173 Ga. 185 | Ga. | 1931
Dissenting Opinion
dissenting. Where the purchaser assumes or covenants to discharge, as a part or as the entire consideration of land purchased by him, a prior encumbrance, without actual knowledge of superior liens, the payment of such prior encumbrance without actual notice thereof does not deprive the purchaser of the benefit thereof as against a junior lien which was of record at the time of the purchase, although the prior encumbrance was canceled of record, instead of being assigned to the purchaser. In these circumstances the holder of a junior lien or security deed was not misled to his prejudice by any act of the purchaser, since his lien was of no less value to him on account of the relief awarded to the purchaser, than when it first attached. There is no equitable ground upon which the holder of a junior lien or security deed could object to the senior lien or security deed being kept alive for the protection of the purchaser’s interest. The lien of such junior lien or security deed, when given, did not attach to the entire estate of the lienor or grantor, but only attached to his equity of redemption therein. It would be inequitable and unjust in such circumstances to permit the holder of the junior lien or security deed to be paid to the exclusion of the purchaser, when the latter paid off and had canceled the senior lien or security deed for the purpose of securing a good title to the property purchased. This principle is supported by the greater number and the greater weight of the authorities. Rumpp v. Gerkens, 59 Cal. 496; Matzen v. Shaeffer, 65 Cal. 81, 3 Pac. 92; Darrough v. Herbert Craft Co. Bank, 125 Cal. 272, 57 Pac. 983; Capitol National Bank v. Holmes, 43 Colo. 154, 16 L. R. A. (N. S.) 470, 127 A. S. R. 108, 95 Pac. 314; Young v. Morgan, 89 Ill. 199; Peet v. Beers, 4 Ind. 46; Ayers v. Adams, 82 Ind. 109; Shirk v. Whitten, 131 Ind. 455, 31 N. E. 87; Hobgood v.
This court, as I understand it, proclaimed and followed the above principle in Simpson v. Ennis, 114 Ga. 202 (39 S. E. 853), where the following appeared: On June 1, 1888, Burnett conveyed to the Georgia Loan & Trust Company a described tract of land to secure an indebtedness due it. He died in the fall of 1889, without having paid the debt, or without having had the title to the property reconveyed to him. On April 30, 1890, the only heirs at law of Burnett conveyed this land to Ennis and others, for a given consideration. At that time there had been no administration of the estate of Burnett. The heirs represented -to the purchasers that there were no debts against the estate, except the above debt to the trust company and 'the taxes due the State and county, which amounts it was agreed that the purchasers should pay from the total purchase-money of the land. Accordingly, the purchasers reserved from the total purchase-money the amount necessary to pay this debt and these taxes, and paid the difference to the heirs, who-thereupon conveyed by warranty deed the entire interest in the land to the purchasers. On March 12, 1891, the purchasers paid the secured debt and taxes from the purchase-money so reserved by them, and caused the security deed to be canceled of record. An administrator was appointed for the estate of the intestate. The administrator brought suit against the purchasers, in order to recover this land for the purpose of administering the same to pay other debts of the intestate. Thereupon the purchasers brought their suit in which they sought to be subrogated to the title and rights of the holder of the security deed, and to the taxes, to the extent of the amounts paid out by them to discharge the secured debt and the taxes due on this land by the intestate at the time of his death. At that time the heirs at law from whom the purchasers bought this land were non-residents and insolvent.
In that case the purchasers did.not buy the equity of redemption
It is insisted that under previous decisions the purchaser is not entitled to be subrogated to the rights of the holder of the senior security deed. Ragan v. Standard Scale Co., 128 Ga. 544 (58 S. E. 31); Brown v. Hooks, 133 Ga. 345 (65 S. E. 780); Citizens Mercantile Co. v. Easom, 158 Ga. 604 (123 S. E. 883, 37 A. L. R. 378). In those eases there were no agreements, express or implied, between the owners and those seeking subrogation, by which' the purchasers were to be subrogated to the rights of senior encumbrancers. Those decisions in effect held that if there had been such agreements the purchasers would be entitled to subrogation. In the instant case there was an express agreement between the purchaser and the owner and the holder of the senior security deed that the purchaser was to pay off the senior encumbrance (he having no actual notice of the junior security deed), in order to put a good title to the property purchased in him. In the decision in Ragan v. Standard Scale Co., supra, it was stated that a purchaser of property will not be entitled to subrogation as against the holders of other encumbrances of which he had notice either actual or constructive. It is insisted that the junior security deed was of record, was constructive notice to the purchaser, and that for this reason he would not be entitled to subrogation to the rights and title of the holder of the senior security deed. This holding is contrary to the ruling in Wilkins v. Gibson, 113 Ga. 31 (38 S. E. 374, 84 Am. St. R. 204). It was there held that “Knowledge of the existence of an intervening encumbrance will not alone prevent the person advancing the money under an agreement of the character above referred to from claiming the right of subrogation, when the exercise of such right will not in any substantial way prejudice the rights of the intervening encumbrancer.” In the decision it was said: “When the defendants, the holders of the intervening liens, took their mortgages, the lien of Eichardson was in existence and superior to theirs, and of this fact they had knowledge. To substitute Gibson for Eichardson would apparently place them in no worse position than they were before. . . The fact that Gibson may have known of the existence of the mortgages
Lead Opinion
On its facts this case is controlled by the principles ruled in Federal Land Bank v. Barron, post, 242. Under application of these principles the judge erred in overruling the demurrer to the petition.
Judgment reversed.