Case Name: HILL, executor, et al. v. SMITH
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1926-10-15
Citations: 163 Ga. 71
Docket Number: No. 5477
Parties: HILL, executor, et al. v. SMITH.
Judges: All the Justices concur, except Atkinson and Hill, JJ., who dissent.
Reporter: Georgia Reports
Volume: 163
Pages: 71–79

Head Matter:
HILL, executor, et al. v. SMITH.
No. 5477.
October 15, 1926.
Pemberton Cooley, G. A. Johns, J. C. Pratt, and J. P>. Quillian, for plaintiffs in error.
E. E. Chandler, contra.

Opinion:
Gilbert, J.
The defendant in error insists that the rule is as follows: "The test, then, whether an instrument be a deed or mortgage is necessarily whether the interest acquired by the holder of an instrument is such an interest as can be extinguished by the voluntary act of the debtor alone. If it can be, the instrument is defeasible, and does not pass . . absolute title," etc. She contends that the terms of this instrument bring it within the general rule, and that the instrument will be construed to be a mortgage. This general rule was applied in the following decisions of this court: Frost v. Allen, 57 Ga. 326; Pirkle v. Equitable Mortgage Co., 99 Ga. 524 (28 S. E. 34); Scott v. Hughes, 124 Ga. 1000 (53 S. E. 453); Burckhalter v. Planters Bank, 100 Ga. 428 (28 S. E. 236); Sims v. Jones, 158 Ga. 384 (123 S. E. 614). On the other hand the plaintiffs in' error insist that the instrument with which we are dealing in this case is a security deed, passing title> and that the interest is not such "as can be extinguished by the voluntary act of the debtor alone." They point out the provision in the instrument, that when the debt has been fully paid;'"this deed is to become void, and the clerk- of the- superior court is hereby granted authority to cancel as of record." •
The instrument to be construed in this case-is strikingly similar to the instrument construed in Pitts v. Maier, 115 Ga. 281 (41 S. E. 570). The words are not exactly the' same;-but when we consider the' effect placed 'upon-the words- in-, that 'case,'-We' are forced to the conclusion that thé meaning is the same.-, In that case the instrument contained the words, "reconveyance of said property to be made upon fulfillment of all the conditions of this instrument." In that case it was contended that the words just quoted determined the character of the instrument to be that of a mortgage.. It will be seen by what was said in the opinion written by Mr. Presiding Justice Lumpkin, that the rule applied in Frost v. Allen and Pirkle v. Mortgage Co., supra, was modified. The court expressly overruled the two former cases in so far as anything said in them conflicted with the latter ease. In the opinion it was said: "A'stipulation for an actual reconveyance upon payment of the secured debt is, for all practical purposes and in essence, the same as a stipulation for surrender and cancellation which shall under a statute operate as a reconveyance. The end to be accomplished is, in each instance, precisely the same, the only difference being as to the method to be employed for accomplishing the desired result, viz.: that the title which has passed from the debtor to the creditor shall go back to the former. Were we, therefore, to adhere to the ruling made in the PirTcle case, we would be constrained to hold that the paper on which we are now called upon to pass was a mere mortgage. The decision therein is, however, under review, and we are fully satisfied of its unsoundness. Indeed, we were much disposed to take this view soon after it was rendered. See the comment made thereon by Mr. Justice Cobb in the case of Williamson v. Insurance Co., 100 Ga. 794 [28 S. E. 914]. In passing the act of November 12, 1889 (Acts of 1889, p. 118), the General Assembly was expressly undertaking to deal with instruments which actually passed title to property for the purpose of securing the payment of debts. The subject-matter of the legislation was deeds, not mortgages; and the only object of the statute was to substitute for a formal reconveyance of title a mere surrender and cancellation of the instrument executed by the debtor, the cancellation to be entered of record by the clerk of the superior court 'in the same manner that cancellations of mortgages are now entered.' See Civil Code, § 2774, which sets forth the provisions of this act. The legislative purpose was not to provide for the cancellation of liens, but for the reconveyance of title. We therefore made a grave mistake in holding that a stipulation in a security deed for the cancellation and surrender thereof in accordance with the statute jufet men tioned was the 'equivalent of such a defeasance clause as is usually inserted in a mortgage, and that, as a consequence, a deed manifestly designed to pass title became a mere mortgage. This is our first opportunity to correct this mistake, and we do so by overruling the decision in the Pirlcle case to the extent here indicated. The decision rendered in the case of Frost v. Allen, 57 Ga. 326, is likewise under review; and in so far as it conflicts with what is now laid down, it also is overruled."
