Groover v. Brandon

1. Under a proper construction of the judgment modifying the temporary restraining order, the petitioner was not required to pay the full amount of the indebtedness referred to therein into the registry of the court, and the trial judge did not err in denying the motion to vacate the restraining order.

2. Taking the allegations of the petition to be true, as must be done on general demurrer, sufficient facts were alleged to constitute an agency, under the terms of which the petitioner deeded property to one of the defendants to secure him for an amount which he promised to pay in extinguishment of a debt due by her to a bank, and for which service she was to pay him a commission of five percent of the indebtedness.

3. The allegations of the petition as amended set forth a conspiracy by the defendants to defraud the petitioner, by preventing her from knowing, after she had been lulled into a sense of security, that the property which she had deeded to one of the defendants, under the terms of the agency referred to in the preceding headnote, was to be sold by the bank because of default in the payment of an installment, it being alleged that the defendants conspired to bid it in and thus defeat the rights of the petitioner; and accordingly any act done by either of the conspirators is chargeable to the other.

4. Insolvency need not be alleged in order to obtain injunctive relief where the petitioner is without an adequate remedy at law or where an injunction is necessary to avoid a multiplicity of suits.

5. A tender is not required where the party to whom the offer is made states that the tender would be refused if made.

6. The additional grounds of demurrer to the petition are without merit.

No. 15293. OCTOBER 5, 1945. REHEARING DENIED NOVEMBER 19, 1945, DECEMBER 3, 1945. Mrs. R. M. Brandon filed in Fulton Superior Court, against C. W. Groover and the Georgia Savings Bank Trust Company (hereafter referred to as the bank), residents of Fulton County, and C. J. Camp, a resident of Gwinnett County, a petition which as amended alleged substantially the following: On May 15, 1943, the petitioner executed to Groover a deed conveying described property, known as the Brandon Funeral Home in the City of Hapeville, as security for a debt. On the same day she executed to Groover a warranty deed conveying the above property. Copies of the two deeds were attached as exhibits to the petition. The deeds were made contemporaneously and for the purpose of securing Groover for loans made to the petitioner under the circumstances hereinafter more fully alleged. At the time the deeds were executed to Groover, the petitioner was indebted to the bank on a promissory note, secured by a deed to secure debt to the Brandon Funeral Home, and by reason of default in the payment of the indebtedness, the bank, under a power of sale in its security deed, was advertising the property for sale. Groover, upon seeing the advertisement, offered to lend the petitioner money with which to pay off the loan, and an additional amount to take care of other obligations and to pay a brokerage commission of five percent on the transactions; and suggested that the petitioner get in touch with Camp, who Groover stated would handle the transaction for him. In accordance with the suggestions, the petitioner called upon Camp, and entered into an agreement with Camp and Groover, whereby for a commission of five percent paid by her to Camp and Groover, Groover agreed that he would assume her indebtedness to the bank, either by paying off the same or by giving his personal note therefor, and would have the bank extinguish her liability to it on the indebtedness. The parties further agreed that Groover would lend the petitioner $885, for which Groover would take her promissory note, to be secured by a deed to secure debt. To secure Groover for his assumption of her liability in the manner aforesaid to the bank, the petitioner, at the direction of Groover and Camp, executed to Groover the above warranty deed conveying the Brandon Funeral Home, with the distinct understanding between the parties that, while the deed was in form a warranty deed, the same was in reality intended and was to be a deed to secure Groover against any loss by reason of his paying off or giving his personal note to the bank as aforesaid. The parties agreed that the petitioner would reimburse Groover as to all amounts paid by him to the bank in extinguishment of her note, together with interest thereon at the rate charged by the bank. Groover went to the bank and arranged a loan for an amount sufficient to take care of the petitioner's indebtedness, gave to the bank his note for such amount and secured the same by a deed to secure debt to the property conveyed by her to Groover in her above-mentioned warranty deed. Groover also took the petitioner's note for the principal sum of $885, together with a security deed on the same property to secure the payment of the note last mentioned, and out of the $885 deducted and retained the commission hereinbefore referred to, together with carrying charges on the loan, and paid to her the remainder of the sum. Camp represented Groover in handling the transactions, and all payments made to Groover by the petitioner on her obligation to Groover were made to Camp as agent for Groover. The petitioner has heretofore paid off the note given by her to Groover in the sum of $885, and has reimbursed Groover for all amounts paid by him to the bank. Prior to the maturity of the installments, which the defendants permitted to go into default in the manner alleged, they had conspired and confederated with each other not to pay any further installments on the note executed by Groover to the bank, and to allow the loan to become in default, and thereupon to direct the bank to sell the property under the power of sale in the deed to secure debt held by it as aforesaid, in order that the defendants might bid in the property at the sale and thereby divest the petitioner of her equity in the property. The defendants further conspired and confederated together to keep their acts and intentions secret from her until after the property was sold as aforesaid and bid in by them at the sale in the manner and for the purposes herein alleged. Pursuant to the combination and conspiracy, and without the knowledge, consent, or approval of the petitioner, Groover permitted the note given by him to the bank to go into default, and thereupon directed the bank to proceed to advertise her property for sale under the power contained in the deed to secure debt which he had given to the bank, all of which was unknown to the petitioner until after the property had been sold and bid in by Camp, and until she received a letter from Camp notifying her that he had purchased the property and demanding immediate possession. The bank advertised the property for sale, and on the first Tuesday in September, 1944, offered the land for sale before the courthouse door of Fulton County, at which time it was knocked off to Camp as the highest and best bidder. Camp bid the same off for the amount of the indebtedness and the cost of the sale, but as yet has not paid such amount and no conveyance has been made to Camp by the bank. The bank notified Groover, before advertising the properties for sale under the deed to secure debt, that he was in default on his note, and also notified Groover of the date the property was to be sold before the court-house door in accordance with its advertisement. Groover and Camp combined, conspired, and confederated with each other to allow the properties to be sold under the power of sale contained in the security deed, and to have Camp bid the same in at the sale as a scheme and device by which they conspired to divest the petitioner of the property and her right of redemption thereof, and conspired to and did conceal the fact from her until the properties could be sold and bid in by Camp for the