1. The petition, filed November 30, 1943, showing on its face that the defendant, on December 28, 1932, entered into possession of the land as a purchaser for value under a deed purporting to convey to her the absolute title thereto, and that she had been in possession of the property ever since, receiving the rents and profits therefrom, and no facts being revealed to negative any of the presumptions arising from the foregoing recitals, it was, as to the complainant, Mrs. Ada Gurr, erroneous to overrule a general demurrer thereto, on the ground that, as to her, the defendant had acquired a prescriptive title.
2. The other complainants, being remaindermen the enjoyment of whose rights were in abeyance so long as Mrs. Ada Gurr, the life-tenant, was in life, showed no present interest in the subject-matter of the suit, and were not entitled to call on the tenant in possession for an accounting, nor for any of the other relief sought.
3. The courts of this State are not empowered to enter merely declaratory judgments. The fact that the petition contains a prayer that the complainants' title be established as superior to that of the defendant does not bring the case without the rule as to declaratory judgments. It was erroneous to overrule the demurrer to the petition so far as the remaindermen were concerned.
4. When a debtor executes and delivers to a creditor bank a deed to secure notes, embodying therein a power of attorney, empowering the creditor, its agent or legal representative, if the debt is not paid at maturity, to sell at public outcry the property described in the deed,
and the creditor bank transfers and assigns without recourse to a third party the notes referred to, upon his paying to the bank the balance due thereon, and also conveys to him the property named, together with all the rights, powers, and privileges which the bank held under and by virtue of the notes and deed aforesaid, and in such last-named conveyance constitutes and appoints such third party the agent of the bank for the purpose of exercising any and all powers contained in said security deed, and the debt remaining unpaid, a sale of the property by such third person as agent of the bank, conforming in all other respects to the stipulations and provisions contained in the power, was a valid exercise thereof and passed to a purchaser thereat the title of the grantee to the land included therein.
No. 15026. NOVEMBER 21, 1944.
The petition as amended discloses the following facts: A certain lot of land was owned by J. W. Gurr Sr., who died testate. He devised to his wife, Mrs. Ada Gurr, a life-estate therein, and provided that, upon her death and the arrival of all of her children at the age of twenty-one years, the land should be equally divided among the latter. He made his wife executrix, and constituted her guardian of the person and property of their children. It was provided in item 4 of the will as follows: "I desire that my children by my wife, Ada Gurr, shall be supported and educated out of my estate, and, if in the opinion of my executrix it shall become necessary to encumber or sell any portion of my estate for that purpose, she is authorized to do so. For this purpose and for the purpose of paying my debts, or debts created by her in the operation of her business, or for the support of my children, she is authorized to encumber or sell any of my property, real or personal, at public or private sale during her widowhood." Mrs. Ada Gurr qualified as executrix. It is recited in the petition that she executed a security deed to the Atlanta Joint Stock Land Bank, on which approximately $4000 is due; also, that on December 10, 1928, she, both as executrix aforesaid and as an individual, executed a deed to secure debt to the City National Bank, subject to the prior deed to the Atlanta Joint Stock Land Bank. The deed to the City National Bank was to secure two notes, dated December 10, 1928, one for $2260.79, and one for $1439.88, and an additional amount not to exceed $6000 to be advanced after the execution of the deed. The deed to the City National
Bank contained the following clause: "Said party of the first part hereby agrees that if the aforesaid debt is not promptly paid at maturity, according to the tenor of said notes, or if the interest installments are not promptly paid as they mature (time being hereby expressly made of the essence), then said party of the second part, its agent or legal representative, may, and by these presents, is authorized to sell at public outcry, before the court-house door in said County of Terrell, to the highest bidder, for cash, all of said property to pay said principal debt, with interest thereon to date of sale; and the expense of the proceeding, including attorney's fees of ten per cent. if incurred, on the amount of principal and interest due, after advertising the time, place, and terms of sale in any newspaper published in said County of Terrell once a week for four weeks without regard to the number of days, prior to said day of sale. An interest in said property being coupled with said power of sale, the same shall be irrevocable by the death of either party. Said party of the second part, its agent or legal representatives, may bid at said sale, and may make to the purchaser or purchasers of said property fee-simple titles to the same, thereby divesting out of said party of the