Field, administrator, v. Manly; et vice versa

Supreme Court of Georgia1938-01-12No. Nos. 12115, 12126

185 Ga. 464

Summary · law.co

Holding. The court reversed the trial court's judgment granting nonsuit to the defendant and affirmed the trial court's overruling of the general demurrer to the administrator's petition for injunction and cancellation of the security deed.

An administrator of an estate filed suit to enjoin a sale of real property and cancel a security deed granted by the administrator. The defendant grantee had sold the property to third parties, including a brother of the trial judge, who executed a special warranty deed. The trial judge's brother had insufficient interest in the litigation to disqualify the judge from hearing the case.

The court addressed the administrator's authority to borrow money on behalf of the estate. An administrator lacks the legal power to borrow funds and encumber estate property with a mortgage, even when the loan proceeds benefit the estate or are used to pay estate debts. Neither the beneficial use of borrowed funds nor a court order authorizing such borrowing validates the transaction or prevents the administrator from later challenging its validity, provided the estate's debts remain unpaid and administrative duties are incomplete. The administrator cannot be estopped from attacking the validity of such unauthorized acts, as the administrator represents the estate's interests and owes duties to creditors that cannot be waived.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a trial judge's brother, as a grantee in a special warranty deed, had sufficient interest to disqualify the judge
Whether an administrator has authority to borrow money and execute a mortgage binding the estate
Whether beneficial use of borrowed funds or court authorization validates an administrator's unauthorized borrowing
Whether an administrator can be estopped from attacking the validity of unauthorized transactions when estate debts remain unpaid

Procedural posture

The defendant grantee filed a general demurrer to the administrator's petition for injunction and cancellation of a security deed; the trial court overruled the demurrer but then granted nonsuit in favor of the defendant.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Jenkins, Justice.

1. Where an administrator filed a petition against the grantee in a security deed from the administrator, to enjoin a sale of the real estate described in the deed and to cancel the deed as a cloud on the title, and where pending the litigation the defendant grantee sold the property to persons including a brother of the trial judge, and the brother joined in a deed to a third person, containing no general warranty but merely a special warranty “against all persons claiming through him,” the brother had no such interest in the litigation as would disqualify the judge. Code, § 24-102; Elliott v. Hipp, 134 Ga. 844 (68 S. E. 736, 137 Am. St. R. 272, 20 Ann. Cas. 423); Johnson v. Marietta & North Ga. R., 70 Ga. 712; Patterson v. Collier, 75 Ga. 419 (54 Am. R. 472).

Nos. 12115, 12126.

January 12, 1938.

Rehearing denied February 18, 1938.

W. E. Mourn and W. G. Mann, for plaintiff.

Hardin & McOamy, for defendant.

2. An administrator, by virtue of his appointment as such, has no legal right to borrow money and bind the estate by a note and mortgage given therefor, although the money was borrowed for the benefit of the estate. Nor will the fact that the proceeds of the loan were used for the benefit of the estate to pay debts operate to give the lender an equitable lien on the mortgaged property or other assets of the estate. Carter v. Davis, 174 Ga. 824 (3), 834 (164 S. E. 264), and cit.; Putney v. Bryan, 142 Ga. 118 (82 S. E. 519). The rule is the same as that which obtains in the case of an executor, unless the making of such an obligation is authorized by the will. See Walton v. Reid, 148 Ga. 176, 178 (96 S. E. 214), and cit.; Harris v. Woodard, 133 Ga. 104 (2), 108 (65 S. E. 250); O’Kelly v. McGinnis, 141 Ga. 379 (81 S. E. 197); Tennessee Chemical Co. v. Jones, 171 Ga. 150, 153 (154 S. E. 791); Lowden v. Eskedor, 169 Ga. 672, 674 (151 S. E. 385) ; Brannon v. Ober & Sons Co., 106 Ga. 168, 170 (32 S. E. 16) ; Lovelace v. Smith, 39 Ga. 130, 133; Wright v. Morris, 50 Ga. App. 196 (177 S. E. 365). Nor will the fact that an administrator, as in this ease, obtained from the superior court an order authorizing such a transaction render it valid, or estop him from subsequently attacking its validity, where all the debts are not paid and the legal duties of administration are uncompleted. This would be true even though all the heirs at law join in the application to the superior court, since, while the administrator as an individual and the heirs might thus estop themselves, the administrator could not by such illegal acts and conduct estop himself as the representative of the estate with unperformed duties to creditors.

3. Under the pleadings and the undisputed evidence, as stated, the court properly overruled the general demurrer to the administrator’s petition against the grantee in the security deed, for an injunction and for a cancellation of the deed; but erred in granting a nonsuit.

Judgment reversed on the main hill of exceptions, and affirmed on the cross-hill.

All the Justices concur, except

Russell, O. J., who dissents from the first headnote.

rehearing opinion

ON MOTION ROR REHEARING.

Jenkins, Justice.

In the motion for rehearing the contention is made for the first time that under the testimony of the administrator it appears that all of the debts of the estate had been paid, and there were no remaining unperformed duties to creditors; and that consequently, since the second division of the syllabus was based upon the express assumption of there being outstanding debts, the ruling therein made that the administrator was not precluded from attacking his own security deed is necessarily erroneous. There was testimony by the plaintiff administrator that the judgment debt remained unpaid. The movant undertakes to show that other testimony by the administrator had .the effect of contradicting this positive evidence on his part. Although this additional testimony is not clear, it could only go to show that the lien of the judgment creditor had been released on one particular piece of property, in consideration of the execution by the sister of the administrator of a lien in favor of the creditor on another and different piece of property. Accordingly, we are unable to say that the testimony presented in the motion renders the testimony of the administrator as to the existence of debts either ambiguous or uncertain. Furthermore, the petition itself plainly and distinctly alleged that the judgment referred to in the motion and testimony remained unpaid by the estate; and this averment of the petition was expressly admitted by the sworn answer, which admission has remained unaltered and unstricken. Under the rule of the Code and the decisions of this court thereunder, admissions made in pleadings constitute a conclusive presumption of law, unless and until altered by amendment. Even though such admissions be so altered or withdrawn, they can still be used as evidence on the trial, but, in such event, not as solemn admissions in judicio so as to estop the party making them from denying them. Code, §§ 38-402, 38-404, 38-114; Mims v. Jones, 135 Ga. 541, 544 (69 S. E. 824); Lydia Pinkham Medicine Co. v. Gibbs, 108 Ga. 138, 140-141 (33 S. E. 945). Rehearing denied.