116 Ga. 915 | Ga. | 1903
The present case is in renewal of the litigation instituted by the Atlanta Trust & Banking Company against Nelms, as sheriff, and others, with which this court dealt at its March term, 1902. See 115 Ga. 53. The facts then brought to light were, in brief, as follows: One Morris sold to L. R. Ray a tract of land, taking -notes for a portion of the purchase-price, and giving to him a bond for title. Subsequently J. H. James purchased from Ray one half of this tract, and an arrangement was made with Morris whereby James was to get title to the portion he bought. The banking company, hereinafter designated as the bank, after-wards loaned Ray $1,500, taking, as collateral security for the payment thereof, an assignment of his interest in the bond for title. Still later, Morris discounted at the bank the purchase-money notes he had received from Ray, at the same time delivering to the bank in escrow a deed to Ray covering so much of the land as he had not sold to James. To further secure the payment of the notes discounted, Morris also made to the bank a quitclaim deed to that portion of the land just referred to, which deed was “ conditioned to be void on the payment of the purchase-money notes by L. R. Ray.” These notes were subsequently paid off in full. It was, however, “ agreed between Morris, Ray, and the bank, that the
The bank now predicates its claim to equitable relief upon the following allegations: After Morris had parted with the purchase-money notes given for the land, by procuring the bank to discount the same, he “ desired to secure the bond for titles which he had given Ray, and which Ray had transferred to petitioner; but petitioner, of course, declined to surrender the same until it had received all the money which Ray owed it.” This being the situation, “ Morris suggested that he would make petitioner a deed to
The petition filed by the bank also contained various argumentative conclusions by the pleader, to the effect that the rights of no party to the litigation would be injuriously affected by a decree that petitioner had an equitable lien upon the proceeds of the sale,
To this petition Nelms, the sheriff, and two of the defendants, who were judgment creditors of Ray, demurred on various grounds, one of these grounds being that “ said petition shows that the mistakes asked to be corrected are not such mistakes as are relievable in equity,” and another ground being that the “reasons given in said petition for the reformation of the deed requested are insufficient to warrant such reformation,” petitioner having “ slept over whatever rights it may have had in the premises, and [having] been guilty of such laches and want of diligence as to forever bar its entrance to a court of equity for the purpose of reforming ” that instrument. In order tó meet this charge of laches, the bank offered an amendment to its petition, the purpose of which was to explain why' earlier steps in the premises had not been taken. The trial judge refused to allow this amendment to be filed. In passing upon the alleged right of the petitioner to the injunction prayed for, upon which a hearing was had in the court below, his honor declined to grant the same. To both of these rulings the bank excepted, and brought the case to this court for review.
1. It may, for the purposes of this discussion, be conceded that the bank was guilty of no laches in accepting the defeasance deed to it as written, and was, as between it and Morris, entitled to have the deed reformed so as to express the real agreement entered into by them. ' Indeed, we may regard this reformation as having already taken place, so far as they are concerned, or we may treat the deed as originally setting forth a stipulation to the effect that it should not become inoperative until Ray had paid to the hank the money borrowed, as well as the purchase-money notes held by it, and that he was not entitled to a delivery of the deed in which he was named as the grantee, and which was placed in the possession of the bank as an escrow, until he had satisfied in full all claims which the hank held against him. It is to be observed, however, that there is no claim on the part of the bank that Ray was a party to the contract between it and Morris, or that Ray
It may not be amiss to state, in this connection, that we are not to be understood as intimating a doubt that a defeasance such as that which the bank and Morris had in contemplation would be effectual in preventing the deed in which Ray was named as grantee from taking effect so soon as he had paid in full the purchase-money notes lie had given for the land. On the contrary, the idea we mean to convey is this: As the grantee named in such a defeasance deed, the bank would hold the legal title to the land under Morris- — not under Ray or by his consent, but adversely to-him as the privy in estate of Morris, its sole grantor. One holding land under an adverse title, and not under another or with his assent, is not' in a situation to assert that the latter has pledged the legal title as security for a debt, for such is not true as matter of fact.
