Opinion
21691.
SUBMITTED JUNE 13, 1962.
DECIDED JULY 9, 1962.
Equitable petition. DeKalb Superior Court. Before Judge Dean.
Platon P. Constantinides, for plaintiff in error.
John Wesley Weekes, Robert E. Mozley, Nick G. Lambros, contra.
1. Where land is bought by a member of a partnership with money belonging to the firm, and the legal title thereto is placed in the name of only one member, an implied trust arises in favor of the other partners, who become equitable owners, and tenants in common, of such land. Code § 108-106; Cottle v. Harrold, Johnson Co., 72 Ga. 830 (3); Roach v. Roach, 143 Ga. 486 ( 85 S.E. 703); Purvis v. Johnson, 163 Ga. 698 (4) ( 137 S.E. 50).
2. A petition seeking to establish an implied trust will fail where all the allegations are based solely upon an oral agreement setting up an invalid express trust. Jones v. Jones, 196 Ga. 492 ( 26 S.E.2d 602). However, where, from the nature of the transaction and the conduct of the parties, the law would imply a trust, an express oral agreement that one of the partners will hold the title to partnership property for the partners, with each partner owning an undivided one-third interest therein, will not defeat the trust. Pittman v. Pittman, 196 Ga. 397 (2) ( 26 S.E.2d 764); McCollum v. McCollum, 202 Ga. 406 (1) ( 43 S.E.2d 663); Stevens v. Stevens, 204 Ga. 340 (2) ( 49 S.E.2d 895); Price v. Price, 205 Ga. 623, 629 ( 54 S.E.2d 578).
3. The petition alleges that the quitclaim deed made by the petitioner to one of the defendants, and other deeds made between the parties, were without consideration, good or valuable, and were solely for the purpose of facilitating the borrowing of money for the business of the partnership. While the petitioner would be estopped, as against a third person without notice, to assert his equitable interest in that part of the partnership properties conveyed by him to one of the defendants ( McWilliam v. Mitchell, 179 Ga. 726, 728, 177 S.E. 579), under the facts alleged, his quitclaim deed to one of the defendants, conveying the land then held in trust by him for the use of the partnership, would not divest him of his equitable interest in the partnership properties. Hodges v. Hodges, 213 Ga. 689 ( 100 S.E.2d 888); Carter v. Rayford, 215 Ga. 261 ( 109 S.E.2d 608).
4. "There may be no adverse possession against a cotenant until actual ouster, or exclusive possession after demand, or express notice of adverse possession; ..." Code § 85-1005. Under the allegations of the petition, the petitioner was in actual possession of a part of the properties as cotenant of the defendants at the time of the filing of the petition. The first notice that he had that the defendants were claiming adversely to him was on May 25, 1959, and his petition was filed on March 30, 1961. The petition does not show that his action was barred by the statute of limitations or by laches. Wallace v. Mize, 153 Ga. 374 (3) ( 112 S.E. 724); Hadaway v. Hadaway, 192 Ga. 265, 269 ( 14 S.E.2d 874); Williams v. Porter, 202 Ga. 113, 119 (2) ( 42 S.E.2d 475); Epps v. Epps, 209 Ga. 643 (1) ( 75 S.E.2d 165).
5. The petition as amended stated a cause of action, and it was error to sustain the general demurrer.
Judgment reversed. All the Justices concur.
SUBMITTED JUNE 13, 1962 — DECIDED JULY 9, 1962.
