169 Ga. 495 | Ga. | 1929
(After stating the foregoing facts.)
The facts alleged by plaintiffs in their petition do not make a case of fraud on the part of the defendant in procuring from Manget the deed, which is absolute on its face, and under which the defendant claims title to the property involved. It is alleged that the defendant at the time of the procurement of said conveyance and the execution of said option contract, unknown to Manget, fraudulently intended to put the transaction in such legal form as to make it difficult for petitioners to prove the true nature of the transaction, to the end that the defendant might fraudulently claim the transaction to have been the absolute sale of this valuable property for a sum greatly less than its true value, when in fact it was well known to the officers of the defendant that the transaction was only a loan. It is further alleged that it has been a part of the
The controlling question in this case is whether a deed absolute on its face, and accompanied with possession of the property, can be proved by parol evidence to be a part of a scheme by which the grantee therein was to receive usury from the grantor for the use of money loaned, and secured thereby, in the absence of fraud in the procurement of such instrument ? The answer to this question depends upon the proper construction of section 3258 of the Civil Code, which declares that “A deed or bill of sale, absolute on its face, and accompanied with possession of the property, shall not be proved (at the instance of the parties) by parol evidence to be a mortgage only, unless fraud in its procurement is the issue to be tried.” It will be noted that this section merely prohibits the use of parol evidence for the purpose of reducing a deed, absolute in form and accompanied by the possession of the property conveyed, to a mortgage only. In view of this fact should this section be construed to forbid the use of parol evidence to show that a deed absolute in form, and accompanied by possession of the property conveyed, was executed as a part of a scheme or device to cover usury, and to enable the grantee therein to collect usury from the grantor, when such deed in fact was made to secure a loan? In other words, was this section intended to prohibit the grantor in such deed from showing by parol that it was made and the possession of the property thereby convejred delivered to the grantee as a device to conceal usury and to enable the grantee to receive the same for the use of money loaned to the grantor? This section was taken in part from the act of December 25, 1837. Cobb’s Digest, 274. The preamble of this act declares that “it is now the practice in some of the circuits of this State to admit oral evidence to prove that deeds and bills of sales, absolute upon their face, were intended
Is the principle embraced in section 3258 applicable to a case where there is an absolute deed accompanied with possession, and a writing which purports to give to the grantor in such deed an option to repurchase the land conveyed ? At the time of the adoption of the act of 1837, and of the adoption of the first code of this State, which embraced in totidem verbis the principle as it now appears in section 3258 of the present code, it was legal for the owner of real estate to sell and convey it to another at an agreed price, and at the same time secure the right to repurchase it. Spence v. Steadman, 49 Ga. 133, Monroe v. Foster, 49 Ga. 514; Felton v. Grier, 109 Ga. 320 (35 S. E. 175); Rogers v. Blouen
“However, if a loan was in point of fact made, and these writings merely furnished the cloak for a usurious transaction, then the truth
But it is insisted that this court has held to the contrary in other cases. Certain language in Spence v. Steadman, supra, is relied upon to sustain this position. In that case it was said that “even the papers are open to contradiction by parol, though in this State if the possession has changed, a deed absolute on its face can not be shown to be a mortgage, unless, indeed, fraud in its procurement is the issue.” The question whether an absolute conveyance accompanied with possession would preclude the grantor from showing that such deed was infected with usury was not for decision by the court, for the reason that the grantor in that case remained in possession of the property conveyed. At the date of the transaction involved the title to property made as a part of a usurious contract, or to evade the laws against usury, was void. Code of 1868, § 2025. It would hardly be contended that the vendor in the conveyance involved in that case would be barred from setting up the invalidity of the title, under the principle announced in section 3258 of the code, which principle was of force and in effect at the time of the conveyance involved in that case. In view of what we have just said, the intimation of the court in the case cited can not be held as a ruling adverse to what we now hold. In Hall v. Waller, 66 Ga. 483, usury was not involved, and there was no agreement by which the vendor could repurchase the property. Id Lowe v. Findley, 141 Ga. 380 (81 S. E. 230), there was no written agreement which permitted the vendor to repurchase, and usury was not involved. In Walker v. Lastinger, 141 Ga. 435 (81 S. E. 203), the questions, whether an absolute conveyance was in fact made to secure the payment of money borrowed, and whether the conveyance was infected with usury and for this reason void, were involved. It appears from the decision in that case that both issues were submitted to the jury, which could not have been proper unless the plaintiff was entitled to set up the usury in the conveyance in spite of the fact that it was an absolute deed. In Wilkes
Judgment reversed.