25 S.E.2d 307 | Ga. | 1943
1. To the general rule that a lesser estate becomes merged in a greater one there is an exception when it appears that it was the intention of the holder of the instruments creating both estates that a merger should not take place. The intent controls; and such intention may, as in the instant case, appear on the face of the writing.
2. The deed conveying the power of sale containing an express provision for the naming of a substitute trustee with a power of sale granted to the original trustee, and the record showing full compliance with the terms of the instrument in this respect, there is no merit in the contention that the sale should have been enjoined because of lack of authority in the new trustee to bring the property to sale.
For a recited consideration of one dollar, the loan company, on June 15, 1934, executed a deed to Miss Lizzie Martin, whereby the company "remised, released, and forever quitclaimed" to her "all right, title, interest, claim, or demand which [the loan company] had or may have had in and under" the deed from Annie Mae Scott securing the $1000 bond, and wherein it was recited that "this deed conveys all interest and exercises every right in [said deed from Annie Mae Scott] wherein the grantee herein is the holder of the beneficial interest in said loan deed referred to, and also holds first-mortgage real estate bond for the respective amounts set forth in said deeds and for which said deeds were given to secure." and that this conveyance is "limited only to such interest as was conveyed to the grantor herein under said deed" from Annie Mae Scott to the loan company.
The record does not disclose whether or not the foregoing deed was recorded, nor whether or not the bond and deed securing the same were otherwise transferred and assigned to Miss Martin; but counsel for both parties in their briefs state that both the deed and the bond were "duly transferred and assigned" to Miss Martin, and her right and title to the same are not questioned.
On October 8, 1934, Annie Mae Scott, in consideration of "one dollar and other consideration," conveyed the property by warranty deed to G. W. Smith, subject to her indebtedness to the loan company, "as recorded in Deed Book 1069, page 245, and Book 1161, page 643, Fulton County Records," and G. W. Smith, *685 in consideration of "five dollars and other considerations," on January 16, 1936, in turn conveyed the property by a similar deed to Miss Martin, subject to the same indebtedness. Both deeds were duly recorded. On October 1, 1938, the loan company transferred and assigned to S. A. Fraser the notes of Annie Mae Scott and the deed securing the same. This transfer was recorded on October 19, 1942. On November 2, 1942, Miss Martin executed an instrument, in the presence of two witnesses, one a notary public, which was recorded in deed book 1069, page 345, date not shown, reading as follows: "Whereas the undersigned is the holder of a first-mortgage real-estate bond signed by Annie Mae Scott, dated March 7, 1929, and due March 7, 1934, together with a security deed signed by said Annie Mae Scott, dated March 7, 1929, which was given to the Merchants Mechanics Banking Loan Company as trustee, conveying certain property at 188 Bailey Street as security for said bond, said deed being recorded in Deed Book 1069, page 245, Fulton County Records, and whereas the Merchants Mechanics Banking Loan Company, having dissolved its charter, is no longer in life, and is incapable of acting as trustee aforesaid, and whereas under the terms of said security deed, and in compliance with paragraph seven of same, the undersigned, who is the sole owner of the bond secured by said deed, does hereby name and appoint J. Caleb Clarke as successor trustee to act under and in accordance with the rights, powers, and duties as belonged to the original trustee, under said deed."
On November 21, 1942, the property was advertised by J. Caleb Clarke as trustee, to be sold on the first Tuesday in December, 1942, "by virtue of the powers contained in a security deed from Annie Mae Scott to the Merchants Mechanics Banking Loan Company, as trustee, dated March 7, 1929." Although it is recited in the bill of exceptions that the advertisement was put in evidence, a copy does not appear in the record.
The foregoing is a brief summary of all the evidence appearing in the record, except a letter from John B. Wilson, Secretary of State, stating that the Merchants Mechanics Banking Loan Company had not surrendered its charter, and the testimony of the plaintiff in error that he was cashier of the Merchants Mechanics Banking Loan Company, and that they had not dissolved their charter and were still active, and had not been requested to resign as trustee of the property. *686
Fraser brought to the superior court a petition in which he named as defendants, J. Caleb Clarke, as trustee, and Lizzie Martin, and alleged that Clarke had advertised the property for sale and was proceeding with said sale illegally, for the following reasons: that said loan deed and the rights under said deed and the note secured by same were quitclaimed to Miss Lizzie Martin on or about June 15, 1934; that Annie Mae Scott conveyed by warranty deed to G. W. Smith on or about October 8, 1934, said deed being subject to said loan; that G. W. Smith conveyed by warranty deed to Miss Lizzie Martin on or about January 16, 1936, and by executing such an instrument, by the application of the doctrine of merger, said loan was automatically canceled and therefore void, as said lien was merged into said party's fee-simple title; that by virtue of said merger the second loan that was placed on said property concurrently with the first loan is the only outstanding lien against said property; that said second loan has been transferred to the plaintiff herein; that said plaintiff is the only one legally authorized to foreclose on said property; that the Merchants Mechanics Banking Loan Company is legally qualified as trustee for Annie Mae Scott, as provided in the original trust agreement; that said trustee was never changed; and that if it were changed, the failure to record said powers and the change of the trustee would cloud the title and cool the bidding if sale were hold at this time. He prayed, that the defendants be restrained, temporarily and permanently, from selling said property, so that it will pass to a bona fide purchaser; that his claim be declared the first lien against said property; and that he be permitted to advertise and sell said property.
A temporary restraining order was granted, but was dissolved at the interlocutory hearing, and an interlocutory injunction refused, which ruling was excepted to. Only two questions are argued in the briefs of counsel: (1) merger, and (2) the validity of Clarke's appointment as trustee and his right to advertise and sell as the agent of Miss Martin.
1. Fraser contends that when Miss Martin took a conveyance of the property from G. W. Smith, the estate she then held under the loan deed became merged into that she acquired from Smith, *687
and that the resulting merger of estates "automatically canceled" the loan. He does not contend that the loan has been paid, or that Miss Martin in taking the deed from Smith intended that a merger should take place, and offers no evidence, other than the conveyances themselves, to establish his contention. While it is a general rule of law that when two estates in the same property unite in the same person in his individual capacity, the lesser estate is merged in the greater (Code, § 85-710), in equity there are exceptions to this rule. One of the exceptions is that the lesser is not merged in the greater when it appears that the person in whom the two estates meet intends that it shall not take place. Knowles v. Lawton,
The statement in Muscogee Manufacturing Co. v. Eagle Phenix Mills,
2. There is no merit in the contention that Clarke, as the substituted trustee, had no right to expose the property for sale. The trustee originally named who had the power of sale was the Merchants Mechanics Banking Loan Company. There is an express provision in the deed, in the clause thereof numbered seven, providing for the creation of a new trustee by the holder or holders of the obligation secured thereby. This record affirmatively shows that Clarke was, by formal action of the holder of the debt secured by the deed, substituted trustee, with all the powers of the one originally named.
Judgment affirmed. All the Justices concur.