83 Ga. 727 | Ga. | 1889
It appears from the record in this case that Annie R. Munnerlyn, wife of John D. Munnerlyn, and John D. Munnerlyn, Jr. (son of John I). Munnerlyn, Sr., and Annie R. Munnerlyn), hy his next friend S. J. Bell, and John D. Munnerlyn, Sr., trustee for his said wife and son, in October, 1884, petitioned the judge of the superior court of Burke county for leave to mortgage a certain tract of land described in said petition, for the sum of $2,500, with interest at the rate of eight per cent, per annum, for a term of years; it being alleged in the petition that it was for the interest of the trust estate to raise said sum of $2,500 for the better improvement of, and supplying and carrying on a plantation on, said estate and farming operations thereon. This petition being presented to the judge of the superior court, he passed an order or decree, which recites, among other things, that “Mrs. Annie R. Munnerlyn, wife of John I). Munnerlyn, Sr., John D. Munnerlyn, Jr., by his next friend S. J. Bell, and John D. Munnerlyn, Sr., trustee of his wife and son, having this day filed their petition before me, . . . . showing that, for the better improvement, supplying and carrying on of said plantation and the farming operations thereon, it becomes necessary for the petitioners to borrow the sum of $2,500, and that they are advised and believe they can borrow said money at eight per cent, per annum for a term of years by said trustee giving his promissory note for said amount payable with interest at eight per cent, per annum, and by securing the payment of the same by mortgage deed in and upon a portion of said tract of land (describing) ;
In pursuance of the authority thus given, Munnerlyn, the trustee borrowed of J. II. Tallman the sum of $2,500, and gave his note payable in five years, to wit, on the 1st day of October, 1889, with interest at the rate of eight per cent, per annum, and to secure said note gave a mortgage on the land described in the petition, for $2,500. The trustee contracted in the note and mortgage that the interest should be payable semiannually, and signed ten coupon notes for $100 each, for the interest, and that if he failed to pay these interest notes, that he would pay interest on them. He further agreed to pay ten per cent, attorneys’ fees in case the notes and mortgage had to be collected by law. He also agreed to pay the taxes and keep the buildings on the premises insured, and should default be made in the prompt payment of either the interest or the principal note, or insurance premiums, as stipulated, or if he should fail to pay any taxes assessed against said
It appears that the trustee paid .three of the interest notes when they became due, and defaulted in the payment of three others when they fell due; whereupon the holder of the mortgage, the plaintiff in error here, commenced a statutory proceeding to foreclose the same. A rule nisi was issued against the trustee and his wife and son, the cestui que trust, calling on them to show cause why the mortgage should not be foreclosed, etc. At the trial term of the case they appeared and demurred to the rule nisi, on the ground that there was a misjoinder of parties. The defendant filed other defences, denying the legality of the mortgage. The court overruled the demurrer. The plaintiff tendered in evidence the petition and the exhibit thereto, and the decree of the judge authorizing the trustee to execute the mortgage. The defendants objected to the same on the ground that “ said judgment and decree were void for want of jurisdiction in the chancellor to grant the same at chambers ; the trust in the said marriage settlement being an executed trust, and the estates of the wife and son being legal and not equitable estates, the chancellor at chambers had no jurisdiction to authorize 'the said trustee to execute the mortgage on said legal estate.” This objection was overruled by the court, and the proceedings at chambers were admitted in evidence. The defendants excepted to this judgment, and in the cross-bill of exceptions assigned error therein.
The plaintiff then offered in evidence the original mortgage and notes, and the defendants objected to the admission of the same in evidence, on the grounds that “ said mortgage and notes were not in compliance with
1. Was the court right in excluding the notes and mortgage as evidence before the jury? We think he was. Our code declares that trustees in Georgia are not authorized to create any lien on the trust estate except such as given by law. The only way in which the trustee could be authorized to give a mortgage upon this property was by an application to the chancellor, and the power of the chancellor to grant such an order seems to be, from the decisions of this court, an implied power, it having been ruled that the power is implied under that section of the code which authorizes the chancellor to grant a trustee leave to sell trust property. We think, therefore, that when the chancellor exercises this implied power and authorizes a trustee to mortgage the trust estate, the trustee must comply strictly with the order or decree giving him the authority. He has no power or authority to make any other stipulation in the contract than that given him by the decree. Having no authority under the law to make a contract incumbering the trust estate, and the only authority which he has being derived from the decree, it necessarily follows that any agreement or stipulation
2. We wish to say, as obiter, that in our opinion, when a chancellor is applied to by a trustee for authority to incumber the trust property, he should set out in his order all the powers, terms and stipulations which the contract should contain. By doing this he will put the trustee and the other party to the contract upon notice of the exact terms upon which the contract can be made, and thus prevent litigation of this kind.
3. By affirming the judgment of the court below in excluding these notes and this mortgage as evidence, we do not wish to be understood as ruling that they are void, and that the trust estate is not bound for the principal and eight per cent, interest thereon. We think that when the five years have expired, and the principal and interest become due, the; plaintiff would be entitled to recover the same in a proper proceeding. These stipulations and agreements which we have seen were made without the authority of the decree will then be nugatory, and we see no reason why the plaintiff should not be allowed to recover the principal and
4. The defendants in error excepted to certain rulings of the court, and brought the same up by cross-bill, and the first exception is that there is a misjoinder of parties. The wife and son were made parties to the rule nisi, and this is the misjoinder complained of. There was no error in the ruling of the court upon this point. The wife and son joined in the petition to the chancellor to authorize the husband and father, the trustee, to make this mortgage. They have an interest in the property, and it is proper, though not absolutely necessary, that they should be parties to the foreclosure proceeding.
5. Nor do we think there was any error in overruling their objection to the admission of the petition and decree, as complained of in their cross-bill of exceptions. We do not agree with them in their contention that the trust created by the marriage settlement in 1865 became executed on the passage of the act of 1866. We think it is still a valid and subsisting trust. Half of the property, by the terms of the settlement, is to go to the “heirs of the body” of the wife, which, under our code, means her children. She and her husband are still in life, and it may he that she may yét have other children, and the one she now has is still a minor and is entitled to representation by a trustee under the terms of the settlement. Askew v. Patterson, 53 Ga. 209; Knorr v. Raymond, 73 Ga. 749. Judgment affirmed.