184 Ga. 544 | Ga. | 1937
The Securities Investment Company, a judgment creditor of J. M. Cook, who had executed a security deed to the Home Owners Loan Corporation, filed a suit in equity against Cook and the loan corporation, seeking the appointment of a receiver for the property conveyed to the loan corporation and a sale of the property by such receiver, on conditions stated in the petition. The defendants demurred generally, and, after the petition was amended, renewed their original demurrers and filed a new demurrer to the petition as amended. The court overruled the demurrers, and the defendants excepted. The petition as amended alleged substantially the following facts:
“Petitioner further alleges, on information and belief, that said Home Owners Loan Corporation will not accept from petitioner the principal amount remaining unpaid on said debt, together with interest to date. However, petitioner alleges that it is now ready and willing to pay to the said Home Owners Loan Corporation the principal amount of said debt remaining unpaid, together with interest to this date, or the date on which this hearing or any other hearing in this matter may be had. . . Petitioner shows that if said property is sold at this time, or in the near future, by a receiver appointed by this- court, subject to the principal
Section 39-201 of the Code provides as follows: “Where any person other than the vendor, or other than the holder or assignee of the purchase-money or secured debt, shall have any judgment against a defendant in fi. fa. who does not hold legal title to property but has an interest or equity therein, such plaintiff in fi.
This brings us to the alternative prayer for a sale by a receiver, subject to the principal of the secured debt and interest to date, the purchaser to assume the obligation to the Home Owners Loan Corporation. Since the loan corporation could not be compelled, without its consent, to accept an assumption of the debt by the purchaser, we will dismiss from further consideration the portion of the prayer relating to such assumption. The petition is not, however, wholly bad, because it prays for too much. It also contains a prayer for general relief, which is sufficient to cover a sale of the property, subject to the security deed and the outstanding obligations based thereon. Broderick v. Reid, 164 Ga. 474 (2) (139 S. E. 18). The section quoted above was codified from an act of the General Assembly passed in 1894. Ga. L. 1894, p. 101. It was intended to prescribe a remedy for judgment creditors in cases where the legal title to property of which the debtor is otherwise the owner has been reserved or conveyed to secure debt, and for this reason is not subject to levy. Jarvis v. Burke, 59 Ga. 232; Shumate v. McLendon, 120 Ga. 396 (48 S. E. 10). Is the remedy adequate under the facts of the present case? If inadequate, is it yet the sole and exclusive remedy ? It appears from the petition that the unearned interest amounts to about $780. A redemption under the terms of the statute would require the payment of the principal sum of the debt with interest to maturity, while in a later settlement with the debtor the plaintiff would be permitted to retain only the principal advanced with interest to date. The phrase “principal sum advanced” necessarily means the principal of the debt paid to the loan corporation, and not the whole amount which is paid as principal and interest, in making the redemption. Otherwise, the already burdened debtor would
The plaintiffs in error rely chiefly upon two decisions by this court, namely, Swift v. Lucas, 92 Ga. 796 (19 S. E. 758), and Virginia-Carolina Chemical Co. v. Rylee, 139 Ga. 669 (3) (78 S. E. 27), each holding, in effect, that where land is conveyed by a deed to secure a debt, and the debtor has no other property except his equity in the land, the remedy of another creditor who subsequently obtains a judgment against him is, as a general rule, to- redeem the land and otherwise proceed as provided in what is now section 39-201 of the Code. In these cases neither petition averred such a state of facts as we find alleged in the instant petition, and the question now raised was not presented. We can not agree that these decisions are controlling. In Kidd v. Kidd, 158 Ga. 546, 551 (124 S. E. 45), this court, speaking of a security deed, said: “In such an instrument the vendee has the legal title which he holds as security for the payment of the money thereby
Despite the beneficent purposes of the Federal legislation under which the Home Owners Loan Corporation was established, it contains nothing to prevent a sale of the debtor’s equitable interest in the property as prayed in the instant case. H. S. C. A., title 12, § 1463. Contrast Federal Land Bank of Columbia v. Blackshear Bank, 182 Ga. 657 (186 S. E. 724). If the security deed or contract between the debtor and the loan corporation contains any exceptional stipulation whereby it would be improper for any reason to grant the equitable relief sought by the plaintiff, this fact should be pleaded as a matter of defense. The petition as amended stated a cause of action, and the court did not err in overruling the general demurrer.
Judgment affirmed.