VINEVILLE CAPITAL GROUP, LLC v. MCCOOK
A14A1325
Court of Appeals of Georgia
November 19, 2014
766 SE2d 156
Under
The relevant facts are not in dispute. These facts show that Thomas McCook, Jr., obtained two loans and signed two deeds to secure debt concerning the same property. On or about July 1, 2002, he obtained a $1 million loan from his father, Thomas McCook, Sr.,1 and signed a demand note to repay the loan. The same day, McCook, Jr., entered into a security deed in which he conveyed title to his personal residence located at 760 Fieldstone Drive in Macon (the premises) to his father as security for the loan; this “McCook security deed,” at issue in this case, was duly recorded in the county real property records on July 2, 2002. In 2005, McCook, Jr., obtained a separate loan of more than $500,000 from Regions Bank and executed a security deed for the same premises in favor of Regions, which deed was also duly recorded in the county property records, thereby creating a second position security interest in the same premises. As of July 2, 2009, seven years after the conveyance of the McCook security deed, McCook, Sr., had not foreclosed upon or cancelled the McCook security deed.2
In 2012, Regions Bank sued McCook, Jr., who had defaulted on the Regions loan, and obtained a consent judgment for more than $750,000. In February 2013, appellant Vineville Capital Group, LLC purchased and was assigned the Regions security deed and the rights to the consent judgment obtained by Regions Bank against McCook, Jr.; thereafter Vineville initiated steps to foreclose on the premises.
On appeal of a trial court‘s ruling on a motion to dismiss, we conduct a de novo review. Penny v. McBride, 282 Ga. App. 590 (639 SE2d 561) (2006). “However, we construe the pleadings in the light most favorable to the plaintiff with any doubts resolved in the plaintiff‘s favor.” Ga. Dept. of Community Health v. Data Inquiry, 313 Ga. App. 683 (722 SE2d 403) (2012) (citation and punctuation omitted). Our role is “to determine whether the allegations of the complaint, when construed in the light most favorable to the plaintiff, and with all doubts resolved in the plaintiff‘s favor, disclose with certainty that the plaintiff would not be entitled to relief under any state of provable facts.” Penny, 282 Ga. App. at 590 (citation, punctuation and footnote omitted); see also Southwest Health & Wellness v. Work, 282 Ga. App. 619, 623 (2) (639 SE2d 570) (2006) (on appeal of a motion for judgment on the pleadings, “the issue is whether the undisputed facts appearing from the pleadings entitle the movant to judgment as a matter of law“) (citation and punctuation omitted).
If the maturity of the debt or debts or the maturity of the last installment thereof is not stated or fixed, title to real property conveyed to secure a debt or debts shall revert at the expiration of seven years from the date of the conveyance as stated in the record or, if not recorded, in the conveyance; provided, however, that where the parties by affirmative statement contained in the record of conveyance intend to establish a perpetual or indefinite security interest in the real property conveyed to secure a debt or debts, the title shall revert at the expiration of 20 years from the date of the conveyance as stated in the record or, if not recorded, in the conveyance[.]
McCook, Sr., contends that an “affirmative statement” sufficient to create a 20-year reversionary
[1] In consideration of One Million Dollars . . . to him paid, receipt of which is hereby acknowledged, Thomas H. McCook, Jr. of Bibb County, Georgia of the first part, has this day bargained and sold and does hereby transfer and convey unto Thomas Harlan McCook . . . his successors, heirs, executors, administrators and assigns, of the second part, the following described tract of land, to wit: [the premises]
[2] Said party of the second part, his successors, heirs, executors, administrators and assigns to have and to hold said tract of land forever, in FEE SIMPLE.
He covenant[s] that he is lawfully seized and possessed of said described premises, and has a good title thereto, and right to convey same and that said land is unencumbered.
He warrant[s] the title to said described premises unto the said party of the second part, and his successors, heirs, executors, administrators and assigns, against the lawful claims of all persons whomsoever.
[3] This conveyance is intended to operate as provided in Sections
44-14-60 ,44-14-66 ,44-14-210 of the Official Code of Georgia of 1981 (Michie), and Acts amendatory thereof, in regard to sales of property to secure debt, and to pass the title to said property into the said party of the second part. The debt hereby secured being one certain principal note for said sum of One Million Dollars . . . of even date herewith, and payable to the order of Thomas Harlan McCook . . . payable on demand, according to the terms of a Promissory Note dated July 1, 2002.4
The Code sections referred to in the third paragraph quoted above pertain to deeds to secure debt.5
McCook, Sr.‘s argument is that because the word “forever” found in paragraph 2 and the word “perpetual” found in
1. In its first two enumerations of error, Vineville contends the trial court erred by holding that parol evidence could be used to determine whether the McCook security deed contains the necessary
(a) The trial court denied Vineville‘s motion to dismiss in part on the grounds that “there is a genuine dispute as to whether the parties intended the habendum clause as an affirmative statement within the meaning of
The plain language of
It is true that Georgia law provides that if a court cannot glean the intention of the maker from the contents of the deed, “it may hear parol evidence to prove the maker‘s intention.”