Michael P. Varellas filed a petition on March 30, 1961, against Andrew P. Varellas and James P. Varellas. The petition, as amended, alleged: The petitioner and the defendants are brothers, and for the period from 1921 until May, 1959, were partners in all their undertakings. Andrew P. Varellas, being the eldest of the three brothers, has always managed the financial affairs of the partnership, and has placed the record title of its property at different times in the name of each of the brothers, according to the exigencies of the situation. In October, 1921, the petitioner and the defendants purchased described land from the United States of America with joint funds of the petitioner and the defendants. Title to the property was placed in the name of Andrew P. Varellas, but it was the agreement between the petitioner and the defendants that the property would belong to all three jointly, each owning an undivided one-third interest therein. From time to time record title to the property has been transferred from one brother to another to facilitate the borrowing of money. The following record of transfers of the property appears in the DeKalb County Deed Records: (a) A quitclaim deed from the United States of America to Andrew P. Varellas, dated October 25, 1921. (b) A quitclaim deed from A. P. Varellas to M. P. Varellas, dated August 25, 1923. (c) A quitclaim deed from M. P. Varellas to J. P. Varellas, dated July 7, 1930. (d) Three security deeds made by James P. Varellas (or J. P. Varellas), in 1936, 1937, and 1941, all of which have been paid. (e) A warranty deed from James P. Varellas to Andrew P. Varellas and James P. Varellas, dated September 20, 1954. Three additional parcels of land were purchased with the partnership funds. The first parcel was conveyed to James P. Varellas on September 21, 1946, and transferred from him to James P. Varellas and Andrew P. Varellas on September 20, 1954. The second parcel was purchased in the name of Andrew P. Varellas on July 22, 1948, transferred from him to James P. Varellas on June 6, 1950, and transferred from James P. Varellas to James P. Varellas and Andrew P. Varellas on September 20, 1954. The third parcel was purchased in the name of Andrew P. Varellas on March 6, 1953, and transferred from him to Andrew P. Varellas and James P. Varellas on September 20, 1954. There was no consideration, good or valuable, for the transfers of title. The purpose of the transfers was to protect the property, and when each of the brothers had title in his name, he held it for all. Record title to the property is presently in the names of the defendants, they having wrongfully and fraudulently excluded the petitioner's name from the record title. Since the property purchased in 1921 was acquired, the petitioner and the defendants have occupied the premises and have conducted a restaurant business thereon, known as Varellas Restaurant. From time to time they have engaged in various businesses, all of which were partnership ventures of the petitioner and the defendants. In 1949 the petitioner went to Greece, and returned in 1951 with the wife whom he had married there. Upon his return he resumed his place in the partnership, continued to live on the property, and the business of Varellas Restaurant continued to operate as a partnership. On May 25, 1959, without any prior notice to the petitioner, the defendants notified him and his wife to vacate the premises they were then occupying, informing him that he had no interest in the business or in the properties. A copy of the notice to vacate is attached to the petition as an exhibit. The petitioner has continued to occupy the premises since the date of the notice. The defendants have constantly tried to evict him and his wife from the premises, have harassed them in specified ways, and threatened them with bodily harm. The joint property of the partnership of which the petitioner is entitled to a one-third interest is the land described in the petition, the restaurant business known as Varellas Restaurant, and the rentals from house trailers, located on the premises. No accounting has been had of the profits of the partnership during its entire operation. The parties by mutual agreement have permitted Andrew P. Varellas to handle all the funds of the partnership, and he has provided sufficient funds to each partner for his personal needs. Since the petitioner was notified to vacate the premises, he has demanded an accounting and division of the assets of the partnership, which the defendants have continued to refuse. He desires an accounting of the operation of the partnership from 1951 to date. He has no adequate remedy at law for an accounting and distribution of the assets of the partnership.
The prayers were: (a) For process; (b) That a rule nisi issue requiring the defendants to show cause why a receiver should not be appointed to marshal and take charge of the assets; (c) That an accounting be had of the partnership profits and property, and distribution be made to the petitioner; (d) That title to the real property be corrected so that record title will show an undivided, one-third interest in the real property to be in the petitioner; (e) That the defendants be restrained and enjoined from harassing, threatening, annoying, injuring, evicting, or attempting to evict, the petitioner and his wife; (f) That the defendants be restrained and enjoined from transferring, alienating, selling, mortgaging, or otherwise disposing of the properties described in the petition as partnership property; and (g) For such further relief as the court may deem meet and proper.
The defendants' renewed general demurrer to the petition as amended was sustained, and the exception is to this judgment.