Opinion
26528.
ARGUED MAY 10, 1971.
DECIDED JUNE 2, 1971.
Cancellation. Richmond Superior Court. Before Judge Fleming.
Harris, Chance McCracken, J. Roy McCracken, Bouhan, Williams Levy, Robert M. Williams, for appellant.
Henry J. Heffernan, Jay M. Sawilowsky, for appellee.
1. Under the facts of this case the judge of the superior court did not err in authorizing the guardian of a minor to enter into a contract for a 66-year lease of the ward's farm, together with a provision for an option by the lessee to purchase the farm for the price of $20 per acre.
2. None of the alleged irregularities in the proceedings adversely affected in any significant degree the rights of the ward. The facts in the case existing at the time the court authorized the entering into the contract by the guardian and the lessee over-whelmingly justified the judge in authorizing the lease with option to purchase.
ARGUED MAY 10, 1971 — DECIDED JUNE 2, 1971.
Confronted with the mounting losses from the management of the estate of her six-year-old daughter and ward, Alice Virginia Youmans, which consisted of approximately sixteen hundred fifty (1,650) acres of land in Burke County, Georgia, Virginia V. Youmans on October 20, 1953, petitioned the Superior Court of Richmond County, Georgia, for permission to grant a lease of 66 years and an option to purchase the land to Union Bag and Paper Corporation, corporate predecessor of Union Camp Corporation. She set forth in detail in her petition, brought under the provisions of Sections 49-203, 49-204 of the Code of 1933 as amended by an Act of the General Assembly of Georgia, approved on February 10, 1953 (Ga. L. 1953, pp. 44-46) the reasons for the proposed lease and option to purchase and its purpose to invest and reinvest the proceeds for the benefit of her ward.
The Honorable F. Frederick Kennedy, Judge of the Superior Court, Augusta Circuit, considered the petition. He directed publication once each week for four weeks of the required notice of intention to present the petition for final hearing and service of the proceedings upon the next of kin of Alice V. Youmans, Alice H. Videtto, and upon the guardian ad litem, whom he designated to be Charles A. Youmans, the father of Alice Virginia Youmans, provided he accepted the appointment. He set the final hearing on the petition for the 19th day of November before the Honorable G. C. Anderson, Judge of the First Division in Augusta, Georgia.
The directions of the court were carried out. Mr. Charles A. Youmans accepted the designation and acknowledged service as guardian ad litem on November 6, 1953. Mrs. Alice H. Videtto, as the grandmother and nearest of kin of Alice Virginia Youmans, acknowledged service on November 6, 1953. The notice of intention to present the petition was duly published for four weeks in the official organs of Richmond and of Burke County, Georgia, wherein the land was situated.
The notice published by the guardian, Mrs. Virginia A. Youmans, advised that she "... has filed in the office of the Clerk of the Superior Court of Richmond County, Georgia, an application which will be presented to the Honorable Grover C. Anderson, Judge of the Superior Court of the Augusta Judicial Circuit at 11:00 a. m. on the 19th day of November, 1953, at Augusta, Georgia, ..." It also advised that the proceeding was for "the sale of an estate for years and a future interest" in the lands of her ward which were described and that a copy of the proposed lease and option was attached to and filed with the application. It added, "... reference thereto may be had by all parties at interest prior to the presentation of said application..." (Emphasis supplied.)
