15 S.E.2d 551 | Ga. Ct. App. | 1941
Lead Opinion
Under the law and the evidence the court did not err in directing the verdict for the plaintiff.
The defendants admitted in their answer the execution of the note sued on, but set up that the attorneys for the Land Bank Commissioner, who acted in placing the loan and in the foreclosure proceedings, while advertising the property for sale in the foreclosure proceedings informed the defendants that it was not the custom of their client to seek a deficiency judgment, and told them that the Land Bank Commissioner would bid the full amount of the indebtedness secured by the loan deed and was willing to accept the property in full settlement of the debt evidenced by the note sued on, but stated that the foreclosure proceedings were necessary in order to complete the transfer of title into the Land Bank Commissioner or the plaintiff; that the defendants believed and relied on these statements and did not attend the sale of the property, which sold for the ridiculously low price of $300 and which was entirely inadequate in so far as the value of the property was concerned. The defendant, Mrs. C. W. Sullivan, administratrix, alleged that she accepted the proposition of the bank, through said attorneys, to bid in the property for the amount of the debt and accept the property in full settlement thereof, despite the fact that the property was worth several times the amount of the debt, she being in a delicate state of health and unable to look after the affairs of the estate, and the property being in Walker County while she resided in DeKalb County; that the attorney for the bank also informed her that it would not be necessary for her or her husband to attend the sale, assuring her that he would bid the full amount of the indebtedness, and assured them that if the property brought more than the amount of the debt he would pay over to her the excess; that the sum of $300 bid by the plaintiff on the property and for which it sold in said foreclosure proceedings was considerably less than 10 per cent. of the value of the property; that had she not believed and relied upon these statements of the bank's attorneys, she would have attended the sale and solicited prospective purchasers to attend for the purpose of bidding on the property in *195 order that it might bring a reasonable amount, or she would have had her husband, who looked after all the affairs of the estate for her, to attend the sale; that at the time of the foreclosure sale she was sick and confined in a hospital in Atlanta, and being thus unable to attend to her affairs she agreed with the bank's attorneys to sacrifice the property for the amount of the debt, despite the fact that the property had a fair market value of more than $4000 to $5000; that the bank's appraisers placed a minimum value of $3500 on the property before the bank made the loan in question; that the property would have brought considerably more than the amount of the debt, $1375.53, had not the bank's attorneys and agents circulated a report that the bank was going to bid the amount of the debt, with interest and all costs; that, further relying upon the statements of the bank's attorneys and their agreement to accept the property in extinguishment of the debt and of her acceptance of the offer, she considered the matter closed and made her final return to the ordinary of Walker County; that she considers the matter closed, despite the loss she suffered in permitting the property to go for the amount only of the debt, and that she believes and has been reliably informed that the plaintiff bank has sold said property for an amount many times greater than the amount for which it was bought in at the foreclosure proceedings.
The plaintiff demurred to certain paragraphs of the answer, on the ground that the matter pleaded was merely surplusage and constituted no defense to the plaintiff's action. This demurrer was sustained, and the alleged defense as contained in the answer was stricken. The court then directed a verdict for the plaintiff, and the defendants excepted to the ruling and to the direction of the verdict. In this court, to which the defendants brought the case by bill of exceptions, it was held in Sullivan
v. Federal Farm Mortgage Cor.,
After that decision by this court the plaintiff amended the petition by alleging that after it purchased at foreclosure sale the land which it held as security for the note sued on, it entered into a contract on November 25, 1936, for the resale of the land for $1000, to be paid over a period of fifteen years, and after collecting $280 *197 of the sale price it delivered, in August, 1940, a deed to the purchaser and took back a security deed for the balance of the purchase-price; that it is now of the opinion that it will be able to collect the remainder of the sale price of the land; that it is not its purpose to make a profit from the resale of the land, and in order to give the defendants the benefit of the resale it now credits the note sued on, in addition to the credits shown in the original petition, with the amount of $700 as of January 1, 1937. The case came on for trial and the defendants assumed the burden of proving the defense set up by them. It was agreed between the parties that the appraised value of the property in question, as fixed by the plaintiff's appraiser when making the loan to the defendants on April 26, 1934, was $2250.
