Opinion
13020
November 6, 1930.
Before GRIMBALL, J., Sumter, April, 1930. Affirmed.
Action by Bessie S. Wilson against Floy M. Wilson and others, executors and trustees under the alleged will of W. B. Wilson, deceased. From an order sustaining a demurrer to the first cause of action in the amended complaint and permitting plaintiff to amend, plaintiff appeals.
See, also, 153 S.C. 472, 150 S.E., 897.
The order of Judge Grimball is as follows:
This matter comes before me by reason of a demurrer interposed by the defendants to the first cause of action in the amended complaint.
It appears from the pleadings and previous order of the Court that the original complaint undertook to set out a legal cause of action for $100.00 per month temporary alimony from the date of an agreement hereinafter referred to, and for one-third of the net proceeds of the sale of certain lands under the terms of said agreement; and also an equitable cause of action seeking to have the last will and testament of W.B. Wilson, deceased, declared null and void, and the awarding to the plaintiff of the entire estate of W.B. Wilson.
The defendants moved to require the plaintiff to state separately her causes of action, and at the same time demurred for misjoinder, and also moved to require the plaintiff to elect upon which cause of action she would proceed.
The matter was heard before his Honor, Judge S.W.G. Shipp, and he passed his order dated October 17, 1928, in which it was held the cause of action seeking to have the last will and testament of W.B. Wilson set aside, and seeking to have awarded to the plaintiff the entire property of W. B. Wilson, was equitable and inconsistent with the cause of action for $100.00 per month alimony and judgment for one-third of the net proceeds of the sale of a tract of land in Manatee County, Fla.
Plaintiff's counsel having elected to proceed with the equitable cause of action, his Honor so ordered, and directed the remainder of the complaint stricken out, except in so far as the allegations thereof might be needed in aiding the Court to determine the equitable cause.
Thereafter, however, the plaintiff served an amended complaint, to which the defendants answered, and to which answer the plaintiff replied.
On March 15, 1930, the defendants served notice of a demurrer to the first cause of action; the same being based on the ground that the same failed to state facts sufficient to constitute a cause of action, because the alleged contract of June 15, 1922, between W.B. Wilson and the plaintiff specifically sets forth in the fifth paragraph thereof that the agreement to make no change in the will of W.B. Wilson was made merely as security for the payment of W.B. Wilson to Bessie S. Wilson of one-third of the net proceeds of the sale of the Manatee County lands in the State of Florida, and, if the said W.B. Wilson failed to carry out this contract, and further executed a last will and testament as is set forth in the complaint, the plaintiff would not be entitled to maintain this action for the recovery of the entire estate of W.B. Wilson. This demurrer was argued before me April 10, 1930, and I reserved my decision therein until this time.
Ordinarily, a demurrer will not be sustained if the cause of action demurred to shows the plaintiff entitled to any relief, but the status of this cause, as above indicated, brings the question squarely before me as to whether the defendants, in their representative capacity, should be put to the expense of defending a suit seeking to annul the last will and testament of W.B. Wilson, by virtue of which they are executors and trustees, and seeking to divest them of the entire estate so as to vest the same in the plaintiff.
If the plaintiff has stated a cause of action, which, if true, will entitle her to this relief, then it is my duty to say so; but if she has failed to do this, then it is also my duty to say so; in order that the situation may be clarified and the issues set in their proper channels.
It appears from the allegations of the complaint that on or about the 15th day of June, 1922, the plaintiff and her husband, W.B. Wilson, were about to procure a divorce in the State of Florida, and in contemplation thereof they entered into an agreement, dated June 15, 1922, which is set forth in the complaint. In said agreement it was provided that the plaintiff should have $100.00 per month from W.B. Wilson for her maintenance, and alimony until such time as W.B. Wilson should sell either a large tract of land in Manatee County, or certain stock which he held in the San Carlos Development Company, the one sold first to be the one referred to in said contract. Upon the sale of said property, the plaintiff should receive one-third of the net proceeds accruing to the said W.B. Wilson, after deducting from the gross sale price the expense of sale, taxes, carrying charges, and liens and incumbrances which might be a specific lien upon the property sold, or any part thereof. The fifth paragraph of said agreement is as follows:
Fifth: In order to secure said Bessie S. Wilson in the payment of said sum of money (one-third of the net proceeds of such sale), the said W.B. Wilson further covenants and agrees that he will make no change in his will as now drawn in which said Bessie S. Wilson is named as the principal beneficiary until the terms of his agreement as to payment to said Bessie S. Wilson of said sum of money shall have been fully performed.
The complaint alleges that the lands in Manatee County were first sold, and that there was left as net proceeds from said sale the sum of $40,908.02, to which the plaintiff was entitled to one-third, amounting to $13,636.00. The complaint however, does not ask judgment for this sum, but asks that the last will and testament of W.B. Wilson, which was executed August 16, 1926, be declared null and void, and that the will of W.B. Wilson, in existence at the time of the making of the contract be declared his last will and testament, and that the entire estate of W.B. Wilson be vested in the plaintiff by virtue of said contract and said former will.
