deed was handed to him after it was signed and witnessed, and the grantor, Mr. Battle, paid him for recording the same; that at the time the deed was executed witness's brother represented Mr. Battle in two suits by creditors, and Mr. Battle was in financial trouble; that witness recorded the deed and returned it to his brother, attorney for Mr. Battle, as he had been instructed to do by Mr. Battle; that he did not see Mrs. Allen when the deeds were executed or at any time while they were in his possession; that he has never seen Mrs. Allen in possession of the deed; that the first time he ever heard from Mrs. Allen about the deed was in December, 1940, when she requested him to make a copy of the deed that Lawrence Battle made to her; that on the same date the deed to the defendant was made, Mr. Battle executed three other security deeds and had all of them recorded; and that witness, in carrying out the instructions of B. L. Battle, delivered all of the four deeds to his brother when they were recorded. Witness Mitchell testified that the defendant told him that Mr. Lawrence had the deed recorded to her; that she did not know why he did, because he did not owe her anything; that she did not know why, she did not understand, but Lawrence made the deed to her, and she was claiming that and she was going to have the place. Witness Darden testified for the plaintiffs, that the defendant asked him to bid on the land at the guardian's sale, which he did; that when she requested him to bid at the sale she did not say a word about having any paper against the land; that he had been acquainted with the defendant and the land here involved for a number of years, but had never heard her claim the land; and that a negro by the name of Arthur Collins had been living on the land during the past two years. Witness Bracy testified, that B. L. Battle was in possession of the land at the time of his death; that the defendant went into possession after his death; that when Mr. Battle died Mr. Smith was farming the land; that Mr. Smith went to Jim Battle, a brother of Lawrence, and Jim told him to go ahead and farm it that year; that after that year the defendant took possession, but witness did not know whether she claimed it as her own, as she never claimed it to the witness; that after Smith left the land in 1926 a man by the name of Levy went down there, and witness thinks Levy rented it from Mrs. Allen. Levy stayed there about six years. When Levy left Coot Griffin took possession for one year, and after Coot Griffin left a negro by the name of Arthur Collins went there and remained four of five years. Arthur Collins told witness that he rented the land from Mrs. Minnie [defendant]. Witness has ten acres of the land, and will pay the rent as the law directs; he does not know from whom he is renting. The plaintiff Flynt testified, that he was the highest bidder and purchased the land at the guardian's sale; that he incurred and paid expenses in trying to perfect the title; that Mr. Miller had the land rented in 1939, and Arthur Collins left the rent for Mr. Miller at witness's gin-house; that he bought two bales of cotton that were paid Mr. Miller for rent by Arthur Collins, and paid Mr. Miller for same; that Arthur Collins rented the land from Mr. Miller in 1940, and witness collected the rent for Mr. Miller; and that Mrs. Allen has made no demand upon him for the rent.
Also admitted in evidence without objection were the following: A writing from Augustus Levy as agent for Allen and Lawrence Battle, dated January 1, 1927, for land known as the Doughty place together with other lands and personal property. A rent and option contract, dated May 18, 1939, between J. R. Bemis as guardian and L. L. Miller, reciting that the guardian had rented to Miller the Doughty place for 1939 for $100, and that for another $100 Miller was granted an option to purchase the land for $2100 if the law would permit the sale. Court records showed an application of the defendant for appointment as administratrix of the estate of Lawrence Battle in 1934, and a similar application at the same time as to Allen Battle; that she qualified as administratrix of the two estates; but no other returns were made. It was admitted that the guardian had executed and placed in the hands of his attorney a deed conveying the Doughty place to the plaintiff Flynt to be delivered upon the payment of the purchase-price. The tax-digests of the county were in evidence. These showed that for the years 1921 to 1940, inclusive, the defendant, Mrs. Allen, made no return for taxation of any note or other indebtedness due to her; that in 1941 she returned as the property of the minor, B. Lawrence Battle, 850 acres of land in the same district as the Doughty place; that for the years 1921 to 1925, inclusive, B. L. Battle was assessed for 574 acres of land as the only property he owned; that the B. L. Battle estate was assessed for the same property and at the same valuation in 1926 and 1927; that from 1928 to 1937, inclusive, the tax assessments were in the name of Lawrence or Allen Battle, or both, in the same amounts and on like property as the B. L. Battle estate; and that for the years from 1937 to 1940, inclusive, they were in the name of B. Lawrence Battle, for 850 acres of land.
