Opinion
17434.
ARGUED APRIL 9, 1951.
DECIDED MAY 15, 1951.
Equitable petition. Before Judge Humphrey. Candler Superior Court. January 12, 1951.
Anderson Trapnell, for plaintiff in error.
Rountree Rountree, contra.
Where, as here, after signing a waiver of all liens upon the crops grown by his tenant in favor of a lien of a third party for advances to aid in making crops, the landlord receives the proceeds from the crops, which are sufficient to satisfy the lien for advances, and converts the same to his own use, a petition of the holder of the lien for such advances against the landlord and the tenant, seeking judgment against them as trustees ex maleficio for the full amount of such advances, alleges a cause of action against both the defendants, and an answer by the landlord which admits these material facts constitutes no defense thereto.
No. 17434. ARGUED APRIL 9, 1951 — DECIDED MAY 15, 1951.
Swainsboro Production Credit Association sued John E. Barfield and M. E. Trapnell on a note executed by Barfield, which was secured by a bill of sale on crops growing or to be grown on described lands belonging to the defendant Trapnell, and payable to the plaintiff for loans made for the purpose of buying necessary supplies in making the crops. Attached to the petition is a copy of the note and an instrument signed by the defendant Trapnell as landowner, wherein he expressly waived any and all liens against the crops in favor of the petitioner's lien to secure the advances made for the purpose of making the crop. The petitioner alleges that the cotton and the tobacco were sold for more than $1700, and that this was more than enough to pay the petitioner's claim, but all of these proceeds from the cotton and the tobacco were delivered to the landlord, M. E. Trapnell, who had converted the same to his own use. The prayer was for judgment decreeing both of the defendants to be trustees ex maleficio and for judgment against each as such for the full amount of the petitioner's claim. To this petition the defendant Trapnell filed his demurrer upon the general ground and upon the special ground that there was a misjoinder of parties and of causes of action. The defendant Trapnell filed an answer, in which he admitted the allegations of the petition except that he denied the allegations as to the amounts received from the cotton and tobacco crops and his conversion thereof to his own use "as alleged." For further answer he alleged that some of the crops, without specifying what portion, were raised on lands of the defendant other than lands described in the plaintiff's bill of sale. The answer admitted that Trapnell had received all crops as alleged, and admitted the allegations that the proceeds of the tobacco and cotton crops were more than sufficient to pay the note secured by the bill of sale, but asserted that they were applied to claims of his and that such application was lawful. The plaintiff demurred to this answer upon the ground that no defense was therein set forth, and this demurrer was sustained. The defendant Trapnell excepts, assigning error upon the judgment overruling his demurrers to the petition and also upon the judgment sustaining the plaintiff's demurrer to his answer.
1. Whenever the circumstances are such that a person taking property, either from fraud or otherwise, can not enjoy the beneficial interest without violating some established principle of equity, the court will declare him a trustee for the person beneficially entitled. Code, § 108-107. This sound principle of equity is applicable in the present case. Here the landlord executed an express waiver of his claims upon the crops involved, and he did that in order to induce the petitioner to extend credit which was necessary to make those crops. Now it is shown that, disregarding his waiver of claims to the crops, he has appropriated to his own use the proceeds of those crops to the loss and injury of this petitioner. In such circumstances he can not be allowed to enjoy the benefits of these crops, since that would violate established principles of equity. The sole object of the petition is to invoke this principle of equity and to claim for the petitioner the rights conferred upon it by the foregoing Code section. In Smith Co. v. Austin Co., 143 Ga. 254 ( 84 S.E. 444), this court held that, where a debtor transferred his assets, thereby rendering himself insolvent, it was a fraud on all creditors, and that the transferee was a trustee ex maleficio as to the creditors to the extent of the value of the assets so transferred. This same principle of equity was applied in Belle Isle v. Moore, 190 Ga. 881 ( 10 S.E.2d 923); Millers National Insurance Co. v. Hatcher, 194 Ga. 449 ( 22 S.E.2d 99); Edwards v. United Food Brokers, 195 Ga. 1 ( 22 S.E.2d 812). The creditor here has a bill of sale to the assets that were delivered to the defendant Trapnell, and Trapnell had previously signed a consent that the plaintiff's lien be superior to any claim of his against those assets, thus giving this plaintiff an even stronger case against the transferee than that of Smith Co. v. Austin Co., supra. There is nothing to the contrary of what we now rule in Smith v. Pennington, 192 Ga. 478 ( 15 S.E.2d 727), and Mays v. Perry, 196 Ga. 729 ( 27 S.E.2d 698). Nor was the petition here subject to the attack that there was a misjoinder of parties or causes of action. Millers National Insurance Co. v. Hatcher, 194 Ga. 449 (3) (supra).
Notwithstanding the absence of any allegation in the petition or answer that shows a relationship of these defendants as landlord and cropper, the brief of counsel for the plaintiff in error contends that the relationship was that of landlord and cropper, and from this premise seeks, by the application of rules of law controlling that relationship, to sustain the contention that the judgments complained of are erroneous. While under Code § 61-502, when the relationship of landlord and cropper exists, title to the crops remains in the landlord until all advances made by him have been paid and there has been a division of the crop, yet it has been held that, if the landlord is unable to make such advances and requests another to do so, the person making the advances has a claim against the crops that will prevail over the landlord's claims or interest therein. Alexander Howell v. Glenn, 39 Ga. 1. The Court of Appeals has held that the cropper has a mortgageable interest in such crops, notwithstanding the landlord's title, until certain conditions have been met. Fountain v. Fountain, 7 Ga. App. 361 ( 66 S.E. 1020); Fountain v. Fountain, 10 Ga App. 758 (73 S.E. 1096). That court has further held that the landlord can not make claims against the crop for indebtedness for previous years that will defeat liens of third parties. Fountain v. Fountain, 10 Ga. App. 758 (supra). See also Rhodes v. Verdery, 157 Ga. 162, 166 ( 121 S.E. 221). Where the landlord has been paid for all advances, title to the cropper's share is in him, and he is entitled to receive it. Conley v. Kelley, 43 Ga. App. 822 ( 160 S.E. 532). Furthermore, if there were allegations in the pleadings here to show the relationship of landlord and cropper, the executed waiver of the landlord's lien is an agreement that would alter his rights under Code § 61-502. In Hanson v. Fletcher, 183 Ga. 858 ( 190 S.E. 29), this court held that the landlord's right under the above Code section may be varied by special agreement. For the reasons above set forth, the petition was not subject to any of the grounds of the demurrer.
2. The answer of the defendant Trapnell contains no allegations that would defeat the plaintiff's right to the relief sought. In that answer the landlord admits that he executed a waiver of all liens in favor of the lien of the petitioner, and yet the answer admits that the landlord has taken possession of the crops embraced in the petitioner's lien and converted them to his own use. The order of the judge recites that this defendant admitted in open court that the amount he received from the crops involved was more than sufficient to satisfy in full the petitioner's claim. The answer therefore constitutes no defense to the suit, and the court did not err in sustaining the demurrer thereto and dismissing the same.
Judgment affirmed. All the Justices concur.