The order of the court, entered November 19, 1953, showed the court's findings that "... all requirements of law covering said matter have been fully complied with, and that the court has full jurisdiction at this time to pass upon the matters and things presented..." The court also found from its investigation and consideration of the evidence "... with the constant, recurring obligation for the payment of taxes, and the present economic conditions affecting agricultural interests, it appears not only unwise but impractical to conduct further farming operations..." The court found from the depleted condition of the timber on the lands and the necessity for reestablishment of the timber growth over a period of years, that the proposed lease "would insure an annual income for at least twenty years before the option to purchase can be exercised by the lessee, and with the option to purchase, exercisable only after the expiration of twenty years, realizing what the guardian and her family think is the full market value of the property at this time." The court concluded, "... the advantages to the minor ward appear unquestionable." The court determined that the application constituted a sale of the ward's estate for reinvestment under the Code and was in the best interest of the minor ward. The court pronounced its decision as follows: "It is, thereupon, Considered, adjudged, and ordered by the court that the application of said guardian for authority to enter into said lease be and the same is hereby granted, with authority to execute in the final draft thereof a surveyed description accurately describing the property involved, and said lease and the option therein contained when so executed is hereby declared to be valid in all respects, upon said guardian and her successors, her ward, upon the termination of said guardianship, and upon the heirs, executors, administrators, and assigns of said ward."
The pronouncement of the judgment of the court on November 19, 1953, was followed by the completion of the survey of the property and preparation of a plat. The lease and option to purchase, reciting the permission of the court and incorporating the results of the survey, was entered into by the parties on January 2, 1954.
On June 23, 1970, Alice Virginia Youmans, having attained her majority on October 19, 1968, brought a complaint in equity against her mother and guardian, Virginia V. Youmans, her father and guardian ad litem, Charles A. Youmans and Union Bag Paper Corporation, the corporate predecessor of Union Camp Corporation, to set aside the judgment of November 19, 1953, and the contract entered pursuant thereto. The defendant Union Camp Corporation, the only defendant that made answer to the petition, filed its answer and moved for a directed reply to its defense that the plaintiff had ratified the lease and option to purchase by receiving and retaining the benefit of two of the annual rental payments. Following reply of the plaintiff denying she had ratified the agreement, Union Camp Corporation filed a motion for judgment on the pleadings.
The plaintiff then amended her pleadings to show that the hearing before Judge Anderson was not held in the Richmond County courthouse and denied the defense of ratification. The motion for judgment on the pleadings was duly heard and after briefs by both sides, the court entered its order denying and overruling the motion. Paragraph 12 of the petition to lease and grant an option to buy alleges: "The proposed indenture of lease and option to purchase constitutes the sale of an estate for years and future interest ( capable of ripening into a fee simple title) in said lands, and the reinvestment of her ward's estate under the terms and condition thereof, within the provisions of Section 49-203-204 of the Code of Georgia of 1933 as amended." (Emphasis supplied.)
On the hearing for leave to sell, give option to purchase and reinvest, the judge rendered the following order: "The above matter comes on for hearing before me in the City of Augusta, Georgia, on this the 19th day of November, 1953, pursuant to the terms of the order entered therein under date of October 20, 1953, by the Honorable F. Frederick Kennedy, Judge of the Superior Courts of the Augusta Circuit, in which order the cause was referred to me for final consideration and judgment, and Charles A. Youmans, as the father of Alice Virginia Youmans, was appointed as guardian ad litem for his said daughter, with direction that service be perfected upon said guardian ad litem and upon Alice H. Videtto, the grandmother of the minor ward, the nearest of kin of said minor ward.
"From a consideration of the record and documentary evidence submitted, it appears that said proceeding was filed on October 20, 1953, in the office of the Clerk of the Superior Court of Richmond County, Georgia, that on the 6th day of November, 1953, Charles A. Youmans, as guardian ad litem for said ward under the previous order entered herein by this court, accepted said appointment, consented to act, and duly acknowledged service of said proceeding, and that on the same date, to wit, November 6, 1953, Alice H. Videtto, as the grandmother and nearest of kin of said ward, likewise acknowledged service of said proceeding.
"It further appears from evidence satisfactory to the court that notice of said proceeding and of the intention to present the same to the court on this date was duly published in the Augusta Herald, as the official organ of Richmond County, Georgia, and the Waynesboro True Citizen, as the official organ of Burke County, Georgia, in which the land involved is located, once a week for four weeks next preceding this hearing.