first part all right and equity that they may have in and to said property, and vesting the same in the purchaser or purchasers. Said party of the second part, its agent or legal representatives, are authorized to put the purchaser or purchasers summarily in possession, said party of the first part covenanting to surrender same without hindrance of any kind. The remedy herein provided for being cumulative of the other remedies provided by law." Said deed also contained the following: "This deed is executed by virtue of the authority vested in the maker hereof by the last will and testament of J. W. Gurr, deceased, which will has been duly probated in Terrell County, Georgia, and recorded in the ordinary's office of said county, and the execution of this instrument is in the exercise of the power conferred upon the undersigned by said will, and the debt herein secured has been incurred for the purpose of operating the business of the said Mrs. Ada Gurr and supporting and educating the children of the said Mrs. Ada Gurr and J. W. Gurr, deceased." The last-named bank executed to T. B. Raines a deed of conveyance to said property, the said instrument among other things reciting: "Whereas, the balance due on said notes is in the
amount of $832.62, on date of October 30th, 1931, which balance has been paid by T. B. Raines, and the notes representing the balance due on said indebtedness have been transferred and assigned to the said T. B. Raines, now, therefore, the City National Bank, in consideration of the payment of the balance of said indebtedness, in the amount aforesaid, does hereby sell, transfer, and convey unto the said T. B. Raines the property described in said security deed, securing said indebtedness, which property is described as follows: The whole of lot of land No. 95 in the 11th land district of Terrell County, Georgia, containing 202 1/2 acres, more or less. This deed is made subject to the rights of the holder of that certain deed executed February 2d 1924, and recorded in the deed records of Terrell County, Georgia, book Y, pages 513-514, which said deed was made to secure the Atlanta Joint Stock Land Bank of Atlanta in the sum of $9000. To have and to hold said described property unto the said T. B. Raines, in as full and ample manner as the same was held by said bank under the security deed aforesaid. The purpose of this deed is to transfer and convey unto the said T. B. Raines all the rights, powers, and privileges which the said bank held under and by virtue of the said deed and the notes aforesaid, and by virtue of the powers contained in said deed the said T. B. Raines is hereby constituted and appointed the agent of the City National Bank for the purpose of exercising any and all powers contained in said security deed."
The advertisement under which the land was sold was as follows:
"PUBLIC SALE.
"Will be sold before the courthouse door in Dawson, Terrell County, Georgia, on the 27th day of December, 1932, within the legal hours of sale, to the highest bidder for cash, the following described property, to wit: The whole of lot of land No. 95, in the eleventh (11th) land district of Terrell County, Georgia, containing two hundred two and one-half (202 1/2) acres, more or less. Said property will be sold under and by virtue of the powers contained in one certain security deed from Mrs. Ada Gurr, executrix of the estate of J. W. Gurr, and Mrs. Gurr individually, to the City National Bank of Dawson, Georgia, dated December 10th, 1928, and recorded in the office of the clerk of the superior court of Terrell County, Georgia, in deed book BB, page 30, for the
purpose of paying the indebtedness described in said security deed, which indebtedness is in the amount of eight hundred thirty-two 62/100 ($832.62) dollars, principal, besides interest from October 30th, 1931, at the rate of 8% per annum. The undersigned, as assignee of the indebtedness secured by said deed, and the holder of the title to the property described in said security deed, under and by virtue of an assignment from the City National Bank of Dawson, Georgia, dated October 30th, 1931, and recorded in the office of the clerk of the superior court of Terrell County, Georgia, in deed book CC, page 423, and as the agent of the said City National Bank, under and by virtue of the assignment aforesaid, will sell said property and execute to the purchaser thereof fee-simple title to the same, as provided in said security deed. Said property will be sold subject to loan deed in favor of the Atlanta Joint Stock Land Bank, dated February 2d 1924, and recorded in book Y, pages 513-14, of the deed records of Terrell County, Georgia, and will be sold also subject to all unpaid taxes. This November 28th, 1932.
"T. B. Raines, agent of the City National Bank, attorney in fact for Mrs. Ada Gurr, executrix of the estate of J. W. Gurr, and Mrs. Ada Gurr individually.
"R. R. Jones, atty. for T. B. Raines."
Paragraph 9 of the petition is as follows: "Plaintiffs show that T. B. Raines, purporting to act as agent of the City National Bank of Dawson, Ga., did expose for sale under the power the land contained in the security deed to the City National Bank of Dawson, and under and by virtue of said purported sale did make a deed to defendant, Mrs. Helen G. Gurr, a copy of which is hereto attached marked Exhibit `D,' and hereby made a part of this petition."