purpose aforesaid. The lands of petitioner referred to have, and at all times within the period of the transactions had a fair market value of $10,000, and Groover and Camp in the manner aforesaid conspired to cheat and defraud the petitioner by causing the properties to be sold in an effort to cut off her rights to reclaim and redeem the same in accordance with the contract and agreement entered into between the parties when the deeds were executed. Since the sale under the power contained in the security deed from Groover to the bank, the petitioner has offered to redeem the property from Camp, but he has refused to permit her to do so unless she pays him a profit of $1000 on his bid for the property. At the sale, Camp bid the sum of $2164.93, for which the property was knocked off to him, and the above sum was sufficient to pay the bank all amounts due and owing to it, including principal, interest, and the cost of advertising, conducting, and completing the sale. The petitioner did not know, at the time of making the tenders and offers hereinafter referred to, the exact amount of the bid, but being anxious to tender to Camp an ample amount to save the bank and the defendants harmless, tendered to him the sum of $2180, and at the same time offered to pay, and was then and there ready, able, and willing to pay any additional amount necessary to satisfy the bank and the defendants in full, and the tender and offer were then and there refused by Camp. Upon his refusal to accept the tender, the petitioner then and there offered to pay him $500 over and above the tender of $2180, as aforesaid; and she was then and there ready, able, and willing to pay the original tender plus the $500, and would have paid the same except for his refusal to accept the same because of the insistence of Camp and Groover, as hereinafter alleged, that they be paid the sum of $1000 over and above the petitioner's original tender of $2180. The tenders and offers were made immediately upon receipt of the letter from Camp to the petitioner notifying her that he had bid in her property at the sale, and were made in the manner hereafter stated. Immediately upon receipt of the letter from Camp notifying the petitioner that her property had been sold and bid in by him, she made a demand upon him that he accept payment from her of all sums paid by him in purchasing the property, and offered to pay all sums necessary to liquidate the indebtedness of Groover at the bank including the costs of advertising and selling the property at the sale, and to save Groover and Camp harmless, and she demanded that Camp thereupon reconvey the property or cause it to be reconveyed to her in accordance with the original agreement between her and the defendants, Camp and Groover. Acting by and through Paul Hughes and Judge T. O. Hathcock, the petitioner also tendered in cash to Camp payment of the sums, and while the parties were counting out the same, Camp stated: "I see you have enough money there to pay the amount in full, but you need not count it out because I will not accept it." Thereupon the parties offered to pay Camp the sum of $500 over and beyond all amounts necessary to reimburse and pay him, Groover, and the bank, all amounts necessary to entitle the petitioner to redeem the property; and Camp then called Groover by telephone and told him of her demand, offer, and tender, and after talking to Groover, Camp hung up the telephone receiver and stated that Groover would not accept $500 above the amount necessary for the purposes aforesaid, but would accept a profit of $1000 and reconvey the property to the petitioner. Camp further stated that Groover really wanted the property for his sister to use in running a boarding-house. Although the petitioner executed to Groover the security deed, and the warranty deed referred to above, she has been at all times since and is now residing upon the property, and has been and is in actual possession thereof. She is ready, able, and willing to pay the indebtedness of Groover to the bank, together with all costs and lawful charges connected therewith, including the sale of the property under the power of sale in the security deed, and to save the defendants, Groover and Camp, harmless, and to fully liquidate the indebtedness to the bank, and to do full and complete equity in the premises. The petitioner is without an adequate remedy at law, and by reason of the premises is entitled to equitable relief decreeing the title to the property to be in her upon payment of the indebtedness and the cost and expense incident thereto, including the cost of advertising, and is entitled to have the property reconveyed to her so as to vest her with the fee-simple title thereto, in accordance with the agreement between her and Groover and Camp when the above deeds were executed. On September 5, 1944, Camp mailed to the petitioner by registered mail a notice addressed to Brandon Funeral Home, a copy of which notice was attached as an exhibit, and made a part of the petition, and at the same time mailed a copy thereof to the petitioner at her residence at 1591 South Gordon Street, S.W., Atlanta, Georgia. It is his intention to institute legal proceedings to dispossess her from the property as a part of the combination and conspiracy to divest her of all of her rights therein; and, unless restrained and enjoined from doing so, he will institute the proceeding and will thereby irreparably injure and damage the petitioner. In addition to the reasons elsewhere alleged, it is necessary for a court of equity to intervene and enjoin the defendants, in order that a multiplicity of suits and a circuity of actions may be avoided and that full and complete equity may be done. The petitioner's possession of the property since the execution of the deeds above referred to has been in her own right as the owner of the property, subject only to the agreement and understanding between the parties at the time the deeds were executed, and her possession was so recognized by the parties until the notice was mailed to her by Camp on September 5, 1944. She was in possession of the property at the time the security deed was made to the bank by Groover, and therefore the bank was on notice as to her rights in the premises. Unless the defendants are willing to accept the petitioner's tender of the amount of the indebtedness to the bank, and to reconvey to her the fee-simple title to the property in accordance with the agreement, the bank should be required to foreclose the security deed as an equitable foreclosure in this proceeding. The petitioner prayed for process; that a second original issue, directed to the sheriff of Gwinnett County, for service on the defendant Camp; that the defendants be required to accept payment from the petitioner of the indebtedness of Groover to the bank, including all costs and legal charges incident thereto, and that the defendants thereupon be required to cause the title to the property described in the security deed to be conveyed to the petitioner so as to vest her with the fee-simple title thereto; that, if for any reason relief can not be granted to the petitioner by a reconveyance of the property to her, she have judgment against the defendants, Groover and Camp, for the difference between the value of the property and the amount of the indebtedness which she is obligated to pay to Groover; that the defendants be temporarily and permanently enjoined from changing the status of the title to the property until further order of the court, and from interfering with the petitioner in her possession and right of possession in the property, and from taking out any legal proceeding to dispossess her; that they be required to accept payment from her of the amount of the indebtedness due by Groover to the bank, and thereupon to cause the property to be reconveyed to her in accordance with the agreement alleged in the petition; and that the petitioner have general relief.

