17 S.E.2d 257 | Ga. | 1941
1. An estate which by the terms of the instrument creating it is limited to a life-estate is not enlarged into a fee by reason of the fact that in the same instrument the holder of the life-estate is given the power merely to sell or encumber, and to convey by her deed alone, the entire fee-simple title.
2. Where by deed of conveyance a life-estate is granted to one and a remainder estate to another, and contains also a power conferred on the life-tenant to sell the fee, and in pursuance of such power a sale is made and the purchase-money received therefrom is retained by the life-tenant until her death, her personal representative as such is liable to account to the remainderman for the purchase-money which came into her hands as the result of such sale.
3. The life-tenant dying on December 29, 1940, a portion of the purchase-money arising from the sale having been received during the month of October, 1923, and the balance on April 30, 1925, the instant suit, filed on March 19, 1941, is not barred by any four-year statute of limitations, no cause of action arising until there was a conversion, and there could be no conversion so long as the life-tenant lived.
4. The right of action was not in the grantor in the deed, but in the remainderman, since the former by her deed had parted with all interest in the property, and it was the remainderman who was entitled to the proceeds upon the death of the life-tenant.
The petitioner alleges, that Mrs. Cohen died leaving petitioner her sole surviving child, and that upon her mother's death petitioner, as remainderman, became entitled to all of said property under the terms of said deed; that in the year 1923 Mrs. Cohen executed a security deed to that part of the property described in the deed from Mrs. Clarke which fronts on the west side of Juniper Street, extending back westward to a depth of some 200 feet, to secure a loan to her of $5,000, which has never been paid; that in 1925 Mrs. Cohen sold this portion of the property for $10,000, "which sum came into the possession of Mrs. Cohen and was retained by her until the time of her death;" that upon the death of Mrs. Cohen the defendant bank, as her executor, took over the entire estate, including all the funds and moneys aforesaid, and by reason of the foregoing facts the estate is now impressed with a trust in the amount of $15,000 in favor of plaintiff, the $15,000 received by Mrs. Cohen standing in the place of the property under the terms of the deed from Mrs. Clarke. Defendant has refused to deliver the same to petitioner, who prays that defendant account to her for the proceeds of the land and all the profits and issues thereof; or, in the alternative, that judgment be rendered against defendant as executor of the estate of Mrs. Cohen, for $15,000, with interest; and for such other and further relief as to the court may seem meet and proper.
To this petition the defendant demurred on the following grounds: (1) That no cause of action was set forth. (2) That the facts alleged are not sufficient to show a trust, and that there *103 was no obligation on the part of Mrs. Cohen to hold in trust the money so received, and no right on the part of the plaintiff to receive said money on the death of Mrs. Cohen. (3) That Mrs. Cohen had a right to sell or mortgage the property and devote the proceeds to her own use, and that any cause of action for conversion of funds by Mrs. Cohen during or before 1925 would now be barred by the statute of limitations. (3a) That any right of action for conversion would be in the grantor, Mrs. Clarke, or her personal representative.
The judge sustained grounds 1 and 2 of the demurrer and dismissed the action, but stated in his order that grounds 3 and 3a were not passed upon at that time. To this ruling the plaintiff excepted.
1. Mrs. Clarke's conveyance recited that it conveyed "to her daughter, Mrs. Julia C. Cohen, a life-estate, and to such children of the said Mrs. Cohen as she may leave surviving her the fee-simple interest in remainder after the termination of the life-estate." Mrs. Cohen died, leaving surviving her one child, Mrs. Bienvenu. The property described in the deed fronted on both Peachtree and Juniper Streets in the City of Atlanta. There was nothing in the instrument to enlarge the character of the estate which went to Mrs. Cohen, expressly limited as it was to a life-estate, unless it was the following, which was contained in a subsequent portion of the deed: "The power to sell or encumber that part of the above-described property which fronts on the west side of Juniper Street and extends back westwardly to a depth of 210 feet, more or less, is hereby given to and vested in the said Julia C. Cohen, and in the exercise of said power the said Julia C. Cohen is hereby authorized and empowered to convey the entire fee-simple title thereto by her deed alone, either in the matter of a sale or otherwise." The primary question to be determined is, what was the character of Mrs. Cohen's estate created in that part of the property which will be referred to as the Juniper Street frontage. Omitting for the moment the latter of the two above quoted provisions of the deed, the estate of Mrs. Cohen by the express terms of the conveyance was limited to a life-estate, the *104
remainder estate being granted to Mrs. Bienvenu. The general rule is that where an estate is expressly given for life, with an added power of disposal conferred upon the life-tenant, this does not enlarge the life-estate into an estate in fee. 21 R. C. L. 776, § 5; Warren v. Ingram, Ann. Cas. 1912B, 422, 424, note (
2. We need not consider what would be the rights of the remainderman, if any, with respect to the sum of money which came into the possession of the life-tenant as the result of this sale, and which was retained by her until her death, if the instrument had expressly provided for the life-tenant to use the proceeds of the sale, or to encroach upon the corpus for her maintenance and support; for no such provision is contained in the deed. The case is here on demurrer, and we deal with it as made by the petition. On an examination of the instrument as a whole, in connection *106 with the allegations contained in the petition, it must be held that the power of sale did not enlarge the estate created for Mrs. Cohen under the deed, which was expressly limited by its terms to a life-estate; and that the grantor did not intend to give her the right to dispose of the fee in a portion of the property without any liability attaching to the personal representative of her estate to account to the remainderman for the purchase-money which came into her hands as a result of the sale and which was retained by her until her death.
