Court Opinion

ID: 5622975
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:42:58.560804+00
Date Added: 2024-06-11T08:37:29.749830
License: Public Domain

Broyles, C. J.,
dissenting. Where a note secured by a conveyance of land to the payee is transferred to a third person, without a conveyance of the secuñty, the title to the land does not pass to the transferee. Sheppard v. Reese, 114 Ga. 411 (2) (40 S. E. 282). However, the transferee acquires an equitable interest in the se*532curity. VanPelt v. Hurt, 97 Ga. 660 (25 S. E. 489). “At law [in sucli a case] the transferee is the owner of the debt, but not the owner of the land. In equity he is the owner both of the land and the debt.” Clark v. Havard, 122 Ga. 273, 275 (supra). The transferee “has, and as against the debtor may, when necessary to the collection of such claim, assert an equitable interest in the security effectuated by the deed; and in such case it is within the power of a court exercising equity jurisdiction, upon proper pleadings and evidence, to afford appropriate relief in the premises.” (Italics ours.) VanPelt v. Hurt, supra. The statement in the Clark case, supra, that upon the common-law side of the court “the transferee may proceed to collect the debt by obtaining judgment and causing a levy to be made on the land after a reconveyance by the grantee,” is obiter dictum, as that was a case in equity. If there be any conflict between the rulings of the Supreme Court in the above-cited cases and the-holding in Pape v. Woolford Co., 35 Ga. App. 284, the decisions of the Supreme Court must prevail.
The instant case was an action by a transferee upon a promissory note secured by a deed to land. The petition showed that the note was transferred by the payee to the plaintiff without a conveyance of the security. The suit was brought on the common-law side of the court and the petitioner asked for a judgment against the maker of the note and that the judgment be declared a special lien upon the land, and that the land be sold under a decree of the court and the proceeds of the sale be applied to the payment of the debt. There were no pleadings authorizing the court to exercise its equity powers, and the demurrer to paragraph 5 of the petition (that paragraph stating that “the transfer of the note to petitioner for value as herein alleged has the effect of conveying to petitioner the security afforded by said deeds, and petitioner is now entitled to a lien upon said property superior to all other liens for the purpose of satisfying said debt”) should have been sustained and the paragraph stricken, as the paragraph stated an incorrect conclusion of law, to wit, that the mere transfer of the note to the plaintiff had the effect of conveying to him the security. The provisions of sections 3346 and 4276, cited in the majority opinion, do not cover the transfer of notes secured by a deed to land, but refer to transfers of notes 'secured by mortgages. See, in this connection, VanPelt v. Hurt, supra; Sheppard v. Reese, supra; Clark v. Havard, *533supra. The error in overruling the demurrer rendered the further proceedings in the case nugatory. In my opinion the judgment on the main bill of exceptions should be reversed, and the cross-bill dismissed.