Phelps v. Palmer , 192 Ga. 421 ( 1941 )

1. When a contingent remainder becomes vested by the happening of the event upon which the estate was contingent, the falling in of the estate inures to the benefit of the grantee named in a conveyance executed before the event upon the happening of which the expectant estate became vested. The contingent remainderman is estopped from asserting that the deed which he executed was invalid because the deed under which he claims contained a clause forbidding the sale or encumbrance of the property.

2. Where land is sold under a power of sale contained in a security deed, the grantor in the security deed can not thereafter attack the title of a bona fide purchaser for value at such sale, on the ground that the debt secured by the deed had been paid before the sale.

No. 13727. JUNE 16, 1941. On April 19, 1884, Simeon A. Gray executed to himself "as trustee of Emma Phelps," his daughter, "his successors and assigns," a deed conveying described realty in Waynesboro, Burke County, Georgia. The material portion of the deed was as follows: "To have and to hold said bargained premises and every part thereof unto him the Simeon A. Gray, trustee, and his successors in trust, to and for the sole and separate use, benefit, and behoof of his said daughter, Mrs. Emma Phelps, free from the control and not liable for the debts contracted or liabilities of her present or any future husband, for and during the term of her natural life, and at her death the same to go to, vest in, and belong to any child or children she may have surviving her, share and share alike, in fee simple; but if she should leave no child or children in life at her death, then and in that event said property shall revert to and belong unto the said Simeon A. Gray, his heirs and assigns; provided that no part of the property hereby conveyed shall ever be disposed of by sale or otherwise, nor shall the same ever be mortgaged or encumbered in any way except by the written consent of the said Simeon A. Gray, trustee, under his hand and seal, but with such consent the same may be done, the proceeds of all sales to be reinvested in other property which shall be held subject to the same trusts; and the power is hereby expressly reserved to the said Simeon A. Gray to appoint his own successor in office of trustee created by this deed, by instrument in writing under his hand and seal or by last will and testament, without the sanction or approval of any court, and for the purposes of trust hereby declared." Simeon A. Gray, the trustee, died on July 9, 1899, and no successor trustee was ever appointed. Mrs. Phelps, afterwards Mrs. Waters, was the mother of five sons. One of the sons, Frank Phelps, died in 1935, unmarried and without issue. Mrs. Waters died on April 19, 1940, leaving Robert L. Phelps and three other sons surviving her. On February 19, 1914, Robert L. Phelps executed to the R. C. Neely Company a deed to the property described in the deed above mentioned, to secure a debt of $1500, "it being the purpose of this conveyance to convey all the interest of the said property which he now has or may hereafter have, a remainder or in any other way." The deed contained a warranty of title and a power of sale. It authorized the grantee, in pursuance of the execution of the power of sale, "to make to the purchaser or purchasers of said property good and sufficient title in fee simple to the same, thereby divesting out of the said R. C. Neely Company all right, title, and equity I may have in and to said property, and vesting the same in the purchaser or purchasers aforesaid." On June 11, 1921, Robert L. Phelps executed to Mrs. Inez W. Jones a security deed to the property, this deed reciting that it was subject to the R. C. Neely Company deed, and that it was intended "to convey all of the interest which the said R. L. Phelps has in said property at the present or may have in the future as a remainderman or in any other way." The R. C. Neely Company was adjudicated a bankrupt in 1922, and its trustee in bankruptcy exercised the power of sale in its security deed, and sold the land to Frank S. Palmer in December, 1923.