Said last named deed was as follows: "This indenture made and entered into this the 27th day of December, 1932, between T. B. Raines as agent of the City National Bank of Dawson, Georgia, the attorney in fact for Mrs. Ada Gurr as executrix of the estate of J. W. Gurr, deceased, and Mrs. Ada Gurr individually, and Mrs. Helen Gurr, both of Terrell County, Georgia, witnesseth: That, whereas, Mrs. Ada Gurr, as executrix of the estate of J. W. Gurr, deceased, and individually, did on the 10th day of December, 1928, make and execute one certain security deed to the
City National Bank of Dawson, Georgia, which deed is recorded in the office of the clerk of the superior court of Terrell County, Georgia, in deed book BB, at page 30, for the purpose of securing the payment of two certain notes, fully described in said deed; and whereas, the said City National Bank of Dawson, Georgia, did on the 30th day of October, 1931, transfer and assign the notes described in said security deed to T. B. Raines, and made and executed a deed of assignment on the same date to the said T. B. Raines, in which deed the said bank transferred and conveyed the property described in said security deed unto the said T. B. Raines, and appointed the said T. B. Raines its agent for the purpose of exercising the powers contained in said security deed, which said deed of assignment is recorded in the office of the clerk of the superior court of Terrell County, Georgia, in deed book CC at page 423; and whereas, the said security deed provided that, if the debt thereby secured was not promptly paid at maturity, that the said City National Bank, or its agent or legal representative, would be authorized to sell at public outcry before the courthouse door in the County of Terrell, to the highest bidder for cash, all the property described in said deed to pay said debt, and the expenses of said sale, after advertising the time and place and terms of said sale in any newspaper published in Terrell County, once a week for four weeks, prior to the date of said sale; and whereas, the balance of said debt secured by said security deed in the amount of $832.62, with interest thereon from October 30th, 1931, remained unpaid after its maturity, and the said T. B. Raines, the owner and holder of the notes described in said security deed, and as the agent of the City National Bank of Dawson, Georgia, under and by virtue of the deed of assignment aforesaid, and under and by virtue of the powers contained in said security deed, advertised said property described in said security deed for sale in the Dawson News once a week for four weeks, prior to the date of said sale, said advertisement appearing in said paper on dates of December 1st, 8th, 15th, and 22d 1932, which advertisement stated the time, place, and terms of said sale, all in conformity with the powers contained in said security deed; and whereas, on the 27th day of December, 1932, within the legal hours of sale, before the courthouse door in Terrell County, Georgia, at the time and place named in said advertisement, the said T. B. Raines, as agent aforesaid,
exposed said property for sale to the highest bidder for cash, when the same was knocked off to the said Mrs. Helen G. Gurr, at and for the sum of one hundred ($100.00) dollars, she being then and there the highest and best bidder for said property. Now, therefore, the said T. B. Raines as agent for the City National Bank of Dawson, Georgia, the attorney in fact for Mrs. Ada Gurr as executrix of the estate of J. W. Gurr, deceased, and Mrs. Ada Gurr individually, under and by virtue of the powers contained in said security deed, for and in consideration of the sum of one hundred ($100.00) dollars cash in hand paid, the receipt whereof is hereby acknowledged, does hereby sell, transfer, and convey unto the said Mrs. Helen G. Gurr, her heirs and assigns, the following described property, to wit: The whole of lot of land No. 95 in the 11th land district of Terrell County, Georgia, containing 202 1/2 acres, more or less. To have and to hold said described property unto the said Mrs. Helen G. Gurr, her heirs and assigns forever, in fee simple, subject, however, to the rights of the holder of that certain deed to secure debt dated February 2d 1924, and recorded in the office of the clerk of the superior court of Terrell County, Georgia, in deed book Y, at pages 513-14, said deed being from Mrs. Ada Gurr, as executrix of the estate of J. W. Gurr, deceased, and Mrs. Ada Gurr individually, to the Atlanta Joint Stock Land Bank, and subject to all unpaid taxes on said land. In witness whereof, the said T. B. Raines as agent for the City National Bank of Dawson, Georgia, the attorney in fact for Mrs. Ada Gurr as executrix of the estate of J. W. Gurr, deceased, and Mrs. Ada Gurr individually, has hereunto set his hand and affixed his seal, the day and year first above written." This deed was duly executed by T. B. Raines, "as agent for the City National Bank of Dawson, Georgia, the attorney in fact for Mrs. Ada Gurr as executrix of the estate of J. W. Gurr, and Mrs. Ada Gurr individually."