The construction of the agreement of June 15, 1922, comes up on this demurrer. If it appears that the plaintiff is entitled to the relief which she seeks, the Court will say so; but if it appears that she is not entitled, the Court will say so, and should, in my opinion, indicate the relief to which she is entitled to seek under the complaint.
Having in mind the purpose of the parties in executing the contract of June 15, 1922, we find in its preamble the following:
"Whereas, the said W.B. Wilson and Bessie S. Wilson have mutually agreed upon a property settlement in lieu of alimony in the event that the Court shall hold the said Bessie S. Wilson entitled to a decree of divorce."
The purpose of the parties in entering into that agreement, as expressed in the agreement itself, was to determine the property settlement which W.B. Wilson should give Bessie S. Wilson in lieu of alimony.
The contract then proceeds to state this property settlement, to wit: One hundred dollars per month from the date of the contract until the property settlement should be made, and then the plaintiff should have one-third of the net proceeds from the sale of the Manatee County lands. We designate this property because the complaint alleges that it was the first property sold. This property settlement was evidently the primary consideration between the parties and was the real purpose for the contract.
Then the fifth paragraph of the agreement plainly states that its provisions are for the purpose of securing Bessie S. Wilson in payment of the one-third net proceeds of such sale. This provision is merely an incident of said agreement. In the case of Union Nat. Bank v. Cook, 110 S.C. 99, 96 S.E., 484, where a note was secured by a mortgage, the Supreme Court held that the note was the principal and the mortgage merely an incident
The seventh paragraph of the complaint itself alleges that the agreement that the will of W.B. Wilson existing at that time should not be changed was "in order to protect the plaintiff until she was paid said one-third of the net proceeds."
The plaintiff, by her complaint, contends that by virtue of the contract and failure of W.B. Wilson to pay over the one-third of the net proceeds of the sale of said land, she, upon the death of W.B. Wilson, became entitled to his entire estate, and that the second will executed by him is null and void.
The defendants, by their demurrer, contend that the provisions in the contract that W.B. Wilson would not change his will until the plaintiff was paid the one-third of the net proceeds of the sale of said land, was inserted merely for security, and that the same being a security at its inception, could not be turned into an absolute conveyance, under the circumstances of this case, and that the plaintiff is now entitled only to that which she was originally entitled; that is to say, to the one-third of the net proceeds of the sale of the land.
It is true that the complaint alleges after-declarations of W.B. Wilson, but the cases hereinafter cited are authority for the proposition that after-declarations or even a subsequent agreement cannot change that which was intended as a security into an absolute conveyance, unless the same be made upon a subsequent sufficient consideration.
It appears that, after the execution of the instrument of June 15, 1922, and upon the sale of the Manatee County land, W.B. Wilson became indebted unto Bessie S. Wilson in a sum representing one-third of the net proceeds of the sale of said land, and this indebtedness would certainly continue until the same was discharged. And it further appears, and I so hold, that the fifth paragraph of said agreement was inserted for the purpose therein stated, to wit, in order to secure the said Bessie S. Wilson in the payment of said sum of money. This was an indebtedness which the said Bessie S. Wilson could then have enforced in the Courts.
No case has been cited to the Court wherein a person made a will and declared that the same should be security for a debt, nor where a person declared that an existing will should remain as security for a debt, but what appears to me the same principal of law as would underlie such a transaction has been repeatedly laid down by our Court.
In the case of Walling v. Aiken, McMul. Eq., 1, we find the law declared to the following effect:
"It is a well-known rule of the Court, that that which was originally intended as a security, shall never be turned into an absolute conveyance. Even if it be expressly stipulated, that if the money be not paid at a given date, the title shall be absolute, and the estate irredeemable, this stipulation operates nothing. And it is equally incompetent to stipulate from what source the funds to redeem shall be derived. The mortgagee is considered in this Court, only as a creditor, and all that he is entitled to is his money, coming at what time (within the known limits), or from what source, it may."
In the case of Brownlee v. Martin, 28 S.C. 364, 6 S.E., 148, 151, the Court uses the following language:
"Now, the stipulation at the close of the agreement for a conditional sale, in which it is stated that, upon failure of Mrs. Martin to pay by the 3rd of December, 1879, the original purchase price, * * * Brownlee should 'take possession as his own property in fee-simple, forever, under the deed made him by James S. Cothran, aforesaid,' seems to have been an effort on the part of Brownlee, to convert the Cothran deed into an absolute deed in fact, as well as in appearance. Being intended, when first executed, as a security for the money advanced, it was to remain so until the 3d of december, 1879, when if the money was not paid him with the interest accrued, it should then become absolute, and a conveyance to him in fee of all the lands described. This Court said in the former appeal, supra, that such a change could not be made by any subsequent written agreement, unless such subsequent agreement is based upon a sufficient consideration, the burden of showing which is upon the mortgagee; and, further, that it should amount to a sale of the equity of redemption, fairly made."