We reach the conclusion, based upon the reasoning in the case of Pitts v. Maier, that the instrument is a deed. In addition to what was said in that case, there are other reasons which lead us to that conclusion. One is from reading Civil Code (1910) § 3306, which is as follows: "Whenever any person in this State conveys any real property by deed to secure any debt to any person loaning or advancing said vendor any money, or to secure any other debt, and shall take a bond for titles back to said vendor upon the payment of such debt or debts, or shall in like manner convey any personal property by bill of sale aDd take an obligation binding the person to whom said property is conveyed to reconvey said property upon payment of said debt or debts, such conveyance of real or personal property shall pass the title of said property to the vendee till the debt or debts which said conveyance was made to secure shall be fully paid, and shall be held by the courts of this State to be an absolute conveyance, with the right reserved by the vendor to have said property reconveyed to him upon payment of the debt or debts intended to be secured agreeably to the terms of the contract, and not a mortgage." It will be noted that this code section as originally enacted contemplated the taking of a bond for title binding the grantee or creditor to reconvey the property to the debtor upon the full payment of the debt, and declared that "such conveyance of real or personal property shall pass the title of said property to the vendee till the debt or debts which said conveyance was made to secure shall be fully paid." But the legislature, not content with that declaration, followed it, in immediate connection, with the following words: "and shall be held by the courts of this State to be an absolute conveyance," etc. The statute so remained for many years until, in 1924, the General Assembly amended it by providing, "no bond to reconvey shall be necessary where such deed shows upon its face that it is given to secure a debt." Park's Ann. Code Supp. 1926, § 3306. Tire instrument in the present case, on its face, recites: "This deed is given to secure a loan of $35,000.00, as is evidenced by a note for a like amount, bearing even date with this deed," etc.. Here it will be noted that twice in the same sentence the instrument is denominated a "deed." Moreover, the caption is, "Warranty Deed, Georgia, Barrow County: This indenture," etc. The habendum clause contains the usual language found in deeds, to wit: "To have and to hold," etc., as well as the usual warranty clause, the attestation clause, and the attestation as for a deed. Thus it will be seen that the maker of the deed executed an instrument in perfect harmony with the usual form of deeds and quite unlike the usual form of mortgage, and in addition denominated it a deed in the caption, and throughout the body of .the instrument. Clearly, therefore, it would seem that the grantor thought he was executing a deed, and it is altogether unlikely that the idea ever occurred to him that the provision in the deed as to the payment of the debt and the deed becoming void and the authority of the clerk to cancel same on the record would convert that which he called a deed into a mortgage. We think we are not only authorized but forced to draw the conclusion that the parties intended the instrument in question to be a deed. If there is a doubt on the question, we must turn to .the rule applicable in cases of doubt. Our Civil Code (1910), § 4266, declares: "The cardinal rule.of construction.is to ascer-. tain the intention of the parties. If that intention be clear, and it contravenes no rule of law, and sufficient words be used 'to arrive at the intention, it shall be enforced,, irrespective of all technical or arbitrary rules, of construction." In the present case the intention is clear, and such intention contravenes no rule of law. Sufficient words are used in the deed for the ascertainment of the intention of the parties, and it is our duty to enforce that intention, "irrespective of all technical or arbitrary rules of construction."
The instrument with which we are dealing was executed prior to the passage of the act of 1924, and for that reason it may be- said that the act should not enter into the determination of the quesr tion. Our conclusion has been reached irrespective of the act,, but the act is mentioned to show that the General Assembly were cognizant of the decision in Pitts v. Maier, and therefore knew that the provision for a reconveyance, in the Code, § 3306, was wholly immaterial and determined nothing as to the character of the instrument. It should be noted also that the General Assembly in 1889 (Ga. Laws, 1889, p. 118) passed the following statute, which is now Civil Code (1910) § 3309: "In all cases where property is conveyed to secure a debt, the surrender and cancellation of such deed in the same manner that mortgages are now cancelled, on payment of such debt to any person legally authorized to receive the same, shall operate to reconvey the title of said property to the grantor, his heirs, executors, administrators, or assigns, and such cancellation may be entered of record by the clerk of the superior court in the same manner that cancellations of mortgages are now entered." Certainly after the passage of the act of 1889, even before the passage of the act of 1924, the distinction between mortgage and security deed could not be placed upon the principle applied in Frost v. Allen and Pirkle v. Mortgage Co. Having reached the conclusion that the instrument was a deed and not a mortgage, it follows that G. W. Smith did not die seized and possessed of the land, and accordingly that the land was not dowerable in this case. McPhaul v. McPhaul, 150 Ga. 486 (104 S. E. 241).
Judgment reversed.
All the Justices concur, except Atkinson and Hill, JJ., who dissent.