A temporary restraining order with a rule nisi was issued as prayed. Each of the defendants filed separate answers. They interposed a joint demurrer to the original petition on general and special grounds, and also demurred to the petition as amended. At an interlocutory hearing on the question of injunction, at which the pleadings, copies of the deeds referred to in the petition, and certain affidavits were introduced in evidence, the original restraining order was modified as follows: Camp was permitted, within ten days, to pay to the bank the amount of his bid, and to receive a deed from the bank. He was restrained and enjoined from filing the deed for record and from altering the status of the title, and from instituting dispossessory proceedings against the petitioner until further order; such restraining orders, however, being conditioned upon the petitioner paying to Camp, after his payment of the bid, all amounts due under the note and security deed from Groover to the bank, maturing and unpaid prior to the date Camp paid the bid and all amounts thereafter as and when payable, and on default in any such payment by the petitioner, the defendants were given permission to apply for a modification of the restraining orders. The order was subsequently modified further by permitting the petitioner to pay the amounts due under the note and security deed into the registry of the court instead of to Camp, who represented to the court that he was unwilling to accept such payments. Camp within the ten days paid to the bank the amount of his bid which was $2164.93 and took a deed to the property, after which the petitioner paid $187.14 into the registry of the court. Camp thereupon filed a motion to vacate the interlocutory injunction, because of the failure of the petitioner to pay the full amount of the indebtedness. The court denied the motion to vacate the injunction and also overruled stated grounds of demurrer to the original petition, to each of which rulings the defendants filed exceptions pendente lite.

