Manning v. Carroll , 204 Ga. 100 ( 1948 )

1. The trial court did not err in admitting evidence, over objection of the defendant, as complained of in the corresponding division of this opinion.

2. The evidence was insufficient to raise an issue of accord and satisfaction, and the trial court did not err in failing to submit such issue to the jury.

3. The evidence was sufficient, on the question of whether the consideration in the contract sought to be specifically performed was adequate, to have been submitted to a jury for the determination thereof, and the trial court erred in directing a verdict for the petitioners.

4. As a new trial will be granted, it is not necessary to decide whether the evidence was sufficient to support a verdict for specific performance.

No. 16237. JUNE 18, 1948. REHEARING DENIED JULY 16, 1948. Mrs. Leona Upshaw Carroll and Mrs. Jessie Estelle Williams filed in Fulton Superior Court, against R. D. Manning, as Liquidating Agent of Milton County Bank, a petition seeking specific performance of a written contract for the sale of land, the material provisions of which were as follows: "State of Georgia, County of Fulton. Alpharetta, Ga. 8-19-33. The undersigned hereby agrees to buy through G. C. Adams, Liquidating Agent of the Milton County Bank, the following described property, to wit: All that tract or parcel of land lying and being in C. A. Upshaw 1/7 undivided interest in the W. T. Upshaw estate, consisting of 80 acres of land located in the town of Alpharetta, 250 acres farm land located about 1 mile West of Alpharetta, less 7 acres of the town property which will revert back to Mrs. C. A. Upshaw; for the sum of Five Hundred ($500.00) Dollars to be paid as follows: On or before October 15th, 1934. It is agreed that such papers as may be necessary to carry out the terms of this contract shall be executed and delivered by the parties at interest."

Prior to institution of the present suit, W. D. Rucker, S. A. Willbanks, and G. B. Walker, as stockholders in Milton County Bank, brought an action against George T. Upshaw and others, seeking cancellation of a number of settlements of claims owing the bank by some of the defendants pursuant to orders of the judge of the superior court. In paragraph 52 of that petition it was alleged: that on August 8, 1933, the defendants, Mrs. Leona Upshaw Carroll and Mrs. Jessie Estelle Williams, both sisters of C. A. Upshaw, made to R. E. Gormley, Superintendent of Banks, an offer to purchase the one-seventh undivided interest of C. A. Upshaw in the estate of W. T. Upshaw, deceased, which had been previously conveyed by C. A. Upshaw to Milton County Bank, at and for a consideration of $500, payable on or before October 15, 1934; that in pursuance of the above offer of purchase R. E. Gormley, Superintendent, prepared a petition seeking approval of the offer, and on August 26, 1933, Milton County Bank acknowledged service of said offer and petition; that on September 15, 1933, the petition was presented to the judge of the superior court, and he on that day passed an order reciting that it had been made to appear to him that it would be to the best interest of creditors and depositors of Milton County Bank that the prayers of the petition be granted, and by the terms of the order R. E. Gormley, Superintendent of Banks, was authorized to sell the property on the terms set forth in the petition. The contract for the sale of land, here sought to be specifically performed, was set forth as exhibit "T" to that petition. Prayer number 17 in that case was that the original offer and agreement to purchase made by Mrs. Leona Upshaw Carroll and Mrs. Jessie Estelle Williams with R. E. Gormley, Superintendent, dated August 19, 1933, for the one-seventh undivided interest of C. A. Upshaw in the W. T. Upshaw estate, at $500 for such interest, together with the acceptance of R. E. Gormley, and any and all further agreements in consummation of said offer, be surrendered and canceled. By intervention, R. D. Manning was made a party plaintiff, and he adopted the entire petition as amended. General demurrers that were interposed by the defendants in that case were sustained, and the petitioners brought the case to this court. It was held:"An order of the judge of the superior court, granted on application of the State Superintendent of Banks, authorizing a settlement of bad or doubtful claims, is conclusive on all parties to the proceeding, including the bank, until set aside in the manner prescribed by law for setting aside judgments. A petition by stockholders, seeking to set aside such orders and settlements made pursuant thereto upon alleged fraud consisting of misrepresentation as to the amount of such debts and the value of the securities therefor, is subject to general demurrer, where, as here, it contains no allegation of fact showing a want of knowledge and the exercise of diligence upon the part of the petitioners. Rucker v. Upshaw, 199 Ga. 529.

