Ledford v. Lee

200 S.W.2d 393, 29 Tenn. App. 660, 1946 Tenn. App. LEXIS 101
CourtCourt of Appeals of Tennessee
DecidedSeptember 5, 1946
StatusPublished
Cited by10 cases

This text of 200 S.W.2d 393 (Ledford v. Lee) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ledford v. Lee, 200 S.W.2d 393, 29 Tenn. App. 660, 1946 Tenn. App. LEXIS 101 (Tenn. Ct. App. 1946).

Opinion

BURNETT, J.

On July 17, 1943, the original bill was filed by tbe administrator of T. B. Lee, deceased, and Hamilton National Bank of Chattanooga, against the widow and heirs at law of T. B. Lee, deceased, in the nature and form of a general creditors bill. A note held by the bank is sued on. The estate is alleged to be insolvent. Insolvency was properly averred in County Court and the bill asks that the cause be transferred to the Chancery Court "to the end that all necessary references be ordered and all proper accounts be taken and proper distribution of the estate be made among those entitled. ’ ’

The bill sought to have certain deeds (fully described and set forth in the bill) “decreed to be fraudulent, null and void as against complainants, and as against all other creditors of the estate of T. B. Lee, deceased,” and that the lands be sold.

On July 20, 1943, E. A. Lee, one of the sons of T. B. Lee, and a defendant to the original suit, filed a petition herein against the estate for the funeral bill of his father, T. B. Lee.

On August 16, 1943, J. Brown, Pat F., Thomas 0 , and Darius Lee answered the original bill denying the material averments thereof. They among other things deny the insolvency of the estate and say: “said deeds were not fraudulent or made to hinder, delay or defraud creditors, and they were based on sufficient considerations.”

The note sued on by the bank was purportedly signed by T. Y. Swafford, Emma Lee Swafford (two of the defendants of the bill) and T. B. Lee as security. Emma Lee Swafford is a daughter of T. B. Lee. The Swaffords, on August 18, 1943, filed a duly sworn plea of non est *663 factum in which they deny that the note was signed by them or by anyone authorized by them. They also say: “inasmuch as the administrator has failed or refused to make defense on the part of the estate to said note, . . . that said note was not executed by said T. B. Lee or by anyone authorized to bind him in the premises.”

Some of the other defendants answered. Others made no answer. No pro confesso was asked or taken against the non answering defendants, one of whom is the appel-lee, E. A. Lee. No affirmative right is averred against E. A. Lee. On the face of the bill he is a party merely because he is a son of T. B. Lee, deceased.

Over three hundred pages of proof is taken on the claim of the banks. The major portion of this testimony consists of the direct and cross examination of E. A. Lee who was called to testify by the complainant, i. e., the bank and the administrator.

A brief summary of this evidence must be made to show the necessity of E. A. Lee’s testimony.

The suit of the bank was on a note dated March 3,1942, for $2,740 and due in thirty days. This note was purportedly signed T. Y. Swafford and Mrs. T. Y. Swafford. This note was a renewal of a note that the bank had held since 1930. Originally the note was much larger but it had been reduced. To this note the bank held a note dated May 29, 1939, for $3,225 signed by the above parties and T. B. Lee (sec.). Their suit against the Lee estate was based on the latter note which was the last one they received before T. B. Lee’s death on June 4, 1939. After learning of Lee’s death this last mentioned note was held by the bank and the makers allowed to renew it periodically.

*664 It developed in the proof that none of these signatures were the signatures of the purported signers but that these names had been signed to these notes by E. A. Lee. He says that his authority to do so was by virtue of a power of attorney from his father, T. B. Lee, dated June 22,1936. He says further that T. Y. Swafford signed the original note and others afterwards and also signed his wife’s name. That it was his custom and he was authorized by Swafford to sign these notes for him. He also says Mrs. Swafford (E. A. Lee’s sister) had no knowledge that her husband or E. A. Lee was signing her name to these notes until he asked her to assign certain life insurance as security therefor. Sire assigned this life insurance and by so doing he assumed he should continue to sign her name to the notes. This debt or note of the bank was a direct liability of the Swaffords on which the father of Mrs. Swafford, T. B. Lee, was surety.

E. A. Lee for many years was connected with the First National Bank of Pikeville. For some years prior to April 1,1942, he was its cashier (the highest executive office). He resigned this position effective April 1, 1942, on request of the directors. There was no renewal of the note in question after E. A. Lee’s resignation. There was no apparent objection to a renewal as long as he was connected with the bank, i e., the Pikeville Bank, it being an affiliate of the complainant hank. E. A. Lee says that from and before his father’s death he, E. A. Lee, paid the interest and reduced the principal of this note out of his, E. A. Lee’s own funds. In the course of his testimony he testifies to having paid out of his own funds over eight thousand dollars for his father. The most of this was paid after the death of his father on June 4 1939. Most if not all the liability of his father was of long standing. Inferentially, most of this indebtedness has been *665 kept alive by E. A. Lee signing the names of bis father and others to renewal notes. Part of the sum was what he paid on the note of the complainant bank and for premiums on a life insurance policy, oír the life of Swaf-ford, held as collateral by him to secure his father as security or endorser on the complainant bank note. A few hundred dollars of the sum allegedly paid was for taxes on the property herein involved. The remainder he paid was on notes to the Pikeville Bank that his father, T. B. Lee, was directly liable or was endorser on.

The deeds of T. B. Lee, deceased, sought to be set aside were made to three of T. B. Lee’s sons. These deeds were dated October 5, 1931, and were acknowledged- on December 12,1931, before Solon L. Robinson, Notary Public, one of the present counsel for E. A. Lee. Judge Robinson also drafted the deeds. Within a very few months after these deeds were executed and delivered E. A. Lee knew of their existence. He, E. A. Lee, insisted that they not be recorded because of the note held by the complainant bank. They were not recorded until 1942, after E. A. Lee had severed his connection with the' Pikeville bank. The complainant bank did not know of these deeds until they were recorded. It is attempted to be shown that the execution of these deeds in 1931 made T. B. Lee insolvent. The testimony on this question though is purely hindsight. There is no competent proof on the subject.

In this state of the record, the Chancellor decreed in a chambers decree on May 31, 1944, that the complainant bank have a judgment on the note sued on. The judgment was against the administrator ‘ ‘ and a lien is hereby declared upon the real estate described in the bill for the purpose of enforcing the judgment. Order of sale, however, is suspended temporarily, but the cause shall be and remain open for further applications, order of sale *666

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Cite This Page — Counsel Stack

Bluebook (online)
200 S.W.2d 393, 29 Tenn. App. 660, 1946 Tenn. App. LEXIS 101, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ledford-v-lee-tennctapp-1946.