It was alleged that the note which was secured by the deed to the City National Bank was transferred and assigned to T. B. Raines without recourse. The property was advertised as set forth in the deed made by Raines as agent to Mrs. Helen G. Gurr, and the sale was had in accordance with said advertisement. The suit was by Mrs. J. W. Gurr Sr. (Mrs. Ada Gurr) and the children of J. W. Gurr Sr. against Mrs. Helen G. Gurr; and in addition to
what appears above, paragraphs 11, 12, 13, 14, 15, 16, 17, and 18 of the petition are as follows: "11. That said deed from T. B. Raines, as agent of the City National Bank of Dawson, to defendant is void and of no legal effect. 12. Plaintiffs show that defendant entered into possession of said property about December 28, 1932, and has been in possession of said property ever since said time receiving the rents and profits therefrom. 13. Plaintiffs show that under facts heretofore alleged defendant's possession has been under and by virtue of the security deed from Mrs. Ada Gurr (Mrs. J. W. Gurr Sr.) to the City National Bank of Dawson, Ga. 14. Plaintiffs show that, defendant's possession having been under said security deed referred to in the preceding paragraph, her right to possession terminates upon defendant receiving sufficient rents and profits from said property to pay in full the principal and interest due on said security deed, and plaintiffs allege that defendant has received sufficient rents and profits to pay in full the amount due on the security deed given to the City National Bank of Dawson, Ga. 15. Plaintiffs show that, if defendant has not received sufficient rents and profits to pay in full the amount due on the security deed given to the City National Bank of Dawson, they stand ready and willing to pay same and now tender whatever amount may be due to defendant or into this court. 16. Plaintiffs allege that, in view of the relation existing between the parties, there should be an accounting in order to determine if there is any amount due defendant, and if so, what amount. 17. Defendant, Mrs. Helen G. Gurr, is a person who is feeble-minded and incapable of handling her property, or of understanding and protecting her legal right, and therefore a guardian ad litem should be appointed for her in this litigation. 18. The executrix of the estate of J. W. Gurr Sr., to wit, Mrs. J. W. Gurr Sr. (Mrs. Ada Gurr), consents to and joins in this suit."
The prayers were: "(a) That plaintiff, Mrs. J. W. Gurr Sr. (Mrs. Ada Gurr), be declared to have a life estate in said property superior to any claim, right, or title in said property of defendant; (b) that the remaining plaintiffs be declared to have a remainder interest in said property superior to any claim or interest of defendant; (c) that the deed from T. B. Raines, agent of the City National Bank of Dawson, be declared null and void; (d) that
defendant be required to account to plaintiffs for all rents and profits received from said property, and if upon an accounting there is found any amount due defendant, that upon the payment of same, or if it is found that defendant is not due anything, then the defendant be adjudged not entitled to any further possession, right, or use of said property. If upon an accounting it is found that defendant is indebted to plaintiffs, or any of them, that judgment be rendered for said amounts. (e) For such other and further relief as to the court may be deemed meet and proper. (f) That process issue."
A demurrer was interposed to the petition as amended, asking that the same be dismissed on the following grounds: "1. That the petition, as to each and all of the plaintiffs, sets forth no legal or equitable cause of action. 2. That the petition shows that the alleged cause of action, if any, is barred by the statute of limitations, in that it appears that more than eleven years elapsed from the date of the deed attached to plaintiffs' petition — Raines's deed to defendant — and the date of the filing of the petition, and that during said time defendant was in continuous possession of the land described in said deed, and it not appearing that any of the plaintiffs during said time were laboring under any legal disabilities. 3. Defendant demurs to paragraph 11 of plaintiffs' petition, for the reason that the same sets forth a mere conclusion of the pleader, there being no facts in said petition to authorize the same. 4. Defendant demurs to paragraph 13, as amended, of plaintiffs' petition, for the reason that said paragraph sets forth a mere conclusion of the pleader, there being no sufficient facts in the petition to authorize said conclusion. 5. Defendant demurs to paragraph 14 of plaintiffs' petition, for the reason that said paragraph sets forth mere conclusions of the pleader, without setting forth facts sufficient to justify such conclusions." The judge overruled the demurrer, and Mrs. Helen G. Gurr excepted.