"The court finds that all requirements of law covering said matter have been fully complied with, and that the court has full jurisdiction at this time to pass upon the matters and things presented, both under the terms of Section 49-204 of the Supplement to the Code of 1933 of Georgia, and as the provisions thereof have been supplemented and amplified by the Acts of the General Assembly of Georgia, approved on February 10, 1953, and now appearing in Georgia Laws of 1953, pages 44-46.
"Evidence has been submitted to the court by the guardian, by the guardian ad litem, and by the grandmother of the ward to the effect that the title of the minor ward here involved to the lands in Burke County, Georgia, described in said proceeding originated under a devise made for the benefit of the minor under the terms of the Will of her grandfather, Pickens H. Videtto, late of Richmond County, Georgia, deceased.
"After the title to said property was acquired for the benefit of said minor ward, efforts have been made each year to secure an income therefrom, but notwithstanding vigorous efforts, it has not been possible to lease the property in its entirety to a tenant capable of financing the agricultural operations required; with the result that in order to insure any return whatever, the guardian and the grandmother of the ward have each year been forced to guarantee accounts and bills for necessary expenses in the operation of the farm. As a result of this, the returns from the operations have in the main been entirely unsatisfactory and have, in fact, necessitated expenditures by the guardian, as the mother of the ward, and by the grandmother, from their private funds, in order to protect the interest of the ward and prevent the reduction of the corpus of her inheritance. Some income has been derived through the sale of grazing rights and hunting privileges, but with the constant, recurring obligation for the payment of taxes, and the present economic conditions affecting agricultural interests, it appears not only unwise but impractical to conduct further farming operations, with the tenant houses and other improvements on the property in need of repairs and the apparent impossibility of securing lessees willing and able to conduct farming operations upon a productive basis.
"Under these circumstances, efforts have been made to develop the farm along productive lines which will insure an income to the minor ward, which the guardian hopes to invest and reinvest in securities approved for trust investments, without encroachment thereon so long as she and her husband are able to supply to the ward adequate support, maintenance, and educational advantages. To this end, negotiations have been entered into with Union Bag and Paper Corporation, which at the present time is developing large tracts of timbered lands upon which to grow timber for use in manufacturing operations, and as the timber originally growing on the property here involved has now been cut down to a point where no substantial income can be expected therefrom for a number of years, the proposal for the reestablishment of the farm for the growth of timber and the conversion of the land into what is generally referred to as a `tree farm' has been determined by the guardian to be desirable, where such use would insure an annual income for at least twenty years before the option to purchase can be exercised by the lessee, and with the option to purchase, exercisable only after the expiration of twenty years, realizing what the guardian and her family think is the full market value of the property at the present time. The development of `tree farms' by large owners, financially able to incur the expense and delay of returns, to procure the services of trained personnel, and to use other means to insure proper production, is generally recognized at the present time as a very satisfactory use of agricultural lands, which, through continued farming operations without rebuilding depleted soil and through lack of necessary repairs to improvements, have reached the point where satisfactory returns are not obtainable from continued operations for the production of annual crops.
"The court has some knowledge of the location of the property here involved, and, while the terms of the lease extend over a long period of time, and, therefore, merit close consideration, the advantages to the minor ward appear to be unquestionable. The guardian has acted not only on her own judgment, but has made a somewhat extensive investigation of the proposal, and both she, her husband, and the grandmother of the ward are definitely of the opinion that the proposed lease, with the option included, even though extending beyond the majority of the ward, is desirable and will insure to her an annual income, which through investments and reinvestments may ultimately furnish her a competence, in the event her father and mother are able to provide for her maintenance and support during her minority. The lessee is a very large and substantial corporation, has been successful in its operations, and has the reputation of maintaining lands upon which it grows timber in a manner which improves the land and results in the growth of the maximum amount of usable timber products. The proposed lease contemplates the grant of the complete dominion and control of the lands in question, including mineral rights, as well as any other profitable use which may be made of the lands, subject only to the limitations and covenants contained in the proposed indenture. At the present time there is no mining activity in the area and there are no known minerals of any value in said lands. The risk of later discovery and development of minerals is one which is incident to the sale and disposition of lands of similar nature in the area, and, therefore, the grant thereof is not to be considered as unreasonable in view of the consideration to be received by the ward.