The petition alleges that upon the death of Mrs. Cohen the bank as her executor took over her entire estate, including the funds and money which came into her possession as the purchase-price of the property sold under the power; and that by reason of the facts heretofore recited the estate is impressed with a trust in favor of the plaintiff, the remainderman, in the amount of fifteen thousand dollars so received by Mrs. Cohen and retained by her until her death. It is pointed out by counsel for defendant that no trustee was named in the deed, no duties whatever were placed upon Mrs. Cohen with reference to the use of the property, no obligation placed upon her to preserve or hold in trust the money received from the sale of the Juniper Street side of the property which she was empowered to sell, and not the slightest suggestion that the sale of the property would create a trust fund. It is true that none of these things was done eo nomine; but when Mrs. Clarke by deed granted a life-estate only to Mrs. Cohen, with a remainder over, her relation to the remainderman became to a certain extent at least a fiduciary one, and has been frequently termed an implied or quasi trusteeship. 17 R. C. L. 626, § 15. Appended to the case of Peak v. Peak, 137 Am. St. R. 638, there is a collection of authorities treating, as was done in that case, the life-tenant as a quasi trustee for the remainderman, the editorial note stating that "The terms `trustee' and `quasi trustee' are to be found running through the cases; and though it has not passed unquestioned, the greater weight of authority is in so classing it."
Because of the duty resting on the life-tenant to preserve and protect the estate in remainder, the relation of the life-tenant to the remainderman has been recognized by this court to be a certain extent a fiduciary one and termed an implied or quasi trusteeship. Barmore v. Gilbert,
Where remainders are subject to be divested, in whole or in part, by a disposition of the whole or some part of the property, this contingency does not deprive the remainder of its character.Melton v. Camp,
If these several postulates be sound, then it must follow that the petitioner is entitled to the relief prayed for. The author of Kale on Estates and Future Interests (2d edition), § 650, states as a conclusion the following: "Where the life-tenant has power to dispose of the fee by sale, his power to use up the proceeds of sale must be expressly given, or he will hold the proceeds in trust to invest, use the income, and pay over the principal to the remainderman. Thus, where the donee of the power was entitled to sell for her `comfort and convenience,' she could use up the proceeds for that purpose. Where the donee merely had the power to sell, she was obliged to hold the proceeds for herself for life, and then pay over the principal to the remainderman." While the precise question here involved has never heretofore arisen in this court, an examination of the authorities, some of which are next above cited, shows that the rule laid down by Kale, supra, rests upon reason as well as authority. We hold that the petition in the instant case stated a cause of action.
3. The five thousand dollars was received by Mrs. Cohen during the month of October, 1923, the ten thousand dollars on April 30, 1925. So long as she lived no conversion occurred, because *108 said sums represented the proceeds of the sale of the property in which she was granted a life-estate. She had the right to the use of the money during her life. It is alleged that she died on December 29, 1940, and that on her death the defendant bank as executor took over the entire estate of Mrs. Cohen, including the money aforesaid. The petition was filed on March 19, 1941. A suit by the remainderman against the executor, seeking a recovery of the fund with profits and issues therefrom, after the death of Mrs. Cohen, with an alternative prayer that petitioner have judgment for the fifteen thousand dollars, with interest from the date of the death of Mrs. Cohen, is not barred by the four-year statute of limitations.
4. The petition was further demurred to on the ground that any right of action as for conversion of the funds would be in the grantor, Mrs. Clarke, or her personal representative. The position is untenable. Mrs. Clarke's interest ceased upon the execution and delivery of the deed, and thereupon the remainder interests began. Mrs. Bienvenu under the allegations of the petition was the proper person to bring the suit, because the right of action was hers.
Judgment reversed. All the Justices concur, except Atkinson,P. J., and Bell, J., disqualified.