1. The petition, filed November 30, 1943, shows that Raines, as agent for the bank, on December 27, 1932, by absolute deed, which was recorded on January 7, 1933, purported to convey for a valuable consideration to Mrs. Helen G. Gurr the title to the lot of land here involved; that on the following day she entered into possession of said property, and has since
been in possession of the same, receiving the rents and profits therefrom. Under the facts as they thus appear, her possession is presumed to be adverse until the contrary is shown. Hall v.Gay, 68 Ga. 442, 443; Hammond v. Crosby, 68 Ga. 767,771. A like presumption exists as to her good faith. Baxley v.Baxley, 117 Ga. 60, 61 (43 S.E. 436). There is nothing in the instant case to negative either of the two presumptions. The complainants take the position that it can not here be ruled that the petition shows on its face adverse possession in Mrs. Helen G. Gurr under color, because it is alleged in the thirteenth paragraph of the petition that, "under the facts heretofore alleged, defendant's possession has been under and by virtue of the security deed from Mrs. Ada Gurr (Mrs. J. W. Gurr Sr.) to the City National Bank of Dawson, Ga." There was a special demurrer to this paragraph on the ground that it sets forth a mere conclusion, there being no facts in said petition to authorize said conclusion. The demurrant's contention as to this is sound. The complainants' theory as to this is, that the sale under the power being void, one who enters under a purchase at such void sale holds merely under the security deed containing the power under which said void sale was had. For the doctrine thus invoked, counsel cites Hirsch v. Northwestern Mutual Life Ins.Co., 191 Ga. 524 (13 S.E.2d 165); Coates v. Jones,142 Ga. 237 (82 S.E. 649), later appearing in 145 Ga. 397
(89 S.E. 334); Ashley v. Cook, 109 Ga. 653 (2) (35 S.E. 89);Georgia Baptist Orphans Home v. Moon, 192 Ga. 81, 84
(14 S.E.2d 590). The authorities do not support the contention. Mrs. Helen G. Gurr was not the grantee in the security deed, nor the donee of the power of sale contained therein. She was a purchaser for value at a sale by one who was the transferee of the debt the deed was given to secure and the assignee of the title to the property conveyed therein, and who professed to act under a valid power of attorney to make the sale. Under the facts alleged, it can not be held that her possession was under the security deed, to which she was not a party and which did not profess to give her any right of entry; but that it was under the deed from one purporting to have authority to sell, which deed named her as grantee therein. In at least two decisions, this court has quoted approvingly a statement made by Story, J., in Prescott v.
Nevers, 4 Mason, 326, 330, to wit: "I take the principle to be clear
that, where a person enters into land under a claim of title thereto by a recorded deed, his entry and possession are referred to such title." Norris v. Dunn, 70 Ga. 796, 800; Bowman
v. Owens, 133 Ga. 49, 51 (65 S.E. 156). As to the complainant, Mrs. Ada Gurr, the petition should have been dismissed on demurrer, because as to her it showed that the defendant had acquired a prescriptive title.
2. Of the several complainants, Mrs. Gurr was a life-tenant; the others were remaindermen. So long as the former lives, the latter have no right to bring this suit for an accounting with the party in possession, nor for any of the other relief sought. They must stand by during the life of the life-tenant. Schley
v. Brown, 70 Ga. 64; Bull v. Walker, 71 Ga. 195;LaPierre v. Martin, 145 Ga. 851 (89 S.E. 1074).
3. The courts of this State are not empowered to enter merely declaratory judgments. Southern Railway Co. v. State,116 Ga. 276 (2) (42 S.E. 508). The prayer that the complainants' title be established as superior to that of the defendant was, standing alone, nothing more than an effort to obtain a declaratory judgment, since it appears that they are not entitled to maintain this suit because they at this time have no right to any of the other relief sought. In the case last cited, a lessor of real estate brought an action against a third party for the use and occupation of a portion of the leased premises during the period of the lease and at a time when the lessee was entitled to the possession of the property. This court held that the plaintiff was not entitled to recover because the right of action, if any, was in the lessee. In the same suit, the plaintiff also prayed for a determination of certain rights claimed by it, but as to those alleged rights did not ask that the defendant do or pay anything. After disposing of the first point by ruling that a right of action for an injury to the freehold could not be maintained by the lessor during the period of the lease, the court ruled as follows as to the second point: "A declaratory action is not maintainable in this State. Accordingly, where a plaintiff files a petition alleging that the defendant is in possession of certain land, and setting up facts which plaintiff claims show that he has title and that the defendant has no title or right of possession, and invoking no injunction, judgment, or decree save that the court decide the law and declare the legal
rights of the parties, a demurrer to such petition should be sustained." So here it must be ruled that, since the remaindermen showed, as to the main branch of the case, that no right of action existed in them, the case will not be retained merely to declare the relative strength of their title and that of the defendant. It was erroneous to overrule the general demurrer to the petition.
