The opinion of the Court was delivered by
Mr. Justice Cothran.
I do not entirely agree with Mr. Justice Purdy in his disposition of this case, and I trust, without disparagement of his very able opinion, I may be excused for presenting my views of this very complicated case, in my own way.
The action was originally brought by W. M. Plamer against Dr. J. H. David, upon an alleged lease of certain
lands of the estate of one H. P. Price, under these circumstances :
Price owned a considerable estate; his wife survived him; they had no children. He had recognized W. M. Rising, an illegitimate, as his son, and in his will he appointed, as executors and trustees, W. T. Bethea, J. B. Gibson, and W. D. B. Playes, who were directed to pay the entire income, of the estate to his wife, during her life, and after her death the estate was to be still managed by the trustees, and the income paid to W. M. Rising, the illegitimate son, during his lifetime. Price died prior to the year 1910, and his wife did not long suryive him. Rising'then became entitled under the will to the entire income for life. On February 16, 1910, W. M. Hamer procured from Rising an assignment of his entire interest in the income payable to him under the will of Price, upon certain considerations. Prior to that time Dr. David had leased a certain. portion of the estate from the executors, and in March, 1913, the lease was about to expire, and Dr. David desired to have ir renewed. After a conference between the executors, W. M. Flamer, who claimed under the assignment the interest of Rising, and Dr. David, a lease was agreed to be given to Dr. David by the executors for a term of 10 years, at a yearly rental of 60 bales of cotton. The lease was executed, dated March 13, 1913. At the same time a “side agreement” was entered into between Hamer and Dr. David, by which Dr. David agreed to give Hamer personally 15 bales of cotton per annum in addition to the 60 bales rental due to the executors. This “side agreement” was purposely concealed by both Dr. David and Flamer, from the executors. For two years thereafter Dr. David delivered 60 bales per annum to the executors and 15 bales per annum to Hamer.
On February 27, 1915, in a written communication; Rising offered to pay Hamer $2,000 for a reconveyance of the
interest which Rising had conveyed to Hamer on February 16, 1910> which offer was accepted by Hamer in a written communication dated May 29, 1915, the transfer to become effective as of June 1, 1915. After the termination of Ham-er’s interest in the assignment by Rising of February 16, 1910, thus effected, Dr. David, while continuing to deliver the 60 bales rental to the executors, declined to deliver the 15 bales under his “side agreement” with Hamer; the default appearing to have begun with the delivery due in the fall of 1916. Thereupon Hamer instituted the original action against Dr. David for that delivery. The case was tried in March, 1917, before his Flonor Judge Memminger and a jury, and resulted in a verdict for the defendant Dr. David. Upon appeal by Hamer, the judgment was reversed. 112 S. C., 211; 99 S. E., 816. This Court held:
“Mr. Hamer used his position as the beneficial owner of the life estate [meaning, I interpolate, the interest of Rising] to secure for himself a contract for 15 bales of cotton per year, for years after his estate might, and in fact did, terminate. Can he have the benefit of that contract, to the detriment of the estate after his interest terminated? The answer should be, he cannot. * * * The procuring of a 10-year term was a valuable consideration to' support the 15-bale lease, but it inures -to the benefit of the estate and cannot extend Mr. Hamer’s interest. Mr. Hamer cannot have the benefit of it longer than his interest continued.”
The Court also held that, as Dr. David was a party to the concealment and was not injured by the exaction of 15 bales extra by Hamer, he had no right to complain; that the executors had an interest in the 15-bale contract and should be made parties. The judgment in favor of Dr. David was accordingly reversed, and the executors ordered to be made parties. This opinion is dated July 19, 1919.
After the case had been remanded to the Circuit Court, the trustees were made parties; they at that time, by sub
stitution, consisting of E. T. Elliott, J. B. Gibson, and J. Earle Bethea. W. M. Rising, the illegitimate, was also made a party. Two of the original trustees, Bethea and Hayes, having in the meantime died, Mrs. Georgia Bethea, executrix of the will of Bethea, and Miss Mary Hayes, executrix of the will of Hayes, were also made parties.