2. In its petition the plaintiff virtually recognizes that the instrument sought to be reformed, had it originally been framed as contemplated by the parties thereto, would not have had the legal
On the argument here, counsel for the plaintiff in error contended that a creditor, is, in equity, entitled to be relieved from the consequences of his voluntary acts, when it appears, as in the case at bar, that, solely because of a misapprehension, on his part, of the law of the land, he in good faith pursues a line of conduct which, instead of inuring to his benefit, as he expected, by giving bim a preference over other creditors of his debtor, has the legal effect of placing them in a more advantageous situation than they would have occupied had he taken the proper steps to sub-serve his interests. In support of this contention the following cases were cited and relied on: Culbreath v. Culbreath, 7 Ga. 64; Wyche v. Greene, 16 Ga. 49; Adams v. Guerard, 29 Ga. 651; Lucas v. Lucas, 30 Ga. 191; Collier v. Perkerson, 31 Ga. 117; McCrary v. Austell, 46 Ga. 450; McCallum v. Brandt, 48 Ga. 439; Langston v. Aderhold, 60 Ga. 376; Werner v. Rawson, 89 Ga. 619; Bohler v. Verdery, 92 Ga. 715; DuBignon v. Brunswick, 106 Ga. 317; Woodside v. Lippold, 113 Ga. 877. A casual examination of the rulings made in these cases will suffice to show
Only one of the above-cited cases need be specially noticed, that of Collier v. Perkerson, in which the following facts appeared: One Hodge gave to Collier a mortgage on land owned by Hodge, to secure the payment of a note for six hundred dollars. Subsequently several judgments against Hodge were obtained by one of his creditors, and the fi. fas. issued thereon were levied on the land. “ When the property was exposed to sale by the sheriff, notice was publicly given that the same would be sold subject to the mortgage lien of the said Collier, and at the sale, the said Collier being the highest and best bidder, the property was knocked off to him at the price of nine hundred and thirty-one dollars. Immediately after the property was knocked off, the said Collier stated that he had bid for the same under a mistake; that he thought that the money arising from the sale would first be applied to the payment of the sum due on his mortgage, and the balance to the judgment creditors ; but upon being informed that he could claim no part of the money on his mortgage, he declined taking the property and stated to the sheriff that he could sell it over again, as he, Collier, had bid for it under a misapprehension of his rights. The property was forthwith sold again, and purchased by ” another bidder, who had previously been laboring under the same mistake as to the interest in the property offered for sale, “at and for the sum of three hundred and seventy-five dollars.” This latter amount represented the full value of the land, taking into consideration the mortgage lien thereon. The sheriff brought a suit, for the use of Hodge, the owner of the land levied on and sold, to compel Collier to pay the difference between his bid and the amount for which the property was knocked off at the second sale. It appears that Collier himself made the public announcement, given before the land was offered for sale, that it would be sold subject to his mortgagé lien.
The case now before this court presents an altogether different complexion. The hank voluntarily parted with the bond for title it held as security, thereby committing the mistake of law that it could safely do so. Its mistake consisted in erroneously supposing that one person has authority, without the assent of another, to create by contract a lien upon his property in favor of his creditor. The hank, of its own volition, filed in the office of the clerk of the superior court a quitclaim deed to the land conveyed to it hy Morris, as well as his deed to Ray which it held in escrow, intending that the legal title to the land should pass to the purchaser at the sale it caused to he made under a levy of its execution. It made a mistake of law in supposing that it had a superior lien on the land which, by statutory operation, would immediately, upon its sale freed from such lien, be transferred to the proceeds realized therefrom ; and that, therefore, it (the bank) could without prejudice, by filing with the clerk the deeds just mentioned and directing the sheriff to levy its execution on the land, divest itself of all title it had thereto and have the land sold, wholly unincumbered by any lien in its favor, as the property of Ray. In its petition the bank admits it would have committed precisely the same mistake had the defeasance deed made to it correctly evidenced the contract between it and Morris; so the fact that this deed was not framed as intended in no way influenced the conduct of the bank in bringing about the sale of the land free from any claim of lien it had thereon. The bank acted under a misapprehension of the law in supposing that contract would afford it the same protection as did the bond for title it surrendered- to Morris, thus relieving him of the obligations he had assumed thereunder, so far as the bank was concerned. It bid off the land fully expecting that, as the purchaser thereof, it would acquire the unincumbered legal title thereto, and that, in its capacity as a creditor of Ray, it could successfully assert that as it had caused the land to be sold free from its claim of lien, instead of subject thereto, the same was, hy operation of law, transferred to the proceeds realized from the sale, and therefore a
The case of Woodside v. Lippold, 113 Ga. 877, affords an instance of where equitable relief was denied to one who, knowing of the existence of a mortgage lien, “but acting under the misapprehension, for which the holder of the . . mortgage was in no wise responsible, that he would not insist upon the enforcement of the same,” lost the protection afforded by a senior mortgage, by committing the folly of permitting it to be marked satisfied and cancelled of record. When dealing with the case reported in 115 Ga., which -was brought to this court by the Atlanta' Trust and Banking Co., Mr. Presiding Justice .Lumpkin took occasion to remark (page 59) that “the bank was not an immune with respect to the operation of the doctrine of caveat emptor, which applies to sheriff’s sales. It bid off the land just as any other purchaser
Judgment affirmed.