4. A reversal of the judgment necessarily follows from the rulings already announced. To end the decision here, however, would leave undecided an important question arising under this record, which was stressed in the oral argument and in the briefs, and one which in all probability will arise again out of this same controversy. The complainants base their right of action on the proposition that the sale of this property under the power passed no title. The purchaser, who is the plaintiff in error here, insists that by virtue of that sale she acquired title. We have ruled in divisions 1 and 2 only that, as against the life-tenant, the purchaser has acquired a prescriptive title, and that the remaindermen have no right to sue so long as the life-tenant is living. In this situation, prescription did not ripen into title as against them (Mathis v. Solomon,188 Ga. 311, 4 S.E.2d 24), and hence at some later time they can bring and present the same contention. Under the circumstances, we feel that, rather than have it postponed, the basic issue here presented should be passed upon. If the sale by the agent, professedly under the power, passed title to the purchaser, it affords an additional reason why the court erred in overruling the demurrer to the petition.
While the advertisement under which the land was sold recited that Raines would sell it as assignee of the indebtedness secured by the deed and the holder of the title to the property described therein, and as agent of the said City National Bank by virtue of the assignment aforesaid, the advertisement was signed "T. B. Raines, agent of the City National Bank, Attorney in fact for Mrs. Ada Gurr, executrix of the estate of J. W. Gurr, and Mrs. Ada Gurr individually." His deed to Mrs. Helen G. Gurr was signed in exactly the same way, and the other recitals in the deed are to the same effect. No power of sale was given to the holder of the indebtedness, whoever he might be, nor to the creditor and his assigns, as was done in Universal Chain TheatricalEnterprises Inc. v. Oldknow, 176 Ga. 492 (168 S.E. 239). Raines sold the
land as agent of the City National Bank, and in that capacity only. If as such agent he was not empowered to pass such title as the estate of J. W. Gurr Sr. had in and to the land, then the deed that he made to Mrs. Helen G. Gurr was no more than color of title, and did not itself convey title. No question is raised as to the authority of Mrs. Ada Gurr under the will to execute the security deed. There is none as to the payment of the debt being in default. No attack was made on the validity or regularity of anything touching the transfer of title, except this: that Raines having paid to the bank the notes of Mrs. Ada Gurr, and the bank having transferred the same to him without recourse, and having conveyed to him all its right and title to the property, it had no further interest in the subject-matter of the security deed, and no authority to constitute Raines its agent to exercise any and all of the powers contained in the security deed, particularly the power to sell the land in case of default, although the deed contained a clause empowering the bank, in case of default, its agent or legal representative, to sell the land at public outcry, etc.
The court has held that a power of sale in a security deed is a power coupled with an interest. Lewis v. King, 165 Ga. 705
(141 S.E. 909), and the authorities there listed. And that the interest referred to must be not alone in the proceeds of the thing to be sold, but in the thing itself. Turman v.Winecoff, 138 Ga. 726 (75 S.E. 1131), and cit. Most of the authorities, both from this court and from other jurisdictions, a number of which are cited in the briefs, that deal with these two statements, apply these principles to those instances where the question discussed or ruled was whether or not the donor of the power could revoke it. A power coupled with an interest is not revocable by death. Baggett v. Edwards, 126 Ga. 463
(55 S.E. 250). Nor is it revocable at will. Code, § 4-214. CompareFinn v. Dobbs, 188 Ga. 602. How, then, can it be said that the power was revoked in the instant case? The insistence of counsel for the defendants in error is that, since the power here involved was one coupled with an interest, it must follow that, when the bank disposed of that in which it had the interest, the power itself was revoked. On this line of reasoning alone the complainants plant their case.
It was ruled in Garrett v. Crawford, 128 Ga. 519
(57 S.E. 792, 119 Am. St. R. 398, 11 Ann. Cas. 167), that, while a power of sale
in a mortgage is extinguished by the payment of the debt which the mortgage was given to secure, if the mortgagor failed to have the satisfaction of the debt entered of record, and a sale was thereafter had under the power, one who purchased in good faith and for value at such sale, without notice of the fact of the satisfaction of the debt, will be protected in his title. The decision in that case was put upon estoppel, and on its facts is not on all fours with the instant case. The interest with which the power was coupled ceased; the debt having been paid, in reality there was no default; but one who bought at the sale under the power was protected in his title.