(b) Second, we agree with Vineville and hold as a matter of law that the McCook security deed does not contain an affirmative statement showing that the parties “intend[ed] to establish a perpetual or indefinite security interest in the real property” as required by
“The construction of a deed presents a question of law which this Court reviews de novo.” Lollar, 282 Ga. at 724 (2) (footnote omitted). “The cardinal rule of construction of deeds, as well as other contracts, is to ascertain the intention of the parties. If that intention be clear from the deed and circumstances of the transaction and contravenes no rule of law, it should be enforced.” Keith v. Chastain, 157 Ga. 1, 6 (121 SE 233) (1923) (citation and punctuation omitted). See also Greene v. Greene, 311 Ga. App. 132 (714 SE2d 650) (2011) (where the language is unambiguous, a court must enforce the deed as written). “[T]he whole instrument is to be construed together so as to give effect, if possible, to the entire deed and the construction which will uphold a deed in whole and in every part is to be preferred.” Shoaf v. Bland, 208 Ga. 709, 711 (2) (69 SE2d 258) (1952) (citation and punctuation omitted). And “[n]o prescribed form is essential to the validity of a deed to lands or personalty.”
The phrase “forever, in fee simple” is found in what is commonly known as the “to have and to hold” or habendum clause6 of the McCook security deed (found in paragraph 2 of the deed as numbered for this opinion). The traditional purpose of the habendum clause is to define the estate which the grantee is to have in the property granted. Keith, 157 Ga. at 5; see also 2 Patton and Palomar on Land Titles § 345 (3d ed.) (“The role of the habendum was to repeat the name of the grantee with a statement of the estate conveyed, and to what use.“)7. And habendum clauses with the language “forever, in fee simple” are often included on form deeds provided in
The word “forever” in the habendum clause indicates the unlimited duration of the estate rather than the nature of the security interest. See First Nat. Bank of Snyder v. Evans, 169 SW2d 754, 756-757 (Tex. Civ. App. 1943) (where the word “forever” in the habendum clause was X‘ed out and replaced with the words “as set out above,” the duration of the estate was controlled by a duration-limiting provision found earlier in the deed). Compare
of some other person or persons.“);
In addition, paragraph 3 of the McCook security deed provides that the conveyance is intended to operate as a security deed, and it identifies the debt being secured and indicates that the deed is intended to operate as provided in certain Code sections that govern deeds to secure debt. Nothing in this paragraph of the McCook security deed suggests that the parties to that deed intended to invoke the 20-year reversionary period. And our review of the remainder of the security deed shows that no other paragraph of the deed does so, either.
Because the word “forever” as used in the habendum clause of the McCook security deed refers to the duration of the estate being granted rather than the nature of the security interest and there being no other indication that the parties intended to invoke the 20-year reversionary period for deeds to secure debt, we conclude that the seven-year default period applies in this case. The undisputed facts of the case show that title to the McCook security deed was
conveyed on July 1, 2002, and recorded one day later; the deed therefore reverted to McCook, Jr., on July 2, 2009; at the latest, seven years after the conveyance of the McCook security deed. All of McCook, Sr.‘s claims rely upon the continuing validity of his security interest in the premises. Without a secured interest in the premises, McCook, Sr.‘s claims therefore must fail as a matter of law. The trial court therefore erred by denying Vineville‘s motion to dismiss because the allegations of McCook, Sr.‘s complaint, even when construed in the light most favorable to McCook, Sr., disclose with certainty that he would not be entitled to relief under any state of provable facts.
2. Vineville‘s remaining enumerations of error regarding the propriety of the trial court‘s interlocutory injunction have been
Judgment reversed. Barnes, P. J., and Boggs, J., concur.
DECIDED NOVEMBER 19, 2014 —
Hatcher, Stubbs, Land, Hollis & Rothschild, Gregory S. Ellington, David L. Mize, William B. Hardegree, for appellant.
Parker, Hudson, Rainer & Dobbs, Darren E. Gaynor, Peter F. Busscher, for appellee.