The final exception is to a judgment overruling general and special demurrers to the original petition and to the petition as amended. 1. The defendant Camp made a written motion to vacate the temporary restraining order as modified at interlocutory hearing, on the grounds: (1) The trial court passed an order permitting the defendant to pay the amount of his bid to the bank, and to receive a deed in compliance with his bid, which has been done. (2) The order further provided that the defendant would be enjoined as stated, conditioned upon the petitioner paying to the defendant "all amounts due under the note and security deed [from Groover to the bank] maturing and unpaid prior to the date the defendant Camp pays said bid and all amounts thereafter as and when payable, and on default in any such payments by plaintiff, defendants may apply to this court for a modification of restraining orders," which order was modified directing payment into court. (3) The petitioner has not complied with the conditions of the order, but has paid into the registry of the court only the sum of $187.14 without any statement of what it purports to cover. (4) To obtain the deed from the bank and get title to the land, the defendant has had to pay in addition to his bid of $2164.93, taxes for 1943 and 1944 in the sum of $205.57. (5) The maturity of the entire loan had been accelerated before the property was advertised, and the sale was for the purpose of paying the full amount of the indebtedness due under the security deed on account of defaults therein, as provided in the security deed. (6) The defendant has not only paid the amount of his bid, but thereafter has paid the taxes, as provided in the former orders, and the petitioner having failed to deposit such sums in court as provided in the orders, the temporary and conditional restraining order heretofore passed should be revoked.

It was alleged in the petition that the property in question was conveyed to Groover in trust to secure him against any loss by reason of his paying off or giving his personal note in payment of the petitioner's indebtedness to the bank, and that the petitioner would reimburse Groover as to all amounts paid by him in extinguishment of her note, together with interest thereon at the rate charged by the bank. While the petition does not refer to the $187.14, which Camp says was subsequently paid into the registry of the court, it does charge that he and Groover entered into a conspiracy whereby the latter, who under his trust relation was obligated to pay the installments to the bank, and in turn be reimbursed by the petitioner, failed to make the payment, but on the contrary notified the bank that no more payments would be made and for it to sell the property, the purpose being to cause the maturity date on the entire debt to be accelerated and thereby to enable Camp to acquire title to the property.

The insistence of the plaintiff in error is that since the maturity date of the entire debt had been accelerated, the petitioner was under the court's order, required to pay the entire amount of the debt into the registry of the court. The judgment modifying the temporary restraining order, which was not excepted to, was conditioned upon the petitioner paying to Camp, after his payment of the bid, all amounts due under the note and security deed from Groover to the bank, maturing and unpaid prior to the date Camp paid the bid, "and all amounts thereafter as and when payable." Under a proper construction of this language, the petitioner was not required to pay the full amount of Groover's debt to the bank into the registry of the court, and the defendants did not insist that the $187.14 which was paid into court was insufficient to meet the installment that Groover would have had to pay to the bank in the event the maturity date had not been accelerated as above indicated.