When the present case came on for trial, there was evidence for the petitioners to the following effect: Much litigation took place over the W. T. Upshaw estate. There were seven heirs, four boys and three girls. W. T. Upshaw's will left to his widow a life estate, which had been encumbered, and various persons, including Milton County Bank, tried to enforce claims against it. The administrators with the will annexed found that all of the boys had encumbered their interest to the full extent. The interest of the girls was unencumbered. In winding up the estate the girls wanted to keep the homestead in the family, so they arranged to buy some of the interests of the other heirs. Among the assets of Milton County Bank was a note of C. A. Upshaw (one of the boys) in the sum of approximately $1800, secured by an undivided interest in the estate of his father. There was a recorded lien against C. A. Upshaw's undivided interest, which outranked the claim of the bank. The State Banking Department and officers of the bank, in order to make it possible to realize something on its claim, arranged a trade with certain of the heirs whereby the bank released seven acres of land that was a portion of the estate to C. A. Upshaw's wife, and in consideration therefor C. A. Upshaw secured a release from the estate. The one-seventh undivided interest of C. A. Upshaw was finally sold by the liquidating agent of the bank to two of the girls (Mrs. Carroll and Mrs. Williams) for $500, which was a fair and adequate consideration. The matter was also passed upon by the depositors' committee, who were elected by the depositors and they had the primary interest in the bank. The entire transaction was submitted to the court, and everybody who had an interest was afforded an opportunity to appear and object, but the settlement was not objected to. The transaction was consummated in the manner in which all sales made by the banking department were consummated. Before the contract was accepted, the bank made unsuccessful efforts to sell the same one-seventh undivided interest to persons other than Mrs. Carroll and Mrs. Williams. The seven acres that the bank gave to Mrs. C. A. Upshaw contained two building lots facing two paved highways. J. T. Upshaw (another of the boys) had previously received from his mother a deed to three acres facing the same paved highway, at a valuation of $1200. When the administrators put up the 77-acre tract in question for sale, J. T. Upshaw ran the property up from $5500 to $8000 so that he would be equalized with the other heirs in the final distribution. The other heirs did not care if he ran the property up more than it was worth, because he had already received the three lots at a valuation of $1200, and they only had to pay him his distributive share on anything above that amount. The husband of one of the girls bid in the 77-acre tract, but it was agreed among those having an interest that no money would pass. On the contrary it would only be a sale on paper for the purpose of distribution. The purchaser issued his check for $8000 and gave it to the administrators, who in turn issued checks for $1600 to each of the beneficiaries. The latter endorsed and returned the checks to the purchaser. There was no actual money consideration, but deeds were given conveying to the bank a one-fifth undivided interest and to named heirs the remaining four-fifths undivided interest in the 77-acre tract. Whether the administrators divided the property in land or in money, the bank as holder of C. A. Upshaw's interest would not get a one-seventh of whatever distribution was made. The bank, having already given Mrs. C. A. Upshaw seven acres in the particular distribution, would only have what was left after the seven acres were given away at whatever valuation thereof might be correct. The seven acres were worth from $1100 to $1200. Since 1933 Mrs. Carroll and Mrs. Williams (the petitioners) have been in control of the seventy acres here involved. The bank has not during the above time borne any part of the obligation of this land or made any claim whatsoever.

R. D. Manning, the defendant liquidating agent, testified in part: The State Banking Department took over Milton County Bank on December 12, 1932. G. C. Adams acted as liquidating agent of the bank at that time. The witness was appointed after Mr. Adams resigned. Several years before the bank closed the directors saw that there was no probability of collecting the debt of approximately $1800 which C. A. Upshaw owed until he inherited what was coming to him from his father's estate. The bank proceeded to secure his indebtedness by getting liens on his interest in the estate. $8000 was a fair valuation of the 77-acre tract of land. $6300 was a fair valuation of a 250-acre farm tract that was subsequently sold by the administrators. The administrators in their return show personal property amounting to $4100. That would make an estate consisting of around $18,400, a one-seventh interest of which would be approximately $2500. The consideration of $500, as stated in the contract for the sale of C. A. Upshaw's one-seventh undivided interest, was in the circumstances grossly inadequate.

At the conclusion of the evidence, the trial court directed a verdict in favor of the petitioners, decreeing specific performance of the contract. The defendant's motion for a new trial as amended was overruled, and the case comes to this court for review upon his exceptions to that judgment. (After stating the foregoing facts.) 1. The second and third special grounds of the amended motion for new trial complain that the court erred in admitting, over objection of the defendant, testimony of the petitioners to the effect that they understood they were getting all the interest which C. A. Upshaw had in the estate. The ground of objection was that the contract speaks for itself and was the best evidence, and the petitioners should not be permitted to testify what they thought they were buying.

The evidence shows that someone other than the petitioners prepared the language in the contract, which states that the undersigned agreed to buy "All that tract or parcel of land lying and being in C. A. Upshaw 1/7 undivided interest in the W. T. Upshaw estate."

The above language of the contract, defining what interest the petitioners were buying, was ambiguous, and the court did not err in admitting the testimony complained of. Code, § 38-502.

The fourth special ground complains that the court erred in admitting the contract for the sale of land, which is the basis of the petitioners' action, over the objection of the defendant that the contract is indefinite, uncertain, and does not describe any property on which the court can base a decree.

The fifth special ground complains that the court erred in allowing the petitioners to amend the sales contract and substitute an entirely new description.

Though the description of the land as contained in the contract was insufficient to be the basis of a decree for specific performance, a definite and specific description could be supplied by amendment. "In an action for specific performance of an agreement to convey land, the petitioner may in the same proceeding have the description of the land reformed so as to fulfill the manifest intention of the parties to the agreement."Martin v. Oakhurst Development Corp., 197 Ga. 288 (3) (29 S.E.2d 179).

