158 Ga. 291 | Ga. | 1924
Lead Opinion
(After stating the foregoing facts.)
Where land is sold and a portion of the purchase-money is paid by the vendee, and when the vendor delivers to the vendee a bond for title conditioned to make title upon payment of the purchase-money, both the vendor and the vendee have a beneficial interest in the land which they may sell or assign. Georgia State B. & L. Asso. v. Faison, 114 Ga. 655 (40 S. E. 760); Dunson v. Lewis, 156 Ga. 692, 700 (119 S. E. 846). Where an owner receives purchase-money notes for land and executes a bond obligating himself to execute a deed to the purchaser on full payment of notes given for the deferred payments of the purchase-price, and puts the purchaser in possession, the vendee acquires an equitable interest in the land, while the legal title remains in the vendor as security for payment of the balance of the purchase-money. Carter v. Johnson, 156 Ga. 207 (119 S. E. 22). Under such circumstances the vendor holds the title in trust for his vendee. While he can sell his interest in the land, if he does so and conveys the same to a third person, he can only sell subject to his outstanding bond for title; and the purchaser from him takes the land subject to the rights of the holder of his bond for title. Such purchaser stands in the shoes of the vendor. He acquires no greater or better title than the vendor had. As the vendor held the title in trust for the vendee in the bond for title, the purchaser from him likewise holds the title under a like trust for the obligee in the bond for title. When such obligee pays the ■balance of the' purchase-money, such purchaser from the vendor is bound to convey the land to the original vendee or his assignee. The same is true where a grantee takes a deed from the vendor to secure a debt. In such a case the grantee takes the place of the
Where one purchases from the vendor in a bond for title, with notice thereof, it is not the land but the obligor’s interest in it which such purchaser acquires. Wilkerson v. Burr, 10 Ga. 117. Such purchaser, as between himself and the vendor, would be entitled to the unpaid purchase-money. If at the time of his purchase there was no purchase-money due the vendor, or if notes given for the purchase-money had been transferred by the vendor without recourse, or without guaranty, such purchaser would acquire no title whatever. Georgia State B. & L. Asso. v. Faison, supra; McLeod v. Bank of Abbeville, 147 Ga. 33 (92 S. E. 645). If at the time of such purchase the vendor held negotiable notes for deferred payments of the purchase-money of the land, such purchaser would, as between himself and the vendor, be entitled to such notes or the proceeds thereof when collected. Although the purchaser did not acquire delivery and possession of such notes, the vendor would hold them in trust for the purchaser. What would be the effect of the transaction, if the purchaser does not acquire possession of the purchase-money notes, but leaves them in the possession of the vendor, who thereafter transfers them to a third person for value and without notice of the rights of such purchaser? The bona fide purchaser of negotiable notes, not dishonored, will be protected in his title, though the seller had none. Civil Code (1910), §4118. A bona fide purchaser for value and without notice of an equity will not be interfered with by a court of equity. Civil Code (1910), §§4531, 4535.
When the bank took from Smith a deed to his interest in this land to secure an indebtedness due by him to it, and did not acquire and get possession of the oustanding purchase-money notes which fell due in the future, it ran the risk of the vendor trading these notes to some bona fide purchaser for value before due; and a subsequent holder of these notes, who acquired them before due, for value, and without notice, acquired a title superior to that of the bank. Under such circumstances the holder of the notes would be entitled to them and their proceeds in preference to the bank.
There are no recitals in these purchase-money notes which would put Gholston Brothers on notice of the title or equity of the bank therein. If they purchased these notes before due, for value, and without such notice, they acquired a good title thereto; and their title under these circumstances would be superior to the title or equity of the bank to these notes. There was evidence that these parties took these notes before due, for value, and'without notice of the claim of the bank.
Judgment reversed.
Dissenting Opinion
dissenting. I am of the opinion that the verdict directed by the court was the necessary result of the uncontradicted facts appearing in the evidence. It is.unnecessary to enter here upon a discussion at length of the principles of law that underlie the judgment, and in consideration of which I reach the conclusion that the ruling and judgment of the court should be affirmed. The principles of law controlling in the case are discussed at length in the opinion rendered by the court in the case of Ga. B. & L. Asso. v. Faison, 114 Ga. 655. In that case it was said: “When land is sold and a portion of the purchase-money is paid by the vendee, and the vendor delivers to the vendee a bond conditioned to make titles upon the payment of the balance of the purchase-money, both the vendor and the vendee have a beneficial interest in the land, and each may sell or assign his interest, and the interest of either will pass to the purchaser at a sale had under an execution issued against the vendor or the vendee, as the case may be. But whether the sale be a judicial sale or a private sale, 'it is not the land but the debtor’s interest in it, whether he be vendor or vendee, that is sold, leaving the residue untouched.’ Wilkerson v. Burr, 10 Ga. 117. The purchaser of: the interest of the vendor, whether at private or public sale, is entitled to call for the balance of the purchase-money as the representative of the vendor, and the purchaser of the interest of the vendee is entitled to call for a conveyance as the representative of the vendee, upon paying the balance due upon the purchase-money. In determining what iirterest in the land the purchaser under such circumstances would obtain, it is therefore necessary to decide in each ease what was the interest in the land, at the time of the sale, of the person from whom such purchaser bought. If the vendor transfers to a third person, without endorsement or guarani^, the unpaid purchase-money notes of the vendee, the vendor from that moment ceases to have any interest whatever in the land, and a purchaser from him at private sale, or a purchaser at judicial sale under an execution against him, acquires no interest whatever in the land. Tompkins v. Williams, 19 Ga. 570 (5); McGregor v. Matthis, 32 Ga. 417; Neal v. Murphey, 60 Ga. 388.”