The defendant Rising in his original answer to the original complaint made this allegation:
“That some time thereafter (that is, after the death of Price) he conveyed for a consideration his right, title, and interest in and to the said rents, income, and profits, unto the said W. M. Hamer, who continued to hold the same until the year 1915, when same was reconveyed to this defendant.”
He also alleged:
“That for some time prior to the 30th day of June, 1915 (June 1, 1915?), he had been negotiating with the said W. M. Plamer for a repurchase of his income and all of the right, title, and interest which grew out of the said estate for the benefit of the beneficiary under the terms of the said will; he at this time having no knowledge whatsoever of the contract between the said W. M. Hamer and J. H. David, but it being his intention to purchase all of the income therefrom, and on the 30th day of June, 1915 (June 1, 1915 ?), he and the said W. M. Hamer entered into a contract whereby, for and in consideration of the sum of $2,-000 to be paid by this defendant, the said W. M. Hamer conveyed all his right, title, and interest as beneficiary of the said estate, to this defendant”
—and called upon Plamer to account for the rents collected by him since the date of his reconveyance to Rising.
The trustees in their answer allege:
“That they admit that, at some time during the said lease (to Dr. David), the said W. M. Rising had sold out his beneficiary interest in the said estate, to the said W. M.
Hamer, and that during the year 1913 he was entitled under the said contract to the income therefrom. * * * They further allege that on the 30th day of June, 1915 (June 1, 1915 ?), the said W. M. Hamer reconveyed to their
cestui que
trust, W. M. Rising, all his right, title, and interest as beneficiary in said estate, and from the date of said conveyance the said W. M. Rising is entitled to receive all moneys paid as income .accruing from said estate by way of rent or otherwise”
—and demand an accounting by Hamer for commissions on the rent collected in 1914 on the 15-bale contract, and the proceeds of the collection upon the same account made in 1915; that Dr. David should deliver to them the rents for 1916, 1917, 1918, and 1919, and for the remainder of the 10-year term for the benefit of W. M. Rising.
To the answer of the trustees, Dr. David made a reply, denying his accountability by reason of the 15-bale contract.-
To the reply of Dr. David, W. M. Rising made a reply in which he alleges:
“That he further admits that he sold out for a consideration his interest in the estate to W. M. Hamer, but same has long since been repurchased by him, and he is entitled to and has been entitled to, since the repurchase thereof, all the rents and profits of the estate.”
There are no dates to these pleadings, but it appears that they were served at some time between the date of the opinion in 112 S. C., 211, July 19, 1919, and the reference before Hon. E. C. Dennis, September 24, 1920, approximately 10 years after the contract of assignment from Rising to Hamer, February 16, 1910.
The case was then referred to Hon. E. C. Dennis, as special referee, before his election as Circuit Judge, by. an order the date of which does not appear. He held a reference on September 24, 1920. At that reference this appears in the record:
“Attorneys for J. H. David state that they have no further contest in this matter as to the payment of the 15 bales of cotton, and admit that, under the decision of the Supreme Court, Dr. David is liable for the 15 bales of cotton to the executors.”
The attorneys for Hamer admitted that the executors were entitled to commissions on the 15-bale contract for the entire term of 10 years for which the contract runs.
The trial then proceeded upon the issue whether the executors or Hamer were entitled to the proceeds of the 15-bale contract from June 1, 1915, the date of Hamer’s re-conveyance to Rising. Some testimony was taken at this reference, and it appears to have been adjourned, to be resumed “at a more convenient season.” Rater it appears that a motion was made by counsel for Rising for leave to serve an amended answer, before the special referee, who, in an order dated May 30, 1921, refused the motion. Upon exceptions to this order, heard by his Honor, Judge Mclver, in August, 1921, the order was confirmed. Upon appeal to this Court, the order of Judge Mclver was reversed, and the case remanded to the Circuit Court. May 8, 1923. 124 S. C., 391. The amended answer alleged fraud on the part of Hamer with reference to his purchase of the interest of Rising in the Price estate, the assignment and contract of February 16, 1910, fraud on the part of certain of the trustees, and demanded an accounting by the trustees and Hamer, alleging a conspiracy between them to defraud Rising. It further set up an alleged cause of action against Hamer to recover the $2,000 paid by Rising to him for the reconveyance of the beneficial interest, of date June 1, 1915, as having been obtained by fraud and overreaching, and an alleged cause of action under the 15-bale contract.
