466 S.E.2d 913 | Ga. Ct. App. | 1996
By warranty deed, plaintiff Donna Diehl conveyed real property to defendant Sandra D. Stewart. The property was subject to an existing first mortgage, “which indebtedness Grantee [Sandra D. Stewart . . .] assume[d] and agree[d] to pay.” Sandra D. Stewart and her mother, defendant Frances Louise Helms, also signed a purchase money promissory note, representing a “second mortgage,” in the principal amount of $6,000. This note was secured by a purchase money security deed to the property, and provided for a default “[s]hould any installment not be paid when due, or should the undersigned [defendants] fail to comply with any of the terms of [the] Purchase Money Security Deed[.]” The purchase money security deed that defendant Sandra D. Stewart gave to plaintiff in turn provided that: “This conveyance is subject to an outstanding Security Deed from Donna B. Diehl to Congressional Mortgage Corporation of Georgia dated July 28, 1986, in the original principal amount of $57,200.00. . . . Any default under the terms of said loan shall constitute a default hereunder. Additionally, any failure to pay the condominium assessments on the above property shall constitute a default hereunder.”
Plaintiff subsequently brought this action on the purchase money promissory note alleging that defendants were in default for “failing to make any mortgage payments since the purchase of the property on the first mortgage or to pay the condominium association fees or special assessment fees.” Defendants’ pro se answer denied default, averring that “being behind on a first mortgage does not cause default on a second mortgage [, . . . and further showing that] the first mort
Based on this prima facie case of indebtedness, plaintiff moved for summary judgment. Defendants, represented by counsel, opposed the motion, relying on a contractual provision that ostensibly forgave the note: “[I]f the undersignedf, i.e., defendants] within 9 months from the date hereof is able to refinance and pay off the existing first mortgage with Sunbelt National Mortgage Corporation, ... or to qualify to assume said loan and release Creditor [i.e., plaintiff] from any liability on said loan, then Creditor agrees to cancel this Note in full at that time without any further payment, to satisfy and cancel the Purchase Money Security Deed executed to secure this Note.” Defendants also submitted the affidavit of Sandra D. Stewart, who deposed that she had “only been served with the Demand for Payment of Note[, . . . and never had] been served with any Notice of Confirmation,” Notice of Foreclosure or any other attempt to foreclose upon the real property securing the second mortgage. They argued that plaintiff should have foreclosed first because the value of the real property would cover any notes due from defendants to plaintiff and so plaintiff would be “relieved from liability upon the note and therefore the note discharged.”
The trial court granted plaintiff’s motion for summary judgment and this appeal followed. Held:
In their sole enumeration, defendants contend the trial court’s grant of summary judgment “on Plaintiff/Appellee’s suit on a note violated the provisions of the Georgia Confirmation Statute, O.C.G.A. 44-14-162.”
“The holder of a note who is also the grantee in a deed to secure the indebtedness of the note is not forced to exercise the power of sale in the deed. He may sue on the note or exercise the power of sale. Gentry v. Hibbler-Barnes Co., [113 Ga. App. 1 (1) (147 SE2d 31)]. See also Oliver v. Slack, 192 Ga. 7 (2) (14 SE2d 593) (1941).” Trust Investment &c. Co. v. First Ga. Bank, 238 Ga. 309, 310 (1) (232 SE2d 828). The debtor “cannot force [the secured creditor] to accept the
Judgment affirmed.