"The court further finds that the proposal as set forth in the application constitutes a sale of the ward's estate and a reinvestment thereof in and under the terms of the proposed indenture of lease within the purview of the foregoing sections of the Code.
"Under these circumstances, and based upon the above findings, the court finds that the proposed lease is to the best interest, of the minor ward, that the terms thereof have been reached after negotiations of some months, and represent what is apparently the best use that can be made of the property in question at the present time.
"It is, thereupon Considered, and adjudged, and ordered by the court that the application of said guardian for authority to enter into said lease, be and the same is hereby granted, with authority to include in the final draft thereof a surveyed description accurately describing the property involved, and said lease and the option therein contained when so executed is hereby declared to be valid in all respects, upon said guardian and her successors, her ward, upon the termination of said guardianship, and upon the heirs, executors, administrators, and assigns of said ward.
"From the proceeds of the first twelve-month rental payment received under the terms of said lease, said ward is authorized to pay and discharge the cost of this proceeding, together with her counsel fees in the investigation and handling of said matter, in an amount of $500. The cost of the survey and any investigation of title made by the lessee are by agreement to be paid by it."
1. There is no merit in the contention of appellee that the proceedings and judgment authorizing the guardian to lease and grant an option to purchase the ward's lands are void for the reason that the hearing on the guardian's application was not held at the courthouse in Richmond County, Georgia. There is no contention as to where the hearing was held and no contention that the hearing was not held "at chambers" as the law authorizes. The application by the guardian to lease and grant the option to purchase was presented to Judge Frederick Kennedy, one of the Judges of Richmond Superior Court, and he by order set the hearing "before Judge G. C. Anderson, Judge of the first division of the said court, at his office in the City of Augusta, Georgia on the 19th day of November, 1953." This order required publication as required by law once a week for four weeks next preceding the date of the final hearing as fixed in said order.
2. There is no merit in the contention of the appellee that the judgment attacked is void because the published notice does not set forth the reason for making the application. The public notice expressly referred to the guardian's application which was on file in the office of the Clerk of the Superior Court of Richmond County, Georgia, where it was available to all interested parties, and which gave notice of the reasons for the proposed lease and option to purchase. It is a general rule that a paper which expressly refers to another paper within the power of the party, gives notice of the contents of that other paper. Livingston v. Maryland Ins. Co., 7 Cranch (U.S.) 506, 538 ( 3 LE 421).
3. There is no merit in the contention of the appellee that there were material differences between the lease presented to the court by the guardian, with the petition, and that actually entered into. The statute does not require that the exact document by which a sale for reinvestment is sought, be filed with the petition, the reason for which is obvious, because the court's hands should not be tied by a particular instrument when the court might wish to revamp or revise it as the evidence suggests or requires. Such corrections as were made in typing, spelling, punctuation, etc., did not affect the meaning of the document. The only difference in the two documents is the addition of the description of the land and a plat based on a survey of the property. These additions were made pursuant to the order of the judge. Code Ann. § 81A-161 (Ga. L. 1966, pp. 609, 664) states the State's public policy as to irregularities such as those dealt with in the three divisions above. "The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties."