After the case had been remanded to the Circuit Court, the reference was resumed before Samuel McLaurin, Esq.; the former referee, Hon. E. C. Dennis, having been elected
Circuit Judge. A mass of evidence was taken before Mr. McDaurin, who made his report at some time in 1924 (the report is not dated), simply submitting the testimony as he had been directed to do.
The case was then heard by his Honor, Judge Dennis, who filed a decree dated September 13, 1924, holding that Hamer was entitled to retain the rents collected in the years 1914 and 1915 under the 15-bale contract; that he should account to the trustees for commissions upon the proceeds of this rent cotton, but “I find that Hamer should not receive any other rents or income from the estate, and that the rent collected for the year 1916, and all subsequent years, should be a part of' the estate in the hands of the trustees, and should be disbursed by them under the terms, of the trust.”
In reference to the attack made by Rising upon the original assignment of his interest to Hamer, of February 16, 1910, he refused to sustain the contention of counsel for Rising that the latter was “little more than an idiot when it comes to busines matters.” He held:
“Rising impressed me as shrewd enough as to testify very explicitly to things which were beneficial to him, and denied everything that anybody else testified against him” —and concluded by saying:
“With reference to the original transaction between Hamer and Rising in 1910, and all that was done thereunder until Hamer reconveyed to Rising, I find that (it) should be sustained. These transactions were known to Rising, and he not only acquiesced in them but gave his written approval on numerous occasions. It was only after Hamer and David got into this lawsuit, that Rising took any action. I think Rising has sense enough to be responsible for what he did, and therefore I do not see any sufficient reason to upset what was done prior to the reassignment by Hamer to Rising.”
In reference to the charge of fraud upon W. T. Bethea, one of the trustees, the Circuit Judge held:
“There is an attempt to discredit W. T. Bethea, but he is dead, unable to explain his connection in any of the matters, and I do not think that the evidence would warrant holding W. T. Bethea’s estate for any amount, or casting any reflection upon his name, which had always been an honored name in Dillon
County;
he having always stood for what was right and fair.”
From this decree both Hamer and Rising and the present trustees have appealed.
The exceptions of Hamer assign error in holding:
“That Hamer should not receive any other rents or income from the estate, and that the rent collected for the year 1916 and all subsequent years should be a part of the estate in the hands of the trustees, and should be disbursed by them under the terms of the trust.”
The exceptions jointly of Rising and the present trustees raise substantially the following questions:
(1) The validity of thq assignment and contract of February 16, 1910, by which Rising purported to assign to Hamer his entire right, title, and interest in the income from the estate in the hands of the trustees under the will of Hugh P. Price and Hamer purported to assume certain obligations to Rising.
(2) The validity and effect of the assignment and contract of March 2, 1910, by which Flamer purported to assign to W. T. Bethea, one-half interest on the profits derived from the original assignment and contract between Hamer and Rising, dated February 16, 1910.
(3) The validity and effect of what has been referred to as the 15-bale contract, between Hamer and Dr. David, dated May 13, 1913.
(4) The validity and effect of the contract, of reassignment between Hamer and Rising, effective June 1, 1915,
whereby Hamer reconveyed to Rising the interest which Rising had conveyed to Hamer by the original contract and assignment, dated February 16, 1910.
(5) The validity and effect of a letter from Flamer to Gibson, one of the trustees, dated July 28, 1915, directing him to divide equally between Hamer and Rising “all cash collected as specific income for 1915, beginning June 1st. * * * This to continue until otherwise notified in writing by me.” At the foot of this letter appears what purports to be Rising’s consent thereto.
