171 Ga. 878 | Ga. | 1930
On January 9, 1929, the West End Park Company, by contracts in writing, agreed to sell to Black lots 25 and 26 of that company, for a consideration of $1750 each, of which $250 was to be paid in cash upon the purchase-money of said lots, and monthly notes for $25 each were to be given for the balance of the purchase-money of each of the lots. Each of said contracts con-
On January 16, 1929, Black executed to Mrs. Ella Mitchell his deed to each of said lots, to secure a loan of $2500 on each. The above deeds from the company to Black, the loan deeds from Black to the company, and the loan deeds from Black to Mrs. Mitchell were filed for record simultaneously on January 16, 1929, at 4 p. m. The cash payments of $250 on the purchase-price of each'
On May 8, 1929, C. W. Long, W. M. Meadows, and C. D. Bailey filed separate suits against Black, to foreclose their liens on said lots and the improvements thereon, for labor performed by them - in the erection of the houses on said lots. Tn their petitions these parties alleged that they had filed their liens and had had them recorded as provided by statute, that the only interest which Black had in these properties was his equities of redemption, that the legal title had been put in Mrs. Mitchell and the West End Park Company by the above loan deeds from Black to them, that Black had undertaken to improve said lots by erection thereon of two six-room brick veneer bungalows, that he had partially completed the same, that he was unable to obtain material necessary to complete the same, that he had abandoned the work, and that these buildings were left in an incomplete state. They prayed for judgments against Black for the sums claimed by them, that their liens be set up and foreclosed, that other creditors similarly situated be permitted and required to intervene and set up their claims, that all parties be restrained from prosecuting separate actions for foreclosure of their liens except in this proceeding, and that a receiver be appointed to take charge of the properties. These suits were consolidated, and a receiver was appointed as prayed. The company, after the appointment of the receiver, advertised the properties for sale, under powers in its security deeds. These plaintiffs then filed an amendment to their petition, in which they sought to enjoin this sale upon the ground that these properties had been put in the hands of a receiver. On the hearing of the appli
On January 17, 1929, J. E. Creel, trading as Union City Lumber Company, began furnishing material which was used in the improvement of said lots, and furnished material to the amount of $3300. He received on this a credit of $600. On January 18, 1929, and within 90 days from the last delivery of this material, he filed and had recorded his liens for the same. He commenced proceedings to foreclose his liens within one year from the time his bills for said material became due. Creel in writing authorized Mrs. Mitchell to advance to Black $125 on lot 26, to be used in the purchase of flooring, doors and hardware for erecting the house on that lot, and that this amount, together with the amount held by her against said lot under her loan deed for pay-rolls, should be paid out of the loan and should come ahead of his claim. In this writing Creel further agreed that Mrs. Mitchell could advance the sum of $220 on lot 25, and that this amount should be paid out of the permanent loan, and that said amount, together with the amount of the pay-roll already advanced by her under the loan deed held by her against this lot, should be paid ahead of his claim, and that the claims held by him for material used in the improvement of said property were thereby subrogated to the claims above stated and the claims already held by Mrs. Mitchell under her loan deeds to these lots.
Black became insolvent and was unable to complete the buildings on these lots. Mrs. Mitchell introduced evidence tending to show that these buildings. could be completed by the outlay of
What is the standing as to priority of the liens of the West End Park Company under its loan deeds from Black to these lots and the liens of Mrs. Mitchell under her loan deeds from Black to these lands ? In deciding this question it is unnecessary to determine whether the loan deeds from Black to this company became colnpleted conveyances without delivery on the dates when they purport to have been executed, or whether they only became such completed conveyances at the time when all the deeds involved were filed for record. At the time Mrs. Mitchell received her loan deeds from Black to these lots she knew of the existence of the loan deeds from Black to the West End Park Company; and she is chargeable with notice that these loan deeds were given to secure a balance of the purchase-money due by Black to that company. If a purchaser of land, at the instant of receiving his deed, executes and delivers two mortgages of it, one to his grantor to secure a payment of a part of the purchase-money, and the other to a third person to secure his debt to the latter, and all the mortgages are filed for record at the same moment, the mortgage to his grantor takes precedence. The deed and the mortgage for the purchase-money are parts of one transaction and give the pur
