Opinion
22496.
SUBMITTED MAY 11, 1964.
DECIDED JUNE 1, 1964.
Injunction, etc. Chatham Superior Court. Before Judge Harrison.
Friedman, Haslam Weiner, for plaintiffs in error.
Ronald H. Cohen, contra.
Where the right of the plaintiff to injunctive relief and the cancellation of a security deed depends upon the decision of an issue of fact and the evidence as to the issue and every phase thereof is disputed and in conflict, the trial judge does not err in granting a permanent injunction and in canceling the deed.
SUBMITTED MAY 11, 1964 — DECIDED JUNE 1, 1964.
Ethel Goodman Greenfield brought her equitable petition seeking an injunction to restrain a foreclosure and to remove a cloud on the title of certain property against S. G. Bodziner and Aron Weiner, as sole trustee appointed under a power of sale in a deed to secure debt, in Chatham Superior Court. Her amended petition alleged: that on January 10, 1963, she executed a security deed on certain described property to one Max Cooper, Agent, for a stated consideration of $3,200, such sum to be used for improving the property only; that the instrument recited "the borrower hereby agrees that this loan will be used only for improving said property"; that special instructions from the defendant Bodziner to Cooper, agreed upon by the parties, were that the proceeds of the loan were to be held by Cooper until improvements were completed and then to be disbursed directly to the contractor making such improvements; that the improvements were never made and the funds were never disbursed because Cooper, agent of Bodziner, failed to authorize the contractor to proceed with the improvements and Cooper, following Bodziner's instructions, did not give the funds to the plaintiff; that this rendered the security deed and notes null and void for failure of consideration; that on February 27, 1963, the grantee of the deed and payee on the notes (Cooper) executed and delivered a cancellation to the plaintiff, which was duly recorded on February 28, 1963; that the defendant has advertised for foreclosure on the property, which if allowed will cause irreparable injury to the plaintiff in that she will be deprived of title and use and enjoyment of the property; that the defendants recorded on March 1, 1963, an assignment alleged to have been made on January 19, 1963, which is a cloud upon the title of the property in question.
The prayers of the petition were: that the defendants be restrained and enjoined from advertising to foreclose and from foreclosing the loan deed; that the defendants be required to show cause why the court should not issue an order requiring the defendants to execute whatever papers are necessary to remove the cloud on the title of said property.
The defendants answered denying the material allegations of the petition and further alleged: that Cooper, acting on the plaintiff's request, contacted Bodziner regarding the loan; that Bodziner received the deed to secure debt with the plaintiff as grantor and Cooper as grantee; that such deed was recorded on January 16, 1963; that Bodziner also received 72 promissory notes from the plaintiff to Cooper, each endorsed by Cooper; that Bodziner received from Cooper an assignment of the deed dated January 19, 1963, and recorded March 1, 1963; that the plaintiff had knowledge that the loan was made by Bodziner and that Cooper had assigned the security deed to Bodziner, which knowledge existed prior to the date of the alleged cancellation; that at the date of the cancellation Cooper had no right, title or interest in the deed, the property or the debt, all of which was known to the plaintiff, and the alleged cancellation was therefore null and void; that no payment was made when the first note became due on February 10, 1963, nor have any payments been received by the defendant.
The defendants prayed that the cancellation be declared null and void and canceled and that they be permitted to proceed to enforce their rights under the terms of the deed to secure debt.
The case came on before the Chatham Superior Court for a final trial on the issues of the permanent injunction and cancellation of the security deed. By stipulation between the parties it was agreed that the court would act as both the trier of the facts and the law. It was further stipulated that neither side had any evidence other than that which had been introduced at the time of the preliminary hearing and that the transcript of the evidence from that hearing would constitute all of the evidence at the final hearing.
From the evidence, it was undisputed that Mrs. Greenfield executed the security deed and the accompanying notes to Max Cooper, Agent, on January 10, 1963, and that she received no consideration from him; that on the same day Bodziner gave Max Cooper, Agent, a check for $3,200 which Cooper endorsed and deposited to his account; that the deed was recorded on January 16, 1963, and that Cooper executed a transfer of the deed to Bodziner on January 19, 1963, which transfer was not recorded until March 1, 1963; that on February 27, 1963, Cooper executed a cancellation to Mrs. Greenfield (for no consideration) which was duly recorded on February 28, 1963; that Cooper spent the money for his own benefit; that the first note became due on February 10, 1963, and was not paid, nor has any payment been made by Mrs. Greenfield to Bodziner.