The principal issue in the case is the attack made by the trustees and Rising upon the original contract and assignment of February 16, 1910. They allege, in substance, that at the time of the death of Price, and during the subsequent transactions between Hamer and Rising, the latter was an ignorant man, of limited mental capacity, and weak will, poor business judgment, inexperienced in business transactions, an habitual drunkard, and, in consequence, of impaired capacity for handling business; that Hamer was a man of strong will, of high mental capacity and, business judgments, and pretensively a warm friend of Rising, who trusted him as such; that, prior to the execution of the said contract, .Rising by the adroit suggestions of Hamer was led to believe that the trustees were not fairly accounting to him for the income from the estate to which he was entitled, and were imposing upon his ignorance and incapacity; that, at the time of the execution of the contract, he had been on an extended spree and was drinking heavily; that Hamer, taking advantage of his condition and of the trust reposed in him as his friend, with intent to cheat, swindle, and defraud him, induced him to execute the assignment and contract without any valid consideration.
I agree with the conclusions reached by Mr. Justice Purdy as to the mental capacity of Rising, his relations with Hamer, and the advantage taken of him by Hamer in the transaction.
The evidence shows that during the period in which Hamer held the assignment, February 16, 1910, to June 1, 1915, Hamer realized profits, after complying with his obligation to pay Rising $24 per annum, to the extent of $6,919.42. It shows also that on March 2, 1910, Hamer assigned one-half interest in the assignment to W. T. Bethea, one of the trustees, the consideration stated being “$5 and services to' be performed in making all collections and looking after property * * * and assigns to me (Hamer) one-half interest in an insurance policy with the South Atlantic Life Insurance Company on the life of said Wilbur M. Rising.”
It shows also that on July 28, 1915, less than two months after Hamer had reconveyed to Rising the interest assigned to him by Rising in the contract of February 16, 1910, Hamer induced Rising, without any consideration whatever, to consent to an order upon the trustees to pay to him (Hamer) one-half of “all cash collected as specific income for 1915, beginning June 1, 1915, * * * this to continue until otherwise notified in writing by me.”
There does not appear any reason for the assignment by Flamer to Bethea of one-half interest in the contract of February 16, 1910. The stated consideration that Bethea should perform for Flamer services in making collections and looking after the property is unsatisfactory, as his position already required these duties of him. That Bethea had misgivings as to his participation in the matter is shown by his letter to Hamer, dated June 23, 1913, in which he says:
“Don’t you think it would be better for you to make some kind of settlement with him (Fass, a judgment creditor of Rising), rather than have the whole thing aired in Court?”
To this Hamer replied quite sharply, that he did not understand what Bethea meant by “aired in Court”; that “I have never yet had a business transaction that I objected
to be ‘aired’ before any tribunal; you once wrote me that you thought best for yoü not to participate in the profits, but the tempter evidently got hold of you later and changed your heart.” From which the inference is plain that Hamer carried out the terms of his assignment to Bethea. On October 20, 1913, Bethea reassigned to Hamer the interest which Hamer had assigned to him March 2, 1910. While Bethea held the assignment from Hamer, the latter received net from the trustees' — -that is, between March 2, 1910, and October 20, 1913 — $3,808.28, one-half of which, $1,904.14, was evidently received by Bethea.
The plaintiff Hamer, replying to the amended answer, in rather an informal manner, pleaded the Statute of Limitations to the cause of action set up by Rising to have the contract and assignment of February 16, 1910, set aside for fraud.
While I agree with the conclusion of Mr. Justice Purdy that Hamer took advantage of the mental weakness of Rising to drive a hard bargain with him, and think that, if Rising had moved in time, the transaction could and would have been set' aside, I think that Rising is barred by his laches, his ratification and the lapse of time, in maintaining his claim. He testified that when he found out that he had assigned his interest to Hamer, he went to see Bethea about it; that Bethea told him that he had signed the paper; that he asked Bethea, “What chance is there to get shut (shed?) of it?” that Bethea told him: “You can’t get shut of it; you made a bad trade, and you will have to stick to it.” That happened in March, after the contract had been signed in February. He-claimed then that he had not signed any contract, but that, if he had, he “was sure on a spree at the time.” Then was the time for him to have moved in the matter. As his Honor Judge Dennis holds in his decree:
“These transactions were known to Rising, and he not only acquiesced in them but gave‘his written approval on numerous occasions. It was only after Hamer and David got into this lawsuit that Rising took any action.”
