Carlton v. Reeves

157 Ga. 602 | Ga. | 1924

Hines, J.

(After stating the foregoing facts.) Before the bank could levy its execution against Grant upon the lands in dispute, the same having been conveyed by Grant to the mortgage company, previously to the rendition of the bank’s judgment, to secure an indebtedness of Grant to the mortgage company, it would have to take up such debt of the defendant to said company. Until this was done there was no leviable interest in Grant in these lands which could be reached by the bank’s' execution. A judgment against the grantor in a security deed, executed before such judgment was rendered, has no lien upon the land embraced in such deed, which can be enforced by levy and sale, until the title becomes revested by redemption. Phinizy v. Clark, 62 Ga. 623; Cecil v. Gazan, 65 Ga. 689; Groves v. Williams, 69 Ga. 614; Osborne v. Hill, 91 Ga. 137 (16 S. E. 965); Ashley v. Cook, 109 Ga. 653, 656 (35 S. E. 89); Virginia-Carolina Chemical Co. v. Williams, 146 Ga. 482 (91 S. E. 543); Dickenson v. Williams, 151 Ga. 71 (105 S. E. 841).

When the holder of the junior judgment pays to the grantee in the security deed the debt thereby secured, it is the duty of the grantee to convey the property embraced therein to the defendant in fi. fa.; and when such conveyance is made and recorded, such property may be levied upon and sold as the property of the defendant. Civil Code (1910), § 6038. So when the bank redeemed this land, by paying to the mortgage company its debt, it lawfully levied its execution upon these lands, and properly advertised them for sale. If the sale had taken place, the proceeds would have been “applied, first, to the payment of liens superior” to tbe claim of the mortgage company, which had been taken up by it; next, to the payment of the money paid by the bank in taking up said claim of the mortgage company; and the balance to the execution under which the property was levied upon and advertised to be sold. Here an ample method is provided for the collection of both debts against the debtor. When the plaintiff in the junior fi. fa. pays off the senior incumbrance, he can proceed to sell the property to pay his own execution, and the debt secured by the senior security deed. He does not have to wait and reduce the latter debt to judgment before he can collect the same. The fact that he afterwards reduces the indebtedness secured by such deed to judgment would not deprive him of the right to enforce its collection by the method pointed out in this statute; nor would the lien of the security deed be displaced by the reduction of such debt to judgment. Hnder this statute the existence and priority of such lien would not be destroyed by the fact that the holder of the debt secured thereby put the same in' judgment. This being so, the purchaser from the vendee in the security deed of the property therein embraced, prior to the general judgment obtained by the holder of the debt thereby secured, would not acquire a title superior to that vested in the plaintiff or his assignee by the payment by him of the secured debt.

The contention that the only lien which the bank obtained on the notes transferred to it by the mortgage company was a general judgment against Grant, and that the only lien which the bank transferred to Reeves was the lien of this general judgment, is not well founded. Even if the bank had to rely upon the general judgment which it obtained upon the indebtedness secured by this deed, the failure to describe the property embraced in the security deed or to refer to the same, either in the pleadings or judgment, did not have the effect of depriving the creditor of the special lien or title created by the security deed, since such lien or title is not fixed by, and derived from, the judgment on the secured debt, and such judgment does not add anything to the force and effect thereof. All that was essential to the enforcement of a special lien in favor of the bank, which had paid the note held by the mortgage company, was the rendition of a general judgment thereon, the conveyance by the mortgage company to the defendant of the lands embraced in its security deed, and proof aliunde that such judgment was rendered upon the secured debt. McAlpin v. Bailey, 76 Ga. 687; Bennett v. McConnell, 88 Ga. 177 (14 S. E. 208); Maddox v. Osborne, 122 Ga. 671; Spradlin v. Kramer, 146 Ga. 396 (91 S. E. 409). When the bank did this, it acquired the lien of the mortgage company upon this land created by this security deed; and the bank likewise acquired the right to levy upon and sell this land under its execution. By thereafter transferring its execution to the plaintiff, the bank put it in the power of the plaintiff to sell this land under its execution, but did not destroy its right to enforce this lien or to have payment of its equitable lien under the security. deed from the proceeds of the sale of this land, whenever brought to sale under its execution. The splitting of its rights and the transfer of one to the plaintiff did not have the effect of destroying the other and major right.

When the bank as transferee afterwards reduced the indebtedness of Grant to the mortgage company to judgment, it could transfer the execution issued thereon to the plaintiff; and the latter could levy it upon and sell this land, the mortgage company having already reconveyed it to the defendant for the purpose of enabling the bank to levy its execution against the defendant. The deed from the mortgage company to Grant did not put the title in him, except for the purpose of levy and sale. It was “a mere escrow, except for the purpose of levy and sale.” Dykes v. McVay, 67 Ga. 502; Coleman v. MacLean, 101 Ga. 303 (28 S. E. 861). Until sale or the payment of the indebtedness secured by the deed of Grant to that company, the title remained in that company. After the making and recording of the deed from the mortgage company to Grant, for the purpose of levy and sale, the title remained in the former until the debt due that company was paid, whether due to it or its transferee. This being so, that company holds the legal title for the benefit of the owner of the debt. As long as that company owned the debt, it held the title for its own benefit. After it transferred the debt, but not the title, it holds for the benefit of the transferee. Shumate v. McLendon, 120 Ga. 396 (10) (48 S. E. 10). The transfer of notes secured by mortgage or otherwise conveys to the transferee the benefit of the security. Civil Code (1910), § 4276; Setze v. First Nat. Bank, 140 Ga. 603 (79 S. E. 540); Beall v. Patterson, 146 Ga. 233 (91 S. E. 71); Jordan Mercantile Co. v. Brooks, 149 Ga. 157 (99 S. E. 289). Now the assignee'of notes, given by the holder of a bond for title for the purchase-money of lánd, and transferred by the vendor without recourse, is subrogated to the rights of the vendor, and is entitled to a lien against the land for the purchase money. Ray v. Anderson, 119 Ga. 926 (47 S. E. 205); Van Pelt v. Hurt, 97 Ga. 660 (25 S. E. 489). This being so, the purchaser of this land from Grant, after the bank had paid up the claim of the mortgage company, and the mortgage company had conveyed it to Grant for the sole purpose of enabling the bank to levy upon and sell the land under its judgment, and before the bank obtained judgment on the claim of said company, which had been transferred to it, took the title subject to the rights of the bank under the security deed. The plaintiff, as transferee of both judgments from the bank, succeeded to all its rights and could enforce the same, notwithstanding the title set up by .the claimant, the same being subject to both judgments. Both the law and the gospel of righteousness demand this conclusion. The trial judge did not err in rendering judgment in favor of the plaintiff.

Judgment affirmed.

All the Justices concur.