The plaintiff's evidence showed that Leo Dermer, the plaintiff's son, had arranged with a loan company to lend her money but while talking with Cooper, the loan company's attorney, Dermer either became dissatisfied or was convinced by Cooper that better terms might be found. On Dermer's statement to the effect that "see what you can do with some of the people you know," Cooper contacted Bodziner who, after looking over the property, agreed to make the loan. He instructed Cooper to have the security deed made out to Max Cooper, which Cooper did. Mrs. Greenfield executed the deed and the notes to Cooper. Bodziner then gave Cooper his check for $3,200, but upon seeing the deed instructed Cooper to incorporate a "for improvements only" clause in the instrument. This was done, and Mrs. Greenfield signed the addition to the deed a few days later. Cooper testified that Bodziner gave him specific instructions to hold the $3,200 and distribute it only as improvements were made. Both Cooper and Mrs. Greenfield testified that she was informed and agreed that the money would be so utilized and retained by Cooper. It was further brought out that at that time Mrs. Greenfield did not know who was lending her the money.
The defendant Bodziner professed ignorance of giving any special instructions to Cooper other than that he include a "for improvements only" clause in the deed; that he did not know of any particular arrangement in this instance whereby Cooper was to hold the money. He admitted "that's what they usually do." He stated that Cooper was acting as the agent of the borrower, Mrs. Greenfield.
Dermer testified that there was never any discussion as to a legal fee between him and Cooper although he admitted that he expected to pay Cooper for doing "this work." Cooper testified that he and Bodziner had participated in several similar transactions, that he felt he was his agent, that he was not holding the money for Mrs. Greenfield but, at Bodziner's insistence, for the work to be done. Cooper stated that he filled out the check for $3,200, except for the signature, to himself, making the check payable to Max Cooper, Agent, and receiving instructions from Bodziner to put the borrower's name on the lower left-hand portion of the check. He also stated that he gave some $75 to Bodziner. In this connection, Bodziner stated that the brokerage fee which he received from Cooper was $50; Cooper stated that he received $100 from Mrs. Greenfield as her attorney and that Bodziner paid him nothing; Dermer testified that Cooper told him there was a $100 brokerage fee, not an attorney's fee.
Regarding the plaintiff's knowledge of the transfer prior to the execution of the cancellation the following testimony was given. Cooper stated that at the time Mrs. Greenfield executed the instruments in question she knew Cooper wasn't lending her the money but some unidentified person; that probably some time in February she knew Bodziner was the one lending the money; that prior to giving the cancellation Cooper told the plaintiff's attorney that he was "pretty sure" he had given Bodziner a transfer of the security deed; that he was willing to sign the cancellation knowing he had already transferred the property. The plaintiff's attorney stated that prior to receiving the cancellation he knew about a transfer only from "hearsay." Mrs. Greenfield testified that Cooper told her that he had received the $3,200 from Mr. Bodziner.
Dermer testified that Bodziner called on the 10th of February, 1963, regarding the first payment. As to this conversation, Bodziner testified that he told Dermer that the note was payable and that Dermer told him: "Well, you'll get your money." Dermer could not remember making such statement, but only that he said that he would call Cooper and find out what the situation was.
The trial judge entered a final judgment permanently enjoining the defendants from foreclosing the deed to secure debt and from proceeding against the plaintiff in any manner to collect the debt and that the security deed be canceled of record. From this judgment the defendants except and assign error on several grounds which in effect raise the issue that the judgment is not supported by the pleadings and the evidence.
In the present case, according to the undisputed evidence, the plaintiff received no consideration for the note and deed against the foreclosure of which she seeks an injunction. The controlling issue in the case is whether Cooper who held the funds which the plaintiff was to receive as consideration for these instruments (the note and deed) was entrusted by the defendant with these funds pending the completion of the work to be done upon the plaintiff's premises or whether Cooper was the plaintiff's agent to hold and disburse the funds.
The judge to whom the case was submitted without the intervention of a jury might have determined that Cooper was acting as agent for the defendant Bodziner and when Cooper appropriated the funds to his own use the loss should fall upon the defendant. On the other hand, from the defendant's version of the events that transpired, he might have found that Cooper received the money for the plaintiff and hence she should bear the loss.
While there was a material conflict in the evidence adduced upon the trial it authorized the conclusion reached by the trial judge and the decree granting the permanent injunction will not be disturbed. Davis v. Newton, 215 Ga. 58 ( 108 S.E.2d 809).
Judgment affirmed. All the Justices concur.