During all the years, 1910 to- 1915, he recognized the validity of the contract by accepting the annuity which Hamer was obligated to pay him. Not only this, but when he was permitted to intervene in the action of
Hamer v. David,
he put in an answer relying upon the conveyance by him to Hamer of his interest, and the reconveyance by Hamer to him, and in his reply to the answer of David, he reiterated the same thing.
The attorney for Rising contends that Rising did not know of the fraud of Hamer until the reference disclosed the assignment from Hamer to Bethea of a half interest in the contract of February 16, 1910, and that for that reason he comes within the protection of Section 331 of the Code. Whether that transaction was a fraud or not has no bearing upon the validity of the original contract, unless it be shown that it was in pursuance of an agreement beforehand between Hamer and Bethea, looking to the acquisition by them jointly of Rising’s interest, of which there is not a particle of evidence. The attack is based, not upon the transaction between Hamer and Bethea, but between Flamer and Rising, every particular of which was known to Rising within two months certainly, after it transpired. I do not think that it can be said that Rising did not have intelligence enough to know the facts upon which he now bases his charge of fraud, until he was told of them at the reference. The transaction between Hamer and Bethea was some evidence of the fact of Hamer’s improper conduct in acquiring Rising’s interest, but every fact in connection with it was known to Rising.
I think, therefore, that.the attack upon the validity of the original transfer oí February 16, 1910, has not been sustained.
Whether Hamer shall be required to account for the $2,000 which he exacted of Rising for the reconveyance of June 1, 1915, depends largely upon the facts which establish his improper conduct in connection with the original assignment. Why he should have been willing for $2,000 to reconvey an assignment which had netted him $7,000 in 5 years can be explained only by his consciousness that that transaction was not what it should have been. I think under the circumstances of that transaction he should have done for nothing, and accounted for his profits, that for which he charged Rising $2,000. He should therefore be charged with $2,000, with interest at 7 per cent, from June 1, 1915, to October 1, 1926, which amounts to $3,-586.66.
There is some confusion in reference to the payment by Gibson, one of the trustees, of $2,086.14, to Hamer on January 29, 1916. Mr. Justice Purdy is of opinion that that represented the $2,000 to> be paid by Rising for the re-conveyance with interest from June 1, 1915, and is influenced by the fact that $2,000 with 7 per cent, interest from June 1, 1915, to January 29, 1916, amounts to $2.092.55, quite near the payment of $2.086.14. Taken in connection, however, with the statement which Hamer sent to Gibson on January 28, 1916, and Gibson’s reply of the 29th, I think it is clear that the $2,086.14 was not for the $2,000 with interest, but was for what Hamer claimed in that statement was due to him from the income of 1915.
The statement which Flamer submitted to the trustee Gibson, dated January 28, 1916, taken from the return of the trustees for 1915, shows:
Receipts ..................................$5,869.60
Expenses ................................. 1,363.63
Balance...............................$4,506.07
(An error of 10 cents in subtraction.)
This balance he apportioned:
January 1, 1915, to June 1, 1915 ............$1,877.50
June 1, 1915, to January 1, 1916 ............ 2,625.50
$4,506.00
(An error of 7 cents.)
The $1,877.50 he claimed under the contract of February, 1910, and one-half of the $2,628.50 ($1,314.25), under the order of July 28, 1915, upon the trustees to divide equally the income of 1915 between him and Rising, which he induced Rising to approve.
He claimed that of the $1,314.25, Rising’s half of the income from June 1, 1915, to January 1, 1916, Rising had received $628.25, leaving due him $686. The return of the trustees shows:
That the net balance of income was ..........$2,772.14
From which deduct amount paid to Rising...... 686.00
Leaving for Hamer ........................$2,086.14
This interpretation is confirmed by the letter of Gibson of January 29, 1916, in which he- says:
“I am inclosing herewith check for two thousand eighty-six and 14/100 ($2,086.14) dollars, which is the amount you are entitled to in the Price estate matter in accordance with your statement.”