The trial judge did not err in denying the motion to vacate the restraining order.

2. Taking the allegations of the petition to be true, as must be done in considering the general demurrer, sufficient facts were alleged to constitute agency. It is alleged that, while the property of the petitioner was being advertised under a power of sale in a security deed executed to the bank, Groover went to see the petitioner and offered to make a loan to her for an amount sufficient to pay off her indebtedness, and suggested that she get in touch with Camp who would handle the transaction. In response to such suggestion, the petitioner called upon Camp, and entered into an agreement with Camp and Groover whereby for a commission of five percent Groover agreed that he would "assume" her indebtedness to the bank, either by paying off the same or by giving his personal note therefor, and would have the bank "extinguish" her liability to it on the indebtedness. To secure Groover for his assumption of the liability to the bank, the petitioner, at the direction of Groover and Camp, executed to Groover a warranty deed conveying the property in question with the distinct understanding between the parties that, while the deed was in form a warranty deed, it was in reality intended and was to be a deed to secure Groover against any loss by reason of his paying off the indebtedness or giving his personal note to the bank. It was agreed that the petitioner would reimburse Groover as to all amounts paid by him to the bank in extinguishment of her note, together with interest thereon at the rate charged by the bank. Groover went to the bank and arranged a loan for an amount sufficient to take care of her indebtedness, gave the bank his note for such amount, and secured the same by a deed to secure debt to the property in question. The petitioner remained in possession of the property and paid to Camp and Groover as their compensation for handling the transaction a commission of five percent of her indebtedness to the bank.

It can not be seriously contended that a relationship of agency was not alleged to exist between the parties. The petitioner was indebted to the bank. That indebtedness was secured by her property. It was about to be sold. The defendants, Camp and Groover, offered for a consideration to perform a service for her, to act for her in obtaining her release from liability to the bank, and to substitute one of themselves as the bank's debtor. It was proposed that Groover would accomplish the petitioner's release from liability either by paying off the indebtedness or by giving his note and extinguishing her liability. For this service Camp and Groover were to be paid and were actually paid a commission of five percent. The property was conveyed to Groover to secure him in his right to be reimbursed by the petitioner, who remained in possession of the property.

"The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him, or subsequently ratifies the acts of another in his behalf." Code, § 4-101. In such a relation the utmost fidelity was imposed upon the agents. The principal could in law rely upon the alleged agreement of one of the agents to release her from liability either by paying off the indebtedness or by giving his personal note with an agreement by the bank that such note would itself extinguish the liability of the petitioner. Code, § 108-107; Smith v. Harvey-Given Co., 182 Ga. 410, 414 (185 S.E. 793); Chandler v. Georgia Chemical Works, 182 Ga. 419,422 (185 S.E. 787, 105 A.L.R. 837); Murray County v.Pickering, 196 Ga. 208 (2) (26 S.E.2d 287).

Counsel for Camp and Groover insist that under the allegations of the petition Groover did not agree to pay future installments on his personal note, that when the bank accepted Groover's note their contract was fully complied with, and that he and Camp were under no duty to inform the petitioner when the bank notified them that the property would be sold because Groover's note was in default.

The allegations of the petition as a whole negative this contention. They show that when Mrs. Brandon entered into an agreement with Camp and Groover, at their request, she conveyed her property to Groover as security upon his agreement either to pay off her indebtedness or to give a note therefor. The petition further shows that when this was done Groover was to have the bank extinguish her liability to it, and she in turn would reimburse him for such amounts as he paid the bank; also that Mrs. Brandon paid a commission of five percent to Camp and Groover. In the circumstances, considering the alleged relations and conduct of the parties, both Camp and Groover were the agents of Mrs. Brandon for the purpose of negotiating and executing this transaction, and in the premises all of the obligations of an agent to a principal became operative. Accordingly, Mrs. Brandon had a right to rely upon Groover to pay the installments on the note which was executed in his name, with the obligations on her part to reimburse him in the amount of such payments.

