Opinion
14499
June 14, 1937.
Before DENNIS, J., Darlington, December, 1936. Affirmed.
Action by C.E. Gardner, as Receiver of property of L. K. Kirven against A.M. Coker, as Receiver of the Bank of Darlington, George H. Edwards, as alleged trustee, and Theola Gandy and others, as beneficiaries of an alleged trust, to adjudicate claims of defendants to property held by plaintiff. Judgment for defendant, A.M. Coker, and George H. Edwards, trustee, Theola Gandy, and others appeal.
The decree of Judge Dennis follows:
"The plaintiff, C.E. Gardner, as Receiver and custodian of the property described in his complaint, seeks an adjudication of conflicting claims thereto, asserted by the defendant, A.M. Coker, as Receiver of the Bank of Darlington, Inc., and Geo. H. Edwards, as alleged trustee for the other defendants.
"No useful purpose would be served by a recital of the proceedings that culminated in this action. It will suffice to say that in consequence of supplementary proceedings instituted by A.M. Coker and his co-receivers under a judgment in an action against L.K. Kirven and others in the Court of Common Pleas of Darlington County, the property that is the subject of this controversy was discovered and brought into Court and is now in the custody of the plaintiff.
"The defendant, A.M. Coker, who is now sole Receiver of said bank, claims that by virtue of the said judgment against L.K. Kirven and the levy of executions thereunder and the discovery and bringing into Court of the property described in the complaint in this action, he has a preferred claim to the said property, paramount and superior to the alleged rights of the defendant, Geo. H. Edwards, as alleged trustee, and the beneficiaries of the alleged trust. No other claim to said property is asserted.
"There is no written evidence of the alleged trust. The defendant, Geo. H. Edwards, testified that L.K. Kirven, then dead, had previously created the alleged trust by a parol agreement with him. It appears conclusively by Mr. Edwards' testimony that the late L.K. Kirven owned the property of which that here in controversy is a part. He exercised complete dominion over it. Pursuant to his instructions, it was used for his support, for the payment of his debts, including the initial payment and one additional installment on the purchase price of land described in a contract between him and the First Carolinas Joint Stock Land Bank of Columbia, for his doctor's bills and funeral expenses, and he directed how any surplus remaining after his death should be used and designated the persons to receive it.
"It appears that at the last reference in this cause, Mr. Edwards' attorney attempted to introduce, over the objection of opposing counsel, three inactive judgments, the liens of which had then expired, and, in argument, it was contended that because the said judgments antedated that of Coker et al., Receivers, against Kirven they must have priority in the payment of his debts. On the same day, undated assignments of two of said judgments to Geo. H. Edwards, trustee, were inserted in the Judgment Rolls. The other inactive judgment appears to have been assigned to Geo. H. Edwards, attorney, who, in that capacity, is not a party to this action. Even if said judgments were all active they could not prevail against the superior equity of Coker, Receiver, whose diligence, under an active judgment, in discovering and bringing into Court the property in question will be rewarded. Ex parte Roddey, 171 S.C. 489, 172 S.E., 866, 92 A.L.R., 1430, and cases therein cited. Moreover, if and when the alleged ownership of the said judgments united with the alleged ownership of the only property against which they might have been asserted, there was a merger and they became extinct. In any event, the law required Mr. Kirven to be just before he was generous, and the Court will not sanction the donation of his property to others by any device whereby the payment of the undisputed and adjudicated debt to the bank previously contracted by him would be evaded.
"For the reasons hereinbefore stated, I find that the property described in the complaint in this action is a part of the estate of L.K. Kirven, deceased, and that by virtue of the aforesaid judgment of A.M. Coker et al., Receivers, against L.K. Kirven and the levy and executions thereunder and the discovery and bringing of said property into Court by supplementary proceedings, the said A.M. Coker, as Receiver, has a preferred claim upon the property, paramount and superior to the alleged rights and claims of the defendant, Geo. H. Edwards, as trustee, and the other defendants designated as beneficiaries of the alleged trust. It is, therefore,
"Ordered, adjudged and decreed, that the property described in the complaint be sold at public auction, for cash, by the Judge of Probate of Darlington County, acting as Master, during the usual hours of sale on salesday in February, 1937, or on some convenient salesday thereafter, and that the proceeds of said sale, or so much thereof as may be necessary after the payment of the costs and expenses of this action and of said sale, including a fee of $50.00 for plaintiff's attorney, and any taxable unpaid costs incurred in proceedings for the discovery and bringing of said property into this Court, be paid to A.M. Coker, as Receiver of the Bank of Darlington, Inc., to be credited on the judgment asserted by him in this action, and that the surplus, if any, be held pending the further order of the Court."
Messrs. Jas. R. Coggeshall and George H. Edwards, for appellants, cite: Equitable interest not subject to execution: 10 Rich. L., 294; 58 S.C. 382; Dudley, L., 62; 26 S.C. 450; 113 S.C. 378; 10 R.C.L., 1230; 58 S.C. 117.
Messrs. Dargan Paulling, for respondent, cite: Trust: 171 S.C. 84; 171 S.E., 473. Property subject to execution: 171 S.C. 489; 172 S.E., 866.
June 14, 1937. The opinion of the Court was delivered by
This action by the plaintiff, C.E. Gardner, as Receiver, against the defendants, A.M. Coker, as Receiver of the Bank of Darlington, Inc., Geo. H. Edwards, as alleged trustee, and Theola Gandy, Christine Gandy, Thomas Gandy, Rogers Gandy, and Melvin Gandy, as beneficiaries of the alleged trust, defendants, of whom Geo. H. Edwards, trustee, and Theola Gandy, Christine Gandy, Thomas Gandy, Rogers Gandy, and Melvin Gandy are appellants, and A.M. Coker, as Receiver, is respondent, was commenced in the Court of Common Pleas for Darlington County, June 26, 1936, for the purpose of determining the ownership to certain bonds and a contract in the hands of the Receiver, the said C.E. Gardner. In his answer, the said A.M. Coker, as Receiver, served his answer upon the other defendants, claiming that as such Receiver he was owner of the property and the securities involved, and asked that his claim be adjudged to be paramount and asked that the property involved, or the proceeds derived therefrom, be applied to the payment of a judgment against L.K. Kirven. The answer of the said George H. Edwards was also served upon the plaintiff and also upon the defendant, the said A.M. Coker, as Receiver. In this answer of George H. Edwards he set forth his claim to the bonds and the contract and property involved, as trustee for the other defendants, and asked that he be adjudged to be the owner and holder of the property involved for the benefit of his cestuis que trustent. Certain other defendants adopted the answer of the said George H. Edwards.
The case was heard by his Honor, E.C. Dennis, Judge of the Fourth Circuit at his chambers. His Honor, Judge Dennis, after fully considering the testimony in the case and the matters involved, issued his decree in the cause, dated December 24, 1936. From the decree of Judge Dennis the defendants-appellants, pursuant to due notice, appealed to this Court upon the several grounds set forth in the exceptions.
We are satisfied that his Honor, Judge Dennis, reached the right conclusion in the case. The exceptions are, therefore, overruled, and the judgment of the lower Court affirmed.
MR. CHIEF JUSTICE STABLER and MESSRS. JUSTICES BONHAM, BAKER and FISHBURNE concur.