So in this case the liens created by the loan deeds from Black to Mrs.- Mitchell would generally be inferior to the liens created by the loan deeds from Black to the West End Park Company to secure the purchase-money of these lands. But there are exceptions to this general rule. Generally two mortgages executed on the same dajr are of equal date, and, if both are recorded in time, are entitled to share pro rata in a fund not sufficient to satisfy both. Bussell v. Carr, 38 Ga. 459. But while ordinarily mortgages executed on the same day have equal liens on the mortgaged propertj’’, yet where facts apparent on the face of the mortgages show that it was the intention of the parties to give preference to one over the other, the lien so preferred will be enforced, though all were executed on the same day. Coleman v. Carhart, 74 Ga. 392. The parties may, as between themselves, make a valid agreement, though it be verbal only, that one of two mortgages shall be prior to the other, and the order of record is then immaterial unless they are subsequently assigned to other persons who have no notice of the agreement. Mut. L. Ins. Co. v. Storges, 33 N. J. Eq. 328; 1 Jones on Mortgages, § 608, note 58, and cit. It is also true that, without any agreement, there may be facts and circumstances which will entitle one of two mortgages recorded at
These deeds were executed by Black to Mrs. Mitchell with the knowledge and consent of the West End Park Company. The initial payments on the purchase-price of these lots were made from the proceeds of these loans. Thus the land company reaped a very substantial benefit from this transaction. It received $500 of the money loaned by Mrs. Mitchell to Black. The loans from Mrs. Mitchell to Black were temporary loans to be paid off in three months. In the loan deeds from Black to this company it was agreed between the parties that the company would subordinate the payment of the purchase-money due to it on these lots to a loan equal to 60 per cent, of the value of the lots and improvements. Thus it is shown that the company was willing to have put upon these lots a junior mortgage superior to its loan deeds made to secure the purchase-money thereof. In these circumstances a jury would have been authorized to find that the company was willing to subordinate its claim for purchase-money to the loan deeds made to Mrs. Mitchell by Black.
But it is insisted by counsel for the company that it was understood by Black, the company, and Mrs. Mitchell, that the loans from Mrs. Mitchell to Black were temporary loans, were to mature in three months, and were to be paid out of the proceeds of the permanent loan to be obtained by Black upon the completion of the houses; and from this understanding counsel for the land companjr draw the conclusion that Mrs. Mitchell was only to be paid
Furthermore, a senior mortgagee has an unquestionable right to waive his priority in favor of a subordinate mortgagee. It is perfectly competent for a mortgagee to waive or release his lien in favor of a junior encumbrancer. But this will not extinguish the elder mortgage, but merely postpone it to the junior one. Bolling v. Roman, 95 Ala. 518 (10 So. 553); Mullanphy Savings
But it is urged by counsel for the land company that the right of Mrs. Mitchell to enforce the liens of her loan deeds in preference to the liens of the company under its loan deeds depends upon the contract between Black and the land company, which is set out in its loan deeds, under which Black could place a permanent loan upon this property if he had completed thé houses on the same within the time prescribed in the contract.
But it is insisted that it would be inequitable to permit Mrs. Mitchell to receive the whole of the proceeds of the sale of these lots, to the exclusion of the land company. We can not agree to this contention. The liens of Mrs. Mitchell embraced the property as improved. The liens of the land company were, as we have undertaken to show, postponed to her liens. When the lots as improved were sold and were purchased by her, she was entitled to be paid in preference to the land company the amount of her liens in full. When the land company waived its liens on
Creel, after the execution of the loan deeds from Black to Mrs. Mitchell, furnished material which went into the erection of the houses on these lots. The value of these materials was $3,300, on which he was paid the sum of $600, leaving a balance due him of $2,700 for the material so furnished. He filed and had recorded his lien for this material within the time prescribed by law; and he intervened in this case for the purpose of foreclosing his lien also within the time prescribed by law. The lien of Creel for material was inferior to the liens of Mrs. Mitchell under her security deeds. Picklesimer v. Smith, 164 Ga. 600 (139 S. E. 72). The trial judge awarded Creel judgment for his claim against Black, and held that Creel would have been entitled to claim any excess if there had been any over the amount due Mrs. Mitchell. To this judgment Creel does not except. Mrs. Mitchell excepts to it on the ground that the lien of Creel was superior in dignity to the loan deeds of the company, and that she had been subrogated to Creel’s lien under the agreement between him and her above set out. What would have been the right of Creel in the premises if he had excepted to this judgment is not for decision, as he did not except. Under the writing from Creel to Mrs. Mitchell, the latter was not subrogated to Creel’s lien. His agreement was that his lien should be postponed and come behind her lien. This does not amount to subrogation of Mrs. Mitchell to Creel’s rights under his lien. There is no evidence that she had paid out moneys which she was authorized to pay out under this agreement, or that she had paid any part of the lien of Creel. This being so, she was not hurt by the verdict directed and the judgment rendered in this matter. Besides, under the ruling made in this ease she is given a first lien upon the proceeds of the sale of these lots as improved. We do not think she has been injured by the rulings made by the court in this matter; and the judgment should not be reversed on that ground. Besides, Mrs. Mitchell does not in her pleadings pray to be subrogated to the rights of Creel under his materialman’s lien, and that this lien be foreclosed for her benefit.
Judgment reversed.