In August, 1940, Robert L. Phelps filed a petition alleging the above-stated facts and seeking to obtain cancellation of the security deeds to the R. C. Neely Company and Mrs. Inez Jones and the bankruptcy trustee deed to Frank S. Palmer, upon the following grounds: (1) The security deeds violated the terms of the trust deed of 1884, and were void because no trustee joined in their execution or consented thereto in writing. (2) The debts secured by the deeds were paid by the delivery of stated amounts of cotton and mules shortly after their execution. (3) At the time of their execution petitioner had only a bare contingent interest in the property, which was not salable, and this fact was known to the grantees in the security deeds, who had full knowledge of the trust deed to Mrs. Phelps, which was duly recorded. The petition also sought to have the land sold and partitioned among the remaindermen. The court sustained demurrers of the defendants interested in the relief of cancellation, and dismissed the action as to them. The petitioner excepted. 1. The plaintiff contends that the Simeon A. Gray deed created an executory trust for both the life-estate and the remainder, that the remainder did not vest until the death of the life-tenant, and that the contingent remaindermen did not have a salable interest in the property conveyed until the death of the life-tenant. However, in our view of the case it is not necessary to pass upon the nature of the trust, or to determine whether the remaindermen had such an interest in the land under that deed as to be able to assign a present interest in the land before the death of the life-tenant. We think this case is controlled by the principle announced in Isler v.Griffin, 134 Ga. 192 (4) (67 S.E. 854), where it was held: "When a contingent remainder becomes vested by the happening of the event upon which the estate was contingent, the falling in of the estate inures to the benefit of the grantee named in a conveyance executed prior to the event upon the happening of which the expectant estate became vested." The facts of that case are strikingly similar to those in the present case. There the property was conveyed to a trustee for the use of Elizabeth Griffin "for and during her natural life" and "for her sole and separate use, and on her decease to such own child or children as she may leave surviving her, not including the issue of any deceased child or children." Peyton J. Griffin, one of the sons of Elizabeth Griffin, executed a deed to his interest in the property before her death. In the opinion this court said: "And counsel for plaintiff in error insist that a contingent remainder can not be the subject of a sale and conveyance. To what extent this is true it is unnecessary here to decide; for subsequently to the execution of the deed the event happened upon which the estate of Peyton J. Griffin, the grantor, was contingent, and the expectant estate became a vested one, and this operated to the benefit of the grantee in the deed, relating back to the time of the grant, if the deed itself at the time of its execution was insufficient to pass title. Parker v. Jones, 57 Ga. 204;Lathrop v. White, 81 Ga. 29 (6 S.E. 834); Hill v.O'Bryan, 104 Ga. 137, 142 (30 S.E. 996)." At the time the plaintiff executed the security deed to the property here involved, he held the same interest in the property as did Peyton J. Griffin in that involved in the quoted case. While the security deed disclosed that only a remainder was intended to be conveyed thereby, this case can not be distinguished from the Isler case on that ground. The deed from Peyton J. Griffin also disclosed that he was conveying property to which he did not have a fee-simple title. The deed referred to "my reversionary right to my interest" in certain property. The plaintiff contends that the remainder interest which he had was merely a "bare contingency or possibility" which the Code, § 96-102, declares may not be the subject of sale. This contention is without merit, because the plaintiff's contingent interest was more than a bare contingency or possibility. A contingent-remainder interest in land is an "estate." Code, §§ 85-701, 85-703; McGowan v. Lufburrow,82 Ga. 523 (9 S.E. 427, 14 Am. St. R. 178). See Todd v.Williford, 169 Ga. 543 (150 S.E. 912); Cooper v. Davis,174 Ga. 670 (163 S.E. 736); Shockley v. Storey, 185 Ga. 790 (196 S.E. 702). The case of Dailey v. Springfield,144 Ga. 395 (87 S.E. 479, Ann. Cas. 1917D, 943), is distinguished on its facts from the present case. There the deed disclosed that the grantor was purporting to convey such interest in property as he might later inherit. This was clearly a "bare contingency or possibility."

The plaintiff is likewise estopped from asserting that he did not have authority to execute the security deed, because the deed from Simeon A. Gray provided that no sale or encumbrance should be made without his written consent. Even if this provision was valid after the grantor's death in 1899, the plaintiff can not now attacked his own deed by asserting that he was guilty of violating that provision. 19 Am. Jur. 606, § 10.

2. The plaintiff alleges that he paid the debts for which he gave the security deeds, but no allegation is made that the security deeds were canceled of record or that the purchaser at the sale under the first security deed had notice that the debt had been paid. So far as is disclosed by the petition, the purchaser bought bona fide and for value at such sale. In this situation the plaintiff can not now attack the title of the purchaser by pleading payment. Garrett v. Crawford, 128 Ga. 519 (57 S.E. 792, 119 Am. St. R. 398, 11 Ann. Cas. 167); Ellis v. Ellis, 161 Ga. 360 (130 S.E. 681). The petition failed to state a cause of action, and the court did not err in sustaining the demurrer and dismissing the same.

Judgment affirmed. All the Justices concur.