4. The principal contention of the appellee in this case is that the order of the court, authorizing her guardian to lease her lands for 66 years to appellant's predecessor at a yearly rental with an option to purchase the land for $20 per acre at any time after 20 years of the lease had expired, is void because such an order is contrary to public policy and because no right existed for the court to authorize an option to purchase in connection with the lease. We think that there is no merit in the contention for a number of reasons. (a) We find no law to the effect that an owner of land or a court having jurisdiction of a minor's property may not authorize a lease of and option to purchase his land or the land of a ward of the court upon legal application to the court. (b) In this case the option to purchase was a condition of the lease, without which the lease could not have been negotiated, in which event the ward would in all probability have lost her land and the very material benefits she could have received if the lease and option to purchase had become a reality. (c) It makes no difference whether an option is an interest in the property to be optioned or not. In this case the guardian, in requesting the authority to lease and give the option to purchase, did not intend to classify the option as a traditional future interest, that is to say, an interest vesting in the present, but sought to clarify what she meant by putting in parentheses that she meant that "future interest" meant an interest which was (capable of ripening into a fee simple). It stands to reason that something that is capable of ripening into a fee simple title, is not at present a fee simple title. However, we do not believe that the court would have been without authority to do what he did even if the guardian had simply sought authority to lease the land. In such case the court could authorize a lease and an option to purchase if it would be in the ward's best interest. He was equally, or more, justified in this case, because the most beneficial lease would not have been possible without the option to purchase. That was a sine qua non of the package proposal. (d) Code Ann. § 108-439 (Ga. L. 1953, p. 44) and the "legal" provision of Code § 49-203, give concurrent jurisdiction to law and equity in cases involving the property of wards and sales of their property, inasmuch as in such case the minors become wards of the court. In Sangster v. Toledo Mfg. Co., 193 Ga. 685, 691 ( 19 S.E.2d 723), this court said: "That the jurisdiction of equity of the estates of wards of chancery is broad, comprehensive, and plenary, cannot now be questioned, was the pronouncement of this court in the Richards case, [ 106 Ga. 614] supra, and authorities were there cited to support the statement. When this jurisdiction attaches, the court's action is not limited by any narrow bounds, but it is empowered to stretch forth its arm in whatever direction its aid and protection may be needed. 19 Am. Jur. § 151, and cit. It may order a sale or partition when such would be for the best interest of the ward, or confirm a sale or a partition which is beneficial to such interest, although the same might be subject to such infirmities as ordinarily would avoid it. It can in a variety of circumstances make an election on his behalf, after having ascertained, through an inquiry, what action is best for his advantage. Compare 2 Pomeroy's Eq. Jur. (5th Ed.), § 510, note 17, and cit.; Buswell on Insanity, § 35." (Emphasis supplied.)
The cases of Adler v. Adler, 216 Ga. 553 ( 118 S.E.2d 456, 83 ALR2d 1303) and Campbell Coal Co. v. Baker, 142 Ga. 434 ( 83 S.E. 105) are not applicable to the facts of this case. The Adler case involves a situation where an executor-trustee under a will, which does not contain authority to grant an option to purchase, was held not ordinarily to have authority to give or sell an option to purchase. In the Campbell Coal Co., case this court held that to grant an option in a private sale made prior to a court-ordered public sale, was violative of Civil Code (1910), § 4035. "If a trustee has power to sell and lease trust property, he may make a lease and give an option to purchase where the property could not otherwise be advantageously leased or sold." Restatement of the Law of Trusts (2d Ed.), p. 422, § 190 (k), cited in Adler, supra, p. 557. Accord III Scott on Trusts (2d Ed., 1956) 1573, § 190.8 and cit. The judgment of the court granting the guardian the right to lease and give an option to purchase, was also authorized by Ga. L. 1953, pp. 44, 45 ( Code Ann. § 108-444). In this case the beneficiary was bound even though the lease extended beyond the termination of the trust (the majority of the ward).
5. No injustice resulted to the ward from the lease and option to purchase approved by the court. "The right of an infant to show cause against a decree which affects his interests is limited to cause existing at the time of the rendition of the decree, and not such as arose afterward." 43 CJS 352, Infants, § 123 (d). The order of the court attacked authorized the guardian to lease for 66 years 1,650.92 acres, at $1.20 per acre per year and give the lessee an option to purchase the property at $20 per acre any time after 20 years up to the expiration of the lease. What has been said above renders it unnecessary to consider the questions of ratification and estoppel.
The court did not err in authorizing the guardian to make the agreement sought to be set aside and erred in denying appellant's motion for judgment on the pleadings.
Judgment reversed. All the Justices concur.