I think that, in the matter of the order on'the trustees to pay Hamer one-half of the income from June 1, 1915, to January 1, 1916, Hamer imposed upon the credulity of Rising and obtained it without the slightest consideration,
within less than two months after he had reconveyed to Rising the entire interest which Rising had conveyed to him in February, 1910, and that he should account for the $1,-314.25 received by him in the check of $2,086.14 on January 29, 1916, with interest at 7 per cent., amounting as of October 1, 1926,.to $2,296.05.
On July 28, 1915, Hamer received a check from Gibson for $900, which expressed upon its face, “For balance income to June 1, 1915.” Thereafter he received, evidently upon his alleged contract of July 28, 1915 (the order on the trustees), the following sums:
September 4, 1915 $ 50.00
September 23, 1915 50.00
October 8, 1915 ... 100.00
November 8, 1915 100.00
November 26, 1915 50.00
December 31, 1915 100.00
Total .................................$ 450.00
—for which he is accountable with interest from the several dates to October 1, 1926, $343.93, making a total of $793.-93.
It appears that Hamer received during the years 1914 and 1915, 15 bales of cotton, each year, upon the “side agreement” made by'him and Dr. David, for which this Court has virtually decided in the first appeal (112 S. C., 211) that he is accountable.
1914 — 15 bales 500 lbs. each 7,500 lbs. at 6 2/3... .$500.00
1915 — 15 bales 500 lbs. each 7,500-lbs. at 12...... 900.00
Interest on $500 Jan. 1, 1915, to Oct. 1, 1926.. 411.25
Interest on $900 Jan. 1, 1916, to Oct. 1, 1926.... 677.25
Total ................................$2^488.50
On October 17, 1916, Gibson, trustee, issued a check to W. M. Rising for $2,366.96, and took credit therefor in his return. The check was indorsed by Rising and W. M. Hamer. It is plain that he received the money for it. There is no explanation in the evidence of this check, and it should be charged to Hamer. It evidently does not represent the $2,000 paid by Rising for the reconveyance, for the $2,000, with interest from June 1, 1915, to October 17, 1916, could not amount to as much as $2,366.96. The interest upon it from October 17, 1916, to October 1, 1926, amounts to $1,649.42 — total $4,016.38.
In my opinion, therefore, judgment should be rendered in favor of the trustees and W. M. Rising against W. Mh Hamer for the following amounts:
(1)For the amount received by Hamer as the consideration for the reconveyance ...........$2,000.00
Interest at 7 per cent, from June 1, 1915, to October 1, 1926 . . 1,586.66 $ 3,586.66
(2)For the amount received by Hamer under the alleged agreement of July 28, 1915.. 1,314.25
Interest at 7 per cent, from January'29, 1916, to October 1, 1926 ................... 981.80 $ 2,296.05-
(3)For the additional amounts received by Flamer under the alleged agreement of July 28, 1915 ..................... 450.00
Interest to October 1, 1926, upon the several amounts ......... 343.93 $ 793.93-
(4) For the proceeds of cotton received by Hamer under the David “side agreement,” in 1914 ...................$ 500.00
Interest January 1, 1915, to October 1, 1926 .................. 411.25
In 1915 ...................... 900.00
Interest January 1, 1916, to October 1, 1926 .................. 677.25 $ 2,488.50
(5) For the amount, received by Hamer from Gibson, trustee, October 17, 1916 .......... 2,366.96
Interest October 17, 1916, to October 1, 1926 ............ 1,649.42 $ 4,016.38
Total ............................ $13,181.52
The decree of his Honor, Judge Dennis, should be modified accordingly. This being the opinion of a majority of the Court, it is so ordered; the calculation of interest to be counted to the date of filing remittitur.
Mr. Chief Justice Watts and Mr. Justice Marion concur.
Mr. Acting Associate Justice Purdy concurs in part and dissents in part.