Case Name: Lee et al. v. Johnston, trustee, et al.
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1926-07-15
Citations: 162 Ga. 560
Docket Number: No. 5328
Parties: Lee et al. v. Johnston, trustee, et al.
Judges: All the Justices concw.
Reporter: Georgia Reports
Volume: 162
Pages: 560–565

Head Matter:
Lee et al. v. Johnston, trustee, et al.

Opinion:
Hines, J.
1. The grantors in a security deed filed a petition against the ' grantee and two successive transferees of this instrument and of the note thereby secured, to enjoin a sale of the land conveyed, under a power of sale therein evidenced, on the grounds (a) that as to one of the grantors said deed was obtained by fraud, and (b) that as to the other grantor it was void, because it was procured by a threat to prosecute the husband of the latter, and because it was given by this grantor, who was a married woman, to secure the debt of another. The plaintiffs offered an amendment to their petition/in which they alleged, among other things, that these transferees were not bona fide holders of said note and security deed for value before due, but took the same with notice of the defenses which the mhkers had to said deed and note. The court rejected this amendment, and to this ruling plaintiffs excepted. Held: 1. That before the plaintiffs could prevail it was incumbent upon them to allege and prove that these transferees were not bona fide holders of this deed and note for value before due; and the court erred in disallowing this amendment. 2. The allegation in this amendment that the transferees were not bona fide holders of this deed and note for value before due, but took the same with notice of the defenses which the makers had thereto, was not a mere conclusion of the pleader, but was a statement of fact. First National Bank v. Adams, 92 Ga. 545 (17 S. E. 924).
2. The evidence demanded a finding that the note referred to above was the joint note of Mrs. S. L. Naylor and of her husband, R. G. Naylor, payable to the order of the Standard Motors Finance Co. Inc., and indorsed by G. W. Lee; that the same was given to cover an indebtedness of the Brooklet Motor Company; that the payee knew, at the time said note was given, that Mrs. Naylor was a married woman, and could not directly convey her property to the payee to secure the debt of the Brooklet Motor Company to it; and that she conveyed' her interests in the land embraced in the above security deed to G. W. Lee, in order that the latter might convey the same to the payee, thus indirectly and by a collusive scheme pledging- her individual property as security for the said indebtedness of the Brooklet Motor Company to the payee. Held:
(а) A deed given by a married woman, in pursuance of a scheme by which she pledges her individual property as security for the debt of another, is void in toto. Civil Code (1910), § 3007; Central Bank & Trust Corporation v. Almand, 135 Ga. 231 (69 S. E. 111) ; Summers v. Lee, 10 Ga. App. 441 (73 S. E. 602).
(б) While the mere fact that one of two joint makers of a note is the wife of the other, there being nothing upon its face to indicate that she signed as surety, is not, though her true relation to the paper was one of suretyship only, sufficient to charge a purchaser of the paper with notice of suretyship (Southern Mutual Building &c. Association v. Perry, 103 Ga. 800, 30 S. E. 658), the trial judge disallowed the wife's amendment to the petition, in which she alleged that the holder of the note was not one bona fide, for value, before due, who took the same with notice of her defenses thereto; thus preventing the wife from submitting proof of these allegations.
3. The grantee in, and the two successive transferees of, the above note and deed were non-residents of the State. The last transferee was proceeding to foreclose said deed under a power of sale, through the instrumentality of an agent or trustee resident in the State. The petition in this case was brought against said grantee, transferees, and agent or trustee, in the county of the residence of such agent or trus tee. Counsel for plaintiffs in error in Ms brief asserts that the court refused to grant an interlocutory injunction, because the court was without jurisdiction, as no substantial relief was prayed against the resident defendant. It does not appear from the judgment of the court, or any recital in the bill of exceptions, that the judgment of the court was put upon this ground; and for this reason we make no ruling on the questions thus raised. On this subject see Sellers v. Page, 127 Ga. 633 (56 S. E. 1011) ; Babson v. McEachin, 147 Ga. 143 (93 S. E. 292).
No. 5328.
July 15, 1926.
4. In view of the rulings in the first and second headnotes, the judgment of the court below must be reversed; and this renders it unnecessary to pass upon the other assignments of error.
Judgment reversed.
All the Justices concw.
Hinton Booth, for plaintiff.
G. S. Johnston and Lewis A. Mills, for defendants.