C. W. Sullivan testified for the defendants: "I am the son-in-law of Mrs. Flora Bailey and the husband of Mrs. C. W. Sullivan, who is one of the administratrices and one of defendants in this case. Ever since my wife was appointed administratrix of this estate I acted for and on behalf and in her stead in looking after the estate of Mrs. Bailey, and handled the matter entirely on all things in connection with this loan after the death of Mrs. Bailey. I believe Mrs. Bailey died in the late summer of 1935, and some 60 to 90 days after her death and after the administratrices had been appointed we received a notice from the Land Bank that the note representing this loan was in default, and advising us that foreclosure would follow unless the loan was paid off. I had been informed that Mr. Ralph Rosser, a member of the law firm of Rosser Shaw of LaFayette, Georgia, was the agent and attorney for the Land Bank Commissioner, so I went to see him about the matter, and I told him that under the circumstances we were not in position to pay of this debt though we would like to get the matter settled. I explained to him that my wife, as administratrix, was in a delicate condition and not able to look after the estate, and that her sister, Mrs. Rice, lived in Tennessee, and that I was employed by the Southern Bell Telephone Company and did not have time to look after the affairs of this estate. I also told him that we did not want any deficiency judgment against us or the estate. He stated to me that I need not worry about that, and that it was the custom of the Land Bank Commissioner not to seek deficiency judgments. He stated that he had handled quite a few *198 foreclosures under power in Walker County, and that he had never sought a deficiency judgment against the debtor. He also stated to me that he would conduct the sale, and that he would bid the full amount of the indebtedness, together with the expense of advertising, and also stated that I need not attend the sale, and that I could just forget about it. He stated that if any one else bid more than the amount of the indebtedness and expenses that such bidder would get the property. I told Mr. Rosser that even though the property was worth several times the amount of the loan that we would be willing to give the property to the Land Bank Commissioner and/or the Federal Farm Mortgage Corporation in satisfaction of the debt. He stated that they had a deed to secure the debt with power of sale, and that it would be necessary to foreclose under the power of sale so as to perfect the title. Mr. Rosser again reiterated to me that he would see that the property brought at least the full amount of the indebtedness. . . We relied upon the statements of Mr. Rosser and believed them to be true, and therefore did not attend the sale or make any effort to get bidders for the property. If we had not believed what he said to be true we certainly would have attended the sale and had some bidders there in an effort to make the property bring at least the amount of this loan. This sale was had by Mr. Rosser under power in the security deed on May 5, 1936, in Walker County, Georgia, and Mr. Rosser conducted the sale and only bid $300 on behalf of the Federal Farm Mortgage Corporation, in violation of the agreement he had made with me prior to the sale. Some weeks after said sale we were informed that the foreclosure had been made, and believing the matter was wound up the administratrices, defendants in this case, filed their application for discharge with the court of ordinary of Walker County and obtained their discharge in due course. Subsequent to obtaining said discharge we received a notice from the law firm of Rosser Shaw, making a demand upon us for about $1300 deficiency. Being surprised and dumfounded I went again to see Mr. Rosser about it, and he did not wish to discuss the matter with me. I think the date that I first went to see Mr. Rosser about taking the property in satisfaction of the indebtedness was in the fall of 1935 or perhaps afterwards. It was some 60 or 90 days or perhaps more after the death of Mrs. Bailey. I do not remember just the date of her death. I did not talk with *199 Mr. Rosser any more about the matter until after the foreclosure and receipt of the notice from him or his firm making demand upon us for payment of the debt."
The defendants tendered in evidence a photostatic copy of the original contract between the Land Bank Commissioner of Columbia, South Carolina, and J. R. Rosser of LaFayette, Georgia, dated August 28, 1933, appointing the said Rosser a local correspondent for Walker County to assist eligible farmers in securing loans from the Land Bank Commissioner. The duties of a local correspondent were stated in the letter or contract, to which Rosser agreed in writing, but no reference was made to foreclosures of loan deeds. The defendants also introduced in evidence a letter dated April 4, 1936, addressed to "Messrs. Rosser Shaw, attorneys at law," signed by Julian Webb, assistant counsel, stating that the loan made Mrs. Flora Bailey was delinquent, and that the entire indebtedness had been declared due and payable and the holder of the loan deed desired to sell the land under the power contained in the deed; expressing a desire that Rosser Shaw handle the matter of foreclosure for a fee of $25; giving detailed instructions as to the handling of the foreclosure and furnishing certain information in a form of abstract and certain data as to taxes on the property involved, and adding that "If you think a judgment could be collected from the borrower, and that suit should be filed for the amount of the loan and attorney's fees, please defer advertising sale and furnish us with a complete report and recommendation," and "If for any reason you are not in position to handle this matter for us, please wire us collect and you will be informed what disposition we wish made of the papers." A postscript was added to the letter: "Bidding instructions will be forwarded to you prior to the date of sale." The defendants also introduced in evidence a letter, dated April 30, 1936, addressed to "Messrs. Rosser Shaw, attorneys at law," signed by "Julian Webb, assistant counsel," stating that at the sale of the property in question it was desired that they bid, on behalf of the Federal Farm Mortgage Corporation, a maximum of $1000 in case competitive bidding required a bid of that amount.