The case of Ellis v. Ellis, 161 Ga. 360 (130 S.E. 681), may also be distinguished on its facts from the present case, but, nevertheless, it was there held that, where a security deed contains a clause accelerating the payment of the principal before its maturity, by the failure of the vendor to pay any installment of interest, and where it contains a power of sale authorizing the holder, in default of payment of any installment of interest, to declare the principal due and to advertise and sell the premises therein embraced to enforce payment of the principal and interest of the debt, a sale to a bona fide purchaser under such power, after due advertisement thereof, in which it is stated that the holder is proceeding to sell because of default by the vendor in the payment of a past-due installment of interest, is equivalent to a sale under a decree in equity, and passes the title to the premises in such deed to such purchaser, although there was no default in the payment of any installment of interest, the purchaser having no notice of this fact. There, also, it will be noted, the debt had been paid, and the interest in the subject-matter had ceased; and, although it could be argued that there, as here, the interest and the power had been divorced, yet it was held that the title passed to a purchaser at the sale.
Smith v. Pharr, 162 Ga. 358 (133 S.E. 863), presented a state of facts where Mrs. Smith executed a promissory note to Pharr, to secure which she made to Pharr a security deed to described land, containing a power of sale; Pharr made to Clark a conveyance of the land described in Mrs. Smith's deed, reciting in his deed to Clark that Pharr had made a note to Clark for $4000, which was to be secured by the note of Mrs. Smith to Pharr, and
that, "it is the purpose of the said G. F. Pharr to transfer the security of said note [of Mrs. Smith] as well as said note as collateral to the above-named note of $4000." Pharr advertised the land under the power contained in the security deed of Mrs. Smith. She filed a petition against Pharr, setting out the assignment by Pharr of her note and the security, alleged that because of the same "he has no right to sell said property, or to exercise said power of sale," and sought an injunction, which the trial court denied. This court affirmed the ruling, giving therefor the following reason: "In this case Pharr, the grantee of the payee, retains an equity in the securities, and, under the power granted in the deed from plaintiff to him, may sell the property, the proceeds being liable to the payment of the debts secured thereby." Pharr had parted with his interest, although Clark held it as collateral, and yet the court ruled that he had a right to sell the property for the reason stated in the excerpt quoted above.
In Phelps v. Palmer, 192 Ga. 421 (15 S.E.2d 503), it was ruled again that, where land is sold under a power of sale contained in a security deed, the grantor in the security deed can not thereafter attack the title of a bona fide purchaser for value, on the ground that the debt secured by the deed had been paid before the sale. In the opinion, it was said: "The plaintiff alleges that he paid the debts for which he gave the security deeds, but no allegation is made that the security deeds were canceled of record or that the purchaser at the sale under the first security deed had notice that the debt had been paid. So far as is disclosed by the petition, the purchaser bought bona fide and for value at such sale. In this situation the plaintiff can not now attack the title of the purchaser by pleading payment. Garrett v. Crawford, 128 Ga. 519 (57 S.E. 792, 119 Am. St. R. 398, 11 Ann. Cas. 167); Ellis v. Ellis,161 Ga. 360 (130 S.E. 681). The petition failed to state a cause of action, and the court did not err in sustaining the demurrer and dismissing the same."
In Hunt v. New England Mortgage Security Co., 92 Ga. 720
(19 S.E. 27), it was said: "Where a deed was made under the provisions of sections 1969, 1970, 1971 of the Code [of 1882] to secure the payment of a promissory note, and afterwards the payee transferred the note, without recourse, to another, at the same time
also conveying to the assignee of the note the title to the land described in the security deed, this was no discharge of the land from the debt, and the assignee had all the rights of his assignor, and all the remedies for enforcing the same." Let it be noted that, in the case last referred to, the grantee in the security deed had transferred the note without recourse, but that, having also transferred the title to the land described in the security deed, the assignee had all the remedies for enforcing the same. One of the remedies, as presently will be seen, is the exercise of the power of sale. The quoted statement would seem to support the view that, although the original holder of the power had no further interest in the security deed, or the remedies therein provided, nevertheless he could transfer these over to another by merely assigning to him the deed and the security. In the opinion in that case, it was said: "The case is altogether different where one makes a deed to his land for the express purpose of securing the payment of his own promissory note, and that note, together with the title to the land by which its payment is secured, is assigned and conveyed to another. In such case, the assignee takes the place of the assignor, and is entitled, not only to the note, but also to all the remedies of the assignor for enforcing its collection."