3. On account of the alleged relationship of principal and agent which existed between the petitioner and the defendants, even if it were assumed that the contention of the defendants was correct as to who was required to pay future installments to the bank, this would not relieve them, after receiving notice that the property was being advertised for sale, from communicating such information to the petitioner. It was alleged that prior to the maturity of the installment the defendants had conspired to defraud the petitioner by preventing her from knowing that they were not going to pay future installments, in order that they might bid the property in at the sale and thereby divest her of her equity.

A conspiracy is defined as "the combination of two or more persons to do: (a) something that is unlawful, oppressive, or immoral; or (b) something not unlawful, oppressive, or immoral, by unlawful, oppressive, or immoral means; or (c) something that is unlawful, oppressive, or immoral, by unlawful, oppressive, or immoral means." 1 Eddy on Comb. § 171; Horton v. Johnson,192 Ga. 338, 346 (15 S.E.2d 605); Peoples Loan Co. v. Allen,199 Ga. 537 (34 S.E.2d 811). The conspiracy is not the gravamen of the charge, but may be both pleaded and proved as aggravating the wrong complained of and enabling the petitioner to recover in one action against all as joint tort-feasors.National Bank of Savannah v. Evans, 149 Ga. 67 (99 S.E. 123); Bentley v. Barlow, 178 Ga. 618 (173 S.E. 707). "So far as the conspiracy is concerned, no further specification is required than the general terms in which it is pleaded in the declaration; and this is true although the jurisdiction of the court to render judgment against one or more of the defendants depends upon allegations and proof of conspiracy." National Bankof Savannah v. Evans, supra; Walker v. Grand InternationalEngineers, 186 Ga. 811, 820 (199 S.E. 146).

The allegations of the petition as amended set forth a conspiracy between Camp and Groover to defraud the petitioner by preventing her from knowing, after she had been lulled into a sense of security, that property, which she had deeded to one of the defendants under the terms of the agency referred to in the preceding division, was to be sold by the bank because of default in the payment of an installment, it being alleged that the defendants conspired to bid it in and thus defeat the rights of the petitioner, and accordingly any act done by either of the conspirators is chargeable to the other. Peoples Loan Co. v.Allen, 199 Ga. 537 (supra).

4. While counsel for the defendants cite a number of cases to show that an allegation of insolvency is necessary before injunctive relief can be granted, there is an exception to the above principle where, as in the present case, the allegations are that the petitioner is without an adequate remedy at law, or that the injunction is necessary to avoid a multiplicity of actions. Code, § 37-1501; Mayer v. Coley, 80 Ga. 207 (7 S.E. 164); Burns v. Hale, 162 Ga. 336 (3) (133 S.E. 857);Pullen v. General American Credits Inc., 186 Ga. 642 (198 S.E. 747).

5. The contention that the petition set forth no cause of action for the reason that it failed to allege a proper tender is without merit. The allegations of the petition as amended show that Mrs. Brandon made a tender to the defendants, Groover and Camp, of all amounts which she was under any duty to pay to them or to the bank, and further that the defendants not only refused to accept the amount tendered, but declined to accept $500 in addition thereto, and expressly stated that they would not accept the tender unless the petitioner added to the amount, which she was under duty to pay to the defendants, $1000 as a profit on their bid.

Since equity will not require a useless formality, it is unnecessary to make a tender where the party to whom the offer is made states that the tender would be refused if made. Miller v.Watson, 139 Ga. 29 (2), 32 (76 S.E. 585); Tolbert v.Short, 150 Ga. 413 (5) (104 S.E. 245); Alexander v.Chipstead, 152 Ga. 851, 864 (7) (111 S.E. 552); Fraser v.Jarrett, 153 Ga. 441 (3) (112 S.E. 487); Peoples Bank v.Fidelity Loan Trust Co., 155 Ga. 619 (5) (117 S.E. 747);Grant v. Hart, 192 Ga. 153 (3) (14 S.E.2d 860).

6. In addition to the general demurrer, the defendants filed special demurrers to the original petition, the amendments thereto, and the petition as finally amended, which demurrers, counting the subheads, raise more than seventy grounds as to the sufficiency of the petition. After a careful and painstaking examination of each, we find no error in the rulings thereon; nor is any specific authority cited in support of any ground.

Judgment affirmed. All the Justices concur.