After the defendants had rested, the court, on motion of the plaintiff, directed a verdict for it for $675.53 principal, $83.01 attorney's fees, and $154.06 interests and costs of court and future *200 interest at 5 per cent. per annum., and judgment was entered accordingly. The exception here is to the direction of the verdict and to the judgment.
The facts adduced at the hearing of the case were quite different from those set up as a defense in the answer of the defendants, and the ruling heretofore made is not conclusive on the right of the plaintiff to recover. The ruling on the demurrer to the answer of the defendants on the former appearance of the case before this court was based on the allegation that the attorney who made the declarations relied upon was then and there acting in the capacity of a foreclosure agent for the plaintiff, and that in what he did and said he was acting in the scope of his employment; that the creditor bank, by reason of his conduct, lulled the debtors into a false sense of security that it would subserve the defendants' interest and cause the property to be bid in for the amount of the indebtedness; that instead of doing so, and after circulating a report that it would bid in the property for such amount, thus deterring bidders, it itself bid only a small amount, considerably less than the true value of the property and the amount due on the note, and thus broke faith with the debtors and damaged them in an amount at least equal to the alleged balance. The evidence, however, shows that the conversation between the alleged agent of the plaintiff, Rosser, and the agent of the defendants took place in the fall of 1935, and that Rosser's law firm, Rosser Shaw, had not been appointed to act in foreclosing the loan deed to the property in question until April 4, 1936. While Rosser had been appointed a "local correspondent" on August 28, 1933, the letter of appointment, the terms of which he accepted in writing, did not delegate to him any duty of foreclosure, but limited his appointment to assisting eligible farmers in securing loans. In fact, it is apparently conceded in the brief of counsel for the plaintiffs in error that, unlike the allegations of the defendants' answer, the facts show conclusively that Rosser never had any authority to represent the plaintiff in foreclosure matters until April 4, 1936, and even then was authorized to bid only to the extent of $1000. The evidence does not show that Rosser Shaw, or anybody on behalf of the plaintiff, did anything in the way of deterring bidders or chilling the bids or made any representation to the defendants, or to any one on their behalf, that the property would be bid in for the *201
amount due on the note, or in any wise lulled them into a false sense of security with respect to the foreclosure of the loan deed. In these circumstances the alleged declarations of Rosser, made prior to the appointment of his law firm to act in foreclosing the loan deed, could not in law be imputed to the plaintiff so as to set up any fraud or liability on its part. "The declarations or admissions of an agent, unless part of the res gestae, do not bind the principal, and in a suit against the principal have no probative value. Conduct of an agent, from which it is sought to imply an admission, is within the rule."Georgia Ry. El. Co. v. Harris,
But it is contended by the plaintiffs in error that the conversation had with Rosser, though prior to the appointment of his law firm to foreclose the loan deed, might be found by the jury to have been still within his knowledge and recollection or bosom at the time his firm was in fact authorized to act in the foreclosure proceeding, and that his promise to the defendants to bid in the property for the amount of the debt due, etc. was, under Faircloth v. Taylor,
Judgment affirmed. Felton, J., concurs. Stephens, P. J.,dissents.
Dissenting Opinion
If the agent of the plaintiff conducting the sale stated to the defendants, as it appears from the uncontradicted evidence (the agent not having testified or denied the defendants' testimony), that the plaintiff would bid in the property for its value and not seek a deficiency judgment against the defendants, and the defendants relied upon this as alleged in their plea, as testified to by them, and if the agent when making the statements alleged was agent for the plaintiff and acting within the scope of his authority, the sale would be void as between the plaintiff and the defendants, as was held in this case, in passing on demurrer, in Sullivan v. Federal FarmMortgage Corporation,
It is stated that when the plaintiff's agent made the alleged statement to the defendants with reference to the plaintiff's buying in the property and taking it in payment of the debt etc., he was not at the time agent for the plaintiff for the purpose of foreclosing the loan and conducting the sale, and that therefore in making the statements he was not acting as the authorized agent of the plaintiff and the plaintiff would not be bound thereby. Conceding that the agent at the time of making such statements was not the agent of the plaintiff to conduct the sale, he afterwards became the agent of the plaintiff to conduct the sale, and did conduct it as such agent, and conducted it after he had made the representations referred to to the defendants. It is immaterial whether the agent made these representations before he became in fact the agent or afterwards. The sale was conducted under such representations by him to the defendants. The effect of the representations when made by the agent, although they were made before the agency began, were continuing, and were in effect being made by him during the entire period from the time when he first *204 uttered them until he conducted the sale. Such representations were in effect being made by him after his agency began. Such representations therefore were being made by the plaintiff through him at the time of the sale, and were binding upon the plaintiff.
I am of the opinion that the evidence demanded a verdict for the defendants, and that the court erred in directing the verdict for the plaintiff.