The description of the property in question as amended was not too indefinite, and the trial court did not err in allowing the contract to be introduced in evidence.

The instant case is distinguished by its facts fromWashington Mfg. Co. v. Wickersham, 201 Ga. 635 (40 S.E.2d 206), wherein a description, contained in a written contract, that the defendant agrees to convey "all land, buildings, and machinery located on property on west side of Georgia Railroad tracks in City of Washington, Georgia," standing alone, was held to be too indefinite to authorize a decree for specific performance.

The sixth special ground complains that the court erred in admitting a designated part of the record in the prior suit to cancel the contract, for the purpose of showing that the present defendant, having intervened in that proceeding, is now estopped to raise any question as to the sufficiency of the description in the contract for the sale of land, over the objection that such an adjudication and estoppel could not supply a deficient description relative to land, and that estoppels are not creative but negative.

The portion of the record in the prior case that is objected to contained references to deeds describing the property now in litigation. As pointed out in the third division of this opinion, estoppel is negative. However, the portion of the record in the prior case was admissible for the purpose of showing a correct description of the land, and the trial court did not err in allowing the same in evidence over the objection urged thereto.

2. The seventh special ground complains that the court erred in directing a verdict for the petitioners, as the defendant on the trial of the case pleaded accord and satisfaction, and that under the evidence the court should have submitted this issue to the jury.

Various letters between an attorney who represented the present petitioners, who were defendants in the prior suit, and the defendant were introduced in evidence. The correspondence shows in effect that after termination of the prior suit the present petitioners offered to pay whatever amounts were due by them, and requested the defendant to cancel and surrender certain notes and deeds to secure debt, and also requested the defendant to execute a quitclaim deed as provided in the contract now before the court. The defendant answered, stating that he would surrender the notes and security deeds (which involved other settlements between heirs of the W. T. Upshaw estate and the bank), but that he would not execute a quitclaim deed. The petitioners paid the amount due by them, and the defendant canceled and surrendered the other papers. So far as appears from the record, the other notes and security deeds were not canceled and surrendered in satisfaction of the contract to sell land. While the defendant testified that the attorney for the petitioners stated orally that it was not necessary to execute the quitclaim deed, such attorney, who was sworn as a witness for the defendant, testified that there was no settlement or mention of settlement, but that the amount due by the petitioners was paid to lay a foundation for the present suit for specific performance.

The evidence was insufficient to raise an issue of accord and satisfaction within the meaning of Code § 20-1201, and the trial court did not err in failing to submit such issue to the jury.

3. The first special ground complains that the court erred in directing a verdict for the petitioners, as the defendant pleaded that the contract sued on was without adequate consideration; and that under the evidence the consideration for the sale of the bank's interest in the land involved was wholly inadequate; and that the court erred in taking this issue away from the jury and in ordering specific performance of the contract.

The petitioners in the present case were the defendants in the prior case, which sought cancellation of various contracts, including the one here involved, on the ground among others that the consideration therefor was inadequate, and counsel for the petitioners (who are now defendants in error) insist that under the principle of res judicata the defendant in the trial court was estopped from denying that the consideration in the contract was adequate, and that therefore the evidence demanded a verdict finding in favor of specific performance.

After the judgment sustaining a demurrer and dismissing the prior case was affirmed (Rucker v. Upshaw, 199 Ga. 529,34 S.E.2d 602), the then defendants filed the present petition for specific performance. They alleged in the present petition that the defendant now before the court was precluded from raising any issue as to inadequacy of consideration. This insistence is not well founded for the reason that estoppel is negative, not creative. See Reese v. Spence, 188 Ga. 349 (4 S.E.2d 244); Hughes v. Cobb, 195 Ga. 213, 231 (5) (23 S.E.2d 701), and cases cited.

Whether the consideration in the contract for the sale of land was inadequate, was one of the principal issues in this case. The evidence for the petitioners was to the effect that there had been much litigation over the W. T. Upshaw estate, and that the consideration was fair and adequate. However, there was evidence for the defendant from which a jury could have found that the estate in question was worth approximately $18,000, and that the 1/7th undivided interest, which the bank agreed to sell for $500, was worth $2500. Under the conflicting evidence, an issue of fact was involved, which should have been submitted to the jury, and the trial court erred in directing a verdict in favor of the petitioners.

4. The eighth special ground complains that the court erred in directing a verdict and decreeing the 77-acre tract to be in the petitioners, for the reason that the petition shows on its face that, prior to the contract of sale involved in this suit, the administrators sold the tract of land sued for, divested the W. T. Upshaw estate and all his heirs of any interest they may have had therein, and in pursuance of said sale the administrators deeded the same to the bank and to named heirs of the estate.

This is an elaboration of the general grounds, and since the judgment refusing a new trial is reversed for the reason set forth in the third division of this opinion, it becomes unnecessary to pass upon the sufficiency of the evidence to support the verdict.

Judgment reversed. All the Justices concur, except Bell andWyatt, JJ., absent on account of illness.