Felder v. Paulk , 165 Ga. 135 ( 1927 )

Hines, J.

1. Where Paulk conveyed to Felder, his son-in-law, his plantation of 1800 acres, and much personalty, in consideration of the agreement of Felder to pay all the debts of Paulk, including a debt secured by deed to the dwelling-house and lot of Paulk, and where Felder paid off this debt, but took a transfer from the holder of the note given for this debt and of the deed securing the same, a court of equity has jurisdiction, after demand by Paulk upon Felder for the surrender of said note and deed and the cancellation of the latter, and upon the refusal by Felder to comply with such demand, to require Felder to surrender said note and deed for cancellation. Civil Code (1910), § 5465; Hollingshead v. McKenzie, 8 Ga. 457; Sims v. Sims, 162 Ga. 523 (134 S. E. 308).

2. Where the conveyance from Paulk to Felder was intended to embrace all the parcels of land constituting Paulk’s plantation of 1800 acres, but by inadvertence this conveyance did not embrace two parcels of land forming part of this plantation, to which two parcels a bank held a deed from Paulk to secure debt, with power of sale, which debt Felder was to pay as part of the purchase-price of this plantation, and where Felder did not pay this debt to the bank, but permitted the bank to sell these two parcels of land under its power of sale and buy them in, and then took from the bank a quitclaim deed to these parcels, the consideration of this conveyance representing Paulk’s indebtedness tb the bank; and where Felder had been put in possession of this plantation, including said two parcels, by Paulk, at the time of the conveyance by Paulk to him of said plantation, and his possession had been undisturbed, he can not set up in defense to this suit the above facts. In equity Felder will be treated as having paid the debt of Paulk to this bank, and the conveyance by the bank to him will be treated as a 'conveyance by Paulk to him of these two parcels. Henderson v. Lott, 163 Ga. 326 (136 S. E. 403).

3. R. C. Singletary sold and conveyed to Paulk, on credit, a tract of land containing 185 acres, for the price of $1500, and simultaneously took from Paulk a deed to this land to secure the purchase-money. This tract was a part of the Paulk plantation. This debt of Paulk to Singletary was one of the debts which Felder assumed and agreed to pay as a part of the consideration which he was to pay for this plantation. Subsequently, by agreement between Paulk, Felder, and Singletary, the contract of purchase of this land was rescinded by the payment to Singletary by Felder of $300, and the release of Felder from the payment of the debt due by Paulk to Singletary on the purchase-money of this tract, and Paulk and Felder conveyed this tract back to Singletary. This transaction was entirely satisfactory to Felder. These facts furnished to Felder no defense to the present suit.

4. Paulk owned a dwelling-house and lot in Blakely, known as the Roberts place. Paulk had borrowed from a bank $1000, and to secure this loan had executed to the lender his deed to this house and lot. This was one of the debts which Paulk contended that Felder had agreed to pay and did pay as part of the consideration which Felder was to pay Paulk for the Paulk plantation. Felder admitted that he agreed to pay this debt, but denied that he was to pay it as part of the consideration which he was to pay Paulk for his plantation, but on the contrary he contended that he was to have this house and lot and that Paulk was to convey this property to him. The jury found against this contention of Felder, and in favor of Paulk’s contention. Paulk admitted that he subsequently agreed to relieve Felder from the payment of this debt, but that Felder went ahead and paid the debt anyway, under his agreement touching the purchase of this plantation. Held, that these facts do not furnish to Felder any defense to the present action.

5. There was evidence authorizing a finding that Felder refused to pay the debts of Paulk; that he advised Paulk to go into bankruptcy, as one of his creditors was about to sue him, and this would prevent the performance by Felder of his agreement to pay the debts of Paulk; that he advised Paulk to see a named lawyer, which Paulk did; that in consequence Paulk filed his voluntary petition in bankruptcy, and was adjudged a bankrupt; that Paulk made an offer of composition to his unsecured creditors of fifty cents on the dollar, which was accepted; and that Felder furnished the money with which this composition was effected. Felder contended that this offer of composition, in view of Paulk’s contention that he was to pay all of Paulk’s debts, was a fraud against his creditors, and that this fraud debars him from seeking the relief prayed, as he does not come into equity with clean hands. Held:

(a) When both parties are at fault, and equally so, equity will not interfere, but leaves them where it finds them. The rule is otherwise if the fault of one overbalances, decidedly, that of the other. Civil Code (1910), § 4534.

(h) Conceding but not deciding that Paulk was guilty of any fraud against his creditors in his bankruptcy proceeding, Paulk is not basing 1ns right to recover in this ease upon his offer of composition, its acceptance by his creditors, and its performance by him with money furnished by Felder; but his right of action is based upon the previous contract made between him and Felder, by which he conveyed to Felder his plantation, and in consideration of which Felder was to pay all his debts, including a debt to the Citizens Bank, secured by deed from Paulk to that bank, which would result in discharging the incumbrance upon Paulk’s dwelling-house and lot, and upon his right to have canceled the note given for said debt and the deed executed by him to secure the same, when it was paid off by Felder in pursuance of this agreement.

(c) Besides, if any fraud was committed upon Paulk’s creditors in the bankruptcy proceeding, Felder was a party thereto, and the fault of Felder in this matter decidedly overbalances that of Paulk.

0 “The expenses of litigation are not generally allowed as a part of the damages; but if the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.” Civil Code (1910), § 4392.

No. 5918. October 15, 1927.

(а) In an action to recover damages for breach of contract of sale by the buyer, including expenses incurred by the buyer in carrying same out, and a cash payment on the purchase money, and for cancellation of the contract, this court held that attorneys’ fees might be allowed by the jury where the defendant had acted in bad faith and caused the plaintiff unnecessary trouble and expense. Mendel v. Leader, 136 Ga. 442 (71 S. E. 753). By parity of reasoning, where suit is brought by the maker to cancel a note and deed to secure the same, against the defendant who, for a valuable consideration, had agreed to pay off the note and cancel the same of record, and who had paid off the note but who had taken a transfer to himself of the note and of the deed to secure it, and who had refused, upon demand, to surrender th,e note and cancel the deed, the jury trying the ease might allow attorneys’ fees for such breach of his contract by the defendant, where he had acted in bad faith, and caused the plaintiff unnecessary trouble and expense. Mendel v. Leader, supra.

(б) There was evidence which authorized a finding that the defendant had acted in bad faith, and had put the plaintiff to unnecessary trouble and expense in having to bring the present action against the defendant for the surrender of the note and for the cancellation of the security deed, which was a cloud upon his title.

Judgment affirmed.

All the Justices concur. A. II. Gray and II. A. Wilkinson, for plaintiff in error. O. L. Glessner, contra.