Other interesting cases along this line are as follows: Francis v. Francis, 78 S.C. 178, 58 S.E., 804; Frady et al. v. Ivester, 118 S.C. 195, 110 S.E., 135; Leland v. Morrison, 92 S.C. 501, 75 S.E., 889, Ann. Cas., 1914-B, 349; Hamilton v. Hamer, 99 S.C. 31, 82 S.E., 997; Shaw v. Shaw, 122 S.C. 386, 115 S.E., 322; Code 1922, Vol. 3, par. 5223.
The decisions in our State appear to be in accordance with the general law. See, for instance, 41 C.J., 310; 27 Cyc., pages 994 and 1098; 19 R.C.L. Mortgages, pars. 7 and 162.
This matter is in equity, and, if the plaintiff recovers whatever money is coming to her from the proceeds of the sale of the Manatee County lands, she will in no wise be injured. It appears from the complaint that W.B. Wilson subsequently married, and that the defendant Floy M. Wilson is his widow. It further appears from the complaint that the said W.B. Wilson executed, before his death, a last will and testament, dated August 16, 1926, in the first paragraph of which, and before making any devises or bequests, he provides as follows: "I direct that my executors and executrix do pay any first claims against my estate as soon after my death as is practicable."
I, therefore, hold that the plaintiff, under and by the terms of her complaint and the instruments therein quoted, is not entitled to the entire estate of W.B. Wilson, but that she is, at most, entitled to the one-third of the net proceeds from the sale of the Manatee County lands, under the terms of the contract above alluded to, if there be any such proceeds; and that she is further entitled to have an accounting from the representatives of the estate of W.B. Wilson as to the transaction of the sale of the Manatee County lands, and the disbursement of the funds therefrom, and that she is entitled to have any amount found to be due her thereunder declared a lien against the estate of W.B. Wilson.
Of course, this order is based entirely upon the complaint, the instruments therein set forth, and the demurrer. I am not attempting to pass upon any defenses that the defendants may have in the matter, nor am I touching upon the other causes of action set out in the complaint.
It is, therefore, ordered and adjudged that the demurrer to the first cause of action in the amended complaint be, and the same is hereby, sustained.
It is further ordered and adjudged that the plaintiff, if she be so advised, may so amend her first cause of action as to seek an accounting on the part of the defendants for the sale of the Manatee County land, and the disbursement of the proceeds from said sale, and for judgment against the defendants for whatever amount the plaintiff may be found entitled to, and to have this judgment declared a lien against the estate of W.B. Wilson in acordance with law under the terms of the agreement of June 15, 1922. And it is further ordered that the plaintiff have twenty days from the filing of this order within which to make said amendment. Of course, the defendants will, under the law, have the right to answer, demur, or otherwise plead within twenty days after the service of such amended complaint.
I do not deem that this permission to the plaintiff to amend is in contravention of the order of his Honor, Judge Shipp, heretofore made, as his Honor only declared therein that the plaintiff had made an election as between the equitable remedy of seeking the entire estate and the legal remedy of procuring judgment for the one-third of the net proceeds of said sale. Nothing was said as to the equitable remedy of an accounting and the impression of a lien for the security of whatever amount the plaintiff might be found entitled to under said accounting. Also, I do not think this contraverts his Honor's order wherein I am permitting the plaintiff to amend the complaint and perhaps reinsert allegations which were stricken out of the original complaint, except for the purpose of aiding the Court in determining the equitable cause of action therein contained.
Messrs. L.D. Jennings and L.D. Lide, for appellant, cite: Case should not be decided on pleadings where ground for relief is stated: 114 S.C. 382; 70 S.C. 572; 154 S.C. 138; 153 S.C. 305; 50 S.C. 557; 56 S.C. 38. Error to construe contract was in nature of a mortgage: 41 C.J., 285; 8 So., 757; 119 S.C. 273. Party may make a binding agreement to dispose of property under a will: 57 S.C. 341; 105 S.C. 496; 73 S.C. 155; 60 Am. Rep., 107. Messrs. Epps Levy, for respondents, cite: Construction of complaint by Judge Shipp res adjudicata: 43 S.C. 221. Procedure proper: 70 S.C. 108. Contract must be construed according to terms if plain: 105 S.C. 107; 140 S.C. 464; 28 S.C. 364.
November 6, 1930. The opinion of the Court was delivered by
The order of his Honor, Circuit Judge Grimball, is satisfactory to this Court, and it is affirmed.
MESSRS. JUSTICES COTHRAN, STABLER and CARTER concur.