It will be readily conceded that none of these cases are decisive of the precise point here presented. It is submitted, however, that some of them, at least, can not without difficulty be reconciled with the contention of the complainants that whenever the grantee parts with title to, i. e., his interest in the subject-matter, he can not thereafter exercise the power of sale through the transferee of the debt and of the title to the property, as the agent of the original creditor and donee of the power.
A power of sale may lawfully reside in one who has no legal or equitable interest in the property which is to be the subject-matter of the sale. This has been frequently decided by the courts of this State, and the proposition was restated inSmith v. Pharr, supra. If this be true, then how can it be that the power of sale in the case at bar was illegally exercised by the grantee of the power after it had parted with its interest in the subject-matter, merely because of that fact?
A power of sale in a mortgage or security deed becomes a part of the security, conferred for the purpose of effectuating the same. Mutual Loan Banking Co. v. Haas, 100 Ga. 111
(27 S.E. 980,
62 Am. St. R. 317). It is a remedy by contract intended to substitute the remedy by law, should the creditor see fit to avail himself of it. Moseley v. Rambo, 106 Ga. 597, 600
(32 S.E. 638); Fulghum v. Williams Co., 114 Ga. 643, 645
(40 S.E. 695, 1 L.R.A. (N.S.) 1055, 88 Am. St. R. 48). A sale thereunder is for some purposes the equivalent of a sale under a court foreclosure. Seymour v. National Building Loan Assn.,116 Ga. 285 (42 S.E. 518, 94 Am. St. R. 131). It is a distinct advantage to a creditor, whether he pleases to exercise it or not. It adds to the attractiveness of his security. In the instant case, a third party purchased the notes, without recourse, it is true, but at the same time he had assigned to him the deed given to secure the debt; such deed containing a provision that, upon default, the bank or its agent could exercise the power of sale, and the assignment containing a provision whereby the third party, Raines, was constituted the agent of the bank for the purpose of exercising any and all powers contained in the security deed. It is fair to assume that the transferee of the debt knew that the debtor had placed in the hands of the original creditor this additional remedy of sale under the power, and that she had further stipulated that the power might be exercised by an agent appointed by the bank. Here the assignee was made the agent to exercise the power when and if a default occurred. He purchased whatever rights the bank had, and, along with it, he took an appointment from the bank as its agent to sell. The power did not say: "If I default in my payments to the bank;" but that, "if the aforesaid debt" — a debt which she knew the bank had the right to transfer and assign to another, as it did — "is not promptly paid at maturity," etc. The bank also had the right to assign to him the right to sell it on default, notwithstanding the note had been transferred without recourse. Hunt v. New England Mortgage Security Co., supra. It effectuated the assignment of this right to him by constituting the assignee of the debt its agent for this purpose, the power containing the provision that, in case of default, the bank, "its agent or legal representative may, and by these presents is authorized to sell at public outcry," etc.
It was said in Garrett v. Crawford, supra: "That portion of the mortgage containing the power, like all other contracts, is to be construed so as to effectuate the intention of the parties, and
the power must be exercised in accordance with the intention of the parties as indicated in the clause in the mortgage conferring the power. The power is conferred for the purpose of enabling the mortgagee to collect his debt. When the debt has been paid, as between the mortgagor and the mortgagee the power is extinguished." The quoted clause does not say that the power is conferred to enable the mortgagee to collect his debt "from the mortgagor."
It will be conceded that powers of sale such as these should be strictly construed. Code, § 37-607. There was a strict compliance with the terms of the power. They were followed literally. On default, the donee of the power, through an agent, as the parties had agreed might be done, advertised and sold the property. Nothing was said in the grant of the power that it could be exercised by the donee or its agent only so long as the donee itself remained a creditor of the donor. It contained no provision that the power would be revoked whenever the creditor transferred the debt and assigned its interest in the security deed and its right, title, and interest in the property to a third person who had paid the balance due thereon. To give it the construction contended for by the defendants in error would be to supply a meaning not expressed by the words employed, and to read into it a limitation that goes beyond the language used. Construing the power strictly, and giving heed to the rule just stated, there was, in the judgment of this court, a lawful exercise of the power of sale, and, under the facts set forth in the petition, Mrs. Helen G. Gurr obtained a valid title to the land in question.
Judgment reversed. All the Justices concur.