163 Ga. 71 | Ga. | 1926
Lead Opinion
The defendant in error insists that the rule is as follows: “The test, then, whether an instrument be a deed or mortgage is necessarily whether the interest acquired by the holder of an instrument is such an interest as can be extinguished by the voluntary act of the debtor alone. If it can be, the instrument is defeasible, and does not pass . . absolute title,” etc. She contends that the terms of this instrument bring it within the general rule, and that the instrument will be construed to be a mortgage. This general rule was applied in the following decisions of this court: Frost v. Allen, 57 Ga. 326; Pirkle v. Equitable Mortgage Co., 99 Ga. 524 (28 S. E. 34); Scott v. Hughes, 124 Ga. 1000 (53 S. E. 453); Burckhalter v. Planters Bank, 100 Ga. 428 (28 S. E. 236); Sims v. Jones, 158 Ga. 384 (123 S. E. 614). On the other hand the plaintiffs in' error insist that the instrument with which we are dealing in this case is a security deed, passing title> and that the interest is not such “as can be extinguished by the voluntary act of the debtor alone.” They point out the provision in the instrument, that when the debt has been fully paid;’“this deed is to become void, and the clerk- of the- superior court is hereby granted authority to cancel as of record.” •
The instrument to be construed in this case-is strikingly similar to the instrument construed in Pitts v. Maier, 115 Ga. 281 (41 S. E. 570). The words are not exactly the' same;-but when we consider the' effect placed 'upon-the words- in-, that ''case,'-We' are forced to the conclusion that thé meaning is the same.-, In that
We reach the conclusion, based upon the reasoning in the case of Pitts v. Maier, that the instrument is a deed. In addition to what was said in that case, there are other reasons which lead us to that conclusion. One is from reading Civil Code (1910) § 3306, which is as follows: “Whenever any person in this State conveys any real property by deed to secure any debt to any person loaning or advancing said vendor any money, or to secure any other debt, and shall take a bond for titles back to said vendor upon the payment of such debt or debts, or shall in like manner convey any personal property by bill of sale aDd take an obligation binding the person to whom said property is conveyed to reconvey said property upon payment of said debt or debts, such conveyance of real or personal property shall pass the title of said property to the vendee till the debt or debts which said conveyance was made to secure shall be fully paid, and shall be held by the courts of this State to be an absolute conveyance, with the right reserved by the vendor to have said property reconveyed to him upon payment of the debt or debts intended to be secured agreeably to the terms of the contract, and not a mortgage.” It will be noted that this code section as originally enacted contemplated the taking of a bond for title binding the grantee or creditor to reconvey the property to the debtor upon the full payment of the debt, and declared that “such conveyance of real or personal property shall pass the title of said property to the vendee till the debt or debts which said conveyance was made to secure shall be fully paid.” But the legislature, not content with that declaration, followed it, in immediate connection, with the following words: “and shall be held by the courts of this State to be an absolute conveyance,” etc. The statute so remained for many years until, in 1924, the General Assembly amended it by providing, “no bond to reconvey shall be necessary where such deed shows upon its face that
The instrument with which we are dealing was executed prior to the passage of the act of 1924, and for that reason it may be- said that the act should not enter into the determination of the quesr tion. Our conclusion has been reached irrespective of the act,, but the act is mentioned to show that the General Assembly were
Judgment reversed.
Dissenting Opinion
dissenting. The distinguishing feature in this instrument is the clause “that when said note together with all accrued interest and costs, shall have been fully paid, this deed is to become void, and the clerk of the superior court of Barrow County is hereby granted authority to cancel this deed of record.” As the so-called deed is to become void by payment of the note, payment will completely extinguish all interest of the grantee under this instrument, and consequently the clause is a defeasance clause.
In Scott v. Hughes, 124 Ga. 1000 (supra), decided by all the Justices, it was held: “A paper in the usual form of a warranty deed, but containing a clause providing that should the grantor pay to the grantee a stated sum of money by a given date, the instrument ‘shall be void, otherwise in full force/ is a mortgage, and not a deed.” In the opinion it was said by Presiding Justice
In the recent case of Sims v. Jones, 158 Ga. 384 (supra), decided by all the Justices of this court as now constituted, it was held: “Where an instrument is executed and made payable in the State of North Carolina between citizens of that State, which is in the form of a deed conveying standing timber in this State, to secure a debt, but which has a defeasance clause declaring the instrument null and void on the payment by the debtor of the sum due, such instrument under the law of Georgia is a mortgage and not a deed, and does not convey the title to the timber, but creates a lien thereon.” It was said in the opinion by Mr. Justice Hill: “The instrument under consideration, while purporting in one portion of it to convey the title, has a defeasance clause in the following language: 'Provided, however, that if the parties of the first part, or their legal representatives, shall pay over to the party of the third part, or to its assigns, the full sum of $21,300,