In evidence was a notice by plaintiffs to produce, on which due service was acknowledged by defendant's attorney. It was dated July 25, 1940, and called upon the defendant to produce at the August term, 1940, and until the case was finally tried, the security deed dated August 20, 1921, purportedly from B. L. Battle to the defendant, conveying the "Doughty place," the notice reciting that it was given without prejudice and with the distinct right reserved to continue to maintain, as set forth in the petition, that the deed and notes therein referred to were never delivered to the defendant, and that they were invalid. The defendant was not present in court at any time during the trial, and her counsel stated in open court, in response to the notice to produce, that his client did not have the deed. The jury returned a verdict in favor of the plaintiffs, and decree was entered accordingly. The defendant filed a motion for new trial, which was amended by excepting to a number of excerpts from the charge to the jury. The motion was overruled, and the defendant excepted.
1. All the assignments of error, including the special grounds, are involved and will be decided by a decision on four questions, to wit: (a) Has the plaintiff Flynt such an interest in the subject-matter as to authorize him to prosecute the action? (b) Was the deed sought to be canceled invalid because of non-delivery? (c) Were the plaintiffs entitled to show that the purpose of grantor in executing the deed was to hinder, delay, or defraud his creditors? (d) Is the verdict supported by the evidence?
Whatever interest and rights the plaintiff Flynt has arose by virtue of the acceptance of his highest bid at the sale by the guardian. He has not paid the amount of his bid, nor has he received a deed to the land. By the acceptance of his bid and knocking off the land to him at the sale, he thereupon and thereby became legally bound to pay the full amount of his bid. Code, § 39-1301. No memorandum of the sale is necessary in order to render it effective and binding upon both the guardian and the bidder. Code, § 39-1306; Green v. Freeman, 126 Ga. 274 ( 55 S.E. 45, 7 Ann. Cas. 1069); Arnold v. Arnold; 154 Ga. 195 ( 113 S.E. 798). In the circumstances of the case, either the guardian or Flynt, the bidder, can by legal process compel the other to execute fully the terms of the sale. Flynt has such an interest in the land by virtue of his bid that upon payment or tender of the amount thereof he can require the execution by the guardian of a proper conveyance of the land. On the other hand, the guardian can by legal process require Flynt to pay the amount of his bid. Under such circumstances Flynt has a very definite interest in the subject-matter of the suit. The deed which it is sought to cancel constitutes a cloud upon the title, and this action is to remove that cloud by cancellation of the deed. Although the deed be void for the reasons alleged in the petition, its cancellation is necessary to the perfect protection of the owner of the land. Under these circumstances Flynt is entitled to prosecute the action for cancellation of the deed. Code, §§ 37-1407, 37-1408; Hale v. Turner, 183 Ga. 593 ( 189 S.E. 10).
