137 Ga. 760 | Ga. | 1912
Lead Opinion
J. W. Crawford gave to J. E. Scott a mortgage containing the following description of the property: “One stock of drugs, medicines, drug sundries, fixtures, show-cases, iron safe, soda fountain, cigars, scales, oil-tanks, and any and all merchandise of any character whatsoever, incident to or connected with the drugstore under the name of the pharmacy, including all medicines, books and accounts of any and all character whatever; the said drug-store being situated in the Bradley Building, city of Adairsville, Bartow county.” Scott transferred the mortgage to Mrs. Lizzie E. Scott. She proceeded to foreclose under the Civil Code (1910), § 3386. An execution was issued and a levy made by the sheriff. The defendant filed an affidavit of illegality under sections 3389 and 3300. One ground of illegality was as follows: “Defendant shows further, that the sheiiff has levied on his books of account, and that plaintiff is seeking to sell his accounts and choses in action, the same aggregating the sum of five hundred ($500) dollars. Defendant shows that these have been contracted since the execution of the mortgage being foreclosed, and that they are not subject to such mortgage, because they were not in existence and could not have been mortgaged before they ever existed, and that an account or chose in action is not capable of being mortgaged.” The plaintiff in fi. fa. moved to dismiss the affidavit of illegality, upon the ground that it was not the proper remedy. The motion was sustained, and the defendant excepted.
The question before this court is whether affidavit of illegality was the proper, mode of defense. The merits of the various grounds were not specifically passed on by the court below. When the holder of a mortgage on personalty proceeds to foreclose it under the Civil Code (1910), § 3386, he makes an affidavit, and an execution issues. If no defense is interposed, this execution is treated as final process. It does not merely declare that a certain amount is due
As early as the ease of Bailey v. Lumpkin, 1 Ga. 392, the question of the extent of the defenses which might be made by a defendant under a proceeding to foreclose a mortgage on realty was decided. It is true that the defense there set up was one of usury, but Nisbet, J., in the opinion said: “But the view of this subject, which to the mind of this court is decisive, is this: The process of foreclosure in England is by bill in chancery. Our statute dispenses with the equitable proceeding and gives a m'ore easy, direct, and less expensive process of foreclosure at law. This legal mode is in lieu of the bill in chancery. This is, therefore, what we are in the habit of calling an equitable statute. It is not in derogation of the existing law, and therefore to be construed strictly; but it is declaratory of it, and remedial, and therefore to be construed liberally. It affirms the law of foreclosure, by providing a different remedy, un,der it. The mortgagee, instead of being driven into a court of chancery to foreclose, is admitted at law to all the rights which he
In Dixon v. Cuyler, 27 Ga. 248, it was declared that in a proceeding to foreclose a mortgage on real estate it was competent for the mortgagor to “show, for cause why the rule absolute should not be granted, that the mortgage debt was usurious, that it was founded upon a gaming consideration, that it was contracted to compound a felony, or that the mortgage was given under duress, or had been released, or to avail himself of any other defense which goes to show that the mortgagee is not c entitled5 to the judgment of foreclosure, or that the amount claimed is not due.” In the opinion Lumpkin, J., said: “There is enough in the act to justify this interpretation. It is one taken by this court the first year of its organization, and the only one which will save the statute from be-' ing looked upon as a nuisance.” The act under consideration in the two cases above cited contained the expression: “In case of any dispute as to the amount due on any mortgage, if the mortgagor shall appear within the time prescribed by this act and make affidavit that he hath made payments which have not been credited upon said mortgage, or that he is entitled to sets-off, which in equity should be allowed,” etc.
In Mell v. Moony, 30 Ga. 412, the second headnote is as follows: “As against a proceeding of foreclosure on personal property, the mortgager may at law go into the consideration of the mortgage, or rely by way of defense upon any fact or principle of law which would entitle him to relief in a court of equity.” The affidavit then under consideration set up that the mortgagee had violated the condition of his obligation, and. that the right had accrued to the mortgagor to claim a thousand dollars and to have
We think that the principles ruled in the cases above cited are conclusive in that now before us. The proceeding was one to foreclose a mortgage on personalty by affidavit. In such a case the plaintiff does not merely state that the defendant owes him a certain sum, but makes affidavit “of the amount of principal and interest due on such mortgage.” The defendant can reply by counter-affidavit. If the mortgage is invalid, or the property offered to be mortgaged is such as can not be mortgaged, nothing is “due on the mortgage,” whether there is any indebtedness by note or account or not. To put a literal and restricted construction upon Civil Code sections 3289 and 3300, and hold that the expression that “ the defendant may file his affidavit of illegality, in which he may avail himself of any defense that he could have set up in an ordinary suit upon the demand secured-by the mortgage, and show that he is not justly indebted to the plaintiff in the sum claimed in said affidavit of foreclosure,” restricts the defendant to contesting merely
In Arnold v. Carter, 125 Ga. 319 (54 S. E. 177), it was held that by an affidavit of illegality to the foreclosure of a mortgage on personalty the mortgagor may avail himself of the defense of recoupment, but that he can not plead set-off in such a proceeding; nor can he have the foreclosure enjoined in order to avail himself of a set-off in equity, where the plaintiff is neither insolvent nor a nonresident. Speaking for himself, the writer gravely doubts the correctness of that ruling, and is -by no means sure that it is not so conflicting with the former rulings cited that it will not have to yield to them whenever the exact case is again presented. But, however that may be, the ruling that the defendant can not plead a set-off in no way adjudicates that the defendant can not set up any defense which would prevent the plaintiff from having a judgment of foreclosure upon the property upon which the lien is asserted, either for the whole or a part of the amount.
Eor these reasons the ruling of the presiding judge was error.
Judgment reversed.
Dissenting Opinion
dissenting. We can not agree to the opinion of the majority of the court in this case. The Civil
In order for the mortgagor, upon the foreclosure of a chattel mortgage, to avail himself of the point that the property levied on is not covered by the mortgage, he must, in our opinion, go into a court of equity; as no such defense is provided by the Civil Code, § 3300.