2. The deed in question having been duly recorded, this record is presumptive evidence of its delivery. Harvill v. Lowe, 47 Ga. 214; Parker v. Salmons, 101 Ga. 160 (3) ( 28 S.E. 681, 65 Am. St. R. 291); Equitable Mortgage Co. v. Butler, 105 Ga. 555 ( 31 S.E. 395). But this presumption is rebuttable; and where there is evidence of non-delivery of a deed, an issue of fact arises and it is for the jury to decide whether or not the deed was in fact delivered. Wellborn v. Weaver, 17 Ga. 267 (13) (63 Am. D. 235); Shelton v. Edenfield, 148 Ga. 128 (2) ( 96 S.E. 3); Lowry v. Lowry, 150 Ga. 324 (2) ( 103 S.E. 813); Waters v. Wells, 155 Ga. 439 (8) ( 117 S.E. 322); Morris v. Morris, 171 Ga. 642 (2) ( 156 S.E. 256); Daniel v. Stinson, 179 Ga. 701 (4) ( 177 S.E. 590). The plaintiffs in the present case produced sufficient facts and circumstances to authorize the jury to find that the presumption of delivery arising from the record of the deed was rebutted, and that the deed had not in fact been delivered. Those circumstances may be briefly stated as follows: When the grantor delivered the deed to the clerk to be recorded, he instructed the clerk to return the same to the grantor's attorney when it had been so recorded, and this instruction was followed by the clerk. The grantee knew of the guardian's sale, requested one person to bid thereat, stated that she had no objections to the sale and had no interest in the land, and she was personally close enough to the court-house where the sale was held to hear the bidding, and knew that the same was taking place. She stated that the grantor owed her nothing, that she did not know why he executed the deed, and that she could not understand it. Over a long period of years, from 1921 to 1940, inclusive, she made tax returns, but returned no notes or other claims held and owned by her. She referred to the land as "Sonny's land," meaning B. Lawrence Battle. She presented no claim against the estate, made no effort to collect the alleged notes secured by the deed, and made no objection to the discharge of the executor upon his application reciting that he had paid all debts of the estate and fully executed his trust. And in response to the notice to produce the deed upon the trial she contented herself with the statement of her counsel that she did not possess the deed, and made no attempt to explain why she was unable to comply with that notice. These circumstances fully authorized the jury to find that the deed had never been delivered.
3. It is the general rule that the grantor and his heirs are estopped to assert that the purpose of the grantor in executing a deed was to hinder, delay, or defraud his creditors. McCleskey v. Leadbetter, 1 Ga. 551; Bush v. Rogan, 65 Ga. 320 (38 Am. R. 785); Taylor v. Street, 82 Ga. 723 ( 9 S.E. 829, 5 L.R.A. 121); Boswell v. Boswell, 147 Ga. 734 (2) ( 95 S.E. 247); Anderson v. Anderson, 150 Ga. 142 ( 103 S.E. 160). This rule is founded upon the proposition that one will not be permitted to profit by his own wrong. Where a deed is executed for such fraudulent purpose and becomes effective by delivery, then to allow the grantor and those claiming under him to attack such a deed because of the fraudulent purpose on the part of the grantor would be to allow such grantor to profit by his own wrong. Where, as in this case, it is alleged, and evidence produced to sustain such allegation, that the deed in question was never delivered, the above rule of estoppel does not apply. In Lowry v. Lowry, 150 Ga. 324 (3) ( 103 S.E. 813), it was said: "The doctrine that the grantor in a deed made for the purpose of hindering, delaying, or defrauding his creditors, or one claiming in his right, can not be heard to question the validity of such deed, does not apply where the deed was not in fact delivered." The foregoing quotation was approved and repeated in Morris v. Morris, 171 Ga. 642 (3) ( 156 S.E. 256). To the same effect see Clowers v. Clemons, 185 Ga. 567, 570 ( 196 S.E. 28). This exception rests upon sound principles, because if the deed is not delivered the grantor stops short of executing his fraudulent purpose. He is guilty of no wrong to his creditors. A cancellation of such a deed works no injury to the person named as grantee. Evidence of such purpose, coupled with a claim of non-delivery, tends to support the claim by showing a total absence of a desire or intention to benefit the person named as grantee. It is not necessary in such a case to sustain an allegation of fraud in order to obtain cancellation, since non-delivery alone would authorize that relief. Nor is it necessary that the evidence show that such fraudulent purpose was known to the person named as grantee.
4. The verdict in favor of plaintiffs is supported by the evidence, and the ruling on the demurrer and the grounds assigning error upon portions of the charge are controlled adversely to the movant by the preceding rulings.
Judgment affirmed. All the Justices concur.